R.I.P., Great Recession (December 2007-June 2009).
Last month, the National Bureau of Economic Research chiseled the above epitaph in stone, declaring the official end of the most savage economic downturn since the Great Depression. Of course, Berkshire Hathaway (NYSE: BRK-B ) knew this already, and was telling us about it, a whole year before NBER. But don't blame the bureaucrats for tardy reporting -- they weren't the last to know. As it turns out, American consumers are only now beginning to acknowledge that the world hasn't ended:
According to the Commerce Department, which released its latest report on retail and food services sales on Friday, September was a mediocre month for sales improvement in comparison to August, but an absolute blockbuster compared with where we were a year ago (incidentally, when Buffett was making his pronouncement). Month to month, sales in this industry grew a modest 0.6%, but year over year, sales were up a boffo 7.3%.
Even better, September's gains marked an acceleration in consumer demand. Third-quarter sales as a whole rose only 5.7%, so it looks like things really got swinging toward the tail end of the quarter.
A few caveats and provisos
Now before you go popping the Champagne corks and rush out to buy shares of Zumiez (Nasdaq: ZUMZ ) and Abercrombie & Fitch (NYSE: ANF ) -- the top two retailers for comparable sales gains last month -- there is just one quirk in the data I'd like to highlight for you. See that light grayish column up there on the right? (The one in the chart on the right. That's the one.) Seems automobiles contributed heavily to September's super sales success. Wonder why that might be?
Well, think back to September 2009 -- the month to which we're comparing September 2010. Cash for Clunkers had just ended, and automobile sales were in freefall. Chrysler sold 42% fewer cars than it had in September 2008. General Motors' sales were down 45%. Why, even Ford (NYSE: F ) and Toyota (NYSE: TM ) experienced sales shortfalls.
So the September-over-September auto sales gain was a bit of a fluke, a one-time deal. What's more, if you back out those gains, you wind up with retail sales for September that are right in line with retail sales for the rest of Q3. In other words, there wasn't really an acceleration in sales at all. Aside from the car sales bump, Q3 basically just plodded along.
Which admittedly, doesn't make for happy-sounding headlines -- but reality rarely does.
Got a different read on today's chart? Don't be shy: Tell us about it in the comments section below.