Wal-Mart’s sales and the slowing economy
â€” Lauren Lyster (@LaurenLyster) February 15, 2013
We donâ€™t need to wait around for the macro data to tell us that the economy is slowing. The signals are coming loud and clear from the micro data. Bloomberg reports:
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
â€śIn case you havenâ€™t seen a sales report these days, February MTD sales are a total disaster,â€ť Jerry Murray, Wal-Martâ€™s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. â€śThe worst start to a month I have seen in my ~7 years with the company.â€ť
Reuters reports on state sales tax revenues, which are a key gauge of consumption:
Only about a third of U.S. states were on target for their sales tax collections in January, part of a trend that has some officials worried, an economic newsletter, The Liscio Report, said on Tuesday.
All but five states collect sales taxes, and for those that do, the surcharges on purchases can provide a solid revenue source.
January’s sales tax collections were slightly lower than December’s, when 37 percent of states said they had met expectations. Revenues that consistently come in below expectations can force states to cut spending – all states except Vermont must end their fiscal years with balanced budgets.
However, the growth in sales tax collections in January was up 2.4 percent from the year before, Liscio said.
“A few contacts were relieved to see sales collections pick up in January, but the majority continued to express growing concern,” the newsletter found, adding there was no geographical pattern of performance in the survey.
And Moodyâ€™s chimes in on the broader picture:
Moodyâ€™s says a weaker U.S. economic outlook has diminished hopes of a robust economic recovery, which would buoy state finances. The economyâ€”and in turn state financesâ€”remain susceptible to additional pressure from implementation of federal deficit reduction measures.
Contractions are a natural part of economic cycles. The federal governmentâ€™s deficit spending and extensive quantitative easing of the Federal Reserve have staved off economic decline. But the ground level data may be signaling an economic pullback. Stay tuned.