July retail sales as reported this AM were not only up again, but actually posted higher than the year ago figure, the pandemic to the contrary notwithstanding.
No surprisingly, the MSM was full of “getting back to normal” memes and claims that the “V” is still on track. The Bloomberg story was typical:
Even so, the total value of retail sales was above pre-pandemic levels, and July purchases were up 2.7% from a year earlier, indicating one major part of the economy has returned to near its previous trend.
Well, yes, if you think you can borrow and spend your way to prosperity. That is, compared to the pre-pandemic peak in February 2020—
- Retails sales (black line) are up by 1.6% (July);
- Wage and salary incomes (blue line) are down by 6.3% (June).
Stated in dollar terms, monthly paychecks are down by $50 billion from February, but monthly retail spending is up by $10 billion. The difference, of course, is made up by that great macro-economic air cushion called the Everything Bailouts.
Needless to say, there as never been anything like Uncle Sam’s stunning generosity during the past five months. Total government transfer payments were running at a $3.165 trillion annual rate in February after a long steadily climb from the $2.117 trillion level at the end of the Great Recession (June 2009).