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Full Recovery? Free Money Helps All the Spending

Inflationary surge
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EDITOR NOTE: Up until the shocking CPI increase last week gave investors reasons to temper their bullish optimism, the economic recovery seemed to be advancing full steam ahead. Retail sales are nearing record levels and motor vehicle sales just broke past theirs. Money is flowing through the economy as consumer spending is ramping up. The only catch is that a lot, if not most, of it, is free money given away by the government. In short, stimulus money. Perhaps that’s the reason why they gave it to us in the first place--to spend. But doesn’t that create the “illusion” of recovery, rather than kickstart recovery itself? Some will disagree with this notion (that it’s an illusion). If so, ask them, what will recovery look like when the government's money spigot ceases? 

Give away free money and people will spend it. 

Nearly every class of spending has recovered and some have surged to new heights.

What Free Money Can Do

  • Motor vehicles sales are at record highs.
  • Nonstore retail sales are just off record highs.
  • Despite work-at-home, gasoline has more than recovered.
  • Department store sales are just under pre-pandemic levels.
  • Food and drinking establishments are the one laggard for understandable reasons. 

Retail Sales Month-Over Month

Advance Retail Sales Month-Over-Month 2021-04

The month-over-month increases are interesting, 

There were three rounds of Covid stimulus: a year ago under Trump, then in January and March under Biden.

For details, please see Hot Potato Money in Play as Retail Sales Unexpectedly Flop

What happens when the stimulus stops?

Original post from MishTalk

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