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Americans Go On Biggest Shopping Spree Since ‘Stimmy’
US retail sales rose far more than expected last month, key data out Wednesday showed.
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I would like to understand how much of the home assistance/personal care economy is operating on a “gig”/cash basis.
With our aging population, a lot of people who can afford to do so would prefer to stay in their home and hire additional help- as opposed to moving into an assisted living center or burdening their children. Personal experience over the past few months has resulted in me becoming much more aware of how this portion of our economy functions (due to me helping my aging parents arrange for care so they can remain somewhat in control of their life 🙂 ….I could really go “off course” here, but I won’t). I now realize that it is relatively easy to find excellent help, who generally want to be paid in cash. Greater than 50% of my parents’ annual expenses are now paid to individuals – in cash. One of my parents’ assistants is a retired nurse, who purposely retired in order to support herself solely with gig jobs. She sets her pay and hours.
People who function in this part of our economy are extremely adept at navigating their best financial outcome by “balancing” working for a paycheck, receiving transfer payments from the government and taking cash jobs. I recently had an uber driver who told me that she could only drive a certain number of hours/month for Uber without jeopardizing her disability payments. She also told me that she has standing orders for round trip morning rides to McDonalds 3 days/week. Her customer pays her cash- it isn’t done through Uber.
I love the entrepreneurial spirit and hard work ethic of these types of people – I just don’t have any idea of the size of this portion of our economy. However, this could at least partially explain January sales; and for that matter, the decline in the number of homes being listed for sale across America.
Alternatively, the seasonal January adjustment was too high!
Don’t want to be in denial as I think the economy is not as strong as most analysts. But the numbers are coming out in retail sales and employment are suspicious- and I think you are correct that there is a problem with seasonal adjustments here. It probably means that the economic numbers coming out in November and December were not as weak as folks thought as well- but January could well be overstated. That is why it is always good to look at 3 month numbers rather than monthly ones since that would normally smooth out such problems. I won’t be surprised if there were give backs in February/March.
I totally agree, I’m currently building a cabin, and I am paying all my tradesmen and builders mostly cash and running just enough money through their accounts for them to get their write offs, I think the underground economy is much larger than anyone, and especially the Fed realizes. No wonder all these useless metrics that they monitor are so out of whack.