Spending on VICE and Retail Sales

We'll be back with more later this month, there are a lot of things to unpack from the data, including a possible demographic revolution in spending on the traditional VICE products as younger people display marked differences in vice preferences vs. their elders who are now dying off, in part from their bad habits.

From Moneyball Economics Oct 12:

What The Moneyball Vice Index REALLY Says About Retail Forecast!

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Vice Index Now Points To Lower Spending

Recent downward revisions to retail data confirms that the Vice Index correctly predicted a pullback in spending growth.  

• Trend: The latest data points to a near-term bottom in the 4Q.
• September: August Retail (ex-Autos/Gas) spending came in at 3.3% y/y.  Further erosion means September will dip to 3.1%

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Gambling Outlook – Still On A Losing Streak

Middle America is under financial stress.

Over the past year, US casinos (ex-Vegas) have enjoyed only 1 month of positive growth.
Las Vegas is doing a bit better thanks to the return of Chinese gamblers: YTD gaming revenues are up 3.5%.

This reflects the bifurcated US economy: middle America is pulling back on frivolous activities while upper income consumers continue to spend.

(NOTE: Will higher spending by the 1% be enough to offset a spending pullback by the bottom 99%? We’ll have to find out…)

Is Cannabis Replacing Beer?

Beer consumption fell in 2016 for the first time since 2011 (per IWSR).

Several reasons are possible:

• Changes in drinking habits:  Millenials are socializing differently: it’s popular to hang out at home with friends and “Netflix and chill.”  And that’s driving a shift: drinking at bars (on-premise) has dropped while drinking at home (off-premise) has grown.
• Shifts in taste: Beer is down, but distilled alcohol is up.  That’s largely from new styles of tequila and bourbons being released, and the big marketing campaigns pushing them.

But maybe cannabis legalization is also playing a role....MORE

HT: ZeroHedge