Retail Sales and Jobs


This post is by Michael Panzner from Financial Armageddon


Click here to view on the original site: Original Post




From Panzner Insights:

Economists rely on a variety of indicators to try and get a read on
the economy. But the apparent connection between certain data points and
trends and future activity isn’t always obvious or straightforward.

That
doesn’t seem to be the case in regard to the connection between retail
sales and employment. Indeed, it makes sense that concerns about the job
market would be quickly felt when it comes to household spending. If
workers fear they might lose their jobs, they don’t wait until they get
the bad news before cutting back.

More broadly, if a large enough
number of workers believes the job market is deteriorating, then it’s a
good bet the overall trend of retail sales will signal the change before
the payroll data does.

As the following chart shows, this has
been the pattern previously. Under the circumstances, the latest
readings on the pace of retail sales suggest it’s only a matter of time
before the headline employment data reveals that the jobs market is
heading south.

Retailsalesandjobs

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