After Lukewarm Spell, Retail Sales Rebound
The bounceback in same-store sales further suggests that consumers haven't closed their wallets just yet and fall's lackluster numbers were only a weather-related hiccup.
The bounceback in same-store sales further suggests that consumers haven't closed their wallets just yet and fall's lackluster numbers were only a weather-related hiccup.
Bob Johnson: This week's chart is an oldie but a goodie. It represents weekly retail-sales data reported year over year and averaged over five weeks to get a growth rate. That growth rate is often an excellent predictor of the retail-sales report from the Census Department that comes out much later. This data is compiled from just the past Saturday, so it's only a few days out of date. It's a very current set of data.
Now, it also has a very good correlation with that census data I talked about. Despite being very short term, the correlation is about 60%. So, it's a darn good indicator. Now, you do have to remember that both of these data sets are not adjusted for inflation, so the general trend here looks a little bit lower than it has been. The reason is that prices are lower for goods. Unit sales of good are probably about as they have always been.
Looking at the chart, you can see that same-store sales have kind of had between 2.5% and 3.5% year-over-year growth for almost all of this recovery, with just an occasional dip below that line. It was a bit worrisome late this fall when we dipped under that level. We were all worried, but a lot of that, I guess, turns out to be caused by clothing sales, which were depressed by very warm temperatures and people put off buying their cold-weather gear. So, that certainly hurt the data. But now we've bounced back pretty dramatically. In fact, the most recent data seems to suggest that year-over-year growth is around 3%, right in the middle of where it should be, in our opinion. So, we are very pleased with that, and that bodes well for the months ahead in retail sales.
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