As most of you know, my analysis is geared towards when will the economy start to add back jobs? It may have been last month.
With yesterday's release of December auto sales and ICSC same store sales, we have enough to make a rough guess of December real retail sales, which I have described as the "Holy Grail" leading indicator for job growth.
Auto sales were up ~3% from November to 11.25 Million annualized (and the best showing since Black September 2008). Here's the graph (h/t Calculated Risk):
Meanwhile, the ICSC reported sales the week after Christmas up 1.5% WoW and 2.5% YoY. December is probably going to be up about 0.6% from November and about 2.0% YoY. Here's a graph of both WoW and YoY same store sales for 2009 (h/t Retail Sails):
Auto sales constitute about 1/4 of all retail sales. That gives us a weighted average of about +1.2%. I'm going to knock that number down by 1/2 to 0.6% because increases in auto sales recently haven't directly translated into the equivalent increase in the official retail sales number. Subtract 0.2% for estimated December inflation, and you get a Real Retail Sales increase of +0.4%. That's about +2.2% from the April smoothed bottom, or about a 3.3% annualized rate. Now, that's just a back-of-the-envelope guesstimate, so simply figure it is going to be a decent positive number.
Together with Monday's good ISM manufacturing data, which probably presages a decent increase in Industrial Production in December, and all of the ingredients (with the possible exception of the ISM non-manufacturing report) appear to have come together for an actual positive jobs report.
5 comments:
Funny how state and Federal tax receipts have been declining steadily, while you and the other touts are proclaiming increasing retail sales. Sales tax receipts are not a lagging indicator, as they are collected monthly.
Keep proclaiming the recovery-less recovery, Bonddad. You look more foolish with each passing day.
Spartacus --
Glad to see your detailed reading skills are up to their same high levels -- NDD wrote that piece.
As for predictions,
1.) Where is the 20% market correction you predicted?
2.) Where is the mortgage market prediction your "deep inside information from a prominent attorney told you about?
Those are but two of the many documented 100% wrong calls you have made over the last year. You're almost as good a contrary indicator as Donald Luskin or Larry Kudlow.
BTW: say high to the vice president for me -- I know he's a close personal friend of yours. After all you licked a bunch of stamps (strike that) advised him on the economy in the last cycle and made a lot of pretty graphs. I guess that was your play time -- did you at least keep the pretty crayon colors within the lines?
Run along now to the children's table. The big people are talking.
"all of the ingredients appear to have come together for an actual positive jobs report. "
And the Fed should start raising its interest rate... They always wait the employment recovery before doing that, as was seen during this cycle in Australia, Israel etc.
Do you think such a link exists ?
Thanks for you analysis NDD and especially for exposing the ECRI's LEI's importance.
Hey, guys:
Just so you know, I'm checking this site a great deal and find it indispensible.
Dear Bob/Spartacus:
Before you tout those declining federal tax receipts, you might want to, you know, actually check the data.
You would find that tax receipts went up from October to November, and again from November to December. While some of that is seasonal (not that I would expect you to know that), the YoY %age comparisons have generally been declining. Most likely the seasonally-adjusted bottom in receipts was September or October.
Always glad to be of assistance with your education.
BTW, according to your predictions, isn't China supposed to be boycotting our Treasuries by now, causing interest rates to skyrocket?
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