- by New Deal democrat
Yesterday I noted that retail sales would probably be the most important number reported this week. The Census Bureau just obliged, reporting not only that overall retail sales soared - even above raised expectations due to "cash for clunkers" - by 2.7%! Even ex-autos, retail sales were up 1.1%.
Additionally, the New York Fed's Empire State index rose from 12.08 to 18.88 for September. This report, along with other regional reports, is looked to as a harbinger of the next ISM report. If this region's report is confirmed by those of other regions, it will suggest (per my post just below) that the ISM manufacturing index is going to continue to climb strongly, past the 54 mark that in the past has always coincided with actual job growth.
Finally, separately the Census Bureau reported that the Inventory/Sales ratio, which measures how much slack is in the sales system, declined to 1.36 in July from 1.38 in June. At the depth of the recession, this ratio had risen to 1.46. The Inventory/Sales ratio has recently been falling .02/month, and since this just-released data is 2 months old, the ratio now might actually be 1.32. In the economic expansion earlier this decade, job growth finally occurred when the ratio fell to 1.31 in late 2003, and the ratio varied between 1.24 and 1.31 for the rest of the expansion.
All of these numbers stick a fork in the idea that the recession might still be lingering (subject to confirmation by my co-blogger, Invictus, of course!). Moreover, as I will discuss later this week, the retail sales data is extremely important to a discussion of when the recovery will start to add jobs. In short, the odds of a V-shaped jobs recovery just got considerably better.