Business Magazine

No Signs of a Recession Here

Posted on the 17 January 2013 by Mdelp

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FRED Graph The blue line, left side, is Retail and Food Service Sales (think everything you and I buy on a regular basis) and it is showing yet another all time record high. The red line, right side, is Total U.S. Private Employment. There is a very strong correlation between these two data points but what I found interesting is even though there are roughly 3 million fewer people employed in the private now versus peak employment, retail sales hit record levels about a year ago and has managed to set new record levels regularly since then. My guesses for why this is happening are: - baby boomers are easing out of the workforce but that doesn’t mean they are easing off of their spending habits. - confidence has returned so people are willing to spend more money instead of stashing it away - home prices and home sales activities have increased causing more money to be spent (new paint, carpet, furniture, etc.) - people can only hold their breath for so long in anticipation of “the sky is falling” before they become fatigued and buy those clothes/gadgets/repairs that they were holding off on. What are your thoughts about these two data points?

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