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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?