Wednesday Musings

Wednesday Musings

“The big lesson in life is never be scared of anyone or anything.”

– Frank Sinatra

This past week Markets (S&P500) were down slightly more than 1%, and are up just over 18% for the year.

The consumer is something I watch closely and refer to here often. This is because personal consumption reflects close to two thirds of our economy. Last Friday through the University of Michigan Consumer Sentiment and this week the Bureau of the Census Retail Sales number both painted a grim picture of the consumer for the time being. There is another data point that is telling a very different story, one data point that I like to follow closely - Redbook Same Store Sales.

The Redbook Same Store Sales Index is a weekly measure of comparable store sales at chain stores, discounters, and department stores. Redbook tracks week-to-week change, month-to-date change, and year-on-year change with the latter the most closely watched reading. The report, produced by Redbook Research, offers early indications on ex-auto ex-gas retail sales.

I favor this data point for a two key reasons, first its weekly, meaning it gives you constant data points. Second there are no seasonal adjustments taking away alot of the subjectivity a lot of other data points. In summary, just data in, and data out with a high frequency.

The reading we got yesterday was 15% year over year growth and as you can see in the chart below is showing healthy shopping habits for American Consumers. What you also see is a distinct V-shape for this recovery and and some choppiness throughout the entire graph. Another reason I love this data point, because real life is not a smooth line, and neither is economic data.