Out of curiosity, I scour the web to see who is still saying a recession is coming (with an open mind). This tweet suggests that retail sales are an indicator of the times:
Source: Alex Joosten (2024).
It is highly commendable, in the last 3 recessions. However, the post-pandemic increase in spending and spending is remarkable, so I thought it might be useful to consider the length of the data, using retail sales adjusted for inflation. This is the image I found, 1947-2024M04.
Figure 1: Real retail sales (FRED RSALES series) (tan), and real food service sales (FRED series RSAFS) (blue), in mn.1982-84$, reduced using the FRED CPIAUCSL series. The NBER has defined recession days as shaded in gray. Source: FRED, NBER.
It is certainly true that retail sales are low and even down in some cases before a recession (as explained by the NBER). On the other hand, in each previous case, retail sales have deviated from the pre-recession trend. Is this true in this case? Without knowing that the start-up recession is upon us, I can’t answer that. However, I can check whether retail and food sales, deflated by the CPI, deviated from the 2016-19 trend (stochastic).
Figure 2: Actual sales of food service (FRED series RSAFS) (blue), in mn.1982-84$, are discounted using the FRED CPIAUCSL series. The NBER has defined recession days as shaded in gray. Source: FRED, NBER.
So, with one metric, we should be concerned. For another (deviation from the norm), maybe not.
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