June retail sales: some actual good news; the entirety of the pandemic decline has been reversed

June retail sales: some actual good news; the entirety of the pandemic decline has been reversed

Retail sales are the third report for June out of the four main coincident indicators that show whether the economy is in recession or expansion. And they were the third that grew again for the month. In fact, in real, inflation-adjusted terms they were higher than in February, the last month before the coronavirus pandemic hit:

They were also only 0.4% lower than their all-time high set last August.

 

And they were also slightly *higher* YoY (0.4%), as shown in the below graph:

Beyond that, over the long haul, real retail sales have been a good if noisy short term leading indicator for job growth:

(Note that real retail sales are divided by 2 for scale in the above graph).

Here’s a close-up of the same since Trump took office:

This is a good omen for the July jobs report. In the past two months, jobs have regained about 1/3 of their pandemic losses. It’s at least within the realm of reasonable possibility that most of the pandemic job losses could be made up within the next two months, even if many States at least partially “re-close”  – although brick-and-mortar sales jobs might be replaced by more warehouse and deliver order-fulfilling jobs. And I don’t see how restaurant and bar jobs come back intact for many months to come.

Comments (6) | |