With updates for Retail Sales and Industrial Production, we now have a majority of the Coincident data for the April reporting period. April data will continue to be reported and will replace some of the remaining assumptions.
Real retail sales growth has contracted in five of the last six months, currently declining at a 2.4% pace when measured on a smoothed six-month annualized basis.
In terms of magnitude, the smoothed real retail sales data is down roughly 1.7% from peak levels. The 2000 recession saw only a 1% decline in real retail sales, although the decline lasted longer, taking 17 months to reach a new peak.
Real retail sales growth is recessionary based on historical data. The smoothed series is eight months past peak and down almost 2%, conditions that are consistent with past recessionary periods.
The biggest difference is that this time, the Cyclical Economy hasn’t contracted yet. The Cyclical Economy is comprised of construction and manufacturing. The Cyclical Economy always deteriorates before the broader economy, like real retail sales.
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