High Frequency Economic Data Tanks

Same Store Sales Growth Jumps

Redbook same store sales growth is indicating there was an upturn in spending in the 2nd half of December which is interesting because most indicators have been weak. You’d think there was more weakness in the end of December because the virus spread as the month progressed. The vaccines have only started going out in the past couple of weeks. 

Some people are worried that the vaccines will take years to go out because of the initial slowness. Of course, it will take a few months for them to go out. We all want it to happen as quickly as possible. Some still think the rate will increase in January even though it has started slowly. Remember, Pfizer had a delay at the start.

The stimulus is also important. States will start giving out unemployment benefits immediately. The 14 million people who could have lost their benefits won’t. 20 million people are getting an extra $300 per week. It doesn’t look like Mitch McConnell wants there to be a vote on a $2,000 stimulus. 

It would be a tough vote for Republicans because it is divisive. The GOP senators up for reelection in Georgia both support the stimulus. The latest polls have the races extremely tight. Most of us have no idea who will win.

(Click on image to enlarge)

Redbook same store sales growth rose from 6.5% to 8.9% in the week of December 26th. Remember, last week it was said that just one good week was meaningless. Now that we have had 2 great weeks, it’s reasonable to say based on this metric the consumer is doing better. 

As you can see from the chart above, department stores have had a sharp recovery in sales growth since August. At about -20%, sales growth is the best since March. Departments stores have been in a secular tailspin for years. It will be interesting to see what growth normalizes at. This recession encouraged industry disruption. Maybe, the industry will come out of this in a better place as the strongest firms with the best merchandise survived.

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