Thursday , May 13 2021
Home / Hale Stewart: Bonddad Blog / Why March’s big jump in real retail sales augurs well for big employment gains through summer

Why March’s big jump in real retail sales augurs well for big employment gains through summer

Summary:
- by New Deal democratYesterday I wrote that the steep decline in new jobless claims in the past 4 weeks likely presages another big monthly employment gain, on the order of 1 million or more jobs.Another very big positive for the next few months in employment is the massive, stimulus-fueled jump in retail sales.As I have pointed out many times, real retail sales (blue in the graph below, /2 for scale) tend to lead employment (red) by about 3-4 months. Here’s the long term YoY look from 1993 on, averaged quarterly to cut down on noise:I’ve also included aggregate hours (gold) in the above. Hours tend to be cut more than jobs in recessions, and increase faster in recoveries. The pandemic has been somewhat unique in that, for obvious public health reasons, jobs were cut entirely rather

Topics:
[email protected] (New Deal democrat) considers the following as important:

This could be interesting, too:

Tyler Durden writes Meituan’s CEO Sees Billions Wiped Out Over An Innocuous Thousand-Year Old Chinese Poem

Tyler Durden writes Ira Sohn Conference Highlights: Einhorn’s “New Oil”, ESG Mania And More

Tyler Durden writes Reckless Backseat Tesla Owner Arrested On California Highway  

Tyler Durden writes Lawmakers Reintroduce Bill To Ban “Ghost Guns”

 - by New Deal democrat

Yesterday I wrote that the steep decline in new jobless claims in the past 4 weeks likely presages another big monthly employment gain, on the order of 1 million or more jobs.


Another very big positive for the next few months in employment is the massive, stimulus-fueled jump in retail sales.

As I have pointed out many times, real retail sales (blue in the graph below, /2 for scale) tend to lead employment (red) by about 3-4 months. Here’s the long term YoY look from 1993 on, averaged quarterly to cut down on noise:

Why March’s big jump in real retail sales augurs well for big employment gains through summer

I’ve also included aggregate hours (gold) in the above. Hours tend to be cut more than jobs in recessions, and increase faster in recoveries. The pandemic has been somewhat unique in that, for obvious public health reasons, jobs were cut entirely rather than just hours. Note also the “China shock” in the first few years after 1999, when both jobs and hours continued to be cut, even after sales had rebounded.

But saying that there is likely to be a big YoY jump in jobs in the next several months is hardly surprising, given the 22 million loss in jobs last April. So the below graph compares the absolute data, sales on the left scale, and employment on the right:

Why March’s big jump in real retail sales augurs well for big employment gains through summer

Again, the brief lag with which employment follows sales is obvious. The most important takeaway is that, if the big March gain in sales isn’t taken back in the next month or two, then there’s likely to be a similarly large jump in employment by the end of summer. A gain of another 4 to 6 million jobs, to close to the pre-pandemic peak, is quite possible.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.