The Tale Of Two Economic Indicators

Published on: 05/24/2022

In this edition of Chart Talk, Tony Ogorek and Jeff Viksjo discuss two economic statistics: U.S. retail sales versus consumer sentiment.




Welcome to another edition of Chart Talk.  I’m Tony Ogorek.  I am here with Portfolio Manager Jeff Viksjo.  And today, Jeff, we’re going to be talking about a tale of a couple of economic statistics.  Specifically, we’re looking at U.S. retail sales versus the consumer sentiment index.  And something doesn’t seem to add up here.  What do you see?



Retail sales are on the left in green, this is showing what consumers are spending.  It’s going straight up to new highs.  And then consumer sentiment, what consumers are feeling about the future, their own prospects is declining.  Those two don’t make sense. Typically, they’re linked.



Yea so, what’s interesting when you look over at the right, in terms of consumer sentiment index, we’re seeing that we’ve got nearly record low unemployment levels.  So, pretty much everybody who wants to have a job, can have a job. We see these help wanted signs all over the place. Second, we’ve had three consecutive years of double digits returns in the stock market, which has put money in people’s pockets.  We’ve also had very significant Federal intervention, where they’ve, sort of, had helicopters dropping money on people and organizations in order to pull out of the pandemic. And you would think with all that money floating around that people would feel better, but they’re not feeling the love right now.



Yea and I think as to why not, I think the answer’s inflation.  That consumers are out there, they’re seeing prices going up, and they’re worried about the future, that they’re going to keep going up.  But coming out of COVID, they’re still ready to spend.  Those higher prices aren’t yet ready deter them.



Right, and they have the money to spend also.

Thank you for joining us for this edition of Chart Talk.  We look forward to seeing you soon.


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