Over the past few weeks, we've been closely monitoring high frequency data, which provides the most up to date information about the economy. Most of this data come out weekly, instead of the less frequent, and lagging, monthly indicators. With large swings in the equity and bond markets, many people have been fearful of another financial panic like we experienced in 2008.
The table above shows the high frequency indicators we've been following, and none of them show the downturn that so many are fearful of. Initial claims have risen slightly over the past couple of weeks, but at least 8,500 of last week's claims were related to the recent Verizon strike, which is now over. Both chain store sales and weekly retail sales show that retail activity is still growing within normal bounds for a recovery. And while box office receipt data from BoxOfficeMojo.com show that sales have dropped from the same weekend last year, this seems related to specific movie release dates, not a slowdown in consumer spending. The Help, released this past week, wasn't as popular as The Expendables, which did much better overall in theaters a year ago. Even without blockbuster movie releases over the past couple of weeks, box office receipts are still over $100 million per weekend. Finally, rail traffic is 2.7% higher when compared to a year ago and steel production has accelerated sharply.
These data reflect activity through August 23rd, well past the major market volatility that many feared could cause a panic. These high frequency indicators are the closest thing to real-time readings of economic activity available. None of them show a sharp downturn or a panicking consumer, and we don't expect they will in the coming weeks.
Posted on Friday, August 26, 2011 @ 4:36 PM