Monday, August 06, 2012

Are retail sales a leading indicator for the economy?

As I think about what economic factors to include in a recession watch indicator, retail sales come up. It's hard to ignore the consumer/retail portion of the economy, being 70% of GDP, but I see the retail/consumer segment as the effect rather than the cause of economic activity. Sure, consumer/retail sales continue to cycle money through the economy, but it is business and government decisions about investment that actually "drive" the economy. To me, employment, unemployment insurance initial claims, and manufacturing and services activity are the important drivers for the economy.

-- Jack Krupansky

1 Comments:

At 1:43 PM EST , Anonymous QUALITY STOCKS UNDER FIVE DOLLARS said...

Retail sales can be a sign of economic weakness.

 

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