Watching the Road Signs for a Look Ahead

March 26, 2013
Plan for growth in most markets in 2013, but don’t be blind to the road signs that may tell us we have a different trend ahead for 2014.

Retail sales last month were sluggish, especially when compared to a year ago (down 0.1% year-over-year).  It would be tempting to think that the seemingly weak performance was tied to the tax hike that working Americans experienced beginning in January.  While this can’t be totally discounted, it doesn’t appear to the the case. 

As was reported in the Wall Street Journal, the personal finance website Bankrate.com survey showed that 48% of consumers didn’t notice a change in their 2013 paychecks.  It is either nice to be blissfully unaware, or perhaps some folks that took the survey didn’t actually get paychecks. 

The bottom line is don’t expect dramatic foreboding from consumer data for a while yet; it is too soon to see the trends turn problematic in accordance with our 2014 macroeconomic forecast.

February New Home Sales came out, and the year-over-year increase of 10.0% was apparently a stimulant to the stock market on March 26.  However, when we look at the trend, we see that a 10.0% year-over-year gain is the slowest pace in 12 months. 

Continuing that trend will mean that a cyclical reversal is developing in New Home Sales.  We should have a statistically significant transition around midyear and that will be the road sign for 2014.

Plan for growth in most markets in 2013, but don’t be blind to the road signs that may tell us we have a different trend ahead for 2014.

About the Author

Brian Beaulieu | CEO

Brian Beaulieu has been an economist with ITR Economics since 1982 and its CEO since 1987. He is also Chief Economist for Vistage International and TEC, global organizations comprised of over 13,000 CEO’s. At ITR, Brian has been engaged in applied research regarding business cycle trend analysis and the utilization of that research at a practical business level. 

For the past 25 years, he has been giving workshops and seminars across the US and Canada to thousands of business owners and executives. 

Prior to joining the ITR Economics, Brian was an economist for the US Department of Labor where he worked on the health care component of the Consumer Price Index. 

Brian is co-author of the book, Make Your Move.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!