Macro Monday 36~U.S. Johnson Redbook Index (U.S Retail Sales)Macro Monday 36
The Redbook Index – U.S Physical Retail Store Sales
(Released Tomorrow Tuesday 4th March 2024)
This Johnson Redbook Index is very useful at providing the most current insights into consumer spending habits in the U.S. It is released every week covering the prior Mon – Sun consumer spend period in physical outlets around the U.S.
The index is compiled by Johnson Redbook Service by surveying a sample of 9000 retailers, and tracks year-over-year changes in sales of stores that have been opened for at least one year.
The Redbook Index historically tracks sales information from physical stores (Brick and Mortar Stores). Their website describes that they monitor "retail sales" and "same-store sales" which typically refers to physical locations, however some stores also now have an additional online presence, thus in recent years efforts have been made to incorporate some of the online sales data into the index, however this is a secondary and marginal.
The Chart
The Redbook Index provides the YoY percentage increase or decrease of USD in retail sales in the United States. It is released every week covering the prior Mon – Sun spend period giving a real time read on current consumer spending
It being a YoY data release means the percentage change in the Redbook Index is typically measured by comparing the current week's retail sales to those of the same week in the previous year. This calculation is expressed as a percentage to show the increase or decrease in sales over that time period.
Example: If retail sales for the current week are $110,000 and sales for the same week last year were $100,000, the percentage change would be * 100, resulting in a 10% increase.
The chart above illustrates the following:
▫️ The average % from 2005 to 2024 is 3.59% (black line in middle). We shall use this as our average midline barometer of retail sales.
▫️ Moderate levels of retail sales appear to fluctuate between +6% and -0.1% (white area in the middle).
▫️ We have an Exuberance Zone (Green) for when retail sales were over extended to the upside and a Recessionary Zone (Red) which was penetrated during the last two recessions.
▫️ You can see that in the mid 2000's we bounced off the Recessionary -0.1% zone three times as the index also made a series of lower highs (see arrow). This could be perceived as waning or struggling retail spending ahead of the crash. At present we have a series of lower highs and we have bounced off the Recessionary Level (-0.1%) once, if we see continued lower highs and more bounces from the red zone, this could be a concerning repeating pattern.
You will be able to press play on my TradingView page at any stage over coming months to see where this index has moved on this chart.
Lets see how this index performs over coming weeks and months.
PUKA
