Anybody that knows me is aware of the importance I place on population metrics in the sphere of economics. We do not get demand without people. Supply does not just miraculously appear, people work and make goods and services. So it is not overstatement when I say there are fundamental ways that people matter for economic outcomes. Every so often though, we go into an odd place. I recently attended a presentation by a Chief Economist for a mutual fund company and he showed a graph qualitatively similar to the following,
The Census Bureau released the Advance Sales Report for Retail and Food Services today (available here). While not stellar the nominal increase in sales, year-over-year, was three percent. The Conference Board also released their report today on Consumer Confidence, and it fell significantly (available here). This is why I posted that it matters more what people do than what they feel or say they will do in the future.
We had an active discussion in the last week regarding consumer opinion/sentiment and spending, the actual amounts they buy. Colleagues were surprised by my assertion that the relationship is not as well defined as many believe. Specifically, improvements in sentiment are essentially meaningless. They do not necessarily translate into changes in spending. The graph here shows the two.
Recently, the Economist had a special feature on economic growth. One of the consequences they pointed out related to growth was improved survival of endangered species. I do not think we need to verify that work at this time, though it got me thinking about the consequences of economic growth for economic policy.
It seems odd to think that we should now feel happier given that the responsibility for solving the immediate fiscal mess falls to the Senate. The House and the Senate Republicans have been at odds with each other publicly over the last several weeks. A significant part of the issue is the difference in electoral concerns for Senators when compared to the Representatives from the House. Larger electoral districts generally include more diverse sets of opinions and as a result the entirety of a state requires differing approaches from the House districts.