Skip to comments.ROSENBERG: One Of The Most Reliable Economic Indicators Peaked In July (Eating Out)
Posted on 12/05/2012 9:48:16 AM PST by blam
ROSENBERG: One Of The Most Reliable Economic Indicators Peaked In July
December 5, 2012
When the official headline economic indicators don't work, savvy investors turn to the unconventional economic indicators.
In his latest Breakfast With Dave note, David Rosenberg visits a signal being sent by the restaurant sector:
EATING OUT IS OUT
Our hedge fund desk has always told me that among the most reliable cyclical indicators for the American consumers is the restaurant sector. Traffic is slowing down precipitously and the companies are issuing negative guidance.
I took a look at the monthly details from the latest PCE data and saw that in nominal dollars, consumer spending on eating out sagged 0.4% in October and has contracted now in three of the past four months. The YoY trend peaked at +5.7% in July and has since slowed to +4.4% which is the softest pace in eight months (the three-month trend which a year ago was running at 7.5% at an annual rate is now close to stall-speed of 2%).
As a sign that families are becoming more cautious in their spending and eating habits, grocery shopping is up in two of the past three months and at double the trend (at4%) of the restaurant industry.
ECRI's Lakshman Achuthan has argued that the economy went into recession in mid-2012. This evidence seems to support that thesis.
(Excerpt) Read more at businessinsider.com ...
I don't ever eat breakfast. (I know that breakfast is touted as the most important meal of the day)
It’s just my wife and I at home now so we eat out more than we should. I also entertain customers while when travelling so I see a lot of restaurants and a good cross section of Quality from Morton’s to Applebees and I can tell you that dining out is waaaaaay down. My wife and I stopped in at an Applebee’s last Friday night about 8:30 and were the only people in the joint the entire time it took to eat our dinner.
It seems like restaurants have really jacked their prices since this past summer. If you mix in high gas prices and higher food prices something has to be cut?
You should eat your breakfast. Today, my breakfast consisted of a coke and a slice of Mrs. Smith’s apple pie.
The last time was when we had some company in from out of town and went to our local Diner.
While it was pretty full, it was during the "specials" hour, which gets you more for your money.
We just cannot afford to go out and eat like we used too.
I remember up until just a couple of years ago, any and every semi special occasion off to Red Lobster we would go.
Now we can't afford to go even for like Veterans day.
Thanks for that Ubama, making us like the rest of the world, I so wanted to live like they do in Chad. I hope you burn in hell.
No surprise. Maybe the public is finally realizing that the cost of dining out has gone sky-high over the past years. I have watched the casual restaurant check for two people over the past several years balloon from around $17 including tax and tip to around $32 to $36 today, here in California. Just in the past year alone, that check size has increased by at least $5 or more.
Every time I see what appears to be a brand new menu, I check the date printed (usually on the bottom of the back) to see if it recently was printed. If so, I look at the prices to see the increases. We are seeing new menus printed twice a year. End result is that we are dining out less and using discount coupons more.
I think this indicator is spot-on. We don’t eat out - at all - these days, unless otherwise unavoidable. I’d say less than once a month at a real, honest-to-goodness sit down at a table and order from a menu restaurant. Fast food and pizza less often than before, too.
And a huge part of that is the cost and a tight budget.
We haven’t eaten out since January. We do get takeout once a week or so, but that’s not nearly as expensive. My husband roasted a large chicken last week end, and then made soup with what was left over. Delicious and so inexpensive compared to a restaurant!
Ummm... you might want to re-read what you wrote. I don’t think it means what you thought it meant.... or maybe it DID?
Excellent. Leftover pizza is also good for breakfast. :)
Be should really do that at home, or at least get a hotel room.
I bet it peaked on Chik-Fil-A day.
Four 20 ounce choice ribeyes at Costco = $40. Cut each in half and it is $5 per person. Rest of the meal is less than the cosr to drive to the local steak house and tastes better.
LOL I was thinking the same thing
Depending on the tax impacts, I may be making even more adjustments to my dining habits.
Since there aren’t as many people at their fav place anymore
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