ROSENBERG: One Of The Most Reliable Economic Indicators Peaked In July (Eating Out)

TBI ^ | 12-5-2012 | Sam Ro

[blam]

ROSENBERG: One Of The Most Reliable Economic Indicators Peaked In July

Sam Ro
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.

[exit82]

Looks like the mods are erasing all signs of its existence. Only us lucky few will ever know...

Well, they got post 7, but forgot post 6........

[sanjuanbob]

We’re not the lucky ones...she is!

[kevkrom]

They missed a few others, too, but I wasn’t going to help them on this one...

[Myrddin]

I prefer consistency to illness. I tried to eat the grilled chicken Mexican Caesar at El Torito's. I was sick for 8 days due to gluten contamination. I can substitute a 9 oz steak and baked potato with butter only at Applebee's without harm...except for another $5 added to my bill.

[Polynikes]

Uhh are you sure you want to phrase it like that?. Remember prepositions are your friend :~)
http://www.merriam-webster.com/dictionary/with

[MrB]

They can erase all they want, I figured out what the typo was, and they can’t erase my mind... :)

[MrB]

OK, yes, it was even funnier in context than otherwise.

[MrB]

the funny part was
“there just weren’t as many people there as usual”

[tm61]

everything is much more expensive . inflation is higher than the govt is telling us. go to a grocery now, see what $50 buys you.

[Mr. Jeeves]

My Dad is a small business man and he is saying he hasn’t seen the economy and business this bad ever and he has been in business since 1958.

I am a small business man, and I agree.

I'm not sure how Obama is keeping this out of the media - even his putative enemies are going along with the CNBC rah rah.

[riri]

I took my (2) kids to Red Robin on Saturday for lunch. I ordered the special burger (only $6.99), my son ordered off the kid's menu and my daughter ordered a wrap sandwich. 3 cokes. The bill was $38 by the time I tipped. I about fell over. Burgers were between 10-12 dollars. Who can afford this right now? I predict even more empty commercial real estate by next summer.

A couple of these chains will survive and we will be like Europe where dining at a casual restaurant like Fridays is easily $100 or more.

[outofsalt]

"They can erase all they want, I figured out what the typo was, and they can’t erase my mind... :)"
That makes you a cunning linguist!

[Some Fat Guy in L.A.]

Prices have been jacked through the roof, even for fast food and basic chain fare. Don’t even want to know what it costs to eat at a real restaurant these days. Eating out is now a luxury rather than a convenience for many of us.

Considering that basic food items just went up another 25 - 30 cents over the last few weeks (that’s at Wally World - it’s probably more at other stores), I can understand why eating out is so expensive - but it gets to a point where it’s just not worth it.

[TBall]

I went out to the movies over Thanksgiving. the tickets were not that bad, but the concessions were outrageous. No thank you I will not be doing another movie anytime soon.

[TBall]

Thankfully I got a lot of fish and venison in my freezer for the winter.

[taterjay]

It is 6pm the post 6 and 7 are gone and I am still laughing from seeing this at 1 pm.

[muggs]

I’m glad my boss wasn’t in the office today when I read this thread. I would have hated to have to explain why I was laughing so hard. (Although he would have thought it pretty funny too.)

[greeneyes]

Sheesh, I didn’t get to read either post 6 or 7. I needed a good laugh too.

[taterjay]

1130 pm and I am still laughing.

[MrB]

Looks like they found #6...