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May 31, 2011
Continued operator optimism keeps April RPI positive
Fifty percent of restaurant operators reported a same-store sales gain between April 2010 and April 2011, down slightly from 52 percent of operators who reported higher same-store sales in March.
What did the other fifty percent report?
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
12 hours ago
11 comments:
Who cares, we only report gains!
We need a graph of US average BMI vs restaurant index or eating index, lets see what we see!
D'oh! ;)
Here's what really gets me. The CPI was up 3.2% over the period. Even with zero real growth, the typical restaurant should see 3.2% same store sales growth.
Yet half didn't even see 0.1% same store sales growth?
And this is a reason for optimism?
Restaurant operators remain bullish about sales growth in the months ahead. Forty-seven percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down slightly from 50 percent who reported similarly last month.
That means 53% do not expect to see any sales growth in the next 6 months. How exactly is that bullish?
Speaking of inflation, Doug Short did some cool charts on the GDP using three different measures of inflation. Using the CPI, Q1 GDP was -1.3% !!!
http://dshort.com/articles/Real-GDP-alternative-deflators.html
I think the expectations component, which is a big part, should be stripped of many indicators. This is AMERICA, not some crap country, we are always optimistic, waste of data. I think at the 2009 lows 80% were optimistic of a turnaround and it had not changed the whole time down.
Mr Slippery,
Interesting link. Here's my take on it for what it is worth.
September 18, 2009
CPI vs. GDP Deflator
Generally speaking, the two indexes track each other fairly closely. The article offers an example showing how an extraordinary event can cause the two indexes to vary widely though. I'm going to offer my own example so that I can plug in actual numbers.
I then offer an example if you wish to read it.
I think the GDP deflator is the better way to measure economic activity when it comes to GDP (as it allows for full product substitution). However, it does not show the quality of that activity.
For example, if everyone in our country switched from buying cars to buying food then the GDP deflator would show that economic activity is fine. The CPI would be in horrible shape though. The CPI does not allow for car to food substitution. If food prices went to infinity, so would the CPI. The GDP deflator would not.
GYSC,
I think the expectations component, which is a big part, should be stripped of many indicators.
I hear that. If I thought expectations mattered then I would be buying long-term treasuries without inflation protection. Why bother buying TIPS and I-Bonds? The bond market shows inflation expectations out 30 years. It isn't concerned in the slightest.
Of course, it did freak out big time in the other direction when deflation struck with a vengeance. It didn't exactly see that coming. You'd think if it could see 30 years into the future then it could see a few months into the future. You'd think! Hahaha! ;)
It's kind of like weathermen telling me what the likelihood of rain will be in Seattle 10 days from now. It is about as useful as a random dartboard.
Wait a minute --- isn't the economy determined by rational expectations?
Cheers!
JzB
Jazzbumpa,
From your link:
People also know (because they think rationally, like economists, and have perfect foresight) that future economic and population growth, productivity increases, and inflation will obviate (to some extent) the personal cost they’ll incur from those future taxes. (Assuming they even live long enough to pay them.)
I must be very irrational.
* I don't see the future economic growth that he seems to see. I think we peaked in 2000 and are attempting to replace the missing growth with a mirage.
* I don't think population growth is nearly as important as employment growth. Employment growth (as seen in Civilian Employment) has grown at a 0.2% annual pace from April 2001 to April 2011. Meanwhile, our total government debt has grown at a 9.5% pace over that same period. 0.2% is negligible and insignificant compared to 9.5%.
* I think our productivity increases have reduced the need for future workers and have led to increased income inequality (which also hurts economic growth). Put another way, we are finding ways to do more work with fewer workers faster than we are thinking up new jobs. Call me a pessimist, but I expect this to continue as more and more automation trickles into our lives.
* Inflation will not protect me from taxation. Inflation IS taxation! It is a cowardly form at that. As an example, if inflation hits 20% and stays there then the taxation on my inflation protected treasuries will financially ruin me over time.
I therefore do think of government spending as deferred taxation or quite possibly even worse (deferred economic collapse).
People also know (because they think rationally, like economists, and have perfect foresight)
It is clear that the foundations of academic economics are completely, obviously, and provably wrong. I can only speculate on how and why it continues to be taken seriously, but I would prefer not to air those conspiracy theories.
One more thought.
(Assuming they even live long enough to pay them.)
So in other words, rational people may die before the bill comes due.
You would think that a truly rational person would be looking to improve those odds. Based on this economy, I suggest amateur race car driving, hang gliding, bungee jumping, mountain climbing, and skydiving combined with excessive alcohol, lol. Sigh.
Sorry. Just more gallows humor.
Mr Slippery,
Hey, I love a good conspiracy theory as much as the next guy. Throw enough out there and eventually one might even be right, lol.
It just drives me nuts when some are stated as fact.
Speaking of which...
'Deadliest Catch' Recap
Captains Jonathan and Andy Hillstrand decided to play a little prank on Sig Hansen on the Northwestern by turning off their lights, disconnecting their GPS, and lighting a bunch of lanterns and releasing them into the dark sky. Sig Hansen sees the lanterns and freaks out and begins to shout “What is that,” which was absolutely hilarious. Sig thought the lanterns were other boats or UFO’s and starts shouting out to his crew. Before things got too crazy, Jonathan Hillstrand got on the radio with Sig to reveal himself and then turned all the lights back on the Time Bandit so Sig could see them. It was a pretty good prank.
It was very amusing to watch. They got him hook, line, and sinker. :)
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