Biz

Restaurant Recession Is Already “On”

Is America already in another recession?  Maybe … The fact we’re even asking that question probably isn’t a good sign, is it? Nope … Anyway, there are dozens of economic indicators you can look at to try and answer that question … but one we’ve been paying especially close attention…

Is America already in another recession?  Maybe …

The fact we’re even asking that question probably isn’t a good sign, is it?

Nope …

Anyway, there are dozens of economic indicators you can look at to try and answer that question … but one we’ve been paying especially close attention to lately is called the “Restaurant Performance Index.”  Published monthly by the National Restaurant Association, this metric “tracks the health of and the outlook for the U.S. restaurant industry.”

How’s it doing?

You’d think it was doing pretty well … right?

“What sector would you expect to benefit more from freed-up spending thanks to lower oil prices?” asked economist Harry Dent in his latest column.

Unfortunately, the index “fell sharply” in December – the latest month for which data is available.  In fact the decline experienced looked eerily familiar to a previous drop-off back in late 2007.

(Click to enlarge)

restaurant-performance-index

 

(Graph via National Restaurant Association)

For those of you keeping score at home, the way this index works is simple: Anything above 100 is expansion, anything less is contraction.

“December marked the first time since February 2013 that the RPI stood below 100, which signifies contraction,” the association wrote on its webpage, citing ‘broad-based declines” in both in the current situation and “expectations indicators.”

In other words things are not only bad … they are showing no sign of improvement.

“It gets really ugly when you start digging into the index,” Dent wrote.  “For example, 73 percent of restaurants reported higher same-store sales in July. As of December, only 42 percent of them do.  Ouch.”

Dent also noted that only 13 percent of restaurants were reporting lower same-store sales last April – compared to 43 percent in December.

“That’s a pivotal shift in momentum!” he wrote.

Indeed it is …

This is not one of those “perma-bear” websites.  We don’t believe in perpetually dooming-and-glooming the national economy.  But we’ve also been to the “rainbows and unicorns” fantasyland – and we’re sure as hell not buying what they’re selling.

We’re said it before, we’ll say it again: America’s economy can be rescued – but doing so will require radical reorientation of the governing philosophy in Washington, D.C.  For example, there can be no more perpetual incentivizing of dependency.  No more status quo deficit spending.  No more crony capitalism (a.k.a corporate welfare).  No more invasive bureaucracy.  No more reckless global interventionism.  No more open borders.  No more secretive central bank “stimuli.”  No more rigged trade deals.

Things can change economically … but they won’t change until there is an ideological sea change in our nation’s capital.

***

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30 comments

Bible Thumper February 21, 2016 at 2:11 pm

Does anyone else notice how Fits reaches for obscure stats for his gloom and doom narrative. First, it was South Carolina’s worker participation rate, (WPR) which he rarely mentions since it started improving in May 2014.

Then he started using the Bloomberg economic comfort index, which was supposed to predict that the US was headed toward recession. That was a while back. Hasn’t happened.

Now he says that Restaurant performance index might be an indication that we are already in a recession.

Anyway, there are dozens of economic indicators you can look at to try and answer that question … but one we’ve been paying especially close attention to lately is called the “Restaurant Performance Index.”

If Fitsnews was truly paying close attention to it, then why wasn’t there an article a few months ago that this index reach positive levels not seen since 2004? Also, why does the current drop look like 2007 and not 2005 or 2011, when no recession occured? (See above chart)

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Will Folks aka Sic February 21, 2016 at 2:51 pm

I just said I wasn’t glooming and dooming it, bro …. I just said that. What is ya, ig-rant?

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stumpknocker February 21, 2016 at 3:39 pm

can’t wait to read the article about the cocksuckers that hack you are staring at some jail time and or a hefty fine.

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Bible Thumper April 2, 2016 at 4:25 pm

Two months of the Restaurant Performance Index have been published since this article, yet…. I thought you weren’t a perma bear.
http://www.restaurant.org/News-Research/Research/RPI

You said:

Anyway, there are dozens of economic indicators you can look at to try and answer that question … but one we’ve been paying especially close attention to lately is called the “Restaurant Performance Index.” – Fitnews

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stumpknocker February 21, 2016 at 3:33 pm

you have to read the fine print Thumper, anything over the 100 line represents expansion, so the restaurant industry has been in decline for one month according to Sic’s graph. OH SHIT the freaking sky is falling, yell it from the roof tops the restaurant industry had a bad month, run for your lives, ONLY TRUMP CAN SAVE US NOW!

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idcydm February 21, 2016 at 5:27 pm

Even the Dems on the campaign trail are complaining about the economy.

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stumpknocker February 21, 2016 at 5:33 pm

that is one of the universal lies that has pissed off so many voters, ALL candidates say they can do better with the economy

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idcydm February 21, 2016 at 5:46 pm

One of my favorite Obama quotes:

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that, “the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” ~ Senator Barack H. Obama, March 2006

stumpknocker February 21, 2016 at 5:57 pm

yep, read my lips no new taxes, but Bush 41 put the country before his own career, when he saw he had to raise taxes, he committed political suicide and raised them instead of finding bullshit reasons to stay the course. he may very well be the best president in my lifetime.

idcydm February 21, 2016 at 5:59 pm

Here’s my second:

“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents — #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.” – Barack Obama, July 3, 2008

stumpknocker February 21, 2016 at 6:04 pm

i thought it was a big mistake for my party to nominate him, way too inexperienced as your last 2 post point out, i’m not going so far as to call him a liar, it is more like he did not know what he was talking about.

idcydm February 21, 2016 at 6:14 pm

He knew exactly what he was talking about, he didn’t care he was running for President. He wasn’t lying but if you’re going to talk the talk you better walk the walk. You see I agree “America has a debt problem and a failure of leadership. Americans deserve better.” and “That’s irresponsible. It’s unpatriotic.”. You could say Obama’s words were a self fulfilling prophecy…leadership failure, irresponsible and unpatriotic.

stumpknocker February 21, 2016 at 6:29 pm

the only way to turn this mess around is to raise taxes, get health insurance companies out of the loop, prosecute those gaming the system and make our allies pony up their fair share when we have to do police actions abroad. half of what i said no democrat would vote for and half no republican would vote for and because of that we will all remain fucked until we get together as a country and address our problems as a united front and quit going at it willy nilly.

idcydm February 21, 2016 at 6:38 pm

Tell how much do you think your and my taxes should go up and what about those exemptions we get? Don’t you think it would be a good idea if the government eliminated some of the BS funding they are doing to include the government and private sector?

stumpknocker February 21, 2016 at 6:43 pm

take the tax scales when eisenhower was in office and average it with the scale we have today, and yes we need to be a lot smarter with our funding but it is not all bad investments, the GI bill for example.

stumpknocker February 21, 2016 at 6:47 pm

and factor in inflation with the tax scales and do it over a ten year period of time, there is no quick fix to this, we re access over time.

idcydm February 21, 2016 at 6:57 pm

How old are you stumpknocker, were even alive when Eisenhower was president? When Eisenhower was president even minimum wage earners paid income tax and there was no earned income credit. The highest tax rate, no one paid it just like now.

My tax plan…eliminate all deductions and everyone pays the same rate, the more you make the more you pay. I’ll even let you pick the rate. Corporate taxes lower them because it’s we the consumer that pay them.

stumpknocker February 21, 2016 at 7:00 pm

yes and i know where i was when JFK died and i watched oswald being shot on tv, i remember when my family went to a party to see the NBC peacock in color on a neighbors tv, back then that was about the only thing that was in color.

idcydm February 21, 2016 at 7:02 pm

Me too.

stumpknocker February 21, 2016 at 7:08 pm

we had BB gun wars back then if you got caught in a 2 on 1 situation, you opened fire on the biggest pussy first then battled out with the other kid but if you got caught in a three on one, you where doomed

idcydm February 21, 2016 at 7:39 pm

I was in a few of those, I had a Daisy pump and fired it from the hip when things got hot.

stumpknocker February 21, 2016 at 7:47 pm

yep, you fired for your life, anything to avoid the dreaded balled up in a ball screaming for your mother while a half dozen of your best buddies were riddling you with bbs

idcydm February 21, 2016 at 7:52 pm

One time I took careful at a bird and shoot it right in the head, it died flopping all over the place. Mom watching from the kitchen window, gave me holy hell, but Mom I said I was just trying to scare it. Don’t think she believed me, and rightly so.

stumpknocker February 21, 2016 at 7:56 pm

i did that too, more than once, but i’ll never do it again and i wish i had’nt but i think it is human nature to break things growing up, yourself and the world around you.

stumpknocker February 21, 2016 at 7:58 pm

i mean yourself as in all of us, not you personally

Tennessee February 21, 2016 at 5:40 pm

I have been in the business for a little under two decades, and I must admit we have developed a good customer base with high disposable incomes therefore we are incubated at times. However, I feel it is not a lost cause to point out at that sales aren’t remarkably better due to the general public’s pockets being heavier due to gas prices being so low. The lack of expansion is a good argument to be made. We all (no matter what field) just need to keep being the best we can and try to get some fiscally responsible candidates in office. Good article. I try to look at everything to figure out what the heck is going on.

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opengovernmentup February 22, 2016 at 8:04 pm

It would help if our candidates and then our elected officials could and would understand a budget. I had a professor describe the different types of taxes each candidates talked about and I don’t believe there really is a fair tax. I did like her idea of a sales tax across the nation except on housing, medical, food, and utilities. We had 680 billion dollars in goods shipped around this country last year, we could get out of debt in a few years depending on the percentage. If countries in SC and raise millions on a one cent sales tax, what could the government raise?

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TankMcNamara February 22, 2016 at 9:24 pm

i don’t know anything about a “Restaurant Performance Index” but i use my own “Its Too Damn Expensive to Eat Out Index”. I enjoy going out and having a beverage and dinner but just about everywhere has priced me out for the quality. However, I must be in the minority because whenever I do go out, especially in the Vista, every place is pretty crowded.

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euwe max February 23, 2016 at 12:19 pm

If you really want to give the economy a shot in the arm, make everything use linux… that way everyone will be employed trying to fix it.

Reply

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