US restaurant industry index plunged in December
Restaurant traffic is seemingly a good indicator of how the economy is doing. Eating out is certainly a luxury and it's one of the first things consumers cut back on when they're uncertain about the economy.
That's why I'm surprised that no one in markets ever talks about the Restaurant Performance Index from the National Restaurant Association.
Yesterday, the December report was released and it plunged to the first contractionary reading since mid-2012.
Some highlights:
- For the first time in nearly three years, restaurant operators reported a net decline in same-store sale
- Restaurant operators reported a net decline in customer traffic results in December
- The overall outlook for the economy from restaurant operators was the worst in 3 years
A quick look at the index shows it's a pretty good leading indicator for the broader economy. The last time it was this low (in mid-2012), coincided with the worst two-quarter performance in the US economy since the crisis.
What's most worrisome is the speed of the plunge in December. It corresponds with weak numbers we've seen like the retail sales report and durable goods orders.
My favourite part of this release is this slick, no-nonsense video from their spokesman.
