SHI Update: 06/15/2016

As I write this SHI update, the FED completed their economic ruminations and decided that they would, once again, leave interest rates as is.  Unchanged.

If you’d like to read the FED press release, here it is:

https://www.federalreserve.gov/monetarypolicy/files/monetary20160615a1.pdf

OK…what’s happening today at our southern California highfalutin steakhouses?  Are the New York strips still flying off the griddle?   Are the baked potatoes still fully loaded?

Let’s take a look.   And, as always, if you need a quick refresher, take a look at the original blog: https://terryliebman.wordpress.com/2016/03/02/move-over-big-mac-index-here-comes-the-steak-house-index/

Why you should care:  The US Department of Commerce ‘Bureau of Economic Analysis’ publishes the most recent GDP figures the instant they’re available.

Here’s the problem:  GDP numbers are not proactive … we seem them months after economic events have occurred.  Which means we can’t make financial/investment choices – personal or business – before the economy turns sour … only after.

Not good.   We want advance notice of an economic decline.   The SHI may help give you that.  Our objective with the SHI is to be predictive, to anticipate when the economy is going to ‘turn’ and give you the ability to take action early – not when changes are too late.

Taking action:  Just keep up with the weekly column.   If the index changes appreciably – either showing massive improvement or significant declines – indicating expanding economic strength or a potential recession, we’ll discuss possible actions at that time.  Trending is very important…and we’ll watch the trend.

THE BLOG:  If you were hankering for a big, juicy rib-eye from Mastros, you should have made reservations on Tuesday.   Because there’s nothing available today.   Well, that’s not entirely true:  They have a table for 4 at 9:30.   Hmmm….too late for me.

But good news:   The Capital Grille has openings!  🙂

This week the SHI jumped to a positive 17.   This is quite an improvement from last week – a positive 4 – and seems, again, to mirror the generally higher level of economic activity we’re seeing in the Nowcast.

Here are the last two SHI grids and readings (as always, click on the image to enlarge):

As you can see, Mastro’s is booked solid.   Mortons and Ruth’s Chris aren’t too far behind.  With the exception of the Capital Grille, this Saturday you won’t be sinking your teeth into a Filet Mignon until at least 7:30.

Here is the updated trend analysis:

An SHI reading of 17 is the second strongest we’ve seen since the beginning.  With the exception of the (-3) reading on 5/11, we’ve seen very strong SHI readings for almost 2 months.

We’ll take another look at the Nowcast on Friday and see if their report reflects the same stronger economic activity our SHI seems to reflect.   In the interim, feel free to take another look at the last Nowcast review and blog:

GDP Nowcast Update – June 3, 2016

Have a great day!

• Terry Liebman