Excess Returns · Friday, August 14, 2026
Jim Paulson points out that retail sales, as indicated by the Johnson Red Book index, saw a jump early in the year likely due to inflation boosting nominal sales figures. However, with moderating price increases, sales have returned to levels seen in previous years, showing little real growth and aligning with weak job market data.
“This is, uh, Johnson Red Books weekly, uh, indexes of same store retail sales. It clearly, you can see, jumped up early this year. I think a lot of that had to do with inflation. This is the nominal number. And if you raise the price of, uh, goods, guess what? Uh, retail spending goes up.”
“I'm not sure it's, uh, you know, inherent, real purchasing power, but but it goes up. And now we're seeing some of those price inflations things start to come down a bit and it's kind of comes back down to earth.”
“Uh, overall, it's not that far right now from where it's been for the last few years. And so I don't know if we've had much pick up in retail, which would reflect, we haven't had much pick up in jobs.”