The drought in new data ends tomorrow with consumer inflation. In preparation, let’s take a look at real aggregate payrolls.These increased by 0.2% in December, one of the lower readings in the past 2 years: 
On a YoY basis, aggregate nonsupervisory payrolls increased by 5.8%, compared with consumer inflation in November, which increased by 3.1%: 
Recall that over the long term, real aggregate payrolls YoY have been an excellent coincident marker of recession: 
They have typically made a rounded peak roughly 6 months before its onset. With real aggregate payrolls being up over 2.5% in November, and at a new record, the expansion has remained on solid footing.Yesterday I posted another installment of “consumption leads jobs,” so I decided to take a look comparing real retail sales (blue in the graphs below) with real aggregate payrolls. I’ve split it up into three historical segments for better visibility.Here is 1965 through 1993: 
Here is 1994 through 2019: 
And here is the post-pandemic record: 
As usual, real retail sales are somewhat noisy, and the relationship is not perfect. But in general, real sales have tended to lead real aggregate payrolls by 1-2 months, especially as a smoothed average. Because of the noise, I don’t think we can use the former to forecast the latter, but because each measure independently has been generally reliable, watching them together will be particularly helpful.I will update again tomorrow or Friday after the inflation report.More By This Author:The Unemployment Rate And Consumption: Weak, But Not Recessionary December Jobs Report: Sectors Of Weakness And Strength December Jobs Report: Consistent With A “Soft Landing,” Despite Discordance In Household Data
