Double Dip on the Horizon?

The Consumer Metrics Institute is an economic think-tank. For the past four years they've been tracking retail economic activity, and matching that with the government's official GDP figures. The result has been a fairly consistent prediction of economic upturns and downturns, with the sales figures generally having about a three-month lag time ahead of GDP downturns (although admittedly, by no means an exact correlation).

So why is this significant?

According to their latest chart, retail sales figures have tanked. Dramatically. Which means if the pattern holds true, we are on the verge of a second ("double dip") recession, probably starting in the next few months.

Here's the chart:

Here's their current chart on the economic contraction (March 21, 2010):

Unless the 'demand' side of the consumer economy picks up substantially over the next few weeks the blue line on the graph will drift laterally to the right. If it continues to move in that direction it will be tracing a shape unlike either the mild 2006 (green) or the catastrophic 2008 (red) contractions, indicating instead a relatively shallow but persistent contraction consistent with the oxymoronic 'jobless recovery' that nearly everyone expects.
-- CMI Commentary 3/21/2010

Further information plus more charts that suggest we're heading for another recession (or actually, may already be at the beginning stages of one) can be found at their website:
Consumer Metrics Institute

For my part, I will say that my Ebay business was down in January and February, but seems to have picked up significantly in the last few weeks. So I guess time will tell if we're entering another recession or not.