Retail spending up, as are home values
Today, the released its (with all components revised running back to 2000) showing an increase of 0.4% from March and an 8.8% increase from April 2009 on an aggregate of all items including food, fuel and healthcare services.
Discretionary retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales increased 6.12% compared to April 2009 while, adjusting for inflation, 鈥渞eal鈥� discretionary retail sales increased 3.73% since April 2009.
While the latest data appears to indicate that the consumer is on the mend, it's important to note that retail spending is still far below the peak levels of 2006 and, in real terms, on par with the level seen in 1994.
On a 鈥渘ominal鈥� basis, there had appeared to be 鈥渞ough correlation鈥� between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.
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