Retail sales up 8 percent from last year
Today, the released its showing an increase of 0.5% since March bringing the total increase since last year to 7.6% on an aggregate of all items including food, fuel and healthcare services.
Nominal discretionary retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales, on the other hand, declined 0.64% from March falling 1.44% below the level seen in April 2010 while, adjusting for inflation, 鈥渞eal鈥� discretionary retail sales actually declined a notable 4.39% over the same period.
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.
The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.
As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.
Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI 鈥渓ess shelter鈥� for S&P/Case-Shiller Composite) the 鈥渞ough correlation鈥� between the year-over-year change to the 鈥渄iscretionary鈥� retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.
--------------------------
海角大神 has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.
