Retail sales rise in August
Today, the U.S. Census Bureau released its latest nominal of retail sales showing an increase of 0.9% from July and an increase of 4.7% on a year-over-year basis 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 increased just 0.24% from July and a tepid 1.93% above the level seen in August 2011 while, adjusting for inflation, 鈥渞eal鈥� discretionary retail sales increased a slight 0.24% 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.
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.
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.
