November retail sales rose a bit less than expected, but growth since the recovery got underway has been fairly impressive. Nominal retail sales are now at a record high, 5.5% above their pre-recession high, despite the fact that non-farm employment is still 6.3 million below its pre-recession high. Even after adjusting for inflation—which has not exactly been quiescent—real retail sales are only about 1.5% below their prior high while employment is 4.5% below its prior high. Today's workforce is a lot more productive than it was just a few years ago, and consumer confidence and willingness to spend has apparently not been much affected by the sluggish recovery.
Mark Perry adds some color: "Retail spending in November was 6.7% higher than the year-earlier level, and spending in every category except department stores (-3.0%) registered annual gains last month, with especially strong gains in auto sales (+7.5%), miscellaneous stores (+7.7%), gasoline stations (12.9%) and nonstore retailers (+13.9%). Excluding gasoline sales, retail sales increased by 6% on an annual basis."
"Even after adjusting for inflation—which has not exactly been quiescent"
ReplyDeleteActually, the last readings for PPI, CPI and unit labor costs were all negative....I don't know you get more quiescent that that...
The TIPS market suggest low inflation for many years ahead....
Speaking of Mark Perry, he has a great chart today on the fraction of median income going to mortgage payments. At a record low.
ReplyDeleteOwning a house is cheaper than ever in the USA!
Don't see how this suggests inflation or hype-inflation.
BTW, it may be one of the best times ever to buy a house, for investment or to live.