Last week, the U.S. Census Bureau released its latest nominal read of retail sales showing a significant increase of 1.6% from February and an 7.6% increase from March 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 1.19% compared to March 2009, the first nominal increase in 28 consecutive months.
Adjusting for inflation, “real” discretionary retail sales declined 1.18% since March 2009.
On a “nominal” basis, there had appeared to be “rough correlation” 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 was, 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.
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