July 16, 2018

Consumer spending: The headlines and reality

The headlines: 1 Consumer spending is bustling and likely propelled strong overall economic growth in the recently completed second quarter. 2 U.S. retail sales rose solidly in June as households boosted purchases of automobiles and a range of other goods, cementing expectations for robust economic growth in the second quarter. Reality: Retail sales remain depressed. Even ignoring the original trend path, the next chart illustrates, considering only the post-recession period, that between late 2014 and mid-2017, retail sales faltered, dropping below the new and lower trend path. The recent “bustling” is the result of sales climbing back to the lower… Read More