Retail Sales Rise More Than Forecast; Once Again I Ask "Really?"

10-15-2010 • GlobalEconomicAnalysis.blogspot.com

Once again I am questioning the numbers. They do not fly in in relation to Gallup Poll Shows Discretionary Spending at All Time Low; Trends Support Double-Dip Theory Lower- and middle-income Americans' self-reported average daily spending in stores, restaurants, gas stations, and online averaged $48 per day during September -- down $6 from August and $16 from July. Consumer discretionary spending by these Americans making less than $90,000 a year is now at its lowest level since Gallup began daily tracking in January 2008, as the recession was just getting underway. Unless consumers have gone on a tear in the third quarter (highly unlikely with renewed slowdown in housing as well as the recent Gallup survey above), these retail sales reports are simply not believable. What's clear is the methodology is flawed. By how much is the question. The way to figure out how much is to factor in all sales tax hikes and compare state sales tax collections. I will take another look at that as time permits.