Friday, August 22, 2014

The consumer fades further: real retail sales per capita for July

 - by New Deal democrat

With the release of the CPI the other day, I can update on of my new favorite economic measures, real retail sales per capita.  This takes the real, inflation adjusted sales number and adjusts it further by the number of consumers doing the buying. In the past, when the average individual consumer is puling back, it is an early (as in a year or more) signal of a downturn in  the economy:

This measure is slightly below its high from two months ago. I won't really be concerned unless it stays below its May peak for at least two more months.

Now let's look at it a second way, which is the YoY% change:

As I wrote last week in a post at, there has been a "slow fade" of the consumer since 2010.  July's real number continues that fade, although again I won't really be concerned unless the YoY measure turns negative and stays there for several months.

To put this in context of a number of indicators I continually study, there is a lot of evidence that the expansion is significantly past its halfway point (which ain't too bad after a 5 year expansion), but there is no imminent sign of any actual downtrun. My big fear remains the failure of wages to make any real progress in the last 15 years.