Retail sales increase(Read article summary)
Retail sales increased 0.8 percent from February, and 6.5 percent on a year over year basis.
Today, theÂ U.S. Census BureauÂ released itsÂ latest nominalÂ read of retail salesÂ showing an increase of 0.8% from February and an increase of 6.5% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.
Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales increased 1.61% from February and increased 5.91% above the level seen in March 2011 while, adjusting for inflation, â€śrealâ€ť discretionary retail sales increased 3.23% over the same period.
On a â€śnominalâ€ť basis, there had appeared to be â€śrough correlationâ€ť between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.
The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.
As you can see there is, 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.
Looking at the chart here (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI â€śless shelterâ€ť for S&P/Case-Shiller Composite) the â€śrough correlationâ€ť between the year-over-year change to the â€śdiscretionaryâ€ť retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.