THE BASIS POINT

The Consumer Is in First Gear

Retail

ICSC-Goldman Store Sales

Store Sales – Week/Week +1.8%
Store Sales – Year/Year +3.5%

Redbook

Store Sales Year/Year +2.5 %

One might think that what has happened it that more sales moved to the Internet but the Consumer Metrics Absolute Demand index is still flat and somewhat puzzling. This is a measure of online discretionary spending. It surged last June and July and then tapered off. If Chain Store Sales are weak and online spending is flat then consumers are not increasing spending rapidly enough to support necessary growth in GDP. The GPD report for 4thQ2011 showed that consumer spending had increase at an annual rate of only 1.44%. This is after significant fiscal and monetary accommodations. Consumer spending drives the economy.

The consumer has the economy in first gear.