Comment on U.S. Bureau of Census Retail Sales Report

Ken Goldstein, Economist, The Conference Board

More Spending Power and Sentiment Boost Spending

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Aug 13, 2013, 09:12 ET

NEW YORK, Aug. 13, 2013 /PRNewswire/ -- Consumer spending is up by 0.2 percent, but excluding autos, it's up by a healthier 0.5 percent. Consumer spending is gaining momentum as confidence, jobs, and wages are all on positive trends this summer. Of course, it helped to have some states using their new found fiscal improvement to offer shoppers tax-free holidays. The larger story is that having spent the past few years paying off debt, consumers can finally put into play some long delayed replacement purchasing. This is a story, then, about improved conditions on consumption – two-thirds of total GDP. This is the first chapter of better economic conditions in the second half of 2013, with more to come in 2014. In the following chapters, businesses will have brought on more help, leading to more hiring, spending power and spending.

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