The U.S. consumer must believe the recession is over. Retail sales increased again in April for the 7th month straight. Americans bought $366.4 billion of retail products and food last month, an increase of 0.4% compared to March, according to the Commerce Department (.pdf). That might not seem like a huge increase, but it's a lot better than the 0.3% decline economists predicted. It's also an 8.8% rise compared to a year earlier. Today's report reinforces the assertion that consumers are feeling more and more comfortable spending.
Revisions were also good news. March's retail sales growth over February was revised up from 1.9% to 2.1%. Given that huge rise in March, it's not surprising that April's comparably modest increase didn't result from across-the-board increases in the sales of all retail products. But year-over-year sales are up broadly in all categories. Here's a chart showing how some of the major components changed:
So how close are sales to their pre-recession highs? Very close. Here's a chart showing the history:
April's $366.4 billion is just 3.6% lower than the November 2007 high of $380.0 billion. April's retail sales exceeded those in February 2007. Considering the fact that unemployment is still close to 10%, with underemployment in the high-teens, that's pretty incredible. Consumers must be quite confident that the recovery has taken hold.
Note: All figures above are seasonally adjusted.
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