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Investing Specialists

How Much Consumer Spending Has Really Recovered

The monthly game of expectations is not nearly as important as the well-established trend of continuing improvement in consumer spending.

Individual retailers reported same-store sales on Thursday that seemed to indicate consumer spending was not collapsing as many had feared. So far in this recovery, the key drivers have been inventory restocking, the consumer, and exports. Government has made no contribution to GDP while imports have soared, a detractor to GDP growth.

Consumer retail spending, in aggregate, has had a fairly normal recovery compared with the past 10 recessions. On the other hand, incomes and employment have grown at rock-bottom rates.

Industrial production, the other gold standard economic indicator, has recovered at a subpar rate so far but hasn't fared as poorly as incomes and employment.