Tracking consumer spending

There’s been some concern expressed recently about the lack of strong sales growth for retail outlets.  Some see this as a sign of a sluggish economy and therefore cause for worry. How do you read this? N.C. State University economist Mike Walden responds.

“Well, I don’t read it as suggesting too much worry because I take a broader view, perhaps, of consumer spending than simply focusing on retail outlets.

“I think most people would know that how people buy things has changed dramatically over the last 10 years. Internet buying is still on the upswing, and much of the data that we see for retail outlets does not include that. So that’s one point to be made.

“The other point to be made is that I think consumers are still adjusting to the post recessionary environment in the sense that during the recession, they really cut back on buying big ticket items. And of course, the two biggest ticket items are homes and vehicles. And we’ve had now a surge in the last year really in car sales and truck sales, and now we’re seeing a surge in home sales.

“Those numbers don’t necessarily get reported in those retail outlets because, obviously, those purchases are being made in a different way. So I think we’re still seeing an expansion of consumer spending. It’s still slow. Overall, it’s still slow by post-recessionary standards, but nevertheless, I still think it is on the upswing.”