Retail sales numbers for October were released Monday by the Census Bureau. The punditry speaks of a good number. When you have a low ball expectation of data it is easy to be surprised on the upside.
Here are plots of monthly retail sales going back to 2007.
Looks good right? Well, maybe, maybe not. The slope of the line over the month of October is actually lower than it was in 2007 and even 2009 suggesting that on a seasonal basis we should have expected a higher number for October.
The Ben Bernanke toy model of how economies work is that when the stock market rises, people are happy and will spend more. Among other things, Ben didn't factor the effect of negative home equity into the psyche of Joe Sixpack.
To measure the true position of retail sales we need to look at the data in real dollars. This rarely occurs for some reason.
So the real dollar retail sales put the present state of retail spending into context. To, I'm sure, the amazement of Mr. Bernanke, the consumer is still missing and in my opinion QE2, QE3...Q100 will not entice Joe Sixpack to spend.
Disclosure: No positions