Sunday, May 16, 2010

April Retail Sales and Housing: The Rough Correlation

[mEDITate-OR:
fail to correlate the views

As CR reports to U.S., there is a REAL connection between the ability of U.S. to make our house payments and to purchase goods & services at retail.

However, as another article points out to U.S., that correlation is NOT as high right now as it has been.
People are shifting their money around - especially the strategic defaults, and the about to be foreclosed. They are making some payments and not others, in patterns not previously seen by U.S.

So, while the retail sales numbers appear better, they may also be very deceptive.


=========
April Retail Sales and Housing: The Rough Correlation
May 14, 2010

While the latest data appears to indicate that the consumer is on the mend, it's important to note that retail spending is still far below the peak levels of 2006 and, in real terms, on par with the level seen in 1994. (Click to enlarge)
The following chart shows the year-over-year change in discretionary retail sales and the year-over-year change to the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.

=========

No comments:

Post a Comment