Comment on U.S. Bureau of Census Retail Sales Report
Kathy Bostjancic, Director of Macroeconomic Analysis, The Conference Board
Weak Spending Power but Firmer Spending
NEW YORK, June 13, 2013 /PRNewswire/ -- The following is a comment on U.S. Bureau of Census Retail Sales Report from Kathy Bostjancic, Director for Macroeconomic Analysis, The Conference Board:
Consumer spending is getting a boost from improving consumer confidence and a rebound in aggregate household net worth to a record level, surpassing the pre-recession peak recorded in Q3 2007. The positive wealth effect from rising equity and home prices helps supplement the still weak income gains generated by average workers. In May, average hourly wages only improved by a penny. While not all families have benefitted from the rise in net worth, the wealth effect is broadening as home prices have rapidly leaped higher this past year. Thus, despite weak income gains, it is not surprising that consumer discretionary spending (after necessities have been accounted for) has held up moderately well. A moderate pace of spending may continue until the economy improves enough to finally start to deliver more spending power from wage growth. Consumers seem to expect that this is coming.
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org
SOURCE The Conference Board
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