The latest retail sales report has created quite a buzz among economists and business analysts. What’s all the hoopla about? N.C. State University economist Mike Walden explains.
“Well, the hoopla … is that retail sales have been certainly a laggard in our economy. We have not seen people come back to the stores spending at rates that we typically saw after a previous recession, and we weren’t even back to where we were pre-recession during this business cycle turn.
“And that is important, because what you and I spend and all of our fellow retailers see from consumers is counted for about 70 percent of all spending in the economy. And so if we are not spending, the short answer is, If consumers are not spending, the economy is not going to get well.
“So when we have these numbers come out in November that showed a bug spurt in retail sales, a lot of economists have gotten excited because those numbers, after you adjust for the seasonality and of course retail sales always go up in November and December because of Christmas, economists take that out it looks like we are almost back to where we were pre-recession.
“So the big question is whether this is a short-term spurt. Maybe people are just feeling really good at the holidays; they are going out and spending and once the holiday is over, spending will go down even when you adjust for seasonality.
“We will have to wait and see. But this is really something people should keep their eye on. When you hear news about retail sales and if the numbers are good that certainly bodes very, very well for the overall economy.”