Resilient Retail

Given that consumer spending accounts for two-thirds of GDP and retail sales account for one-third of that, the 0.2% rise in November retail sales was superficially disappointing. But Y-o-Y inflation is zero! Were inflation just 2.3%, retail sales growth would have been double what it was! Moreover, Y-o-Y retail sales are up 3.6%, and non-store retail sales are up 7.3%! Consumers are buying, the lack of inflation is muting it.