Recovering Retail Trade Signals Strong Consumer Activity

Before Christmas, I referenced the strengthening of retail sales, which have been steadily climbing since late ’09 and are now eclipsing their pre-recession levels. This has been accompanied by a fall in retail inventory/sales ratios, which shot up during the recession. The ratio’s fall (to record lows, one might add) shows that retailers have been shedding built-up stock from the recession even as sales have hit new highs. The graph below chronicles the trend.

Though employment is picking up speed only slowly, and remains far below the levels we’d like, we can at least rest assured that the American consumer is beginning to stir. Let’s hope the course of the recovery can be maintained without fouling the waters with new taxes and regulations.