Oct. Retail Sales Back Close to Pre-Recession Levels
Given the strong increases in year-over-year sales tax collections in October for many states like Virginia (6.5%), Georgia (7.4%) and Texas (6.6%), it shouldn't be surprising that retail and food sales increased by 7.3% in October above last year (see bottom chart above). The October increase in retail sales follows a similar 7.4% increase in September, suggesting that consumers are gradually gaining confidence and starting to spend again.
Compared to a year ago, spending in all major categories have improved, with especially large gains in motor vehicles (14%), building materials (12.2%) and sporting goods (6.7%). The $373 billion in consumer spending in October was the highest monthly total since August of 2008, more than two years ago (non adjusted for inflation). October retail sales were only 2% below the $380 billion peak in November 2007 before the recession, and at this pace, retail sales will be above pre-recession levels within the next few months.