It is evident that consumers are spending less as thrift shops have been seeing substantial revenue gains. Two examples are Big Lots which just reported a 4.2 percent rise in revenue per MarketWatch and Dollar General which has increased revenue for the last five years per the Motley Fool.
Year over year retail spending has increased a little over five percent per Census data, but after inflation of 3.6 percent as measured by the Bureau of Labor Statistics, that is an increase of 1.4 percent, an amount .2 percent less than the 2011 annual growth in gross domestic product.
Yet despite anemic gains in inflation adjusted retail spending, consumer sentiment has risen for the last year to reach an index level of 75.3 per Reuters. A longer-term chart of consumer sentiment can be viewed at the Federal Reserve Bank of St. Louis.
So it looks like consumer sentiment is just that, sentiment and does not necessarily translate into economic growth as measured by retail spending and GDP growth. That is using newer ways of measuring things like inflation. Moreover, according to older measurements, retail spending has declined in terms of real dollar value and inflation soared over nine percent in 2011 per the American Thinker.
Debasing the dollar could be monetary policy's way of making Americans feel richer, when in fact they are getting poorer. For example, according to the BLS Inflation Calculator, one 1970 dollar is worth $5.84, that is an increase of 484 percent in 41 years. How many retirement plans can beat that kind of growth?
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