As I was reviewing and updating my economic data, the following chart jumped out at me. Historically, as one would expect, retail sales and consumer confidence have been very highly correlated. That is until 2009, when bailouts, cash for appliances, cash for clunkers, housing rebates, etc. flooded the system. Not surprising this led to a temporary spike in real retail and food service sales that has been on the decline every since.
While consumer confidence has been recovering since the financial crisis, the question becomes what happens when the correlations between these two indexes return to normal. Previously, declines in real retail food and service sales has not led to accelerations in either consumer confidence or economic growth.
