The Retail Sales Data came out this morning showing an increase of 0.1% in June. Although nominal retail sales are just 0.2% off all-time highs set last month, the chart below shows us a rather different view of the US Retail Economy than you might expect. In this case, the sales numbers are adjusted for inflation and population growth.
Consider: During the past 21 years, the U.S. population has grown by over 22% while the dollar has lost about 39% of its purchasing power to inflation. When we adjust accordingly, the rebound in retail sales from the bottom in April 2009 merely gets us back to the per capita spending of 1999.
Retail sales have been recovering since the trough in 2009. But the “real” consumer economy, adjusted for population growth is still in recession territory — 10.0% below its all-time high in January 2006.