Consumer Balance Sheet and Consumer Spending in Perspective

Here is an interesting chart on Consumer Balance Sheet, Savings Rate, and Debt Service Ratio posted by Barry Ritholtz.

Ritholtz also notes Consumers Climb Out of Their Bunkers

From the “It-Aint-That-Bad” file comes the most recent reports of consumer spending.

• Luxury sales rose 22.7% (Mastercard SpendingPulse)
• Furniture sales rose 13.8% and appliance sales rose 6.9%
• Auto sales gained 24% from year ago levels (AutoTalk)
• March was the 7th consecutive month of increasing retail sales growth
• Cargo volume at major ports imports is trending towards an 8% increase in April
• Commerce Department’s personal consumption expenditures was $34.7 billion in February, an increase of 0.3% over January — the fifth monthly gain in a row.
• Gasoline demand continues to rise — +1.2% — before the summer driving season.

Ritholtz comments “It will be some time before we return to the peak levels of 2006-07, when Houses were used more as equity structures than shelter. But that does not mean we won’t see marked improvements over the coming quarters.“

Fair enough. Here is an equally true and arguably more realistic way of saying the same thing: The anemic bounce to date “does not mean we will see marked improvements over the coming quarters.”

State Sales Tax Revenues

State tax collections are a far better measure of spending than same store sales. Please consider Retail Sales Rise: Where? Let’s Take a Look; Expect Nothing Less Than Panic

That report is from February 28, 2010, arguably a bit out of date. Nonetheless, state tax collections are horrid.

Moreover, same store sales are invalid because of store closings. Finally, improvements over horrendous numbers from a year ago are hardly unexpected.

Finally, please note that it took cash for clunkers, $8,000 tax credits, a $trillion in various Fed swap-o-rama programs, and the Fed monetizing a $trillion in mortgages to achieve this bounce in GDP

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