March 2014’s Retailiation

First of all, no, that is not a typo in the title of this post. The fact of the matter is that retail sales have reached a seasonally adjusted $433.9 billion in the month of March. This is a growth rate of 1.1%. This is the best monthly gain since September 2012. That is 18 months, or a year and a half ago. The Wall Street Journal predicted a .8% increase last month. This was based on February’s gain of .7% in the retail area. To put this in perspective retail spending has grown 3.8% since March 2013. The Washington Post reports that two of the larger contributors to this growth were in automobiles and furniture. Automobile sales rose 3.1%, and general merchandise grew 1.9%. An example of general merchandise would be Wal-Mart or Target. This is the largest that general merchandise has seen since March 2007, which was before the recession.

According to the New York Times, we are in a “Great Moderation”. This means that we are experiencing the same steady growth in economic activity and jobs that we saw before the Great recession. During this “Great Moderation”, the economy is less likely to experience a slump, or anything like that. The economy could be on track to being what it was before the financial crisis.

In a few of my other posts, I discussed the retail market in this country and how it is important to the economy. Without a doubt, the harsh winter definitely weakened it. As the winter thawed, so did the retail market. With sales increasing, that means that consumption is on the rise too. This is important for increasing output. Consumption is an important part of output and is integral in helping a troubled economy recover from a slump. Apparently, March 2014 was a month of record numbers. It also exceeded expectations.

Taking all of this into account with the idea of a “Great Moderation”, I would say that Americans can be a little more optimistic about their nation’s economy. As previously mentioned, March was a month of record growth rates. Furthermore, we are seeing the same kind of economic activity that we saw before the drastic downturn in 2008. Before the recession, the United States economy was very strong. We are seeing similar signs of that today. If this were to continue, then the recession would be a thing in the past. This could very well be the light at the end of the tunnel that America has been dying to see since 2008.