In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses retail sales.
- Consumers are shopping, with retail sales rising by 5.4 percent from one year ago in July. Motor vehicle sales were boosted by 11 percent, while furniture/home furnishing stores notched up 3 percent. Food service and drinking places recorded 4 percent expansion.
- No doubt the recovery in the housing sector is providing the impetus for broader consumer spending. With home sales up 15 percent and home prices up 13 percent, spending on carpets, lawn care, moving trucks, and such naturally rises. Increases in housing wealth provide the confidence to spend more and help the economy.
- Buying stuff gives a boost to happiness for many people, even if temporarily, according to research. To this end, there will be even more happiness in upcoming months since the housing market recovery will continue and consumers will, therefore, shop more. Based on feedback loops of consumer spending, jobs, housing, and such, the economy should expand by better than 2 percent in the second half of this year, leading to 2 million net new jobs in 2013.
- But before getting carried away with shopping, we should be mindful of difference between temporary and lasting happiness. Here’s an example out of history: Empress Sisi is an iconic figure in Germany and Austria. She was considered by many to be the most beautiful person of her time. She lived in grand palaces and could buy anything she wanted. But in great contrast to her youthful and happy energetic days of running around freely as an ‘insignificant’ person, she became increasingly melancholy after being chosen as the wife of an Emperor. Her free spirits evidently died in the royal courtly life leading to a tragic end to her life. This story is a simple reminder for us that the best things in life, such as taking a walk in the park with a special person, cannot be purchased and are free and priceless.