Retail sales are a good predictor of confidence, and the numbers for February were released today (see link). Sales were up 2.2% on Feb 2009, which is good news on face value, but it always pays to think carefully about what numbers mean (another hint: Take econometrics seriously!). Feb 2009 was apparently a terrible month for retail sales, and so the number we're comparing today's sales to is an exceptionally low number - meaning that any idea of real growth might be over-stated by comparing to this figure.
Nonetheless, after a bad month in January, this is good news and augers well for continued economic growth this quarter.
The downside would be that ideally any return to growth would be driven by exports and not higher levels of consumption - which runs the risk of leaving us once again saddled with higher levels of consumer debt. We shall see...
This blog accompanies the econ101ab Principles of Economics course given at the University of Birmingham. The lecturers for both parts of the course (101a, microeconomics and 101b, macroeconomics) will occasionally post here on matters related to lecture material. We hope to show the relevance of the concepts we are teaching at each stage of the course for helping understand how the world works...
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