USA Retail Series - 

Febr 2010.  For years, I have had serious doubt about the integrity of the USA economy.  One aspect of my concern deals with America's focus on consumption - which for most of the last 16 years was 32% of the US economy.   My concern is that, while selling goods that are consumed my make you wealthy, "consumption" in and of itself is not "wealth creating";  in fact, consumption is is "wealth destroying".    Most goods that are retailed are "non durable" - meaning that after they quickly over time are "consumed" till nothing is left - which is why the word "consume" is the base for the word "consumer". 

That said, "retailing" is extremely important because

1. for the most part "the stuff" people buy and consume are need to live.
2. "the stuff" need to be distributed somehow
3. retail markets of the magnitude seen in America are perhaps the most competitive in the world.  So, while a portion of the "the stuff" people buy is not necessarily be needed, at least it is being distributed to them in a very efficient manner (or so my thinking goes!)

Anyway, recently I have discovered an way to look at retailing data which, does not alleviate my basis concern about consumption, but show me that at least the relative level of consuming has not increased last 20 years.

Data & Conclusion -

• Monthly data from the US Federal Reserve Bank plotted above right.
• 1992  US Retail and Food Service as a percentage of the US economy (GDP) is 31.5%.
• 2006  US Retail and Food Service as a percentage of the US economy (GDP) is 31.6%.
• The relative level of consumption actually very stable. (since conception)
• Disproportionately effected by the current US recession. 

Discussion

MORE LATER.