Thursday, June 12, 2008
We doubt that the tax rebate checks had much impact on this report. Indeed, from an arithmetic standpoint, most of the upward adjustment to our [second quarter] estimates reflected the revisions to March and April � and, distribution of the checks did not even start until the end of April�.So where is all this spending coming from? We do not have a good answer to this question.Well, it ain't Ricardian equivalence, Mankiw says. Growth of consumer spending has also spread to China, Ironman says, and also to visiting Europeans. Maybe globalization has a good side to it after all.
On the other side (again), Calculated Risk graphs that year-over-year real retail sales are still negative, extrapolating February-April price changes into May. I have no idea whether that is really justified. Probably better we address that next week when the price data for May come out.