G7 retail sales back at pre-recession peak
Simon Ward
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The forecast here that faster global real money supply expansion would provide an economic lift in late 2011 is supported by recent G7 consumer demand indicators.
G7 retail sales volume rose by an estimated 1.0% in the three months to October (i.e. 4.2% annualised), regaining its 2007 pre-recession peak. Industrial output is lagging as firms adjust inventories but should revive in early 2012 if solid demand is sustained. (The G7 retail sales measure is calculated by the OECD and has been updated for September and October using national data.)
The recent tentative recovery in the G7 manufacturing new orders index fits the story, with earlier weakness preceded by a temporary fall in retail sales.
November vehicle sales figures provide more evidence of consumer resilience, although the G7 total remains well below the pre-recession peak.
Consumer purchasing power is being supported by a slowdown in inflation as food and energy price pressures ease.
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