Consumer spending, housing and autos – those are three huge interrelated segments of the economy. Sales in at least two of those sectors are moving into better alignment in the United States, which will help out the other − as reflected in retail sales − later this year. (story continued below)

Northeast		Midwest
Jan-Jul average 2008 = 143,100 units; Jan-Jul average 2009 = 60,700 units (-57.6%). U.S. Northeast annual starts: 2007 = 142,900 units; 2008 = 121,000 units (-15.3%).		Jan-Jul average 2008 = 148,300 units; Jan-Jul average 2009 = 89,600 units (-39.6%). U.S. Midwest annual starts: 2007 = 210,100 units; 2008 = 134,900 units (-35.8%).
South		West
Jan-Jul average 2008 = 507,900 units; Jan-Jul average 2009 = 271,000 units (-46.6%). U.S. South annual starts: 2007 = 681,100 units; 2008 = 453,400 units (-33.4%).		Jan-Jul average 2008 = 223,400 units; Jan-Jul average 2009 = 118,900 units (-46.8%). U.S. West annual starts: 2007 = 320,900 units; 2008 = 196,200 units (-38.9%).

Housing Sector

New and existing home prices and sales are stabilizing and, in some cases, slowly improving. New home starts appear to be gradually creeping upward. This is most apparent, perhaps surprisingly, in the Midwest. The “Great Lakes States” is where much of the manufacturing decline in this recession began. Now that the futures of Chrysler and GM are more certain and inventory levels across many product lines need to be replenished, job prospects and housing demand are firming. This is good news for retail sales. One of the first priorities of all householders is spending on items for the home.

Auto Sector

As for the auto sector, the ‘Cash for Clunkers” program introduced by Washington − officially entitled the Car Allowance Rebate System or CARS for short − caught on like wildfire. The initial $1 billion allotted by Congress has already been doled out and consideration is being given to adding a billion or more to the pot. Unit sales of autos shot up in August, with smaller more fuel-efficient vehicle models in the vanguard. Auto sector retail sales, while still negative year over year, are on a sharply improving path.

Price of Gasoline

The retail sales figures are in current dollars. Therefore, they have held up in product categories where prices have been steady or rising. For example, stores selling food and beverages and personal health care products have maintained sales volumes at levels the same as last year. And in the latest month, gasoline stations achieved a 6.3% increase in sales, primarily due to price increases. The global oil price is on the move upward again.