ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.
The close relationship between U.S. disposable income and retail spending is easy to understand – the more money people have that isn’t earmarked for something else, the more they are likely to spend. What doesn’t make sense? Why some economists believe that a two per cent decline in income won’t be reflected in retail spending.