And once again, we have to look behind the Government wizard's curtain to see the golden truth about what is really going on with the numbers. If you dissect the numbers today, you'll find the biggest boost came from gasoline sales. Within a certain range of tolerance, I consider gasoline to be of inelastic demand, which means people will consume at least a constant amount until the price goes over a certain price level, of which we are not there yet. We know the price of gasoline rose in November, which means that a big portion of the retail sales increase from October to November was from gasoline inflation.
The first chart below shows the dollar level of monthly retail sales as tracked by the Fed. The second chart below show the CRB Index, which is an index that consists of a basket of diversified commodities. As you can see from comparing the two charts, the level of retail sales is HIGHLY correlated with the level of prices in the system (click on the charts to enlarge):