Slow Retail Trade Recovery Reflects Problems Elsewhere

Retail trade sales are critical to state and local governments because taxes from sales provide significant revenue. In the case of local governments, sales tax revenue may account for two-thirds of total funding.

The chart (below) shows cumulative retail trade sales from 2008 through the first four months of 2012. The chart shows how sales dropped off in 2009 and 2010, but returned to 2008 levels in 2011. The data is not adjusted for inflation, so the recovered is slightly lengthier than shown in the chart. (The CPI for Colorado for these years is 3.9% for 2008; -0.6% for 2009; 1.9% for 2010; 3.7% for 2011, and 2.5% is estimated for 2012.)

Retail trade data for the first four months of 2012 show that sales are about 2.2% ahead of the 2008 four-month level and 7.7% above the 2011 four-month level. If the latter growth rate is maintained for the final eight months of the year, retail trade sales will exceed $71 million in 2012.

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