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By Jason Stipp | 11-24-2010 12:24 PM

Johnson: Happier Holidays in Store

October consumption data shows the continuation of a positive trend in spending and points to a better holiday season, says Morningstar's Bob Johnson.

Jason Stipp: I am Jason Stipp for Morningstar. We got some consumption data this week. Consumption growth of 0.3% in October.

What does this mean for the consumer's health and the upcoming holiday season? Here with me to offer some insights is Morningstar's Bob Johnson, director of economic analysis.

Thanks for joining me, Bob.

Bob Johnson: Great to be here.

Stipp: So consumption data, this is different than the retail sales data. It's actually a little bit more encompassing. Can you explain exactly what this metric is looking at?

Johnson: Sure. Consumption data is the broadest measure we have of everything that the consumer spends their money on, including their housing, what they buy at a store, the food they buy, things when they go out to eat, when they get their haircut. It is the broadest measure. It is 70% or so of the gross domestic product. Everything we produce is in this consumption measure.

The retail sales report is – there is different variance of it, some of them are literally average what the big stores see in their stores and how that's grown, and then we have a government report on retail sales, and again that's basically what you sell in the stores, but that also includes autos in there, and it also includes foodservice and some other things, so it's a little bit broader, but still it's not the big Kahuna, and that's why this one take so long to compile. The number we got today is for October.

Stipp: And so  obviously, there is a lot of attention paid to the consumer, especially this time of the year. Can you give me a sense of the trend that we've been seeing then in this consumption data? Is that 0.3% number for October a good number, is it a continuation of a positive trend?

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