June retail sales were weaker than expected (+0.4% vs. +0.8%), but they increased at a 4.6% annualized rate, which is about the same rate of growth that has prevailed in recent years. In short, there's no news here. No improvement, no deterioration. But it is remarkable that sales have easily exceeded—both in nominal and real terms—their pre-recession highs, despite there being 2 million fewer jobs than there were at the pre-recession high. Ongoing productivity gains explain why, and that's a good thing because productivity is the source of rising living standards.
This chart gives you an idea of how much better things might be today if the number of jobs had recovered to its long term trend. Sales are over 10% less today than they might have been given the long-term trends in place prior to the last recession. GDP is also more 10% below where it might have been: the shortfall is measured in trillions of dollars. That's what is so unfortunate about this recovery.
But it is nevertheless a recovery, and it continues.