After two stronger than expected retail sales reports, the October data were in line with expectations for modest growth outside the very volatile auto segment.  Autos remain  the main story driving the large top-line increase. They recovered smartly following the post-clunker retreat in September. Sales are currently above their year-ago level, despite the possibility of some sales loss from clunker sales in August.

Fundamentally, the backdrop for consumers remain poor as wage income is more than 5% below its year-ago level and is not growing appreciably, although the declines have ended. Additionally household wealth is substantially below its prior levels, although some of the pressure may have been removed by the recent increase in equity and home prices.

Add this altogether and factor in no further tax cuts or increases in government payments and consumers will likely remain financially constrained for some time.