Retail sales forged higher to a new all-time record last month, rising 0.3% to $381.6 billion in January on a seasonally adjusted basis, according to this morning’s release from the U.S. Commerce Department. That was less than the 0.5% rise that economists were expecting, and January’s gain is half as much as December’s increase. But last month’s growth in retail sales is the seventh straight month of higher numbers. The various troubles that hang over the economy are far from trivial, but it’s still hard to argue at the moment that the blowback from the Great Recession is pinching consumer spending.

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The White House released President Obama’s 2012 budget yesterday, a document that’s striking for its failure to address the main engine of the projected deficits: entitlement programs. The Republicans’ budget proposal isn’t published yet and so official comparisons aren’t available. Meantime, the President’s budget reportedly cuts the record deficit by $1.1 trillion over the next decade. Here are additional details/opinions on the numbers and the implications from various sources:
Budget Battle Lines Drawn
Wall Street Journal/Feb 15
If Congress accepted all the president’s proposals—which is unlikely—and the economy recovered, the federal deficit would fall from 10.9% of GDP this year to 3%, Mr. Obama’s goal, in 2017. The plan would place the federal government’s deficit next year at $1.1 trillion, down from $1.6 trillion this year, and the White House said it would reduce the government’s accumulated red ink over the next decade by a similar $1.1 trillion. Just over a third of that deficit reduction would come from Mr. Obama’s previously announced freeze in domestic discretionary spending. The balance would come from tax increases, largely on businesses and upper-income taxpayers; assorted fee hikes and spending reductions; and a cut in government borrowing costs, which will continue to rise dramatically but not quite as fast if the deficit is reduced.

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