The California Board of Equalization recently released retail sales tax data for the fourth quarter of 2007, showing that the recession was well underway by the end of 2007 with retail sales in the state declining by $1.2 billion from the fourth quarter 2006. This was the second consecutive quarterly drop. We will have to wait another year for the data for 2008 to be released, but we would expect to see steepening drops in each quarter.
Marin County fared better than the state as a whole, with sales up a marginal 0.1% for the quarter and 1.7% up for the year. This is the worst performance since 2002, when retail sales declined following the fallout from the tech crash. The chart below shows the quick turnaround that occurred in 2003 and 2004: as the Fed loosened the money supply people went on a mammoth shopping spree. It will be interesting to see whether a similar bounce back occurs as quickly this time.