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Stock Rally May Drive Strong Consumer Spending: Economist

Published: Monday, 16 Nov 2009 | 6:51 PM ET

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By: JeeYeon Park
CNBC.com Writer

U.S. retail sales rose more than expected in October as consumers bought more cars and other goods, according to a government report on Monday. Are we finally seeing a recovery in the retail sector? Dan Greenhaus, chief economic strategist at Miller Tabak, discussed his sector outlook.

“There are issues with respect to the consumer sector, but they just don’t have an impact for me until a few months out,” Greenhaus told CNBC.

“My focus is on the recovery in the stock market—a rally in the stock market does a whole lot to insure that the higher-income individual in the country is going to go out and spend.”

In regards to the unemployment rate, Greenhaus said that the idea that high unemployment rate precludes better consumer spending rates is false.

"Unemployment was over 8 percent in 1983 and the consumer spending was quite healthy," he said.

"I’m not saying that 2010 is going to be 1983—I’m just saying that simply asserting a high unemployment rate means that the consumer won’t spend is false.”