With 70% of our economy driven by consumer spending, one would expect that the recession won't be over until people begin to increase their spending. 

So the question is, "Are consumers increasing their spending?"

One of the most direct ways to measure increased consumer spending is to monitor sales tax receipts. It's one of the most current measures of sales and it's what's actually happening.  It's not what someone hopes to buy.  It's what they actually went out and bought.

The Census Bureau puts out state sales tax numbers every quarter about three months after the end of the quarter. 

The Nelson A. Rockefeller Institute of Government takes those numbers and makes some adjustments for inflation and puts out a nice report with nice graphs and charts.  Here is their latest that gives the numbers for the end of the first quarter 2009 with some preliminary numbers for May and June.

The January-March quarter was the worst on record for states. The worst decline in sales tax in 50 years represents historic weakness in one of the two major tax sources for states.

Preliminary data for the April-June quarter suggest that fiscal conditions deteriorated even further, and the second major tax source for states—the income tax —weakened dramatically.With data for April and May now available for 45 states, tax revenue for the two months combined has declined by nearly 20 percent versus the same period last year. Nearly 97 percent of states reporting personal income tax data had a year-over-year decline, with a median decline of 33.2 percent, while 95 percent of states reporting sales data had a year-over-year decline, with a median decline of 10 percent.

I looked for stories about more recent state sales tax receipts.  If the economy has turned the corner then numbers for July and August should be starting to show improvement.

But everywhere I looked, I found stories about local and state governments trying to figure out how to deal with declining tax revenues.

Texas sales tax receipts plunge

The state collected $1.75 billion in revenue in August, 12.5 percent less than in August 2008. The revenue comes from sales made in July, according to the comptroller’s office. Sales tax revenue has dropped in Texas every month this year except January and by a larger amount every month since May.

Mississippi sales taxes down 23.7% in July

Some observers appeared to be "shocked" by the sudden fall in sales tax receipts in Mississippi in July. Collections for July were 10.8 percent below projections and a stunning 23.7 percent below July 2008 collections.

Kentucky sales tax down 8.1%

Among specific revenue accounts, individual income taxes fell 4.2 percent and sales taxes fell 8.1 percent.

Arkansas sales tax down 8.9% in July and August

Gross receipts collections (primarily of sales and use taxes) for the fiscal year ar $345.7 million, down $34 million, or 8.9% below the same period in 2008. The collections are also 10% below revenue forecasts.

Illinois sales tax down 11.5%

Illinois continued its downcast revenue picture in August...

The sales tax, usually the second-greatest revenue source, brought in 11.5 percent less revenue than last year.

Nevada taxable sales drop 12.7%

June's taxable sales show just how quickly losses accelerated toward the fiscal year's end. Nevada merchants sold $3.3 billion in goods in June, down 20.5 percent when compared with $4.2 billion in June 2008. Clark County stores moved $2.5 billion in merchandise, a 21.7 percent decline from $3.1 billion a year earlier.

It was the second consecutive month of sales declines above 20 percent, and the eighth straight month of double-digit decreases.

The newest numbers look especially bleak when you consider they came on top of sales drops in 2008, said Brian Gordon, a principal with local research firm Applied Analysis.

"The pace of decline locally in consumer spending is fairly dramatic and has continued to be down year over year," Gordon said. "These are comparisons to periods in the prior year that were also down.

Virginia revenue continues to slide in August

Sales taxes declined by 5 percent, reflecting July retail receipts.

Colorado sales tax down 13.3% in July

And the situation is not turning around yet, Kennedy said.

July's sales tax revenue was down 13.3 percent compared to July 2008, individual income tax payments were down 7.7 percent and corporate tax receipts down 31.2 percent, she said.

So my question is, if the economy has turned the corner, where are the sales taxes?