On the same day Federal Reserve chairman Ben Bernanke said there were “tentative signs” that the US economy was regenerating, bad retail sales numbers sprayed a hefty dose of defoliant over arguments that the worst is behind us. But why were markets so surprised that sales wilted by 9.4 per cent year on year in March? After all, households are deleveraging and, notwithstanding a blip-up in activity recently, the days of homes-as-ATMs are over.

It impossible to understate how important surging house prices were to consumption. McKinsey Global Institute reckons that from 2003 to the third quarter of 2008, US households sucked $2,300bn of equity from their dwellings. About $890bn was used for personal consumption or for home improvements – a sum exceeding the Obama administration's emergency stimulus package. Another fifth of the total paid down debt, thus boosting spending indirectly, while 45 per cent was invested.

Of course, houses were not the only source of shopping fuel – consumers were also spending a bigger proportion of their disposable income. McKinsey estimates that if the US savings rate had remained steady at the level seen in 1980, a trillion dollars less would have been spent in 2007 alone. That trend has now reversed. But savings are being rebuilt alongside – and in large part because of – a massive reduction in household wealth caused by falling property and other investment prices.