More on: Retail Booming

With our earlier look at Inflation free CPI out of the way, let’s have a gander at Retail Sales. Did they really increase 1% in November? Bond Dad raises some further questions: 

start with the Bank of Tokyo Mitsubihi’s Chain Store Sales Report.
According to this survey, the seasonally adjusted month-to-month
percent change in same store sales was -1%. October’s number was
slightly better at a -.6% drop. The year-over-year percent change in
the number was 2.1%, which was the lowest reading of 2006 except for
March when the number was 2% . . .

The Census data says that "Building material & garden eq. &
supplies dealers" increased from (in millions) $29,289 to $29,817 The
BTM survey says home supply sales sales decreased 15.7%. It’s also
important to remember the housing market is in a slump right now. Sales
are down, inventory is up. Is this a real estate market where building materials and supplies sales will increase 1.8%?

According to the census data, car sales increased from (in millions)
$77,197 to $77,906. This data is not seasonally adjusted. However,
according to motor intelligence, the seasonally adjusted annual rate of
US car sales decreased from 16.16 million in October to 16.04 million
in November. This is the lowest seasonally adjusted annual rate for car sales this year.

In November WalMart reported their November sales decreased .1%, the
first drop since April 1996. Other retailers showed increases. However,
Wal-Mart is far bigger than their competitors.

So, while the Census data says retail sales increased at a high rate in November, all other surveys say sales of various retail sales components decreased.
There is an important difference in methodology in the other reports
because they are seasonally adjusted. However, using the old Sesame
Street game "One of these things is not like the other one" we come to
the conclusion the Census will probably lower their numbers for
November. (emphasis added)

That’s a very straight
forward explanation as to why the reported Retail Sales Data is bogus.
(And it doesn’t even make mention of the Commerce Department’s change
in their sample group we discussed previously).



Did Retail Sales Really Increase 1% in November?
The Bonddad Blog
Saturday, December 16, 2006

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What's been said:

Discussions found on the web:
  1. emd commented on Dec 18

    well, if sales are so great, why are there so many discounts being offered one week before Xmas? i was surprised at some of the markdowns at Macy’s this wknd. Also, heard an ad this morning that EVERYTHING in the Jos A Banks stores are 50% off tomorrow……. hmmmm

  2. WW commented on Dec 18

    “Online retail sales from Nov. 1 through Friday were up 25% over 2005, says Internet market research firm ComScore Networks.”

    Maybe that is telling us something about retail?

  3. Emmanuel commented on Dec 18

    BR, you sure don’t mince words by saying that the Retail Sales report was “bogus.” Be very careful in suggesting that the November figure will have to be revised downwards

  4. Bonddad commented on Dec 18

    I am honored and flattered to have my analysis listed here. Thanks.

  5. Michael C. commented on Dec 18

    WASHINGTON – Murders, robberies and other violent crimes reported in the United States jumped 3.7 percent in the first half of the year, continuing a troubling upswing that began in 2005, the FBI said Monday.

    Given that housing affordability began decreasing dramatically the last few years and the low incomers have been hit the hardest in the poorest recession recovery to date, this makes sense and is interesting.

  6. Hayduke commented on Dec 18

    Well, when the revised number comes out, it won’t matter. It will be deemed ‘old news.’ Just as the option dating scandal is having zero effect on stock prices of those companies.

    With this kind of market, the only thing better than good news is bad news.

  7. MarkM commented on Dec 18


    How do you look in sweaters? There may be a product placement opportunity coming up should our present marketing arrangements not be re-exercised for the New Year. Sightings of “The Sweater” have been sadly lacking in 2006.


    Mark McCormack, President
    The Sweater Marketing Group LLC

  8. Teddy commented on Dec 18

    Anyone notice that when the volume of outrage picked up over the backdating of options, Easy Al came out of the woodwork calling for a dilution of the powers of Sarbanes-Oxley? Coincidence?

  9. john commented on Dec 18

    What I don’t understand- the stats are clearly garbage but if every one accepts them well that’s the end of the story. The government can lie. They are abetted by the Wall Street con artists so let’s party on. Everything negative is ignored or modified to the positive. The Big Lie is alive and well and getting the desired results. So once again party on!!!

  10. KP commented on Dec 18

    No one cares if the rules are being bent(or broken) as long as they are making money. When the music stops, things will be slightly different. Scapegoats will be in short supply.

  11. ECONOMISTA NON GRATA commented on Dec 18

    By Bill Fleckenstein

    “Follow the money (from sales tax receipts)
    Now, however, it’s quite clear that the consumer is being affected — whether one looks at the sales data from Wal-Mart and other retailers, or at the Liscio Report’s data on state sales-tax receipts. To quote from Liscio’s latest survey: “The weakening consumption trend is now established, and the majority of our tax contacts expressed real concern about a slowing in sales-tax collections. It now appears clear that consumers are not spending the billions of dollars they have saved on gas in recent months.” …..”

    “Furthermore, when I e-mailed Liscio to share my view that we are entering a recession, here’s the response I received: “We note with a shudder that our indexes look a lot the way they did in fall of 2000, especially the weakening and then big drop in the sales tax survey. The SDI led us into the last recession, and the states that led are very weak right now, as well.” (The SDI is Liscio’s proprietary sales-diffusion index.)”

    Just another little interesting piece of reality….


  12. Leisa commented on Dec 18

    Re retail sales. Two anecdotal comments made to me by a 100% sampling of people in my home that went shopping this past weekend. N=2. Husbando at Home Depot. “There was nobody there”. My daughter, 18+, shopper extraordinaire, who has been to every mall in Richmond, VA at least 5 times: “Every place I have been, I have never had a problem parking”.

    That may speak well for the on-line retailers. And get this…so clever. Food Lion (grocery store) was selling gift cards for all of the major retailers. Is that a smart distribution strategy or what?! As a school fund raiser, my son’s school did that. You could my gift cards to HD, Sheetz, Barnes and Noble, Bed Bath…about 20 different places. They received a varying commission. I loaded up on the gift cards where they received the highest commission. Better than the schlock they sell many years.

  13. Lord commented on Dec 18

    Who knows? Maybe you will conclude the market is a better indication of statistics than the government. The market may already have done so. ;-)

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