Ignore Those Estimates of Black Friday Spending
The forecast of consumer behavior by the retailers’ trade group relies on faulty methodology and is inaccurate year after year.
Bloomberg, November 14, 2018
What is my beef with the National Retail Federation Holiday shopping forecast? It pretty much looks like this every year:
1. The trade group, full of biases, randomly surveys shoppers on what they plan to spend this holiday season, and what they spent last year.
2. The NRF projects consumer holiday spending by calculating the net difference between the forecast of future spending behavior for the current year and consumers’ recollection of how much they spent the year before. (Inexplicably, the group relies on consumers’ memory, even though actual previous-year numbers are available.)
3. Headline writers parrot the findings to the public.
4. With stunning regularity, the forecasts turn out to be wrong.
5. When the actual sales data come out in January, everyone but me has already moved on.
6. Wait one year, repeat.
This is problematic because fake news can affect investors, and never for the better.
I originally published this at Bloomberg, November 14, 2018. All of my Bloomberg columns can be found here and here.