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Debunking The Myth Of US Retail Sales Improvement

Tyler Durden's picture




 

Earlier today the Census Bureau came out with its February retail sales announcement which was classified by CNBC's Bob Pisani as "terrific" on the basis of a 0.3% increase over January. What few point out is the January revision, which changed the January retail sales estimate  from 355,777 to 354,339. As February came in at 355,546, one can see why the government's game of endless data fudging continues. Had January been unrevised, February retail data would have been a drop of 0.1% instead of a rise of 0.3%. We fully anticipate yet another downward revision to February numbers once March data comes out, to make the March increase even bigger. Yet what nobody at all is pointing out is that the Consumer Spending data reported by Gallup, which tracks "the average dollar amount Americans report spending or charging on a
daily basis, not counting the purchase of a home, motor vehicle, or
normal household bills", and whose 14 day rolling average for the month of February came not only at a drop of 5.8% from January's average read of 63.4, but came in at a series low 59.7, which was an improvement only on the 59.1 recorded at the lows of the US market crash in March 2009. US Consumption, when not parsed by the ever so creative eye of the US government, has rarely been as low as it was in February.

Below, we demonstrate an indexed chart of US Consumer Spending as tracked by Gallup, and compare it to the Census Bureau's Total Retail Sales data. The numbers speak for themselves.

If anyone believes the numbers coming out of the US government anymore, we suggest you relocate to China: you will get just the same "correctness" of economic data reporting.

With Geoffrey Batt

 

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Fri, 03/12/2010 - 12:26 | 263250 Fritz
Fritz's picture

Tomorrows headlines today:

   Consumers Stop Paying Mortgages, Start Buying Clothes Again - Dow/S&P/Banks Skyrocket

Fri, 03/12/2010 - 12:35 | 263267 John McCloy
John McCloy's picture

I wonder what number credit card these people are on?T

Those unemployment checks are falling off a cliff and so is the consumer. Why should they pay their debts? Nobody else does.

Fri, 03/12/2010 - 13:46 | 263397 Anonymous
Anonymous's picture

The Gov't does not pay their bills. They just issue themselves a new "credit card".

Sat, 03/13/2010 - 14:21 | 264397 Anonymous
Anonymous's picture

hello

Fri, 03/12/2010 - 12:27 | 263253 Anonymous
Anonymous's picture

hmmmm gallup numbers seem a little more credible from the spike in Q4. Isn't there some big holiday in December where consumers generally spend more than all months of the year?

Fri, 03/12/2010 - 13:08 | 263320 Anonymouse
Anonymouse's picture

You mean the holiday that dare not speak its name?

Fri, 03/12/2010 - 15:30 | 263534 Anonymous
Anonymous's picture

It is hard to say - that number, like this one may not be adjusted for snow.

Fri, 03/12/2010 - 12:28 | 263256 deadhead
deadhead's picture

manipulation of data now reaching the absolute highest level only to influence the lowest of IQs.  let's get that last marginal sucker buyer in and good bye bid.

Fri, 03/12/2010 - 12:59 | 263304 Howard_Beale
Howard_Beale's picture

Apparently the little guy poured into equity funds to the tune of $7.3 billion in the last week. Getting closer and closer to the top. 

Fri, 03/12/2010 - 13:13 | 263332 deadhead
deadhead's picture

yep, all the classic signs are there.  

keep this in your back pocket for future references, my emai..   zhdeadhead at gmail dot com

 

glad to see you are back with a vengeance.   

Fri, 03/12/2010 - 19:47 | 263835 johngaltfla
johngaltfla's picture

I think it is just quarter end window dressing. Come April there is some serious pain in the charts.

Fri, 03/12/2010 - 12:31 | 263260 DaveyJones
DaveyJones's picture

less is more, more or less 

Fri, 03/12/2010 - 12:34 | 263265 John McCloy
John McCloy's picture

And next month they will revise the 0.8 because it is 30 days away and all will be forgotten by next month. This market makes the tech bubble look rational.

Fri, 03/12/2010 - 16:32 | 263609 drwells
drwells's picture

Exact same crap they did (or still do) with the housing numbers every month.

Lincoln should have said "You can, in fact, fool damn near all the people, all the f---ing time."

Fri, 03/12/2010 - 12:39 | 263272 ShankyS
ShankyS's picture

Its more about greed and lack of moral capacity than ignorance. Ignorance is rampant thru society (or call it selective hearing) allowing the corrupt elite (that are all 'meth'ed out on power and piling up money at any expense) to plow thru our tax dollars like Peter North on some small blond chick laughing all the way.

Fri, 03/12/2010 - 12:43 | 263276 Anonymous
Anonymous's picture

Before this post I emailed Bob Pisani about the revision

I'm not expecting a reply..the question doesn't fit with cnbc's agenda..for the record my trading room is giving fox business a try..

Fri, 03/12/2010 - 13:14 | 263335 deadhead
deadhead's picture

bob pisani is an embarrassment even to bullish cheerleaders...i read his blog and 98% of the time i puke.  irresponsible "journalism" at its finest.

Fri, 03/12/2010 - 12:44 | 263278 Anonymous
Anonymous's picture

even if one accepts the government's propaganda as truth it certainly gives lie to the government's shills whining about recovery....sales are still down 5% from the peak...that means 0 recovery to all of you f-tards mewing about recovery....

and with inflation just a tad below 10% it means that recovery is that much farther away....fuck your recovery lies...

Fri, 03/12/2010 - 13:11 | 263325 Anonymouse
Anonymouse's picture

i was thinking....you should register at the site.....

maybe some name..... befitting your posts.....

Hard to say....perhaps....

...Ellipsis....

Fri, 03/12/2010 - 12:44 | 263279 SheepDog-One
SheepDog-One's picture

Always baffles me as to WHO it is they think theyre fooling? Some guy in a pickup truck with a new U/E check who decides to pile it  into peak equities upon hearing retail sales is up a whoppin .03%, disregard double digit falls is sales tax revenue?

I am Jacks raging bile duct!

Fri, 03/12/2010 - 12:46 | 263286 Anonymous
Anonymous's picture

Come on now Comrades, it's all just "Double Plus Good"!!! Proles don't have the right to think and question! UGH!?!?!?

Fri, 03/12/2010 - 13:37 | 263379 Headbanger
Headbanger's picture

I think you mean it's all just Doublethink.

Fri, 03/12/2010 - 12:48 | 263290 SheepDog-One
SheepDog-One's picture

The 'ladies' of CNBC have me cracking up, they're ALL hyped up on the fake shopping spree news! Queen of Sleaze Erin Burnett just showed a $10,000 handbag she bought with some spare change, and suggests all 'consumers' should scurry out and buy the same. Got to get the sheep herded back into the malls.

Fri, 03/12/2010 - 17:41 | 263684 sharonsj
sharonsj's picture

$10,000 is my Social Security for an entire year.  Who are these bimbos kidding?

Fri, 03/12/2010 - 12:48 | 263291 nope-1004
nope-1004's picture

Bob Pisani, like the tranny porn dudes at the SEC, just shows up everyday for his pay check.  He don't care about the details.... those are for the real media to uncover.

BTW.... nice to see the CNBS is using ZH as their source for news.  Joe and Becky paraphrasing Tyler.... might gain some credibility, at any rate.

Just proof that the old MSM is like our banks:  A dead cat on life support.  Just a matter of time.

Fri, 03/12/2010 - 12:52 | 263295 AnonymousMonetarist
AnonymousMonetarist's picture

Much worse than what you post TD .. try apples versus oranges

Here's an old one...

The truth squad caught the latest Federales lie. The Big Lie is always a lie in plain sight. It is discerned by a bottoms -up approach, the application of the empirical method. The first to catch it was the venerable Bill King of the King Report, who actually reads government reports before he comments on them, it was picked up by Art Cashin in his morning note yesterday, and then picked up by the New York Post.

Posted: 1:56 AM, December 17, 2009
by John Crudele
New York Post

Washington announced last week that retail sales rose a very healthy 1.3 percent during November from the previous month. Wall Street told us to applaud and the media, right on cue, proclaimed that the consumer was back in business.

The trouble is, the 1.3 percent gain was very misleading. In fact, misleading is a kind term for it. It was a lie -- but not one perpetrated by the Commerce Department, which released the figure.

Why am I questioning the 1.3 percent growth in retail sales? Because the Commerce Department questioned it, in a cryptic fine-print note, a sort of footnote, only it was at the top -- the top -- of the press release announcing the figure.

In a box, highlighted in the Dec. 11 release, was this statement: "Special Notice -- The advance estimates in this report are the first estimates from a new sample. The new sample for the Advance Monthly Retail Trade Survey is selected about once every two and a half years." The problem is, you actually have to ask the Commerce Department what that means if you want to know. Government bureaucrats aren't known for clarity. And nobody I could find bothered to ask.

One news organization, which should be ashamed of itself, proclaimed after seeing the release that "consumer spending was solid in November, suggesting that the economy is on sounder footing than previously thought." Not even close…

Well, here's the answer. It seems that the Commerce Department surveyed only 2,600 of the same retailers and restaurants in both October and November. The other 2,700 or so were new to the survey and were only asked about business conditions in November. ..

But this time a lot of the retailers that weren't questioned in November might have gone out of business because of the economy. To borrow a tired, old phrase -- the Commerce Department was trying to tell us that it was comparing apples in October with oranges in November. And the comparison really didn't add up to 1.3 percent growth. But there's more.

That 1.3 percent gain -- even if you were to accept it as valid -- was seasonally adjusted. That means the Commerce Department's computers changed a number here and there because of what has come to be expected over the last five Novembers…

Without the seasonal adjustment retail sales were absolutely flat from October to November -- 0.0 percent. Flat. No change.

AM here : Obviously this does not matter until it does. It is but another piece of kindling on the fire of deceit and fraud.

For this humble blogger, the tipping point for the common man, is looming as a sword of Damocles, the horsehair splintering, the capitulation towards the American Scheme as the American Dream.

The stealth stimulus of sending the banks jingle mail, the vitriol of opinion on both fences couched in either moralizing or justifying, would seem to suggest that many others also view this as a seminal event that will train-wreck itself through 2010.

To understand the markets think of water ... this tide will come back in and drown the fire. And then ... the Federales will spew kerosene.

Some of the smartest folks in the room have recommended that individuals should view their investment portfolio as if they were their own central bank.

Not exactly the right role model dontcha think?

The butterfly wings of the bankster enabling Federales and the insolvent prospering banksters, are causing the hurricane that is the true emulation advised in being your central bank... be you're own corporatocracy.

Life liberty and synarchy for all is one hell of a way to go through life son.

On that path, most assuredly the devil will have his due.

Fri, 03/12/2010 - 16:45 | 263627 carbonmutant
carbonmutant's picture

 The demand for investigations will commence after November...

Fri, 03/12/2010 - 23:51 | 264079 Rick64
Rick64's picture

Very enlightning. Nice addition.

Fri, 03/12/2010 - 12:55 | 263299 overmedicatedun...
overmedicatedundersexed's picture

we are told lies about the lies that we were told by liars who only lie when they open their mouths reported on by corrupt press who

never seek to save one truth least it reveil the lie they thought they wrote long before they

lost their honor in the ocean of their masters lusts & greed hungrily sucking on the helpless souls of those who are the new debt serfs..

gold and silver shine in the dark as they always will. the masters roil and foam in rage as the reflected images burn their idols of paper.

ramblings I posted while drunk last night..has a certain application here ala our "4th estate"

Fri, 03/12/2010 - 13:08 | 263318 Anonymous
Anonymous's picture

funny thing about lies & liars... the more anti-truth impacts our brains experience... the more we begin to doubt if there is even such a world not built on lies by liars and untruth. point being... why do i second guess myself when answering every "Captcha" math question.

Math is quite possibly the last refuge of truth and sanity for those who seek liberty from this impaired world of debt games.

Fri, 03/12/2010 - 12:57 | 263300 Anonymous
Anonymous's picture

Why do republicans want to create more "welfare queens"??

Retail sales wont improve untill income of the population improves. And counting income improvement of top 1% of population doesnt count since they will not consume for the rest of them.

By allowing big corporations to set the lowest wages due to unemployment and GOP protection republicans are creating more "welfare queens".

I am for creating consumers out of those "welfare queens" by drasticaly raising the minimum wage. There is a huge pool of potential consumers itching to receive decent wages.
By IRS data over 50% of returns are incomes les then $33K. So, 50% of the US population is geting refunds bigger then they paid into taxes. They also pay wey little for SS and Medicare.

If someone believes that companies can not survive raising the minimum wage then explain to me why they keep raising menagement wages which represent 1/3 of labor costs and that precentage is raising.

Last 30 years income of middle class is stagnating while income for the rich is skyrocketing, and median income increase can not be counted to improve consumer spending, but mean income increase counts and it is not there.

GOP is supporting lowering the labor wages "in order to save companies" but that also creates "welfare queens" and lack of SS and Medicare contributions. It destroyes overall tax receipts for federal and state budgets.

I am for creating consumers out of those welfare queens and that will also improve retail numbers and save us for debilitating deficits.

Fri, 03/12/2010 - 16:29 | 263603 Anonymous
Anonymous's picture

With the amount of taxpayer money going to bailout the economy, it looks like Corporate America is the new Welfare Queen.

Fri, 03/12/2010 - 12:59 | 263302 Bad Lieutenant
Bad Lieutenant's picture

Batt and TD once again hitting it out of the park.

Fri, 03/12/2010 - 13:00 | 263306 Anonymous
Anonymous's picture

i can't help but wonder that someone somewhere is sitting back and laughing their ass off at all of us

Fri, 03/12/2010 - 13:39 | 263381 Headbanger
Headbanger's picture

Yes, and its name is HAL 9000 (aka Skynet).

Fri, 03/12/2010 - 13:02 | 263309 rubearish10
rubearish10's picture

Here's something that confirms this analysis:

http://link.businessinsider.com/view/bir.5gb/480303dc

 

Fri, 03/12/2010 - 14:35 | 263446 Anonymous
Anonymous's picture

Looking at that GDP could go barely negative in Q2 but I am sure they will message the first released number so it stays positive.

Fri, 03/12/2010 - 14:57 | 263465 rubearish10
rubearish10's picture

true, true but it limits upside and so it'll begin to crumble.

Fri, 03/12/2010 - 13:07 | 263316 JuicyTheAnimal
JuicyTheAnimal's picture

If I can go another 15 months without paying my mortgage I'll consider buying my girl friend a handbag for her birthday in 2011.  But I think they already counted that into the Feburary calculation...because that's when I originally had that thought. 

Fri, 03/12/2010 - 13:13 | 263331 Anonymous
Anonymous's picture

BoT-M Report Shows Retail Sales in February fell -1.7% (mom). Doesn't include Walmart but can be a good indicator for ex-autos.

Fri, 03/12/2010 - 13:13 | 263333 Anonymous
Anonymous's picture

Whereas what you say is true and obvious to all intelligent people who care to be able to read, it does not really matter. All that matters is what the sheeple want to believe. Just asl Geobbels. If one tells a big lie often enough, it is soon believed to be the truth. The bigger the lie, the more believable it becomes. That is the basic underlying premises in all propaganda. It seems that the USSA communists have finally mastered it. You better believe that there is more where that came from.

Fri, 03/12/2010 - 13:15 | 263337 Anonymous
Anonymous's picture

Whereas what you say is true and obvious to all intelligent people who care to be able to read, it does not really matter. All that matters is what the sheeple want to believe. Just asl Geobbels. If one tells a big lie often enough, it is soon believed to be the truth. The bigger the lie, the more believable it becomes. That is the basic underlying premises in all propaganda. It seems that the USSA communists have finally mastered it. You better believe that there is more where that came from.

Fri, 03/12/2010 - 13:30 | 263366 Anonymous
Anonymous's picture

This was the kool aid from the New York Times in February about January's number

http://www.nytimes.com/2010/02/13/business/economy/13econ.html

Surprising Strength in January Retail Sales
REUTERS
Published: February 12, 2010
WASHINGTON (Reuters) — Sales at retailers were unexpectedly strong last month, suggesting consumers were feeling a little more comfortable about spending, which could improve prospects for first-quarter economic growth.

Retail sales rose 0.5 percent as consumers stepped up spending not only on essential goods but on luxury items as well, the Commerce Department said on Friday.

Optimism over the increase was tempered by a separate report showing that consumer sentiment declined slightly early this month. But analysts dismissed the slip as insignificant and focused on the gain in sales as a hopeful economic sign.

THIS IS THE REVISION
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7k5UPWItwdY&pos=1

The Commerce Department revised January data down to show a 0.1 percent increase compared with an originally reported 0.5 percent gain.

ANY QUESTIONS

Fri, 03/12/2010 - 16:08 | 263584 Anonymous
Anonymous's picture

Even if it was 0.5 percent that's pretty damn weak. That means the average person spent $100.50 where they would've spent $100 the previous month. "Stepped up spending", give me a break.

Fri, 03/12/2010 - 13:32 | 263370 Anonymous
Anonymous's picture

This was the kool aid from the New York Times in February about January's number

http://www.nytimes.com/2010/02/13/business/economy/13econ.html

Surprising Strength in January Retail Sales
REUTERS
Published: February 12, 2010
WASHINGTON (Reuters) — Sales at retailers were unexpectedly strong last month, suggesting consumers were feeling a little more comfortable about spending, which could improve prospects for first-quarter economic growth.

Retail sales rose 0.5 percent as consumers stepped up spending not only on essential goods but on luxury items as well, the Commerce Department said on Friday.

Optimism over the increase was tempered by a separate report showing that consumer sentiment declined slightly early this month. But analysts dismissed the slip as insignificant and focused on the gain in sales as a hopeful economic sign.

THIS IS THE REVISION
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7k5UPWItwdY&pos=1

The Commerce Department revised January data down to show a 0.1 percent increase compared with an originally reported 0.5 percent gain.

ANY QUESTIONS

Fri, 03/12/2010 - 13:43 | 263372 goldfreak
goldfreak's picture

This was the kool aid from the New York Times in February about January's number

http://www.nytimes.com/2010/02/13/business/economy/13econ.html

Surprising Strength in January Retail Sales
REUTERS
Published: February 12, 2010
WASHINGTON (Reuters) — Sales at retailers were unexpectedly strong last month, suggesting consumers were feeling a little more comfortable about spending, which could improve prospects for first-quarter economic growth.

Retail sales rose 0.5 percent as consumers stepped up spending not only on essential goods but on luxury items as well, the Commerce Department said on Friday.

Optimism over the increase was tempered by a separate report showing that consumer sentiment declined slightly early this month. But analysts dismissed the slip as insignificant and focused on the gain in sales as a hopeful economic sign.

THIS IS THE REVISION  March 12 (Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7k5UPWItwdY&pos=1

The Commerce Department revised January data down to show a 0.1 percent increase compared with an originally reported 0.5 percent gain.

 

ANY QUESTIONS

Fri, 03/12/2010 - 13:34 | 263373 Anonymous
Anonymous's picture

Considering the fact that people swarmed into grocery stores emptying most of the food shelves before the snow storm cames in Feb in the all east coast area, even a flat Feb retail sales number seems to be a miserable figure.

Fri, 03/12/2010 - 13:44 | 263386 Ripped Chunk
Ripped Chunk's picture

Talk to anyone in retail.  They are wondering how they are going to make it through spring. That is , if they haven't already shut down.

 

Try financing inventory right now.  Non existant.

 

 

 

 

Fri, 03/12/2010 - 18:50 | 263779 pooplagrande
pooplagrande's picture

This is true...but why would you build inventory...the REALITY is that there is no demand. These #s are BS.

Fri, 03/12/2010 - 13:52 | 263402 ozziindaus
ozziindaus's picture

what expalins the acceleration in divergence around Dec 08? Stimulus? Doe's the government consider itself a retail consumer?

Fri, 03/12/2010 - 15:24 | 263518 Sancho Ponzi
Sancho Ponzi's picture

The government is fast approaching 'the retail customer' status

Fri, 03/12/2010 - 14:08 | 263422 Caviar Emptor
Caviar Emptor's picture

Dateline Washington...White House states everything is going according to plan with the economic recovery as the stimulus made consumers spend or avert saving by 0.3% last month on a snow-adjusted basis. 

Fri, 03/12/2010 - 14:25 | 263435 rootless cosmop...
rootless cosmopolitan's picture

Total retail sales from census bureau are with motor vehicle sales and they are adjusted for season, holidays, and trading-day differences. The data are sampled from retailers. The Gallup data don't include motor vehicle sales, and aren't probably adjusted, probably. The data are sampled from households.

 

"The numbers speak for themselves". Your comparison of the two series sucks. What conclusion can one draw from numbers, which aren't directly comparable, because of different underlying methodics and sampling content?

 

rc

 

Fri, 03/12/2010 - 14:52 | 263458 glenlloyd
glenlloyd's picture

This should surprise no one. That the manufacturing of numbers continues is exactly what everyone should expect. There will be absolutely no recognition of the true situation until it's undeniable, and this won't happen until the bitter end.

Fri, 03/12/2010 - 14:59 | 263469 BlackBeard
BlackBeard's picture

Shit's getting more hilarious everyday ain't it?  oh FUCK my USDs!!!

Fri, 03/12/2010 - 15:02 | 263475 Anonymous
Anonymous's picture

Dontcha hate the smell of cooked books in the morning?

It smells like death when they pump embalming fluids into the economy.

Fri, 03/12/2010 - 18:48 | 263771 pooplagrande
pooplagrande's picture

<sigh>...when will this bullshit end? I own a retail store that sells nationally. Sales went off a cliff in Q4 2008 and Q1 2009...recovered in Q2 2009 and remained pretty flat, while the S&P 500 continued to march upwards. Well...we have seen sales dip again in Q1 2010...and I can tell you first hand that my vendors (over 100 nationwide) are experiencing the same thing. There is no way that this is real. What's sad is that we are getting to a point where the government is doing everything they can to deceive us (from market manipulation, to psychological tactics to build confidence, to fudging #s...all to reignite the ponzi scheme...why? Because if they don't, and the truth comes out about how they were actively/knowingly doing all this...there goes the system...I am not sure if they are fully aware of the powder keg they are sitting on (domestically or internationally).

Fri, 03/12/2010 - 19:48 | 263837 johngaltfla
johngaltfla's picture

Tyler, nice post. It's amazing that people accept the data at face value then ignore the revisions. The employment figures are the best with 3 revisions and nobody cares. I find that our government's inability to accurately report economic data is a liability that other nations have yet to exploit fully.

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mark456's picture

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