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Here We Go Again: "Warm Weather" Blamed For Poor Retail Sales
We’ve often said that the only people worse at their jobs than weathermen are economists. In fact, getting it wrong might as well be in the job description. Here’s what we said back in August:
Here’s the job description: make predictions that are almost never right and then make up any reason you want to explain away the fact that you were wrong. These explanations run the gamut from intentional obfuscation via opaque statistical tinkering (“residual seasonality”) to comically absurd attempts to turn common sense into an excuse for poor outcomes (“snow in the winter”).
The irony there of course is that economists and weathermen have something in common other than the fact that they’re virtually always wrong: they both talk about the weather a lot. Indeed, weather has become a catch-all excuse for poor economic outcomes no matter what time of the year it is.
Indeed, late in September Citi jumped the shark and suggested that what the Fed needs to do is assume that economic data is actually better than it looks to avoid making policy decisions based on faulty numbers. Why are the numbers faulty, you ask? Simple: because of the summer.
Several times during this expansion, the Fed has made important policy decisions in the month of September. The history of payroll revisions for August and September has shown that some of those decisions might have been based on false signals, which could have biased policy toward accommodation.
We have found serious residual seasonality in payroll reports for the period from August through October. Weak August and September readings typically lead substantially stronger October reports, including sharp upward revisions to August and September data. This pattern has given rise to shifting market (and Fed) views of the labor market – from weakness to strength – each fall.
We have seen that the seasonal weakness in August payroll gains has supported accommodative policy decisions during this expansion. For instance, shortly after the extremely weak August 2011 payroll report, the Fed announced the plan to ease through Operation Twist. In 2012, after another soft August figure, the Fed announced QE3. In September 2013, the Fed unexpectedly delayed tapering QE3.
In each case, subsequent data showed that the August jobs data had been misleadingly weak – the labor market had been improving all along.
Well, just as snow in the winter is blamed for recessionary GDP prints and just as the summer is now blamed for bad jobs data, Citi and BofA are now out blaming warm weather for poor October retail sales. From BofA:
Based on the BAC aggregate credit and debit card data, our proxy for seasonally adjusted retail sales ex-autos declined 0.3% in October. This left the three month moving average at -0.3% mom SA, revealing a slowing trend.
We believe abnormal weather patterns may have biased retail ex-auto sales lower in October. There has been a late start to the winter this year: the average temperature in October was 57.4 degrees Fahrenheit, which is the highest since 1963 and above the historical average of 54.3 degrees. Intuitively, this would depress sales of cold weather apparel, such as coats, hats, boots, etc.
No, BofA, there is nothing “intuitive” about that statement. No one would notice a three degree difference when they walk outside and even if they did, it wouldn’t keep them from buying a "hat".
And then there's Citi (again):
Warm weather combined with already weak traffic trends likely led to a shortfall in sales and we expect inventory to appear elevated across the sector (good for BURL, ROST and TJX). We believe this is particularly true for the mid-tier players, and we are lowering our estimates for M and KSS.
Got it. So now, warm weather and cold weather are fair game when it comes to explaining bad data.
We suppose it's only a matter of time before "mild" weather joins the mainstream economist "Axis of Evil."
Finally, for those curious what comes next, here is one answer:
@zerohedge lining up the excuses...
* Warm weather
* Late Thanksgiving
* Weekend Rain
* Lack of snow
* Too much snow
* Polar vortex 3.0— Brian Lantier, CFA (@brianlantier) November 10, 2015
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When you look at all the clownfuckery of today, Fonz jumping a shark really wasn't that bad.
pods
Damn Climate Change! We should place a 100% carbon tax on everyone, bankrupting everyone except the Banksters. This way, Retail Sales won't matter under the NWO, aka Feudalism 2.0.
Don't forget: EL NINO...
Fuck El Nino. After we are finished sterilizing everyone except the docile, there will be no El Nino, La Nina, or any other filthy little rat human beings scurrying around.
Signed The Banksters.
And bad weather caused by ........ sneaky Putin.
Don't worry, we have a plan for Putin. The debate is over if we should poison his vodka, hire an attractive suicide assassin, or give him a free date with Michelle/Michael Obama.
Poor sales of what? Snow shoes?
I can only order from Amazon when it is between 69.3 and 72.1 degrees outside.
Jesus, what kind of a moran jumps a shark in a black leather jacket?? He must have been embarassed by his own hairy chest.
Lol, it wasn't Erin Moran.
We are in an El Nigro cycle...nothing more
Another tip for putting into my No. 8 Ball to use for board meetings.
They may as well blame the phase of the Moon, it's just as insane (or should I say 'Lunacy?")!
Nice, Stycho. ISWYDT.
My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.wallstreet34.com
@Big_Hitman I regret that I can give you only one up-arrow. I'm pleased to know that someone (or two someones, if we count your sister's friend) is doing well in this economy and that you're willing to share your trade secrets with the rest of us, even if it is a little off-topic. Thank you for sharing! Oh, and speaking of sharing, do you have any pictures of your sister?
They should just start blaming the boogy man. Folks might fall for that.
we shouldn't make fun of the boogy man... he's president of the US of BARRY!
It's that damn Groundhog, I tell ya.
fuck the banks and anything a bank says
No, it's The Wind They Call Mariah.
I just wish they would be more creative with their weather excuses. Stop being reactive and be proactive
Sales of cloth umbrellas are down this quarter because people know it will be raining fire next March
Lavorgnamenon!
It really sucks having to see how Christmas sales will be without having an accurate weather forecast.
Too bad you can't extrapolate container traffic to gauge arriving retail inventory for the holiday season.
I wonder if China is going to pick up on this...you know, blame the dence chinese smog for retail sales.
They are talking down Friday's retail numbers rekease?
But why?
If the numbers are really bad, it will be seen as bullish and rate hike odds go down.
Just blame it on the weather so the Wall Street partying continues.
Unlimited Fed drugs (QE) going forward.
Warm Weather is a 6000 years of cycle according to those buttholes in banks.
I'm blaming it on those 55 and older. If they weren't so lazy, perhaps after they got off from that second high paying job they could get out there and buy that new Escalade. They start at $72k and should be well within reach for those pulling in $600 a week, with a 120 month car loan.
Now get out there and buy a new car you communist bastards and quit trying to save for your future.
" the only people worse at their jobs than weathermen are economists"
I thought the eCONomists were the Weathermen .... mainly because they are always wrong.
Meh, Weather(wo)men have actually increased their accuracy over the years, and SuperComputers have certainly contributed to forecast accuracy. Economists on the other hand...let's just say tossing chicken bones would probably help them! :>D
Blame weather. Blame China.
I was going to do something today but I couldn't because there was weather today. Maybe there will not be any weather tomorrow.
Blame it on the rain...
https://youtu.be/rB0Le3oM1b8?t=87
Weather as an excuse may make sense back 20 years ago but with internet shopping today it doesn't jive...
"Dog ate my homework." -Fed
It's a nice day out.
"Was gonna buy a new shirt, but bought a car instead" ... said nobody.
It's the goldilocks economomy, not too hot, not too cold, but just right.....
The temp was 57.4 and the average is 54.3. Apparently the humans couldn't figure out if they should wear a light jacket or not when going out so they just stayed home.
I polled the squirrels running around my yard and 72.8% of them said they delayed gathering nuts due to the warm weather.
https://www.youtube.com/watch?v=pIxtuJOPQjY
What interest would it serve for TPTB to lie regarding poor retail sales? I believe them and if you're a patriot, you should believe them too. They have our best interests at heart when they make their decisions. All they ask in return is blind obedience and gross stupidity. I'm personally going to do everything they ask, as I'm a patriot first and an idiot second. We must spend, spend, spend and do our bit to stimulate the economy. USA! USA! USA! Gawd bless America.
It just doesn't matter.
Stock price will still be mainatined by the banks. They do it like it is their job.
It would be cool if all of the rich bankers had to repay all of the people that they stolen from and defrauded through price manipulation ... but it is hopeless situation.
The economy won't be in serious trouble until the Fed starts blaming things on nice weather
The fucktards are using weather as an excuse. Why? Please answer.