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Unadjusted January Retail Sales Post Biggest Sequential Plunge In History
The topic of BLS propaganda seasonal adjustments has been discussed extensively here especially in light of January's NFP beat. We'll leave it at that. However, we were rather surprised to note that the Census Bureau may have also ramped up its seasonal adjustment "fudge factoring" because when looking at the January headline retail sales data, which naturally was a smoothly continuous line on a Seasonally Adjusted basis, rising from $399.9 billion in December to $401.4 billion in January, something rather odd happened in the Unadjusted data set: the plunge from $459.8 billion in December to $361.4 billion in January, or -$98.5 billion in one month, was the biggest one month drop in retail sales in history. Now we won't say much on this topic, suffice to say that it would be far more useful if the BLS and Census Bureaus were to open up their models and explain in nuanced detail just what "old normal" adjustments they still incorporate into data sets. Because as many have already noted, seasonal adjustments used for data from 1980 to 2008 when "up" was the only allowed direction for everything, are completely irrelevant and misleading in the New Deleveraging Normal. Which reminds us: Zero Hedge will offer $10,000 to the first BLS employee to share with us the full and complete excel model set, including assumptions, data tables, and comprehensive output parameters that the agency uses to go from input A to output X. We hope that by spending that money we will finally do society a service and open up to everyone just how it is that the BLS adjusts its Non-Farm Payrolls data.
As for Unadjusted retail sales, here they are:
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*double post
We should get the full and complete data set. Then it wouldn't matter their assumptions, fudging, etc. The gov't should not be in the business of interpreting the data set...only in the business of aggregating the data for the "market" to decide how it should be interpreted. Same for BLS data. Give us the raw numbers then step out of the way.
Ah, your typical opening drop in the DOW followed by a steady climb out of the basement to the positive for the day.
The administration, treasury and the Fed' need to get this sucka' back up over 14K just in time for the elections.
Dear America,
damn it American consumer! I'm just...I'm just so very disappointed in all of you, you really dropped the ball on this one.
You have got to do better, if you don't have the cash, use the card, if you burn through one or two or 12 cards, just get another one, the system is redundant on purpose people! as long as you can make your minimum monthlies you can have a card that works, so why aren't you out there spending?
do you want this economy to fail, is that it? cause if you don't start spending more, lots more, well...just use your imagination. I mean do you want evil Muslim terrorists eating your children in the streets? cause they can do that under Sharia law you know, I mean Syria or Iran could invade at any time and if your not contributing to a healthy economy we will not be able to stop them from marching into Shea stadium like Saddam's troops did, you all remember that don't you? yeah well what if we can't kick them out this time huh?
look serfs, just take a hint from your government, debt is good, debt is healthy, debt is necessary for growth, debt is the precursor, the catalyst of popularity.
so get out there and jump into as much debt as you can find, be a good citizen, do it for your children, your friends, the poor people and the environment, your nation, nay! the free world is counting on you.
warmest regards,
Uncle Benny
A FOIA will cost you only a few hundred bucks and build support and increased following as you report on its progress. I'm sure you could get MANY enlightened institutions to join you in this request.
"Zero Hedge will offer $10,000 to the first BLS employee to share with us the full and complete excel model set, including assumptions, data tables, and comprehensive output parameters that the agency uses to go from input A to output X."
The government claims ownership of all intellectual property used, if they found out who leaked the database functions that person would need a lot more than $10,000 just in attorney fees.
If everyone would borrow money they don't have with the intention to pay it off with earnings they don't have, because they lost the job they had. to buy stuff from China that they don't need then we'd all please the leades of our government we don't want.
might have to put a caveat here to that 10k offer tyler. I think BLS data requires security clearance. the lastthing we need is the feds using that as an excuse to block access to this website.
Save your money Tyler. They simply use a hat with numbers in it.
All this hyperinflation from the Fed printing money is just driving me nuts. If we keep this up we are going to have super high inflation just like Japan.
And The Wurlitzer Plays on ...
When methodologies about how figures are arrived at are not revealed, we can safely assume the methodologies are untruthful. It's a little like a student who writes down an answer but provides no working out. The teacher can safely assume he looked across at someone else's work or simply guessed.
i'm not sure how this works for you, p_pan, but in my experience,
a teacher ass-u-me-ing that no kid can think beyond what is "taught" would never get hired by a decent school
never
yet, he or she would always have a "job" and a roomful of "students"
Talk about MSM shilling, Bloomberg literally changed the caption in minutes after being called out showing a picture with shoppers holding "Banana Republic" bags (see comment section). This is what we're up against, brain dead Americans.
http://www.bloomberg.com/news/2012-02-14/retail-sales-in-u-s-rose-in-jan...
Here's the secret formula: Bankers and politicians say what number they want and the BLS provides it.
My radio just said auto sales were down in Jan otherwise it was a good Jan retail sales number. But if I recall the radio telling me that Dec auto sales were up reflecting the Dear Leader's strong recovery. My take is that non-auto sales in Dec sucked which led to a relatively strong Jan retail number because they were CLEARANCE SALES. Auto sales sucked in Jan and will suck for a couple of months because the dealer lots are now full. The effect of the tsunami is now gone from auto sales but will have good comps to beat in Q2 and Q3.
As you said, unadjusted retail sales in January 2012 showed the biggest month to month drop in the history of the series, and leaving out the seasonal adjustment makes sense if seasoanlity is messed up (I agree it is). But retail sales data is also nominal so not adjusting for inflation doesn't give us all that much (we'd expect sales, and their changes, to get bigger over time). If we adjust for inflation we get something different:
Month to MonthChange ($Mil) Jan-05 ($48,998.24) Jan-00 ($48,660.45) Jan-06 ($45,029.34) Jan-95 ($44,290.46) Jan-07 ($44,212.96) Jan-87 ($43,554.90) Jan-12 ($43,430.79)
Still not good, just not as bad.
Just saying...
Spot on, Finn. I thought exactly the same thing when I had a close look at the graph. In real terms, it's much like any year, with this year's drop from December to January, like the December rise, simply of a slightly greater magnitude undoubtedly due to inflation.
There are so many holes in the bull case for the US economy right now, I don't see why ZH has to resort to exaggerating and manipulating statistics to try to prove a point that undistorted facts would just as easily establish.
Uhm, unadjusted is undistorted. And last we checked people only care about nominal numbers when it comes to the S&P. Because when one adjusts for real currency devaluation, i.e., divide by the price of gold, equity returns implode.
Oh, and incidentally, did you remember the bit about the deflator in Q4 (as per the GDP)? Take a look at that one again if you are so concerned about "exaggerating and manipulating statistics"
Finally, last time you posted here, you had a question:
Here is the not so subtle chart:
Inflation? Have you not heard there is no inflation according to the Fed. Also that inflation in consumer electronics where TV prices are dropping 50% Y/Y sure is a killer. In fact, recall what the GDP deflator was in Q4... We can wait.
Hi Tyler,
Thanks for the reply, but really, going with the Fed answer? Just kidding and as long as I have your attention, just wanted to say I appreciate the work. I come for the analysis and stay for the polite discourse in the comments section.
All right, enough butt-kissing.
I'm not fully getting what you are think the GDP deflator will do. I'm assuming you are referencing that because it was small in 4Q, inflation adjustments would also be wrong. If I missed the point, let me know (I'm sure you will).
Based on the above, I took the data and adjusted the 4Q deflator index as if it had continued to grow at the years average pace (~.25 a month, giving an annualized 4Q deflator ~2.4% from 3Q). I also did the same to get a deflator for January. My results weren't materially different from the original post, though the two series are different from my previous post because I used the GDP deflator instead of CPI data.
With adjusted GDP Deflator:
Jan 05: -$96,871, Jan 00: -$93,940, Jan 07: -$86,957, Jan 06: -$86,734, Jan 12: -$86,489
With regular GDP Deflator:
Jan 05: -$96,871, Jan 00: -$93,940, Jan 07: -$86,957, Jan 06: -$86,734, Jan 12: -$85,772
To move Jan 2012 above Jan 2005 you would need the 1Q GDP deflator to be 3.8% the adjusted 4Q GDP deflator and 4.3% above the actual 4Q GDP deflator.
In regards to the drop in TV prices, well... I guess there's only so many TVs people buy in January. Overall electronics w/o appliances are a small part of consumer spending, generally peak in their share in December, and have been dropping as a share since 2009.
Am I missing something? I'm doing this on the fly, but it seems my initial point stands.
An idea Tyler is to read Age of Turbulence by Alan Greenspan. The book is free in a few places.
Reading that book provides a framework for how he established U.S. reporting metrics. While Greenspan used phone teams to gather samples, this could be done online nowadays.
Tyler, I looked at the unadjusted data set and I'm not seeing the drop you're describing vs January 2011. Are you simply saying that sales plunge between December and January and that December sales were up more than ever, therefore making January sales appear like they've dropped more than ever?
Or maybe there's some other fine point I'm missing here.
The 6 Trillion given to the Wall Street trash has done nothing but lined Obamas election coffers and put off the enevitable collapse.
Well, this is unusual, CNBS is actually reporting a sort of truth on the retail data. Though it is not the headline story they are saying: Retail Sales Weaker Than Expected; Import Prices Rise
OH! Never mind, once you open the story and read it they say that sales ROSE less than expected. "U.S. retail sales rose less than expected in January as consumers cut back on car purchases and did less online shopping, while import prices, particularly in energy, pushed higher."
Fueling the overall increase in retail sales during January, spending at gasoline stations rose 1.4 percent — the biggest gain since March 2011 — while receipts for electronics increased 0.5 percent.
Even if you believed that there was an increase aside from data manipulations like seasonal adjustment it was based not upon increasing economic activity from units sold and customer butts through the door but via price increases alone. This is the problem I have been bitching about for years now, every data set reported that is measured in dollars is a lie. And do remember that the TV was crowing about what a good year it was for holiday sales, that the US economy was at last showing signs of vibrant life again. Inflation makes it appear that the economy is growing when it is actually contracting, unfortunately we cannot know what that rate of contraction is since inflation data is even more wildly fictional than employment data.
And I have sorted through my earlier posts from late last year (about the time Gas dropped below $3 per gallon in the Houston region) because I predicted that the drop would be very temporary indeed, note that RBOB is back over $3 on the NYMEX wholesale market and the last time it was that high I was paying $4.20 a gallon retail. Funny how it took 8 months for retail to drop to within 40 cents of wholesale but when wholesale rises it takes retail less than 8 hours to go back up.
This is exactly the inverse of the Chairsatans claim that PCE is the best model for measuring inflation because nearly all price increases are temporary, it turns out nearly all pricing dips are temporary, except housing which is actually not a consumable for most people but an asset they invested in.
Roses are Red, Violets are Blue.
The BLS is full of shit.
The unadjusted decline in % terms is not out of the ordinary with respect to historical data: the avewrage decline since 1993 has been 22.9%, whereas this Jan/Dec decline has been 21.4%.....
I'll add another $100 to that, make that $10,100!
Adjustments aren't a secret sauce, it's simply whatever the administration tells them to do in order to create the right environment for politics to reign and divide us all.
I want to see that excel also.
http://www.jinrongbaike.com/
http://www.cnhedge.com/