In a news release that would have been blamed on delayed tax refunds and "the weather" if it was a miss, but confirms a stronger consumer if it beat, and denies everything Wal Mart was warning about regarding February sales, today's retail sales just came stronger than expected in both the headline print (+1.1%, on expectations of a +0.5% rise), the Ex-Autos (+1.0%, Exp. 0.5%), and the Ex-autos and gas (0.4%, Exp. 0.2%). All of this of course was on a seasonally-adjusted basis (more on this shortly). This was the biggest beat of expectations since October 2011, and the biggest monthly rise in five months. The number was driven by a 5.0% jump in gasoline station sales, a 1.8% increase in Miscellaneous store retailers, a 1.6% rise in non-store retailers and a 1.1% increase in the broad retail and food services category. Declines were noted in Furniture stores (-1.6%), Electronics and Appliance stores (-0.2%), and Sporting goods and music stores (-0.9%).
So on the surface all was good. The seasonally adjusted surface. because the unadjusted headline number in February actually posted the first sequential decline since 2010, as retail sales declined from $382.4 billion to $381.0 billion: this was the first sequential decline in retail sales in the month of February in three years. Yet somehow the decline actually translated into a growth of $4.4 billion on an adjusted basis, meaning the entire beat was, once more, purely in the calendar adjustment.
The chart below shows the historical pattern in January to February retail sales changes on an adjusted and unadjusted basis. 2013 was the first time since 2009 in which a drop in actual sequential sales resulted in a surge in adjusted sales.
Bottom line: when confused, apply Arima X 12 seasonal adjustments and goalseek.