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Retail Sales Record First Jump in Four Months

While the unemployment rate remains stubbornly above 8 percent, some good news emerged from the Commerce Department today. From the Wall Street Journal:

Retail and food-service sales increased 0.8% last month to a seasonally adjusted $403.93 billion, the Commerce Department said Tuesday. That was the biggest jump since February.

Economists surveyed by Dow Jones Newswires expected a 0.2% rise.

Retail sales are an important component of consumer spending, which accounts for about two-thirds of demand in the economy.

Meanwhile, the beginnings of the energy revolution are already being felt: energy prices fell for the fifth straight month, mostly driven by a 3.1 percent drop in gas prices. On the other hand, sporadic positive data over the past few years hasn’t assuaged concerns that a double-dip recession is looming over the horizon.

Is the economy looking a little better? Voters’ answers to that question might well decide the election.

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  • mezzrow

    The key, or course , being that “seasonally adjusted” modifier. Is there anything out of the ordinary about the adjustment this year as opposed to others in the recent part?

    Answers here:

    The July retail sales beat came as a surprise to many: an 0.8% increase at a time when the data was supposed to grow at less than half this would surely be indicative of a potential turnaround in the US economy. Then we decided to do a quick spot check if maybe the Census Bureau had not adopted one of the BLS’ worst habits: fudging seasonal adjustment factors. The reason for this is because we happened to notice that Not Seasonally Adjusted (full series here) retail sales data in July actually declined by 0.9% from $405.8 to $402 billion. Of course, if the Census Bureau was using a consistent, or at least remotely comparable July seasonal adjustment factor as it has in the past, this would make sense and we would move on. So we decided to look at what the July seasonal adjustment variance over the past decade has been. What we found would have shocked us if indeed this is not precisely what we expected: with the July seasonal adjustment factor routinely subtracting a substantial amount from the NSA number, averaging at -$5.2 billion, in 2012, for the first time this decade, the seasonal adjustment not only did not subtract, but in fact added “value” to the NSA number, resulting in a seasonally adjusted number that was $1.9 billion higher than the NSA number at $403.9 billion.

  • Cromwell

    July retail sales more a bounce back from three months of bad prints. It does not make a trend and indeed is likely statistical noise.

  • Kenny

    The squandering continues.

    There’s no hope.

  • Cas

    Where are gas prices down? In my neck of the woods they jumped up 10 cents just in the past week. This is old data, I guess?

  • BobJustBob

    All they have to do is have enough people believe their lies long enough and by the time their lies have been exposed it’ll be way to late.

    And the best part, form their point of view, is that after having brought us to the point of financial ruin these same people are going to tell us how they’re going to save us.

    And all it’s going to cost us is a few of the those freedoms we weren’t using anyway.

    In a sane world there wouldn’t be enough rope and lamp posts to go around. In our world we’re going to beg the wreckers to save us.

    We are well and truly screwed…

  • Ari Tai

    Remember when Mr. Bush was widely ridiculed after 9-11 because he told the U.S. not to panic and change behavior – i.e. they should not hoard or hunker down (stop consuming, etc.) – better that they go shopping? aka what a leader does when advised by the economics team that the last thing the U.S. needed at that time was a AD (aggregate demand) crisis given all the other shocks.

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