I must admit to being baffled by yesterdays' Retail Sales Data. I am as guilty as anyone else of having selective perception; Like most people, when something doesn't jibe with my world view, I suffer through a bit of cognitive dissonance.
My saving grace is that I at least recognize these biases, which gives me a fighting chance to see reality without all these filters. That's why I am so keen on looking past the headline data and taking apart the details beneath.
Even acknowledging these inherent biases won't prevent me from scratching my head over the direct conflicts between what we heard from various participants over the past month, and the Retail Sales Data for November.
As an exercise, let's review a half dozen questions that came up regarding where the recent retail data might be somewhat over-stated. (and to make it even mroe challenging, we won't even mention the nation's largest retailer, who accounts for nearly $1 out of $10 spent, who is having an absolute stinker of a quarter):
1) Commerce Data disagrees with what we heard from the Retailers themselves.
-The past 4 weeks, Retail Same Store Sales data was soft;
-Mall traffic was "uninspiring"
-Durable goods numbers were weak, inventory has built;
-Both Lowes and Home Depot warned of disappointments, yet Commerce showed sales in Building Materials increased; (See seasonal adjusted below)Retail data made me think of Richard Pryor's great line: "Who are you going to believe, me or your lying eyes?"
2) Price Increases: "The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes." (emphasis added)
We have watched food prices creep up over the past year. A friend steers us to the
