The Devil is in the Data - The Unadjusted Data

Yesterday was a big news day with the assassination attempt on the Republican members of Congress preparing for a charity baseball game. This news overshadowed the 8:30 AM release of the monthly and Annual Retail Trades Survey (MARTS) report for May and the Consumer Price Index (CPI) report fpr May. There was also the announcement by Fed Chair Yellen that interest rates were rising again. Does anybody look at the data before they report on the report?

This was the Best May MARTS Report EVER. We are not in a retail ice age. We may be seeing a problem with shopping malls. We are not seeing a problem with sales. Retail sales were up month to month in all thirteen sectors. Retail sales were up in eleven of the thirteen sectors compared to May of last year. Automobile and Parts sales continue to surge. Retail food and Beverage Stores and Food and Drinking Places continue to satiate our appetites.The only two sectors with lower May Sales than May were Electronics/Appliances and Hobby/Sporting Goods.

This is the Best January to May Retail Date EVER. The media was disappointed by the retail sales report. The majority of the media examines the report and not the data. The report is based on seasonally adjusted data. There are so many adjustments made across the thirteen sectors that using seasonally adjusted data is specious.The data shows that we are on track to have the best retail sales year ever. Two data points creat a line. Three data points and show a tendency. Five is certainly a trend.

The data for Home and Gardens and  Motor Vehicle Parts are at all-time record levels. Furniture Sales have almost returned to pre-recession levels. There are multiple ways to examine the data. You can compare the data for the same month over time. You can examine the current year data, by category or by aggregate. You can examine the data for the past twelve months, the rolling year data. The Current month data is strong. The current year data is strong. The rolling year data shows that the largest sector of the retail industry is at its record level. The same for Building Material and Garden.

The Advance Data  for April was Revised higher by 1.1 billion dollars. There were six sectors with downward revisions to the April data. There were seven sectors with upward revisions. A similar trend was observed in the "final" March data. The March MARTS was revised upward by $400,000 with upward revisions in ten sectors. There was a huge upward revisions to the April General Merchandise store sales data.

May Only Sales was up over 5% from the May 2016 levels. No mention was made of this yesterday. This was the largest same month expansion since May 2006. 

There is an expression that the "Devil is in the details." The Devil is in the Data, the unadjusted data.

It's the economy.