Analyst Says Census Understates Retail Sales Growth

Econintersect:  The U.S. Census Bureau reported today that retail sales increased 0.6% from November, seasonally adjusted.  Steven Hansen, an analyst reporting at Global Economic Intersection, says that the monthly increase was actually up much more, as reflected by the unadjusted data.Hansen points out that the year-over-year improvement for December was up more than 8%.  The Census report, using seasonally adjusted data, reports less than 8% improvement (7.9%).

The factor that is emphasized in the Census Bureau report is that December retail sales was the highest ever for the data series.  December was also the only month in 2010 that significantly beat the previous high reading for the same month in past years.  These two factors are pinpointed by Hansen as major positive factors that were not sufficiently highlighted by the Census Bureau report.

Hansen also said that it remains to be seen if there will be any follow through of the new high for retail sales in the coming months.  The inference is that it might have been just holiday exuberance.    

Sources:  U.S. Census Bureau and Global Economic Intersection (“Record Breaking December 2010 Retail Sales“)