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The Curious Case Of “Strong” Retail Sales: Is The US Already Applying “Double” Seasonal Adjustments
zerohedge.com / by Tyler Durden on 06/12/2015 13:38
There was some confusion why following yesterday’s stronger than expected retail sales, which broke a 4-month series of disappointing data and which according to most economists were good enough to bring forward the Fed’s first rate hike in a trader generation, bond yields tumbled.
Well, in the aftermath of the whole “double seasonal-adjustment” travesty, in which even the BEA admitted any bad economic data (read Q1 GDP) will be “massaged” enough until it becomes good under the “scientific” pretext of “residual seasonality”, and following the suggestion of Dynamika Capital‘s Alexander Giryavets, we decided to take a look at not seasonally adjusted retail sales.
We found something interesting.
The thing about retail sales is that while they are supposed to smooth out month-to-month changes in any given data series, they should be virtually identical on a annual, year-over-year basis. After all the same “seasonal” adjustment that was applicable this May, was applicable last May, the May before it, and so on, unless of course, there was some massive, climatic or otherwise shift to the underlying reality.
To the best of our knowledge there wasn’t.
And indeed, when looking at the annual change in headline retail sales data we find that, as expected, the seasonally-adjusted (blue) and unadjusted (red)retail sales series are almost identical…
The post The Curious Case Of “Strong” Retail Sales: Is The US Already Applying “Double” Seasonal Adjustments appeared first on Silver For The People.
Source: http://silveristhenew.com/2015/06/12/the-curious-case-of-strong-retail-sales-is-the-us-already-applying-double-seasonal-adjustments-2/
