You may have read the headlines already this morning: Retail sales fell 0.4%. It’s worse than the flat December that economists were predicting, and it’s another nail in the coffin of the U.S. economy–to go with the rise in unemployment reported earlier this month. Surely we’re in a recession now.
Except that, when you go to the Census Bureau site and read the release, the actual claim is that:
advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $382.9 billion, a decrease of 0.4 percent (±0.7%)* from the previous month…
The asterisk refers to this:
* The 90 percent confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different than zero.
Without those adjustments “for seasonal variation and holiday and trading-day differences,” in fact, retail sales were up 14.3% in December over November. Which isn’t to say that 14.3% is the correct number–far from it. But when statistical adjustments play that big a role in determining a particular economic data point, you ought to take that data with several big chunks of tasty Maldon Crystal Salt (seriously, it’s the best salt in the world).
I mean, I think we probably are in a recession. I just don’t know it, and nobody can for a while yet.