The headline retail sales report, released today by the Census Bureau, showed a rather unexpectedly large 0.8% jump from October. The Wall Street brain trust was expecting a 0.3% increase. Of course, 99% of stock market investors and 100% of the financial media never looks at the details below the headline reports. To do this, one has make an effort to scroll down to page four of the report. There you will find this table (excerpt):
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You’ll note that I highlighted this ‘(*)’ in yellow. From the footnotes to the report, this ‘(*)’ means this: ‘Advance estimates are not available for this kind of business.’ For purposes of the advance estimate, the Census Bureau ‘imputes’ the data. In other words, the CB fills in a guesstimate. According to the CB propaganda, over 30% of the data used in the monthly estimate is a guess ‘imputed.’ The beauty of this is that the CB has leeway to report a fictitious number for the advance estimate and then revise the original estimate when it reworks its numbers in the annual ‘benchmark revision’ of the data,. By then no one bothers to look or even cares the degree to which the original advance estimated was flawed. The market only cares about the headline number when it’s reported. I would bet a roll of American Silver Eagles that CNBC’s Steve Liesman has no clue about this aspect of the retail sales report.
This post was published at Investment Research Dynamics on December 15, 2017.