Retail Bad News Adjusted into Great News Just in Time for the Election

In keeping with the analysis I did in recent Deeper Dives about how all the good news in economics these days appears to be adjusted into place, we have another clear example today that I'll share with all.

The mainstream media is crooning over the strong economy as usual, praise they are prone to make now that we re less than a month from the election. So, let’s start with what Bloomberg had to say:

US Retail Sales Showcase Resilience of Economy’s Growth Engine

A splendid title with very shiny words like “showcase” alongside another endless reminder that the economy is “resilient” with all the strength of a “growth engine.” You don’t get much more glowing than that. As we read the article, we learn that retail sales “strengthened” by more than expected. They beat economists rosiest expectations.

But did they?

Did they strengthen at all?

According to Bloomberg, via Yahoo!, retails sales demonstrated how the resilient consumer is continuing to power the economy ahead. Well, that, or they demonstrated how economic adjusters are continuing to power the limp Biden economy ahead because it turns out that 100% of the retail sales boost came from the adjustments. 100%! Actually, more than that!

While the retail report does little to reverse expectations the Federal Reserve will cut interest rates by 25 basis points next month, it adds to evidence that the economy shows scant signs so far of materially down shifting.

Deeper in the article, however, we learn that

Industrial production declined in September, largely due to a pair of hurricanes and a strike at Boeing Co.

That’s easier to admit since they can chalk it all up to hurricanes and Boeing. (I mean who doesn’t want to beat up on Boeing these days anyway? They’ve done their utmost to have that coming.) Applications for unemployment also dropped in the latest report with the blame for the previous report’s leap in unemployment also attributed (and probably reasonably so) to the hurricane. Not so sure it was so reasonable to blame that rise in unemployment on Boeing, though, as they did earlier, since few states allow unemployment benefits for strikers. But what reader is thinking that far through anything these guys have to say?

Red-hot book cooking

Now, let’s look at what Zero Hedge had to say about today’s retail report, where the take is decidedly different and exactly what I would expect to find if doing my own Deeper Dive into the numbers. It’s the kind of thing I’ve gotten so used to this year that is now almost my foregone conclusion:

Retail Sales 'Reality Check': This Was The Biggest Positive September Seasonal-Adjustment Ever!

Well, that’s a different sounding title than Bloomberg ran with. Instead of outstanding economic growth, we have record September seasonal adjustments! It reminds me of those two Decembers years ago that I like to refer back to where one year we had 500,000 new jobs in December due entirely to seasonal adjustments that were justified on the basis that it was unseasonably cold. Ostensibly, if it hadn’t been such a cold December (during global warming) the number of new jobs would have been much higher. Contractors, we were told didn’t hire because the extreme cold limited construction work.

No one batted an eyelash over that in the mainstream media. It all made sense to them, but that wasn’t even the funny part. The next December we had 500,000 new jobs due entirely to seasonal adjustments that were justified on the basis that it was unseasonably warm. Ostensibly, retailers didn’t hire during the holidays because no one was buying winter coats that year. The actual number of jobs fell by 200,000, but the addition of 500,000 in seasonal adjustments landed a tidy net figure of 300,000 new jobs.

So it is with this September’s season adjustments to retail. It turns out there were actually ZERO gains in the raw numbers for retail sales. The entire positive figure was due to the seasonal adjustments:

In fact, without the positive “seasonal adjustments,” sales actually fell month-on-month a whopping 7.5%! All, I can say is, “Thank Biden for doing whatever it takes to turn that number positive, or it would have been a sad month!” What a fine job of reshaping a harsh reality.

Maybe it was unseasonably warm this past September (due to “human-caused climate change” of course), so no one was buying fall coats; but had the temperatures been normal, we would have sold enough coats to see this sizable gain in retail sales. All that’s needed is a half-reasonable hypothesis.

That said, the hot sales were not so hot as to help year-on-year changes in retail sales, though. They continued a downward trend that began in March to hit their lowest point since the trend began:

So, thanks to the biggest September seasonal adjustment in history, things are percolating right along in the economy for the election this year:

I imagine they will want to justify that adjustment based on Hurricane Helene hitting Georgia on Sept. 26, keeping actual sales down to where they needed to be adjusted up; but is it really that unusual to have one hurricane in the month of September—the middle of hurricane season—and don’t the days leading up to a hurricane cause a massive surge in retail sales as everyone hoards everything they think they will need, including the purchase of rain coats and other coats?

Ah, Bidenomics at work—where the devil is in the details whenever he isn’t Bidening his remaining time in the White House!