Mike (Mish) Shedlock | Dec 16, 2018 03:18AM ET
Retail sales only increased by 0.2% in Nov. but control group sales which exclude gas and autos jumped 0.9%.
Let's dive into the Census Bureau's Advance Monthly Retail and Food Services Sales Report for November for hints at consumer holiday spending patterns.
Report Confidence
Note that the confidence level of this report is +-0.5% on a report that is only 0.2%.
Expect revisions.
The "Control Group" feeds GDP estimate models. It excludes autos, gasoline, restaurants, and building materials.
Econoday Synopsis
Let's tune in to Econoday for a "Control Group" discussion.
Highlights
Sharp contraction in gasoline sales held down November retail sales which rose 0.2 overall and also 0.2 percent when excluding autos. When excluding autos and also gasoline, the strength starts to show with a 0.5 percent gain and when looking at the control group, which excludes gasoline and several other components that slowed in November, sales really jump, up 0.9 percent in a reading that ultimately defines the strength of the results.
Control group sales are used to compute estimates for personal consumption expenditures and have an outsized impact on GDP. They exclude autos where November growth, against the tough comparison of a sharp gain in October, managed only a 0.2 percent rise, and they also exclude building materials which, also facing a tough October comparison, fell 0.3 percent. Gasoline is also not included in the control group and here sales, because of lower prices tied to November's $20 plunge in oil, fell 2.3 percent. Restaurants are also excluded and here too the results in November were unfavorable, down 0.5 percent.
Get The News You WantRead market moving news with a personalized feed of stocks you care about.Get The AppWhat the control group does include is the remaining balance of the report which is led by a 2.3 percent surge for nonstore retailers (which tracks e-commerce), a 1.4 percent jump at electronics & appliance stores, a 1.2 percent gain for furniture, and an unusually strong 0.9 percent rise at health & personal care stores. Both general merchandise and its department-store subcomponent contributed useful 0.4 percent gains.
Control Group Exclusions
Exclusion Synopsis
Hurricane Distortions?
I cannot help but think this report and analysis of it is grossly distorted by hurricanes.
Florence was a killer. But unlike past hurricanes, people had plenty of advance notice.
Florence Q&A
Retail Sales Spotlight
Hurricane distortions or not, it seems pretty silly to exclude 44% of retail sales while bragging about retail sales.
Mike "Mish" Shedlock
Original post
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