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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.

  • Advance estimates of U.S. retail and food services sales for November 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $513.5 billion, an increase of 0.2 percent (±0.5 percent) from the previous month, and 4.2 percent (±0.5 percent) above November 2017.
  • Total sales for the September 2018 through November 2018 period were up 4.3 percent (±0.5 percent) from the same period a year ago. The September 2018 to October 2018 percent change was revised from up 0.8 percent (±0.5 percent) to up 1.1 percent (±0.2 percent).
  • Retail trade sales were up 0.3 percent (±0.5 percent) from October 2018, and 4.0 percent (±0.5 percent) above last year. Nonstore Retailers were up 10.8 percent (±1.4 percent) from November 2017, while Gasoline Stations were up 8.2 percent (±1.6 percent) from last year.

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.


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.

What 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

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Exclusion Synopsis

  1. If you exclude 44% of retail sales, then retail sales rose by 0.9%
  2. Otherwise, retail sales rose by 0.2%
  3. The former drives GDP estimates.

Hurricane Distortions?

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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

  • What did people do? They drove away, saving their cars.
  • What was ruined? Stuff left behind, especially appliances, electronics, and furniture,

Retail Sales Spotlight​​

  • Gasoline sales fell 1.2% That's easy to explain: The price of crude plunged.
  • Furniture sales rose 1.2%. Really? With existing and home sales falling? Why?
  • Electronic and appliances rose 1.4%. Really? With existing and home sales falling? Why?
  • Nonstore retailers (think Amazon) rose 2.3% but this is part of an overall trend. It may also have been exacerbated by hurricane item replacements.
  • The only strange item in this group is health and person care sales which rose 0.9%, but that is one of the smaller breakdown components.

Hurricane distortions or not, it seems pretty silly to exclude 44% of retail sales while bragging about retail sales.

Mike "Mish" Shedlock