Mish Shedlock notes a discrepancy:
On Thursday, a slew of retailers posted monthly same-store sales. They were described best as a “mixed bag.” There was no obvious trend in terms of up or down, even within specific categories of retailers. But bulls on the economy should be disappointed.
For one thing, notes Mike “MISH” Shedlock author of Mish’s Global Economic Trend Analysis, the same-store sales gainers benefited by the general reduction in store locations. Essentially, survivorship bias is skewing the numbers. If somehow you could take into account all the locations that had been shuttered, you’d see that things were much worse.
And there’s evidence for this, notes Mish. State sales tax collections remain depressed, with no indication of a rebound. That, more than the corporate numbers, is the key thing to pay attention to.
Companies can produce phony baloney numbers to show that their sales are increasing even in the face of the obvious but that doesn’t crteate actual profitability, just the illusion of it. Let’s consider a specific instance.
Unless you believe there’s a huge underground economy that’s not reflected in the sales tax figures, even with Internet sales accounting for an increasing proportion of retail, sales tax revenues are a pretty fair proxy for actual retail sales, at least on an up or down basis. I live in Illinois. Here in Illinois we’ve seen sales tax revenue decline pretty consistently over the last three years (nominal dollar sales tax revenue peaked here in 1998).
I’m no artist.
There are a couple of things that should be considered in looking at that chart. First, these figures are taken directly from the Illinois Department of Revenue’s month by month reports of sales tax receipts over the period of the last three years. They aren’t estimates, projections, or other concocted figures. They aren’t seasonally adjusted. They’re real numbers.
Second, these are nominal dollars, not adjusted for inflation.
Third, the trend is pretty clearly down. Whether you measure from peak to peak, from trough to trough, or try to perform some sort of smoothing, Illinois’s retail sales receipts are going down. Interestingly, these figures look just as I’d expect with the highest receipts being for December reflecting holiday spending and the lowest reflected in March.
Maybe Illinois isn’t typical. I invite you to collect data for your own state and publish a similar chart for it. If you don’t have a blog of your own, I’ll publish the chart here. Although I wouldn’t be surprised if some state somewhere were doing a lot better, I suspect that most are seeing much what we’re seeing here.
Actual retail sales are down. New housing permits are down. Employment is down. Home prices are stagnant at best and continuing to fall in many parts of the country. Business spending is lackluster.