2020 retail sales up +0.6% from 2019 (December 2020 up +4.8% from December 2019) -- big problems with seasonal adjustments

Source of quotes below:

https://wolfstreet.com/2021/01/15/where-americans-splurged-where-they-cut-back-have-seasonal-adjustments-to-ecommerce-sales-gone-awry/ 

 

Prior post here on retail sales:

https://el2017.blogspot.com/2021/01/retail-sales-down-for-third-month-in.html

 

 

 

"... For the whole year 2020, retail sales inched up 0.6% to $6.26 trillion, not seasonally adjusted, after the historic collapse in March and April ...

 

 

 

... Not seasonally adjusted” retail sales in December, at $620 billion, were up 4.8% from December last year. 

 

This was strong, a full percentage point more than the average 3.8% year-over-year increase for Decembers going back to 2011.

 

( but ) Retail sales in December fell for the third month in a row, on a “seasonally adjusted” basis, down 0.7% from November, to $541 billion, and down 2.1% from the peak in September, according to the Census Bureau this morning. 

 

Retail sales are enormously seasonal with a huge burst in November and December, followed by a collapse in January, when retailers are taking back stuff they sold in November and December. 

Returned merchandise becomes a negative sale. 

... Before the Pandemic, the plunge from December sales to January sales ranged from 18% to 22% every year.

... the seasonal adjustments that would normally smooth out these seasonal patterns may have gone awry – particularly for online sales ...

 

... Not seasonally adjusted, sales at non-store retailers spiked by 19.7% in December from November to a new record of $114 billion, up 22.2% year-over-year, pushing them to a record share of 18.4% of total retail sales.

For the entire year 2020, sales at non-store retailers jumped by 22.1% to $971 billion. That is a huge move:

The “seasonal adjustments” for December slashed the sales figure at non-store retailers by $33 billion, or by a record 29.3%, from $114 billion not seasonally adjusted to $81 billion seasonally adjusted.

 

... The current seasonal adjustment was big enough to move the needle for overall retail sales."