Here's What's Hiding Behind the Massive Seasonal Adjustments in January Retail Sales

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Here’s What’s Hiding Behind the Massive Seasonal Adjustments in January Retail Sales
by Wolf Richter • Feb 17, 2021 •

In whiplash charts. For example, department store sales soared 23% “seasonally adjusted” but collapsed 42% “not seasonally adjusted.” What gives?
By Wolf Richter for WOLF STREET.


We had another mind-twister this morning when the media proclaimed that in January retail sales “burst higher,” after the opposite had happened in December, when the media bemoaned the third month in a row of dropping retail sales.

But these are “seasonally adjusted” retail sales, and the seasonal adjustments in December and January are always huge. “Not seasonally adjusted,” retail sales collapse by about 18% to 22% every January during the merchandise-return binge (returns are negative sales) after December’s holiday shopping binge. So I noted a month ago that the massive “seasonal adjustments” in December had gone awry and that Americans had not actually cut back but had splurged in a record manner, documenting this with charts that showed both “seasonally adjusted” and “not seasonally adjusted” retail sales.

And in January, seasonal adjustments went awry again, but in the opposite direction, sort of balancing out December’s “seasonally adjusted” debacle. And then there was maybe a small-ish added oomph of the stimulus checks.

“Seasonally adjusted,” which is what you read in the media this morning, retail sales in January jumped by 5.3% from December, to $568 billion.

But “not seasonally adjusted,” retail sales plunged by 17.3% in January from December, to $510 billion. That plunge was not quite as deep as the normal December-January plunge of 18% or more. And compared to January last year, retail sales were up 5.8%, after December’s year-over-year increase of 4.3%. ...............(more)

https://wolfstreet.com/2021/02/17/whats-hiding-behind-the-massive-seasonal-adjustments-in-january-retail-sales/