Reclaiming Common Sense

In a rare instance, the seasonally adjusted data was better than expected and the unadjusted data showed some weakness.

This week this column produced an article regarding the potential for the March MARTS retail report was that all sectors would grow month to month and March to March non-seasonally adjusted. It was expected that there would be at least one sector that would drop month to month, seasonally adjusted, and that all sectors would grow March to March Seasonally adjusted. That isn't exactly what happened.

Non-Seasonally adjusted, All Sectors surged month to month. All sectors were up by double digits month to month. The Building Material Garden Equipment Sales rose less than expected at 23.62%. Clothing surged by 20.55%. Non-seasonally adjusted data fell, same month, March to March, in Furniture and Furnishings, Electronic and Appliances (EAS,) Building Materials and Garden Equipment (BMGE,) Food and Beverage Stores (FBS,) Clothing and Accessories, Sporting Goods, Hobbies, Books, and Music (SGHBM,) General Merchandise (GM,) and Miscellaneous Sales (MISC) sales all declined. The only sectors that had march to March Gains were Non-Store Retail (NSR,) Food and Drinking Places (FDP,) Gas Station Sales (GASS,) Health and Personal Care (HPC,)  and Motor Vehicle and Parts (MVP) sales.

The Non-seasonally adjusted growth rate is slowing. The Rolling Year growth, the growth of the prior twelve months, came in weaker than expected at 4.27%. This year the current month data was only up 1.45%. The Current Year data is up only 2.25%. The Government Shutdown may have had a larger impact than projected.

The Seasonally Adjusted data showed strength in all sectors except Sporting Goods and Hobbies. All sectors were up month to month except SGHBM. There has been weakness in the sector for a long time, possibly due to on-line, or NSR, sales. The March to March sales were down in SGHBM, EAS, and MISC sales. This was unexpected.

The seasonally adjusted growth is also slowing a bit. The Current Year growth is just 3.08%. The Current Month Growth is 3.63%. The Rolling Year Growth is 4.48%. This means that the data month to month was better than expected, hence the headlines that you are reading elsewhere. The CY growth is slower than the RY growth so the growth is slowing.

Even though the data is showing some slowing, both the NSA MARTS rolling year data and the SA MART RY data are growing at over 4%. The seasonally adjusted same month growth rates of 2.84% for January, 2.76% for February, and 3.63% for March bode well for the First Quarter GDP report with regard to Personal Consumption Expenditures. So far this adds up to a 3.08% current Year growth for the first quarter. There were some surprises in the report. This is why they write them.

It's the Economy.