Retail Sales Bounce?


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It appears this May is one of those lucky Mays when Retail Sales enjoy 2% up year-over-year seasonality adjustment without which they would have been dismal. Looking at pattern of May seasonal adjustments over the last 25 years it appears that this happened before. Interestingly, though, April plus May seasonality adjustment is twice as large as it ever been before.

Below is Year over Year %-change in Total U.S. Retail and Food Services Sales Seasonally Adjusted (SA) vs Not Seasonally Adjusted (NSA) released today:

Quite a difference seasonality adjustment makes for year-over-year (YoY) series where one expects no essential seasonality effects. We drilled deeper and looked at May YoY seasonality adjustments through retail sales report history:

Indeed it appears there is some pattern above that should be an attempt to model calendar effects. Let us look at April YoY seasonality adjustments as well.

Though patter is less clear it is observable that May seasonality offsets April one. So let us look at April plus May seasonality adjustment through years:

Seems like 2% YoY April plus May adjustment this year is twice as large as any up adjustment for this period we have ever seen before. Interesting indeed.

Let us conclude with YoY series for Total U.S. Retail Trade and Food Services, Retail Trade and Food Services (ex Auto) and Retail Trade:

If YoY seasonality adjustment is taken out these series don’t look all that pretty at any rate. Hopefully we will see a real bounce next month.

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