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Retail Sales and future Statistics

Written by A Forex View From Afar on Monday, April 14, 2008

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Retail sales for the last month came in better then expected at 0.2% vs. 0%, while the last release was slightly revised from -0.6% to -0.4%. This data doesn’t look too good, but it’s in far better shape then other releases. The big thing is these numbers aren’t inflation-adjusted, and it’s likely the CPI numbers will be bigger than the 0.2%. So when adjusted, the Retail Sales are somewhat negative.

To add some more weight to the Retail Sales numbers, from my point of view, consumers still haven’t seen all the crisis consequences, and I hope neither the markets nor the consumers will actually get to see them.

Some time ago I said that the only way for the Fed to reduce inflation is to change (again) the way that CPI is calculated. I wasn’t speaking seriously back then, but probably someone took my words:

“Just when reliable and timely indicators are needed most, resources devoted to their production at our federal statistical agencies have been cut, requiring the termination of data series or a reduction in sample sizes used to produce the data.”

“The Bureau of Labor Statistics (BLS) has been forced to terminate all hours and earnings data reported for local areas as well as payroll employment for 65 small metro areas. The BLS International Price Program has also eliminated a number of series including prices of transportation services such as passenger air fares, air freight, and crude oil tanker freight. The Census Bureau will discontinue its Survey of Alterations and Repairs in May. The Bureau of Economic Analysis will reduce the level of industry detail in its county data and will eliminate the benchmark capital flow tables that provide baseline data on industry-by-industry investment by type of investment. This may only be the beginning.”

Maurine Haver President of Haver Analytics

Does the “resource” reduction sound familiar? It also happened with the M3, money supply numbers, and now the Fed is the only major bank that doesn’t publish them. Someone could say it is outrageous.

Since the CPI is one of the most important economic gauges, we will all have to suffer because of “resource” reduction. Due to the same reduction the Non-Farm Payroll data will be modified too!!!

Have you ever wondered where the Government gets money to run two wars and give $150bn in the form of tax rebates, when the Government is running such a large deficit? I’ll tell you, from cutting the budget at Statistics agencies.
This way, in a couple of years the only economical-statistical release will be the interest rate, if they don’t decide to cut it off due to huge costs.

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