The Golden Truth: Is The Commerce Department Fabricating Its August Sales Numbers?

Tuesday, September 15, 2009

Is The Commerce Department Fabricating Its August Sales Numbers?

The headlines for the Government-reported retail sales number loudly announced that "retail sales jumped 2.7% in August." Remember that this is a month to month number, so the August sales number is being compared to the July sales reading. NOT in the headline everyone sees: sales for August 2009 were down 5.3% compared to August 2008. So much for the green shoots of sales growth.

At first blush, this number for August is not very good when you consider that the Government spent close to $3 billion of your money in August trying to stimulate automobile sales. This worked to some degree, as auto sales for August rose 10.6%. That's compared to July. The other large component of the 2.7% sales increase was the price of gasoline. In the second half of July, the price of gasoline jumped over 8%. The Government number does not strip out this inflation effect from its headline-reported number.

But the biggest question I have about the Government's number, and its ubiquitious - if not nefarious - "seasonal adjustment," is that the reported number for August in NO WAY is consistent with the sales numbers reported by big retailers for August OR the rapidly declining trend in consumer credit, which was down over 10% in July (not yet tabulated for August). The news release I read reported "busy shopping malls in August." Here are big mall retailer numbers for August - you decide:

Abercrombie and Fitch -23%, GAP -2%, Hot Topic -7%, JC Penney -5.6%, Limited -4.6%,
Macy's -8.5%, Neiman Marcus -15.3%, Nordstrom -3%, Saks -18.2%

Get the picture? And we don't have the consumer credit number for August, but consumer credit outstanding has been dropping like a rock since the beginning of 2009. Here's chart that shows consumer credit vs. consumer spending (click to enlarge):

I know several people who told me they actually had their credit card lines cut last month.

Is there any reason to believe that consumers miraculously decided to take on more revolving debt in August, other than to buy a taxpayer-subsidized car? We sure didn't see that, if it really happened, in the big retailer numbers in August. This just in: Mastercard announces that their processed volumn was down 8% in July and August - more proof the Government sales number is b.s.:

Article Link

I seriously doubt that the August retail sales numbers, in reality, showed anywhere near the amount growth as reported by the Government's Commerce Department. What I would like see is how the Commerce Department calculates its seasonal adjustments AND the numbers being fed into that calculation. As it stands now, based on the evidence I presented above, I would say that the Government is full of you know what.

2 comments:

EdwardoTuesday, 15 September, 2009
An out and out lie by the U.S. ministers of economic information? Well, that, money printing, and the desperate dispensing of massive doses of putrid propaganda, (pardon my purple prose) are about all they have left.
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Dave in DenverTuesday, 15 September, 2009
Edwardo, they should give George Orwell a posthumous Nobel Prize for his foresight in prophesizing what would happen in this country.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.