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Saturday, September 16, 2006

Retail Sales

There's discussion about how to interpret the latest retail sales figures - William Polley has the links, as does James Hamilton. The main point is one we've heard many times, be careful about interpreting monthly data as it is very noisy. To see this graphically, here's something I put together the last time the retail sales data came out to make a similar point, but never got around to posting (this is updated with the latest data):


As you can see, the average over five months is fairly stable, but there is a lot of noise in the monthly series, too much to make much of a single months movement (William Polley looks at the large standard errors). Here are typical movements by month, along with historical data for July and August:


There isn't much information to be gleaned from monthly retail sales data even though, as William Polley documents, that doesn't stop people from doing so. For a bit more, this post links quarterly retail sales to nominal GDP.

    Posted by on Saturday, September 16, 2006 at 11:17 AM in Economics | Permalink  TrackBack (0)  Comments (3)


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