What do the latest retail sales numbers tell us about the outlook heading into the holiday? It depends whether you believe more in the seasonally adjusted or unadjusted data.
If you believe in the adjusted data, then sales growth improved significantly—to 4.4% growth year-to-year—and the holiday outlook may suddenly be looking much better than a month ago.
If you believe in the unadjusted data, then sales growth worsened significantly—to 2.3% growth year-to-year—and the outlook looks even weaker heading into the holiday.
The truth probably lies somewhere in-between, given that Spending Confidence in October moved sideways (see prior post here). If so, then the MacroSavvy™ forecast (found here) of a relatively weak holiday—between the two extremes suggested by the October numbers—remains likely.
According to the seasonally adjusted results for October, which are mostly commonly reported, there was month-to-month improvement across most retail channels:
In October, seasonally adjusted sales excluding autos, food service, and fuel jumped 0.9% month-to-month and 4.4% year-to-year. This is up significantly from 3.2% adjusted growth in the third quarter, which was revised higher. These measures exclude gasoline and fuel dealers.- By the adjusted measures, nearly all retail channels improved from the prior month except for furniture/home furnishings stores, electronics/appliance stores, and food service/restaurants.
- On an unadjusted basis, sales excluding autos, food service, and fuel rose 2.3% year-to-year. This is down significantly from 3.3% unadjusted growth in the third quarter, which also was revised higher.
- By the unadjusted measures, all the major retail channels slowed in terms of year-to-year sales growth.
See the graphic for a summary of the quarterly trend.
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