EYE-BALL Guru on – Media Economic Commentary on June 2012 Retail Sales Figures – just niave …
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– on June 2012 Retail Sales Figures – Just Naive-
| Author: EYE-BALL Guru | 3rd Aug 2012 |
|Re-Edited 4th Aug 2012.
The June 2012 Retail Sales numbers were released this week and generated a host of opinions as to what they actually represented.For the record the data showed a growth in Retail sales for June 2012 across all Industry to $20,780.9 billion. This was up from the May 2012 figure of $20,778.8 billion and represented a growth month on month of 0.01%.
Industry Sectors grew/declined by the following numbers May 2012 – Jun 2012:
Comparative numbers from the May 2011 – June 2011 period appear below:
In fact – the May – June month on month numbers going back to 2007 are interesting. They give a perspective of pre GFC and post GFC. Those numbers appear below for the Raw Data (Original), the Seasonally Adjusted numbers, and the Trend Flow assessment – all as provided via extractions from the ABS spreadsheet data.
This Table shows ‘RAW’ data improvement in Total Industry Sales since 2008 (-3.88%) to an improved 2012 figure of (+0.01%). The Table has many comparisons that bare further research, yet the Journalists who reported in the June 2012 numbers only reported on the ABS summary numbers and drew their conclusions based only on recent data – i.e. 1-2 months.
These monthly retail numbers are only indicative of trends and need to be viewed in the larger perspective.
Since the GFC everybody is hyper sensitive to minute swings. If anything, the A$ value has a 50 fold impact on retail sales than RBA moves on interest rates – and yet media and economic journalist’s still don’t understand how the high A$ value erodes spending power, cost jobs, and closes down business’ all across Australia. If they do – then they should write about it in a common language when they use Retail sales as the focal point of the story.
If people don’t have jobs, and their confidence in the economy is low then it is natural to assume they won’t spend. End of financial year sales can change that equation and these end of year sales are only matched by post Christmas sales. That is why the ABS seasonally adjust their Raw (Original) data series.
Imports are cheaper with a high A$ policy but shoppers can buy online in offshore markets and get better value. These sales are not recorded in the ABS retails sales numbers.
The Economic Media’s reporting on these Retail Sale numbers don’t understand the correlation between all of the above, else they would have written a more in-depth story. For example – ‘The Australian’ carried a story that took task at the RBA for having prematurely softened Interest rates. The story actually gave a slant that the RBA had moved too soon – see story below:
This story is ‘chin-fluff’ … why pick June as a month to make statements contained in the story? See highlighted section. _suggests’ such a hybrid word – an each way bet – nothing definitive. The next paragraph stated that Retail Sales are – ‘growing in all States’ – yet the Table above only shows ‘Department Store’, and ‘Household Goods’ sales as having increased.
June is the retail markets biggest sale month – retailers offer the biggest discounts ahead of their stocktake end of year cutoff. The ‘Department Retail’ sales in the Table above show a May – June 2011 figure of 4.47% to a May – June 2012 figure of 10.95%. Over the 2007 – 2012 period for Department Retail sales – the figures are volatile. This primarily reflects the ‘discounting’ by retailers heading into ‘end of year’ balance dates – not ‘interest rate’ cuts 2-3 months earlier.
That is not to say that the Interest Rate cuts did not help – but for Journalists to write about economic policy, and only look at interest rates as a cause is very misleading.
The ‘Seasonally Adjusted’ numbers for the same Department sales also show similar volatility – and all smoothed when the ‘Trend Flow‘ numbers are viewed.
There was another Journalist comment made by ‘The Herald’ which again drew the obvious interest rate cuts as being part responsible –
There has to be smart Economic Journalist out there … surely the Australian Media can do a better job on reporting and researching Retail Sales statistics.
If these Journalist’s knew their material they would have be pressuring the RBA and Treasurer Swan on why interest rates have not fallen further and much sooner 2-3 years ago. The Australian economy risk’s running aground in an abrupt halt in coming quarters. What will the media response be then – that interest rates should have fallen further an much sooner?
The following chart is a measure of Retail sales over a 30 year period – [Click on chart to enlarge in a new window]
Look at the last 3 years of data as compared with the previous period … you think the June Quarter number really means anything?
Have your say where it counts: – contact your Local Federal Representative via the links below and let them know how you feel about this, or any other topic that you feel strongly about – or you can just post a comment below and let off some steam.
The EYE-BALL Guru …