UK Retail Sales Rise 1.2%, Real Retail Sales Fall 1.3%
Economics / UK Economy Sep 18, 2008 - 10:38 AM GMT
The official monthly retail sales data again demonstrated the inbuilt trend inaccuracy by reporting a 1.2% rise in August 2008, up 3.4% on the year and in the face of the UK economy slumping fast into recession. Whilst the mainstream media mistakenly concentrates on explaining why retail sales rose, I refer readers to the below two graphs, one of the official retail sales data and the second of the inflation indexed and trend adjusted retail sales which more accurately reflects the current true state of distressed retailers than the wild month to month gyrations of official data that literally switch between boom and bust statistics on a monthly basis.
Even the venerable Financial Times reports puzzlement at the data- Surprise rise in UK retail sales - " These numbers are still puzzlingly strong compared to the much gloomier message coming from the retail surveys, consumer confidence figures and anecdotal evidence,” said Jonathan Loynes, economist at Capital Economics. “”As such we suspect that the (Bank of England's) Monetary Policy Committee will treat them with a pinch of slat when considering the overall strength of the household sector.”
The only thing puzzling is the lack of analysis performed on the data series to determine the underlying trend which as clearly been bearish for several years which has been reflected in the relative under performance of the retailers stock prices.
Whilst official data suggests healthy growing positive retail sales at 3.4% year on year as though everything is rosy in the high street, the real state of the UK high street as per trend and inflation adjusted data illustrates a slump in retail sales activity that is contracting at the rate of -1.9% year on year and reflects the actual state of the retail sales market. This trend is expected to continue deteriorating for the duration of the imminent recession as more retailers report losses and in fact go out of business.
By Nadeem Walayat
http://www.marketoracle.co.uk
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Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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