Some things are best left just as they are published.

Instead, seasonally-adjusted, overall retail sales were calculated to have gained 0.71% from July to August. The implication according to today’s mainstream interpretation seems to be that the last payroll report, the one that missed big, must have been itself a statistical quirk and that consumers as workers are doing just fine.

More than fine.

This is, of course, what seasonal adjustments are meant for; to take regular seasonal patterns and translate the unadjusted data into a comparable monthly change apples-to-apples (including counting up the number of weekend days and accounting for changes in when holidays show up). For our immediate purposes, it is normal for unadjusted August retail sales to end up substantially more than July.

Therefore, what Census does is try to translate what the “normal” increase from July to August must be, and then compare the unadjusted current data to that estimate to come up with the seasonally-adjusted figure.

In other words, hypothetically, if each year the average change from July to August due to seasonality is, say, 0.5%, then in any year where the actual unadjusted increase one month to the next is 0.7%, the seasonally-adjusted figure would be put down as better than “normal.”

What would it be, however, if unadjusted retail sales were thought to be less in whichever August compared to July?

Census data in each of the past two years, 2020 and now 2021, produce that very outcome. For both, August retail sales ended up less than July on an unadjusted basis. When the seasonal adjustments are then applied, magically August is much better – including August 2021 which “everyone” expected to be less but is now transformed into inflation-is-back-on-the-table awesome.

In fact, the month-over-month increase for this August (+0.71%) is almost identical to last August’s +0.81%. How? I have no idea.

To be perfectly clear, there is no conspiracy here nor am I suggesting anything other than the simplest explanation.

The data may be easily confused (see: autos) because these are atypical times. What that would mean is far less assured accuracy especially when it comes to seasonally-monkeyed estimates.

Whenever any data series breaks from long-established precedent (like, say, the participation rate and its effect on the unemployment rate), there’s potentially some trouble figuring out the other numbers related to it.

To go further on the data discontinuities, Census believes that retail auto sales were still huge last month, unadjusted at 10% more than last August while 11% better than August 2019. Immensely booming car sector.

While it doesn’t account for price changes, still this other was an incredibly low number (blamed on low inventory created by production choked off by the menacing microchip shortage) more than 14% less than the estimated number of units sold in August 2020, and a ridiculously different 24% below August 2019.

Something is clearly way off with at least one set of these estimates, and by all anecdotal accounts it has to be Census (though could be both).

In the end, all this may just be splitting hairs anyway because 1. Retail sales remain elevated even if we aren’t exactly confident by how much; 2. They are, over several months, generally fading as expected; 3. In August with renewed delta fears it just may be that some spending on goods came at the unexpected expense of spending on services, which has been the trade-off for much of the pandemic period (and we’ll have to wait for BEA PCE figures later this month to confirm).

Still, this is one of those crucial months (I know, they all seem crucial when they happen) when some legit accuracy might be extremely helpful. It could just be that August retail sales is an outlier, statistical or real, which wouldn’t be unusual.