Headline sales were at 0.0 per cent in November following a 0.2 per cent increase in October, to be 3.1 per cent higher annually. This was much weaker than my forecast for a gain of 0.5 per cent, and the market's for 0.4 per cent. By component, food and household good sales were flat, clothing and department stores fell, while other components were barely above zero (see below chart).
Notionally this suggests weakness in retail sales, although regular readers will already know why we can’t draw this conclusion from the survey.
Firstly, the series is highly sensitive to the process of seasonal adjustment, a dark art at the best of times and I suspect some structural changes and price deflation have added to the already substantial difficulties in seasonal adjustment.
The more important consideration of course is that retail sales, as given in the national accounts, are much stronger – in both nominal and volume terms – and have been for some time. The national accounts data is broader in scope and gives a much better guide as to retail spending overall. So does this survey help us in any way determine the strength or otherwise of retail spending? Not really.