All of the economic news about recovery is really encouraging, right? Sales in December were up quite a lot over last year, employment is improving… (If by “improving” you mean not “unimproving” as rapidly as it was earlier in the year.) Consumer confidence is wonderful.
Remember, though, that none of those numbers are actual, real numbers. They are samplings and polls, the latter of which is a sampling as well.
For instance the government gathers retail sales numbers by questioning a relatively small number of stores who have all been in business for multiple years. If a store does not respond to this year’s questionnaire, the government assumes its sales numbers are unchanged from the preceding year. If its failure to respond is actually caused by its having gone out of business and closing the doors, then its sales numbers actually changed quite a lot, to zero, so the government estimates based on its previous year’s sales might be, shall we say, a bit inflated.
One number that is not an estimate is tax receipts; every business has to file the sales taxes based on current sales at the end of each month, and the government compiles those as actual totals, not as some sort of estimate or “seasonally adjusted” number. So how were the tax receipts for the wonderful holiday shopping season that the government reported?
Um, December was down 7.7% over the preceding year.
The Wall Street Examiner is available by subscription only but the first paragraph of this article about December sales tax receipts can be read, telling us that November’s tax receipts were also down by the same amount. The first sentence of the next paragraph is a doozy, “Meanwhile, the implications of the NAR’s data on pending home sales are terrifying.”
I happen to think that attempting to restore the economy by consumer spending and “restoring home values” is delusional in itself, but that seems to be the government’s plan and they are telling us that it is showing signs of success. All of the government’s manipulated “estimates” are in agreement with that, but the one hard number available is completely at odds with it.
Who to believe, who to believe…
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