No finer example is available than Thursday's Associated Press article concerning February's very disappointing retail sales report. To be sure, store traffic was much worse than expected last month, and we are not trying to paint a rosy picture.
However, there are two truly disturbing elements in Martin Crutsinger's piece entitled "Retail Sales Plunge by 0.6 Percent" (h/t NBer Par for the Course):
- A 0.2 percent rise was depicted as "small," a 0.4 percent rise was "modest," but a 0.6 percent decline was a "plunge"
- In February, January's rise in retail sales was "surprisingly strong." Now, that same rise was depicted as "modest."
First thing's first (emphasis added):
Consumers, battered by plunging home prices and a credit crunch, stayed away from the malls in February, pushing retail sales down by a larger-than-expected amount. It was another worrisome sign that the country could be falling into a recession.
The Commerce Department reported Thursday that retail sales fell by 0.6 percent last month, far worse than the small 0.2 percent increase that analysts had been expecting.
The weakness was widespread with sales of autos, furniture and appliances all down.
It marked the second time in the past three months that retail sales have taken a tumble. Sales had fallen by an even bigger 0.7 percent in December, the largest drop in six months, as the nation's retailers suffered through a dismal holiday shopping season. Sales posted a modest 0.4 percent gain in January.
Hmmm. So, 0.2 is small, 0.4 is modest, but 0.6 is a plunge? How does one go so quickly to a plunge?
Applying Crutsinger's logic to a real life example, if a $100 stock goes up 20 cents, that's a small rise. If it rallies by 40 cents, it's a modest increase. But, if it sells off by 60 cents, THAT'S a PLUNGE!
I get it, Marty.
Of course, maybe even more hysterical is how Crutsinger reported January's numbers when they were released on February 13 (emphasis added):
Retail Sales Post Surprising Rebound in January Following Dismal December
Shoppers put aside worries about the slumping economy to go to the malls and auto dealerships in January. That propelled retail sales to a surprising rebound following a dismal December.
The Commerce Department reported today that retail sales rose by 0.3 percent last month. Sales had fallen by 0.4 percent in December as retailers suffered through their worst Christmas shopping season in five years. The increase was led by strong demand for new cars and a big jump in sales at gasoline service stations, which reflected higher pump prices.
The January performance came as a surprise to analysts who had been forecasting a 0.3 percent decline for the month. However, the January rebound may not last given all the problems facing consumers from the steep slump in housing to job losses and a severe credit squeeze.
Hmmm. So, this was a surprising increase when he first reported it in February. But, now that same increase is just "modest." Think Marty got the memo?
