What Is the Deal with the Reporting on August Retail Sales?

So, was August a good or poor month for retail sales? It depends on who you ask. Despite that the fact that everyone is working from virtually the same data, different reports are reaching totally opposite conclusions.Here's the beginning of one of several reports with an ominous tone from the Associated Press (negative words in bold):

Retail sales in August posted the weakest showing in two months as worried consumers curbed their spending habits.The Commerce Department reported that the nation's retailers saw a tiny 0.2 percent increase last month following a much bigger 1.4 percent rise in July. It was the weakest performance since sales had actually fallen by 0.5 percent in June.Much of the August weakness reflected a sharp slowdown in auto sales, which edged up just 0.4 percent last month after having surged by 4.3 percent in July.

But here's a report on national results from The Dayton Business Journal (Note: DBJ is part of American City Business Journals, which is probably publishing a similar report in other cities with ABJ publications). The only difference is that also looked at data from the National Retail Federation that wasn't much different from what Commerce reported (positive words in bold):

Retail sales surged more than 6 percent nationwide in August, with vacations, back-to-school shopping and clearance sales enticing consumers to part with their cash, according to figures released Thursday.Industry sales jumped 6.5 percent over the year-ago period and climbed 0.3 percent seasonally adjusted over July's performance, the National Retail Federation reported. These figures exclude spending for automobiles, gas stations and restaurants.The U.S. Department of Commerce reported that general retail sales increased 6.7 percent compared with the same month a year ago. On a seasonally adjusted basis, sales increased 0.2 percent compared with July.Commerce Department figures include autos, gas stations and restaurants.Industry observers took heart from the numbers and hope it portends good things for the holiday-selling season.

How can this be? Although looking at monthly results is important, the second article covers year-ago comparisons that the AP chose not to report on. 6%-plus year-over-year retail sales increases are way ahead of inflation (to be fair, the Dayton paper should have indicated immediately that the 6% was a year-over-year figure). Since July was so strong, it's not surprising that there was a bit of a breather in August.The second report is the better bet. Too bad most people will only see or hear about the first one._____________________________UPDATE: The AP reports are also consistently saying that first-quarter 2006 GDP growth was 5.3%, when it was really 5.6%. The Washington AP bureau has been informed.Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.