Statscan spins the recession

Here is the upbeat take on retail sales from Statistics Canada’s Daily:

Retail sales rose 1.9% in January after decreasing 5.2% in December. Sales rose in five of the eight retail sectors, led by a 3.8% increase in the automotive sector. In volume terms, retail sales were up 1.8%.

It goes on to report that sales are up in nine provinces. Woo hoo, the recession is over!

But if we take a reality check, and look not at December 2008 to January 2009 numbers, but January 2009 over January 2008, the result is brutal. I looked through the tables and we find that retail sales are down almost 6% over a year ago. Some of the sub-categories are much worse, such as auto sales, which are down 18%. That is deep recession territory.

As for the provinces, all are in negative territory on a year-over-year basis. The Daily says BC had the largest gain of more than 3% compared to December, but sales are down 8.5% compared to a year earlier, the worst of any province.

All that the Daily tells us, in this context, is that December was really awful, and January was somewhat of an improvement relative to December. But ignoring the year-over-year trend is scandalous and irresponsible, and I for one would like to know who made that call over at Statscan. It just seems way too convenient that this analysis is in step with the federal government’s upbeat message track.

5 comments

  • The fact the sales dropped from January 2008 to December 2008 isn’t exactly news. The don’t have to repeat it with every month’s announcement.

    The fact that sales stopped dropping in January 2009 is something new and interesting.

    Presumably these are seasonally adjusted numbers, and the difference in sales between December (Christmas) and January would be the largest seasonal adjustment, the error in the seasonal adjustment may be larger the 1.8% change.

  • Bless you for providing some research and context. No one else is…

  • Its not just Stats Can. I had a chuckle also over CREA’s (Canadian Real Estate Association). This is from their recent press release.

    “Sales fell 31 per cent to 25,373 units in February, the smallest year-over-year decline since October 2008 . . . It looks like the Category 5 hurricane which had been pounding the home resale market has been downgraded to ‘just’ a Category 4”.

    The housing storm was downgraded because sales only dropped 31%!!!! the smallest yearly decline in, count them, a whole 5 months. January was probably so bad that even February’s dismal numbers looked good.

  • Marc you are definitely on point with this one. Did you know that the new Statcan boss used to hang around and work for Thomas d’Aquino. So you know what circles he is hanging with these days.

    The class war rages on to a new level with Harper behind the wheel. No ditch is safe, no tire will have treads, and no worker will have a pay cheque that is happy.

    It is very clear now that Statcan’s objectivity is in some serious state of decline into a banana republic “bias from above”.

    Harper and his band of reality changers must realize that culturally constructed economic reality can only be changed to a point before the gates come down upon them.

    sc

    Good stuff Marc.

  • I guess this is an echo of Darwin O’Connor’s point, but when we were looking for signs of a business cycle peak, it wouldn’t have made any sense to say “Yes, X fell this month, but if you look at y/y growth in X, we’re still well up. So there’s no way last month could have been a turning point towards a recession.” By that standard, we wouldn’t have declared an employment recession until the release of the January 2009 numbers in February.

    FWIW, I don’t think a one-month jump in retail sales is a signal that we’ve moved on to a recovery. But I don’t see what purpose is served by only looking at data filters that look bad, or only looking at data filters that look good.

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