Reporting bias

Bloomberg reports on the retail sales release “Retail Sales Rise Less Than Forecast as Americans Boost Savings”:

Consumers in the U.S. tempered purchases at retailers in September, pocketing the savings from lower fuel costs and making for a weak finish to the third quarter.

Sluggish sales may raise concern about whether the staying power of consumer spending, which accounts for about 70 percent of the economy, at a time overseas demand is also cooling. While job gains and cheap fuel may help to underpin purchases, a pickup in wages remains elusive as Federal Reserve policy makers are weighing whether to raise interest rates this year.

From the WSJ:

American consumers increased their spending in September, providing support to the U.S. economy despite slowing job growth and uncertainty in major overseas economies.

They are both right, only the bias is different. The point is that the weak retail sales should not have been surprising. You can´t expect spending components to behave contrary to the summary statistic for nominal spending, i.e. NGDP!

Retail Sales

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