There they go again.
The press is out of the gate with the first news stories on the retail sales numbers the government released at 8:30 this morning. If you didn’t know better, you’d think all is right in econoland. But you’d be seeing only part of the picture, because the press isn’t showing it to you.
Here’s The Wall Street Journal’s (which will probably put a new story at the URL I’m linking to—something it should really stop doing) headline:
Retail Sales Jump on Clunkers Boost
U.S. retail sales surge, producer prices up on energy
Retail sales driven sharply higher
Retail sales jump 2.7% in August on widespread gains
Retail Sales in U.S. Jump 2.7%, Most in Three Years
The New York Times does best:
Car Sales Lead Increase in U.S. Retail Sales
First of all, let’s get it out of the way that the increase is certainly good news. We’ll take it.
But let’s also say that it would have been very difficult for the number not to rise sharply, with the government subsidizing tens of billions of dollars in auto sales during the month. Without including cars, retail sales were up 1.1 percent. Without including cars or gas, which spiked more than 5 percent this month, retail sales were up just 0.6 percent. This is better than expected, for what that’s worth (not a lot in the stock market so far this morning), but you might not want to break out the bubbly just yet.
More critically, none of these stories—not a one—gives readers the year-over-year number. If you’re doing a data story like this, I can’t think of a legitimate reason why you wouldn’t give both the month-over-month and the year-over-year numbers. It’s called context. Give it to your readers, instead of hyping your news story.
In this case, the year-over-year numbers are abysmal. Retail sales in August were down 5.3 percent from the same period a year ago, when the economy had already been in recession nine months. Take out car sales, and they were down 6.2 percent.
Check out Calculated Risk’s revealing chart:
CR puts it about right:
It appears the cliff diving is over and the official recession probably ended in July. But retail sales are still far below the pre-recession level, and the recovery will probably be sluggish.
We’re about to get into some more-favorable “comps”—in other words, retail sales got particularly bad in the weeks and months after the Lehman meltdown a year ago, so it should be easier to post better year-over-year numbers. But numbers were already getting worse in August of 2008.
Regardless, there’s no excuse not to give this context to readers, even in early spot stories.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.