The ABS stopped calculating the trend (the dark line) in November because "it is not possible to determine the trend in retail turnover through the period affected by the Federal Government Economic Security Strategy Package and other influences associated with global economic conditions".But it is absolutely clear where retail was going. The December stimulus payments broke the trend and continue to do so.
Even with the 2 per cent fall in seasonally adjusted spending in February we are still spending far more in the shops than we would have without the payments.
Commenter Andos asked for Tony Meer's analysis. It's below the fold:
"The 2.0% fall in the seasonally adjusted value of retail turnover follows an upwardly revised 0.5% gain in January and a 3.8% jump in December. The monthly volatility in these data is all about the timing impact of the cash payments associated with the Economic Security Strategy (ESS) and is something that will continue to be a feature of the data going forward as the cash payments associated with the Nation Building and Jobs Plan (NBJP) have started to be made.
Taking account of the upward revision to January (+0.5% from the originally reported +0.2%) the result was in line with our pick and therefore our view remains strongly that the first round of targeted fiscal stimulus is continuing to boost the value of retail turnover relative to what it would have been otherwise.
The easiest way to understand this is by reference to a chart of the level of retail trade. Doing this below, we show (red segment) the level of retail turnover as reported and then (broken blue) retail if the previous weak trend had persisted.
The difference between the two is the impact on retail trade so far of the ESS, i.e. cumulatively retail trade has been around $2billion higher over the three months to February due to the Economic Security Package."
4 comments:
Playing around with the numbers in same fashion I would guesstimate the spending is about $1.8 billion more than would otherwise have been the case. So Tony's $2 billion (assuming this methodology is appropriate) guesstimate is reasonable. Given, however, that the Commonwealth pumped $10.4 billion into the economy it is not clear that the exercise can be described as being successful. Indeed, if we replicate this technique using unemployment data rather than retail sales, the stimulus starts looking very sick.
The $1.8 to $2.0 billion is presumably the area between the trend line and actual spending.
But what if the counterfactual is that spending would have fallen away from the trend - as I believe it has in the UK and the USA?
Too right. Retail spending was almost certainly boosted by more than $1.8 to $2.0 billion in those months.
Thanks, Peter; much clearer.
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