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Judging Others by Thier Measuring Stick

Here's the dreaded headline with which the Washington Post (and Reuters) obliged its readers:

Retailers Face Worst Holiday in 30 Years

Oh no! Sales on the level of 1972? Hardly:

In a weekly report on Tuesday, the Bank of Tokyo-Mitsubishiand UBS Warburg forecast holiday sales in November and December would be up an anemic 1.5 percent over last year, the smallest gain since the banks began tracking weekly sales in 1970.

In other words, in terms of the money actually exchanging hands, this was the best holiday season ever... despite the wobbling economy and turbulent times. Hey, I know that growth is the major spur of the economy, not stasis, but it's also true that doom-and-gloom reporting can have an adverse effect on it.

It says a lot — though nothing new — that the U.S. media is so glass-half-empty.

Posted by Justin Katz @ 08:03 AM EST


Actually, it appears that neither you nor Reuters got it quite right.

What's missing in these figures is the rate of inflation. For the 12-month period through November 2002, the rate of inflation was 2.20%, based upon the Consumer Price Index and calculated by Financial Trend Forecaster.

So, 1.5% more dollar bills are changing hands, but it takes 2.20% more dollar bills to buy the same thing as last year. That's an overall decrease in things being purchased, isn't it?

Apparently, spending actually went down. Was it really the worst decrease in 30 years? Since they didn't get their basic facts right, I no longer trust Reuters enough to believe their summary.

Mark H @ 12/27/2002 10:59 AM EST


That's a good point, and I'll admit to being a little bit out of my depth with questions of relative economics. However, my underlying point was that, even with a slight slip (as you suggest), there's room to be optimistic — not the least because national mindset does affect the future.

Another underlying point, however, is that there are various data and various ways to look at the question. For the former, consider that higher growth estimates do exist. For the latter, consider that deep discounts may have overcome the inflation and led to more "things being purchased." Quibbling I know.

But we do agree about Reuters!

Justin Katz @ 12/27/2002 11:10 AM EST