Retail Sales 'Smoke and Mirrors': Biggest Seasonal Adjustment Ever Paints a False Picture

By: Eric Blair

When governments and financial institutions need to conjure up good news, statistical gimmickry becomes the tool of choice—and that’s exactly what we saw with September's retail sales report. The headline numbers may look optimistic, but peel back the layers, and a far less rosy reality emerges. This so-called “blowout” in retail sales is more a triumph of seasonal adjustments than any meaningful economic recovery.

Bank of America predicted the spin would happen, warning us to brace for a 0.8% month-over-month (MoM) rise in retail sales—much higher than the mainstream consensus of 0.2%. And sure enough, we got “better-than-expected” numbers across the board: retail sales climbed 0.4% (beating expectations of 0.3%), ex-auto sales were up 0.5% (vs. 0.1% expected), and the control group, which feeds directly into GDP estimates, spiked 0.7% (beating the 0.3% forecast). But here’s the kicker: these numbers look good only after the most aggressive seasonal adjustment in recorded history.

Behind the Headline Numbers: A Crumbling Foundation

Despite these upward adjustments, the year-over-year (YoY) retail sales print still fell to 1.7%, the weakest since January. If that’s not troubling enough, the unadjusted numbers tell an even starker truth: retail sales plummeted 7.5% MoM without the statistical boost. Think about that—a massive drop in spending, masked by a seasonal adjustment so large it practically rewrote September’s reality. This isn’t just financial sleight of hand; it’s outright manipulation to keep the narrative intact.

The Election-Year Effect

It’s hard not to see a pattern here. With a contentious election on the horizon and mounting pressure on the incumbent party, economic spin is in full force. The cracks in the economy are widening, with inflation hammering household budgets and consumer confidence teetering. But the retail sales report gives the illusion that everything is fine—a narrative the administration is desperate to maintain.

Yet, even the sanitized version of the data offers clues that things are unraveling. Spending at gas stations and furniture stores fell on a MoM basis, a sign that consumers are cutting back on non-essential purchases. Meanwhile, spending at food and beverage stores rose, suggesting households are prioritizing the basics, a classic indicator of financial strain.

Is Retail Spending 'Hot' or Is Inflation Burning Through Savings?

Adjusted or not, these numbers raise more questions than they answer. Core retail sales may have shown a 4.0% YoY increase, but when you factor in inflation, real retail sales are likely shrinking. That’s a red flag. If people are spending more, yet getting less in return, it’s not a sign of a healthy economy—it’s a symptom of inflation eating away at purchasing power.

The flat YoY print for unadjusted retail sales (0.0%) offers the clearest signal: real spending is collapsing, and any boost in nominal sales is likely the result of inflated prices, not increased consumer demand. The narrative of strong retail sales is just another distraction from the erosion of personal wealth that’s happening in plain sight.

Prepare Now—Don’t Wait for the Next Crisis

The message is clear: the numbers they want you to see aren’t the ones that matter. Inflation is digging deeper into your pockets, retail spending is stalling, and government manipulation of data won’t change that reality. You need to protect yourself before things get worse.

Download Bill Brocius’ ebook “7 Steps to Protect Your Account from Bank Failure” and start preparing today: Get theGuide Here.

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