Trump Confuses With Bombastic Holiday Retail Sales Boast

“2019 HOLIDAY RETAIL SALES WERE UP 3.4% FROM LAST YEAR, THE BIGGEST NUMBER IN U.S. HISTORY”, Donald Trump shouted, in all-caps on Christmas Day.

“CONGRATULATIONS AMERICA!”, he went on to shriek.

That tweet fostered quite a bit of confusion. Trump is seemingly referring to Mastercard SpendingPulse, which measures consumer spending across all payment types including cash and check.

According to preliminary data, this was, in fact, a record year for online sales during the winter shopping season. Mastercard’s data shows E-commerce sales jumped 18.8% from November 1 through Christmas Eve, and comprised nearly 15% of total retail sales. Overall holiday retail sales, excluding auto, rose 3.4%”.

Notably, this was a shorter holiday shopping season. “Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices”, Steve Sadove, a senior adviser for Mastercard said.

That’s what we know.

Well, actually, we know a few other things, too.

We also know that, as Reuters points out in what very well may be the source article for Trump’s tweet, The National Retail Federation “had forecast US holiday retail sales over the two months to increase between 3.8% and 4.2% [compared] with an average annual increase of 3.7% over the past five years”.

A quick look at NRF’s official forecast (i.e., what Reuters cited in the linked article, alongside the Mastercard data) finds the federation noting that in 2018, holiday sales grew 2.1% over 2017 “an unusually small increase amid a government shutdown, stock market volatility, tariffs and other issues”. NRF goes on to say that 2018’s unusually low figure was “less than half the 5.2% growth seen during the 2017 holiday season”.

For their part, Mastercard on November 4 projected holiday sales would grow 3.1% this year.

[Note: The government’s retail sales report for last December was a disaster, but was generally seen as something of an anomaly]

Now, consider this from Mastercard in 2017:

Mastercard SpendingPulse today reports that holiday sales increased 4.9 percent this year, setting a new record for dollars spent.

And this from 2018:

A robust shopping season from before Thanksgiving through Christmas has given retailers much to cheer about this year. According to Mastercard SpendingPulse, which provides insights into overall retail spending trends across all payment types, including cash and check, holiday sales increased 5.1 percent to more than $850 billion this year — the strongest growth in the last six years. 

It is, as usual, impossible to know precisely what article Trump was referring to on Wednesday. The Wall Street Journal published a piece that was broadly similar to the linked Reuters article, for example.

Wherever he read it, though, the 3.4% figure is from Mastercard SpendingPulse, and as far as anyone can tell, in no world is it “the biggest number in US history”.

Of course, because Trump isn’t particularly adept with the English language, everything he says (and tweets) admits of multiple interpretations and all manner of ambiguity. You could, for instance, take “the biggest number in US history” as a separate thought, apply it to online sales, and it would be true.

In any event, here’s a statement that admits of no such ambiguity: The US consumer is carrying the economy right now.

Business spending and CEO confidence are both in the doldrums, so whatever the numbers are (or aren’t) for the holiday shopping season, they damn well better continue to hold up on aggregate over the course of 2020. During the last two quarters, personal consumption has been robust.

Analysts and economists generally expect the economy to motor along in the new year. Consensus is for 1.8% growth, significantly below what the administration promised to deliver, but still solid.

Only one major bank that we’re aware of is calling for a recession. Here is the distribution of forecasts:

Again, the median needs to be correct if you’re Trump vying for re-election, and given lackluster business spending, the consumer holds the key. If consumer spending were to slow significantly, Trump may get a pink slip for Christmas next year.

For now, though, he can rest easy thanks to Mitch McConnell. And also thanks to the most tremendous holiday shopping season in the history of the world, apparently.