Open up the business section of any newspaper on Monday and you’ll be greeted by the same news: Black Friday sales disappointed. “Holiday Weekend Sales Slide, Despite Bargains,” the New York Times reads. The Wall Street Journal went with “‘Black Friday’ Fades as Weekend Retail Sales Sink.” On Tuesday, you may see similar headlines about Cyber Monday sales data, especially if it comes in below expectations.
Weak sales data is not good: We want consumers spending money and getting the economy back going during the Holiday season.
But it’s not really bad news, either, because sales over Black Friday weekend are a meaningless statistic. Jim O’Sullivan, the chief economist at High Frequency Economics, tweeted a chart that shows this perfectly. For instance, post-Thanksgiving weekend sales were lower in 2013 than in 2012, but overall average retail sales in November and December were higher in 2013.
Why is that? At Bloomberg View, Barry Ritholtz offers one explanation: The National Retail Federation survey methodology is flawed and offers no credible data on sales totals this weekend. We won't know the true sales figures until January. In other words, pay no attention to the Times, Journal, and any other reports on the “disappointing sales.”