Black Friday: Another Crushing Economic Disappointment

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- U.S. Thanksgiving has become a highly ritualized holiday with a large segment of the American population. Eat turkey. Watch football. Go shopping. And then listen to the media lie about the shopping the next day.

In this respect, Thanksgiving 2011 was a carbon copy of the last several years. Turkeys have again (briefly) become an "endangered species" in the U.S., and (so-called) "Black Friday" was another crushing economic disappointment. Those who have only heard the hype from the mainstream media may be somewhat confused by this prognosis, so let's dive into the data.

"Black Friday sales rise 6.6% to record," gushed Bloomberg. Sounds impressive! Or does it? It seems those tricky little scamps at Bloomberg left out one thing in their calculation: the word "inflation."

>> Why You Shouldn't Listen to Black Friday Data

This is not some innocent oversight. As I remind readers again and again, comparing dollar-figure numbers without adjusting for inflation is utterly meaningless. It is comparing apples to oranges. Whether one is reporting retail sales or GDP figures, the only way to engage in credible analysis is to adjust for inflation in order to compare data in constant dollars.

Indeed, GDP data is exclusively reported using (supposedly) inflation-adjusted dollars. It is universally understood that failing to "deflate" GDP figures by the prevailing rate of inflation means that the statistic no longer reports "economic growth." It merely indicates the rate of inflation. And so it is with Black Friday 2011.

When seeking reliable data for U.S. inflation, regular readers know there is only one place to go: to John Williams of Shadowstats.com. We know this is the most reliable inflation data available for one very simple reason. John Williams calculates his inflation statistics the same way they were calculated a generation ago.

Conversely, the U.S. government has "massaged" its inflation calculation so extremely over the past 25 years that it is no longer even recognizable in relation to older calculations. Again we have a deliberate attempt to deceive. If the U.S. government genuinely believed it had come up with "a better inflation calculation," then all it had to do was plug the old data into the new formula, and then all the inflation data would be consistent.

1 2 3 Next › Last »