e-Commerce Holds Strong in Fourth Quarter

The federal government last month put its estimate of e-commerce sales for the fourth quarter of 2006 at $29.3 billion, up 6.3% from the third quarter, and up 24.6% from the fourth quarter of 2005, with the increase in total retail sales from late 2005 to late 2006 estimated at 4.6%.

Total estimated retail sales for the fourth quarter of last year tallied to $990.8 billion, according to the Census Bureau. That's an apparent statistical decrease of 0.2% from the third quarter.

But, concerning the indicated estimated minuscule decrease, the Census Bureau says that it has insufficient statistical evidence 'to conclude that the actual change is different from zero' when the report was released in mid-February.

The fourth quarter figures are adjusted for seasonal variation and holiday and trading-day differences, but not price changes. The Bureau typically adjusts the figures that way, and also releases non-adjusted estimates, which are provided below.

Estimated margins of errors for the calculations are:

• '2.8% for estimated fourth-quarter e-commerce, adjusted;
• '3.5% for estimated total e-commerce increase from fourth quarter 2005 to fourth quarter 2006;
• '0.7% for estimated total retail sales from fourth quarter 2005 to fourth quarter 2006; and
• '0.5% for estimated decreased total retail sales from the third to the fourth quarter.

Not adjusted for seasonal variation and holiday and trading-day differences, estimated U.S. retail e-commerce sales for the fourth quarter of 2006 totaled $33.9 billion, an increase of 32.2% ('2.8%) from the third quarter. Estimated fourth quarter e-commerce increased 25% ('3.5%) from the fourth quarter of 2005, while total retail sales increased an estimated 4% ('0.7%) during the same period.

e-Commerce sales in the fourth quarter of 2006 accounted for 3.3% of total sales, without adjustments.

Total e-commerce sales for 2006 were estimated at $108.7 billion, without adjustment ' an increase of 23.5% ('3.3%) from 2005.

Other unadjusted figures are:

• Total 2006 retail sales ' up 5.8% ('0.3%) from 2005;
• 2006 e-commerce sales were 2.8% of total sales; and
• 2005 e-commerce sales were 2.4% of total sales.

A Look At Data

The Census Bureau notes that e-commerce data is collected from five Bureau surveys that use different measures of economic activity, like manufacturing shipments, wholesale and retail sales, and trade and service-industry revenues.

The Bureau also points out on its Web site (www.census.gov) that because of the survey method ' which changes from time to time, and varies according to when data is received ' economic activity as reported in Census Bureau reports can vary.

By 'e-commerce,' the Census Bureau means measurements of 'the value of goods and services sold online whether over open networks such as the Internet, or over proprietary networks running systems such as Electronic Data Interchange (EDI).'

The government's E-Stats program, which is devoted exclusively to reporting on electronic commerce in the United States, doesn't cover the entire national economy. It focuses on industries in the North American Industry Classification System (NAICS) that compose about 77% of the monetary and trade activity that the Bureau's 2002 economic census ' the most recent such survey ' examined and measured.

Not covered are:

• Agriculture;
• Mining;
• Utilities;
• Construction;
• Agents;
• Brokers;
• Electronic markets in wholesale trade; and
• About one-third of U.S. service-related industries.

A New Sample

Last month, the Census Bureau noted that e-commerce and total retail-sales estimates came from a new sample of its Monthly Retail Trade Survey, from which it extracts and compiles quarterly figures.

The sample, established in 1951 and from which monthly and quarterly reports have been produced since then, changes about every five years to account for fluctuations in the economy, and among the survey sample. The sample changed last year.

The sample consists of 12,500 retail businesses that have paid employees. The Bureau adds to that data estimates for non-employer businesses, new employers, and employers missed ' all data from the Bureau's benchmarking for its Annual Retail Trade Survey.

Retail firms are selected for the sample from the Business Register. That resource has all federal Employer Identification Numbers (EINs) and the location of listed enterprises. Information on sales and inventories is collected on one form, the Census Bureau notes.

The overall working sample is refreshed by quarter to account for what the Census Bureau describes as 'employer business 'births' and 'deaths'; adding new employer businesses identified in the Business and Professional Classification Survey and dropping firms and EINs when it is determined that they are no longer active.'

It takes about nine months for new businesses to show up in the sample.

Census Bureau e-Commerce Q&A

Below is an excerpt of a Census Bureau frequently-asked-questions page concerning e-commerce and e-commerce statistics that the Bureau uses in its reports.

Question: How many firms are surveyed to estimate e-commerce sales?

Answer: e-Commerce sales are estimated based on the monthly activity of approximately 11,000 retail firms. All firms that receive the retail survey report form each month are asked to provide their e-commerce sales.

Question: Are sales at electronic auctions included in the e-commerce estimate?

Answer: Electronic auctions directed at individual consumers are classified as retail trade. However, commissions and fees, not sales, are included in the e-commerce estimate. This is similar to the way the Census Bureau treats sales at traditional auction houses.

Question: Are sales of adult material included in the retail e-commerce estimates?

Answer: Sales from businesses primarily selling goods of any kind are included while businesses primarily providing services such as publishing and broadcasting are excluded.

Question: Are you planning to release an advance estimate of retail e-commerce sales?

Answer: No. The sample used to provide an advance estimate of change in total monthly retail sales is not of adequate size to measure change in retail e-commerce sales.

Question: Are retailers willing and able to provide their e-commerce sales values?

Answer: Yes. The retailers in the survey are very cooperative and in most cases were able to provide the dollar volume of their e-commerce sales.

Question: Are you estimating total retail sales differently as a result of measuring e-commerce sales?

Answer: No. The Monthly Retail Trade Survey covers all sales of establishments primarily engaged in retail activities, including traditional retailers selling via the Internet and companies selling goods exclusively on-line. The survey excludes companies conducting non-retail operations such as travel, ticketing, and financial services.

Question: Are new retail businesses selling via the Internet added to the monthly survey?

Answer: Yes. We update our sample regularly to account for new businesses, including retailers selling exclusively via the Internet. New businesses are identified when they notify the Federal Government of their intention to hire employees. The Bureau draws a sample of these new businesses and adds them to the survey each quarter.

Figures for the first quarter of 2007 will be released on May 16.

The federal government last month put its estimate of e-commerce sales for the fourth quarter of 2006 at $29.3 billion, up 6.3% from the third quarter, and up 24.6% from the fourth quarter of 2005, with the increase in total retail sales from late 2005 to late 2006 estimated at 4.6%.

Total estimated retail sales for the fourth quarter of last year tallied to $990.8 billion, according to the Census Bureau. That's an apparent statistical decrease of 0.2% from the third quarter.

But, concerning the indicated estimated minuscule decrease, the Census Bureau says that it has insufficient statistical evidence 'to conclude that the actual change is different from zero' when the report was released in mid-February.

The fourth quarter figures are adjusted for seasonal variation and holiday and trading-day differences, but not price changes. The Bureau typically adjusts the figures that way, and also releases non-adjusted estimates, which are provided below.

Estimated margins of errors for the calculations are:

• '2.8% for estimated fourth-quarter e-commerce, adjusted;
• '3.5% for estimated total e-commerce increase from fourth quarter 2005 to fourth quarter 2006;
• '0.7% for estimated total retail sales from fourth quarter 2005 to fourth quarter 2006; and
• '0.5% for estimated decreased total retail sales from the third to the fourth quarter.

Not adjusted for seasonal variation and holiday and trading-day differences, estimated U.S. retail e-commerce sales for the fourth quarter of 2006 totaled $33.9 billion, an increase of 32.2% ('2.8%) from the third quarter. Estimated fourth quarter e-commerce increased 25% ('3.5%) from the fourth quarter of 2005, while total retail sales increased an estimated 4% ('0.7%) during the same period.

e-Commerce sales in the fourth quarter of 2006 accounted for 3.3% of total sales, without adjustments.

Total e-commerce sales for 2006 were estimated at $108.7 billion, without adjustment ' an increase of 23.5% ('3.3%) from 2005.

Other unadjusted figures are:

• Total 2006 retail sales ' up 5.8% ('0.3%) from 2005;
• 2006 e-commerce sales were 2.8% of total sales; and
• 2005 e-commerce sales were 2.4% of total sales.

A Look At Data

The Census Bureau notes that e-commerce data is collected from five Bureau surveys that use different measures of economic activity, like manufacturing shipments, wholesale and retail sales, and trade and service-industry revenues.

The Bureau also points out on its Web site (www.census.gov) that because of the survey method ' which changes from time to time, and varies according to when data is received ' economic activity as reported in Census Bureau reports can vary.

By 'e-commerce,' the Census Bureau means measurements of 'the value of goods and services sold online whether over open networks such as the Internet, or over proprietary networks running systems such as Electronic Data Interchange (EDI).'

The government's E-Stats program, which is devoted exclusively to reporting on electronic commerce in the United States, doesn't cover the entire national economy. It focuses on industries in the North American Industry Classification System (NAICS) that compose about 77% of the monetary and trade activity that the Bureau's 2002 economic census ' the most recent such survey ' examined and measured.

Not covered are:

• Agriculture;
• Mining;
• Utilities;
• Construction;
• Agents;
• Brokers;
• Electronic markets in wholesale trade; and
• About one-third of U.S. service-related industries.

A New Sample

Last month, the Census Bureau noted that e-commerce and total retail-sales estimates came from a new sample of its Monthly Retail Trade Survey, from which it extracts and compiles quarterly figures.

The sample, established in 1951 and from which monthly and quarterly reports have been produced since then, changes about every five years to account for fluctuations in the economy, and among the survey sample. The sample changed last year.

The sample consists of 12,500 retail businesses that have paid employees. The Bureau adds to that data estimates for non-employer businesses, new employers, and employers missed ' all data from the Bureau's benchmarking for its Annual Retail Trade Survey.

Retail firms are selected for the sample from the Business Register. That resource has all federal Employer Identification Numbers (EINs) and the location of listed enterprises. Information on sales and inventories is collected on one form, the Census Bureau notes.

The overall working sample is refreshed by quarter to account for what the Census Bureau describes as 'employer business 'births' and 'deaths'; adding new employer businesses identified in the Business and Professional Classification Survey and dropping firms and EINs when it is determined that they are no longer active.'

It takes about nine months for new businesses to show up in the sample.

Census Bureau e-Commerce Q&A

Below is an excerpt of a Census Bureau frequently-asked-questions page concerning e-commerce and e-commerce statistics that the Bureau uses in its reports.

Question: How many firms are surveyed to estimate e-commerce sales?

Answer: e-Commerce sales are estimated based on the monthly activity of approximately 11,000 retail firms. All firms that receive the retail survey report form each month are asked to provide their e-commerce sales.

Question: Are sales at electronic auctions included in the e-commerce estimate?

Answer: Electronic auctions directed at individual consumers are classified as retail trade. However, commissions and fees, not sales, are included in the e-commerce estimate. This is similar to the way the Census Bureau treats sales at traditional auction houses.

Question: Are sales of adult material included in the retail e-commerce estimates?

Answer: Sales from businesses primarily selling goods of any kind are included while businesses primarily providing services such as publishing and broadcasting are excluded.

Question: Are you planning to release an advance estimate of retail e-commerce sales?

Answer: No. The sample used to provide an advance estimate of change in total monthly retail sales is not of adequate size to measure change in retail e-commerce sales.

Question: Are retailers willing and able to provide their e-commerce sales values?

Answer: Yes. The retailers in the survey are very cooperative and in most cases were able to provide the dollar volume of their e-commerce sales.

Question: Are you estimating total retail sales differently as a result of measuring e-commerce sales?

Answer: No. The Monthly Retail Trade Survey covers all sales of establishments primarily engaged in retail activities, including traditional retailers selling via the Internet and companies selling goods exclusively on-line. The survey excludes companies conducting non-retail operations such as travel, ticketing, and financial services.

Question: Are new retail businesses selling via the Internet added to the monthly survey?

Answer: Yes. We update our sample regularly to account for new businesses, including retailers selling exclusively via the Internet. New businesses are identified when they notify the Federal Government of their intention to hire employees. The Bureau draws a sample of these new businesses and adds them to the survey each quarter.

Figures for the first quarter of 2007 will be released on May 16.