U.S. retail sales declined in September even when factoring out weakness at auto dealers and gasoline stations, providing a surprisingly cautionary sign for the strength of consumer demand.
Total retail sales dropped 0.3 percent during the month, the Commerce Department said on Wednesday. Drops in receipts at gasoline stations and auto dealers dragged on the reading. Analysts had expected a fall in retail sales, as auto production has cooled and oil prices have fallen sharply in recent months on signs of slowing global economic growth.
What came as more of a surprise was a drop in so-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had expected the reading to increase. Instead, it fell 0.2 percent in September.
Sales at clothing retailers dropped 1.2 percent and receipts at sporting goods shops edged 0.1 percent lower.
Sales at electronics and appliance stores, however, jumped 3.4 percent, while receipts at building materials and garden equipment suppliers declined 1.1 percent. Receipts at auto dealerships fell 0.8 percent, as did sales at service stations. The drop in gasoline sales reflected declining oil prices and is potentially positive for the broader economy. This could free up income and support discretionary spending in the months ahead.
Retail sales account for a third of consumer spending.
US producer prices fall for first time in more than a year
Prices received by U.S. producers fell in September for the first time in over a year, a potentially worrisome sign for the economy in that inflation appears to be failing to gain traction. U.S. producer prices slipped 0.1 percent last month, the Labor Department said on Wednesday. While many indicators have pointed to a strengthening U.S. economy, policymakers at the Federal Reserve are concerned that inflation has been stuck below their 2 percent target.
Some Fed watchers believe concerns about persistently low inflation could lead the U.S. central bank to delay interest rate hikes expected to begin in the middle of next year. While the Fed targets an inflation gauge prepared by the Commerce Department that looks at consumer purchases, the producer price report can point to inflation pressures down the road. And Wednesday's report suggests these are generally lacking.
Producer prices rose 1.6 percent in the year through September, the lowest annual reading in six months and down two tenths from August's print. The PPI last month was dampened by a 2.6 percent decline in gasoline prices. Food prices slipped 0.7 percent.
When stripping out volatile food and energy prices, producer prices were unchanged during the month. However, these so-called core producer prices rose 1.6 percent from the same month of 2013, a slowdown from August's annual reading. Separately, manufacturing activity in New York state in October slowed to its weakest pace since April after posting its strongest pace in nearly five years the previous month, the New York Federal Reserve said in a report on Wednesday. The New York Fed's Empire State general business conditions index plunged to 6.17 from September's 27.54, which was the highest reading since October 2009.
Economists polled by Reuters had expected a reading of 20.50 this month. A reading above zero indicates expansion. New orders sank to their lowest since April at minus 1.73 from 16.86, while inventories grew to 2.27 from minus 7.61 in September.
The pace of growth in employment gauges was mixed, with the index for the number of employees rising to 10.23 from 3.26, while the average employee workweek index slipped to minus 1.14 in October from September's 3.26. The index of business conditions six months ahead fell to 41.66 from 46.72 the previous month. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
source: CNBC, Reuters
Total retail sales dropped 0.3 percent during the month, the Commerce Department said on Wednesday. Drops in receipts at gasoline stations and auto dealers dragged on the reading. Analysts had expected a fall in retail sales, as auto production has cooled and oil prices have fallen sharply in recent months on signs of slowing global economic growth.
What came as more of a surprise was a drop in so-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had expected the reading to increase. Instead, it fell 0.2 percent in September.
Sales at clothing retailers dropped 1.2 percent and receipts at sporting goods shops edged 0.1 percent lower.
Sales at electronics and appliance stores, however, jumped 3.4 percent, while receipts at building materials and garden equipment suppliers declined 1.1 percent. Receipts at auto dealerships fell 0.8 percent, as did sales at service stations. The drop in gasoline sales reflected declining oil prices and is potentially positive for the broader economy. This could free up income and support discretionary spending in the months ahead.
Retail sales account for a third of consumer spending.
US producer prices fall for first time in more than a year
Prices received by U.S. producers fell in September for the first time in over a year, a potentially worrisome sign for the economy in that inflation appears to be failing to gain traction. U.S. producer prices slipped 0.1 percent last month, the Labor Department said on Wednesday. While many indicators have pointed to a strengthening U.S. economy, policymakers at the Federal Reserve are concerned that inflation has been stuck below their 2 percent target.
Some Fed watchers believe concerns about persistently low inflation could lead the U.S. central bank to delay interest rate hikes expected to begin in the middle of next year. While the Fed targets an inflation gauge prepared by the Commerce Department that looks at consumer purchases, the producer price report can point to inflation pressures down the road. And Wednesday's report suggests these are generally lacking.
Producer prices rose 1.6 percent in the year through September, the lowest annual reading in six months and down two tenths from August's print. The PPI last month was dampened by a 2.6 percent decline in gasoline prices. Food prices slipped 0.7 percent.
When stripping out volatile food and energy prices, producer prices were unchanged during the month. However, these so-called core producer prices rose 1.6 percent from the same month of 2013, a slowdown from August's annual reading. Separately, manufacturing activity in New York state in October slowed to its weakest pace since April after posting its strongest pace in nearly five years the previous month, the New York Federal Reserve said in a report on Wednesday. The New York Fed's Empire State general business conditions index plunged to 6.17 from September's 27.54, which was the highest reading since October 2009.
Economists polled by Reuters had expected a reading of 20.50 this month. A reading above zero indicates expansion. New orders sank to their lowest since April at minus 1.73 from 16.86, while inventories grew to 2.27 from minus 7.61 in September.
The pace of growth in employment gauges was mixed, with the index for the number of employees rising to 10.23 from 3.26, while the average employee workweek index slipped to minus 1.14 in October from September's 3.26. The index of business conditions six months ahead fell to 41.66 from 46.72 the previous month. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
source: CNBC, Reuters