Retail sales rose 0.6% matching the Bloomberg Econoday Consensus estimates. This was a pretty solid jump but it was widely expected.
Highlights
Retail sales proved solid in September hitting the Econoday consensus across the board: total up 0.6 percent, ex-auto up 0.5 percent, ex-auto ex-gas up 0.3 percent. Auto sales as expected are the highlight of the report, up 1.1 percent to reverse the prior month’s 0.3 percent decline. Auto sales, a discretionary category, have been solid this year though down from last year’s peak. Restaurants, another discretionary category, are also strong, up 0.8 percent to add to August’s 0.7 percent gain.
Other positives include two related to housing, furniture which rose 1.0 percent and building materials & garden equipment, up 1.4 percent. This latter reading will give a boost to the residential investment component of the third-quarter GDP report.
This whole report in fact will give a lift to GDP, providing a quarter-end pop to consumer spending which was soft in the quarter’s first two months. Strength in retail sales ultimately reflects strength in the labor market and today’s report will further build expectations for an FOMC rate hike at the December meeting.
Three for Three
Later this morning we will find out how these numbers affected GDP model estimates.
Mike “Mish” Shedlock
Yet wasn’t there some statistic recently that contradicted this report? It involved inventory and was somewhat negative?
Please don’t ask for specifics because I tune out most of these numbers. I suspect many are false, which makes me want to ignore all of them.
Well, one of the stronger parts of this report was vehicle dealers at +1.1% over August. A new vehicle “sale” is counted when dealer takes delivery (and not when actually sold). Both Chrysler and GM reported increased dealer inventory (Ford does not report this number).
LOL. Anyone buying this garbage. Gasoline sales surged 2.5% this month. Can you say higher oil prices. And building materials surged.Can you say hurricane Matthew. The control number, which is what the Fed monitors rose just 0.1%, against forecasts of 0.4%. Yeah, retails sales are booming. You know it’s bad when the headline on CNBC was “retail sales roar in September” LOL. Oh yeah, the US debt has increased $107 billion within the last 2 weeks. Good times.
Consumer debt loads & credit outstanding is also going parabolic. All three credit card, auto & student loans will set records this year.
re building materials
A couple of things. Matthew in October. I’m in the mid Atlantic. It rained a lot in August (building materials was negative for August in last month’s report). Very little rain in September. September gain more likely due to bounce back than any surge in building.
All we need to do is break a bunch of windows and this economy will take off and go to the moon.
“Later this morning we will find out how these numbers affected GDP model estimates.”
New York Federal Reserve Nowcast went from 2.2% to 2.3% for Q3.
Atlanta Federal Reserve GDPNow went from 2.1% to 1.9% for Q3.
Nowcast at 1.6% for Q4
Federal Reserve going to raise rates, right?
https://www.newyorkfed.org/medialibrary/media/research/policy/nowcast/nowcast_2016_1014.pdf?la=en