U.S. Retail sales undershot estimates
U.S. Retail sales undershot estimates with a lean 0.1% September headline rise and a 0.1% ex-auto drop, after downward July and August revisions. Retail sales were likely depressed by hurricane Florence, after big gains earlier in 2018 due to the tax-related Q1 disposable income surge. Analysts saw a 0.8% auto dealer sales rise that undershot a 4.5% unit vehicle sales increase, and a 0.1% uptick in building material sales that reflected no immediate hurricane lift, though after upward July and August revisions. Analysts saw a 0.8% drop in gasoline service station sales that beat a 0.2% CPI gasoline price drop. Analysts still expect GDP growth of 3.1% in both Q3 and Q4, after a 4.2% Q2 pace. Analysts expect firm growth rates for real consumption of 3.6% in Q3 and 2.8% in Q4, after a 3.8% Q2 pace. Analysts assume a 0.3% September nominal PCE rise with a 0.2% "real" increase, alongside PCE chain price gains of 0.1% for the headline and core that Match the September CPI gains. The business inventory report later this morning will reveal a 0.5% August sales rise, after a 0.2% July gain. Today's retail sales data are consistent with another 0.5% business sales rise in next month's September report.