Today's U.S. reports
Today's U.S. reports revealed weak retail sales via both an anemic 0.1% September headline rise and downward prior revisions, with no visible building material sales boost from hurricane Florence, though with the usual current-month hit to core sales. Retail sales ex-autos, gasoline and building materials were flat in both August (was 0.2%) and September. Auto dealer sales rose just 0.8% in September despite a 4.5% unit vehicle sales increase, while gasoline service station sales fell 0.8% in September despite a smaller 0.2% CPI gasoline price drop. Analysts saw the expected 0.5% August business inventory rise after a July boost to 0.7% from 0.6%, and the expected Empire State rise to 21.1 in October from 19.0, with an unchanged ISM-adjusted level of 55.9. The ISM-adjusted average of the major producer sentiment surveys should slip to 58 from a 59 cycle-high in August and September, as seen in May and June, versus 57 in July. Declines in the two Empire job indexes despite a firm headline leaves a mixed signal for our 220k October nonfarm payroll estimate. Analysts still expect GDP growth of 3.1% in both Q3 and Q4, after a 4.2% Q2 pace.