{"id":1623,"date":"2019-11-15T11:29:00","date_gmt":"2019-11-15T16:29:00","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1623"},"modified":"2019-11-15T11:29:00","modified_gmt":"2019-11-15T16:29:00","slug":"october-retail-sales-industrial-production-and-import-and-export-prices","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1623","title":{"rendered":"October Retail Sales, Industrial Production and Import and Export Prices."},"content":{"rendered":"\n

KEY DATA:<\/strong>  Sales: +0.3%; Ex-Vehicles: +0.2%; Gasoline:\n1.1%\/ IP: -0.8%; Manufacturing: -0.6%\/ Import Prices: -0.5%; Nonfuel: -0.2%;\nExports: -0.1%; Farm: +1.9%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cWith households not shopping that much, there\nisn\u2019t a whole lot of need for the nation\u2019s factories to keep producing as much.  \u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  With the Fed indicating it is on hold for an\nextended period – unless economic conditions change significantly – we need to\ndetermine if those conditions are being met.<\/em><\/strong>  Let\u2019s start with consumer spending.  Retail sales were tepid in October.<\/em><\/strong>  They were bolstered by a sharp rise in\ngasoline purchases, but that was driven by a sharp rise in prices.  Vehicle demand was solid<\/em><\/strong>, but\nSeptember\u2019s was so weak that the level of sales in October remained below the\nAugust total.  Other<\/em><\/strong> big-ticket\npurchases, such as furniture, electronics and appliances, were off, which is\nnot a great sign.<\/em><\/strong>  Online sales,\nhowever, were strong, but restaurants saw activity falter.  Basically, there were ups and downs that\nsupport the view that consumer demand was mediocre.<\/p>\n\n\n\n

Meanwhile, back at the factory, the assembly lines\nslowed once again.  Manufacturing output\nfell sharply for the second consecutive month, led by a third consecutive major\ndrop in motor vehicle assemblies. <\/em><\/strong> Seven of the\neleven durable goods sectors and six of the eight nondurables sectors posted\ndeclines.  In other words, the\ncut back in production was wide spread. \nOver the year, manufacturing output is off by 1.5%, a clear sign that\nthis segment of the economy has hit a rough spot.  <\/em><\/strong><\/p>\n\n\n\n

As for inflation, if it is to keep accelerating, the\npricing pressures will have to come form someplace other than imports.  Import costs fell sharply and have been up\nonly once in the last five months.<\/em><\/strong>  Yes, fuel\nprices jumped, but nonfuel costs fell and have risen only once this year.  Food, capital goods and consumer goods prices\nwere down while vehicle costs were flat. \nAs long as the dollar stays strong, import prices will not surge and\ninflation will likely remain in check.  On\nthe export side, farm prices jumped again<\/em><\/strong>, but nonfood export prices\nwere down.  MARKETS AND FED POLICY IMPLICATIONS: <\/em><\/strong>Okay, here\u2019s the story: When if comes to the\neconomy, listen to what Fed Chair Powell says and assume the opposite.  Well, maybe I am being too harsh, but this\nweek, Mr. Powell was telling us that when it came to the U.S. economy, we are\nthe stars!  Of course, with Europe barely\nkeeping its head above water and Asia slowing, that may be the case.  But it still doesn\u2019t say much.  <\/em><\/strong>Today we found out that maybe the\nU.S. economy is growing, but not at any great pace.  The consumer is still spending, but not\nrobustly enough to support other sectors, especially business investment,<\/em><\/strong>\nwhich has been faltering.  And on top\nof that, manufacturing is contracting.<\/em><\/strong>  \nEven if a phase one mini deal is consummated, it doesn\u2019t get us anywhere\nnear back to where things were before the trade war began nearly twenty months\nago.   So why anyone would think the economy would\nsoar as a consequence is beyond me, but I am just looking at this as an\neconomist.  As far as investors are\nconcerned, any good news on the trade front is another excuse to push the\nmarket up.  Meanwhile, the Fed members\nwill continue to pat themselves on their backs and claim to be doing a great\njob.  We shall see about that in 2020.  \n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Sales: +0.3%; Ex-Vehicles: +0.2%; Gasoline: 1.1%\/ IP: -0.8%; Manufacturing: -0.6%\/ Import Prices: -0.5%; Nonfuel: -0.2%; Exports: -0.1%; Farm: +1.9% IN A NUTSHELL:  \u201cWith households not shopping that much, there isn\u2019t a whole lot of need for the nation\u2019s factories to keep producing as much.  \u201d WHAT IT MEANS:  With the Fed indicating it … Continue reading October Retail Sales, Industrial Production and Import and Export Prices.<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1623","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1623"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1623\/revisions"}],"predecessor-version":[{"id":1624,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1623\/revisions\/1624"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}