The summer consumption boom came to a halt in October, and inflationary pressures eased. This suggests that the economy may gradually stabilize as expected by the US financial authorities.
US retail sales in October decreased by 0.1% from the previous month. Figures for August and September have been revised upward. The US Producer Price Index (PPI) in October fell by 0.5% from the previous month, contrary to market expectations. The decline was the largest since April 2020, and was caused by the sharp drop in gasoline prices.
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The figures, released on the 15th, follow recent data indicating a general slowdown in inflation and slowing employment growth, suggesting the economy is in a soft landing. This suggests that we are on the right track.
“An encouraging October CPI and healthy slowing job growth, coupled with a slowdown in consumer spending after strong summer spending, led to a slowdown in consumer spending,” Nationwide Mutual Insurance chief economist Kathy Bostjancik said in a note. “The Fed will be reassured that its pro-cyclical monetary policy stance is easing inflationary pressures.”
Retail sales, the so-called control group used to calculate gross domestic product (GDP), rose 0.2% in October after being revised upward in September to 0.7% month-on-month. This suggests that the economy got off to a good start in the fourth quarter (October-December) after a sharp rise in consumption in the third quarter (July-September).
“Personal spending will continue to expand in 2024, but at a slower pace,” Bill Adams, Comerica Bank’s chief economist, said in a report. “There is a good chance that rates and growth rates will return to more normal levels.”
Reports on PPI and retail sales
Source: Bloomberg
news-rsf-original-reference paywall">Original title:Slipping US Retail Sales, Cooling Prices Point to Soft Landing(excerpt)
2023-11-15 23:00:00
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