It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
The holiday shopping season is definitely underway, as retail sales jumped 0.8% in October. Retail sales for September were also revised higher to a 1% increase, up from the previously reported 0.6% gain. That’s the best two months for retail sales in the past two years. Since consumer spending accounts for about two-third of U.S. economic growth, the boost in retail sales bodes well for GDP growth in the fourth quarter, which will likely encourage the Fed to raise rates next month.
According to the Commerce Department, business inventories edged slightly higher in September. Business inventories rose 0.1% in September and 0.2% in August. That missed economists’ expectations for a 0.2% increase in September. Retail inventories, which exclude autos, were unchanged in September, and business sales jumped 0.7%. Given the September sales pace, it would take 1.38 months to empty shelves.
Producer Price Index (PPI)
The Labor Department posted a disappointing report on Wednesday that showed the Producer Price Index was unchanged in October. Economists were looking for a 0.3% increase. Still, in the past 12 months, the PPI is up 0.8%, which is the strongest annual gain in two years. Core PPI, which excludes food, energy and trade services, slipped 0.1% last month. So inflation still remains modest.
The Federal Reserve also reported that industrial production was flat in October, missing economists’ estimates for a 0.2% increase. Manufacturing output rose 0.2%, while mining output surged 2.1% last month. Capacity utilization dropped to 75.3%, down from 75.4%. Unseasonably warm temperatures across much of the U.S. weighed on utilities output, which was down 2.6% in October, and dragged down overall industrial production last month.
Consumer Price Index (CPI)
Yesterday, the Labor Department announced that its Consumer Price Index jumped 0.4% in October, following up a 0.3% rise in September. So in the past 12 months, CPI has increase 1.6%, which is the biggest rise in two years. Rising prices at the pump and rent increases supported consumer prices last month, but inflation still remains moderate.
Housing Starts & Building Permits
Housing starts surged 25.5% in October to an annual rate of 1.323 million. That marks the fastest pace in more than nine years. The increase in housing starts was led by single-family starts, which were at a rate of 869,000. Building permits, though, only rose 0.3% last month to an annual rate of 1.229 million. So, the homebuilding boom in the U.S. continues.
Initial Claims for Unemployment
For the week ending November 12, initial claims for unemployment fell to their lowest level in 43 years. Jobless claims declined by 19,000 to 235,000. That topped economists’ estimates for claims of 255,000. The prior week’s jobless claims were left unchanged at 254,000. And the four-week moving average also slipped lower to 253,500. Jobless claims have now been below the 300,000 threshold for 89-straight weeks.
That’s all I have for you this week; I’ll be back online on Monday with your weekly ratings changes.
Have a great weekend,