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…
Consumer Price Index (CPI)
Friday’s Consumer Price Index (CPI) report from the Commerce Department showed a 0.5% rise in prices in September, just under the 0.6% consensus by economists. The increase is largely attributable to a spike in gasoline prices, induced by hurricane disruptions on oil refineries in the Gulf Coast. Excluding food and energy, the index increased 0.1% in September. In the past 12 months, the core CPI (that is, the CPI minus food and energy) has risen 1.7%. These relatively tame numbers indicate that inflation remains stubbornly below the Federal Reserve’s target of 2%.
Consumer Sentiment Index
The University of Michigan provides two monthly releases on consumer sentiment: a preliminary and a final report. On Friday, in their preliminary reading for September, the data indicate that consumer sentiment accelerated to 101.1, a 6% increase from August and a 13-year high. This is the index’s highest level since the beginning of 2004 and a healthy beat on economists’ expectations of 95. Clearly, we are in the midst of a strengthening labor market, which is boosting the confidence of the American consumer and may in turn be a boon for consumer spending in the fourth quarter of 2017. All in all, this was a stellar report.
On Friday, the Commerce Department announced that retail sales increased by 1.6% in September, slightly lower than the 1.7% that economists forecasted but marking the largest increase seen in two and half years. Sales were positively impacted by a 5.8% surge in gasoline sales and a 3.6% rise in sales of motor vehicles, which was to be expected as consumers replace hurricane-ravaged vehicles. Excluding automobiles, gasoline, building materials and food services, retail sales increased by 0.4% in September. Overall, this was an encouraging report boosted by spending from hurricane relief efforts.
Before I close, in light of one of the worst wildfires in history being battled in northern California, I want to send my thoughts and well-wishes to you and yours. Please put your safety first and remember to always follow any evacuation instructions from officials.
That’s all I have for you this week. I’ll be in touch again next week with the latest ratings out of Portfolio Grader.