Comerica Economic Weekly


Despite weak job growth and dismal consumer confidence readings, consumers hung in there, doing their part to keep the leaky economy afloat. Retail sales for September beat expectations, increasing by a hefty 1.1 percent as retail auto sales gained 3.6 percent. On an annualized unit basis, auto sales increased from 12.1 million units to 13.0 million units in September. The solid September gain in unit auto sales is attributable to increased sales of light trucks for commercial purposes. But non-auto retail sales also gained a respectable 0.6 percent in September. Clothing store sales increased by 1.3 percent. Gas station sales gained 1.2 percent, even as gasoline prices fell, so it looks like the boost there comes from seasonal adjustment factors in the retail sales series. Furniture stores increased their sales by 1.1 percent in September. Solid retail sales for September are supportive of Q3 real GDP growth, which is expected to register about 2.2 percent. Expectations for the upcoming holiday shopping season are subdued compared to last year’s moderate gains. A clue to what retailers are expecting comes from August international trade data. In August the U.S. international trade gap was unchanged at -$45.6 billion. Total imports slipped fractionally, as did exports. Imports of consumer goods were down $0.8 billion from July, and up a slight $0.3 billion from a year ago. This is suggestive of weak expectations among retailers for the holiday shopping. This view was corroborated by an interesting Wall Street Journal article yesterday saying that lean inbound volumes on southern California docks now suggest weak expectations by retailers later this year. Initial claims for unemployment insurance for the week ending October 8 declined by 1,000 to hit 404,000, still elevated for this point in an expansion cycle. The job openings rate dipped in August to 3.0 openings per 100 employees according to the JOLTS release by the BLS. Separations were also at 3.0 percent, showing no progress in labor markets for the month. Consumer confidence remains impaired according to the University of Michigan Consumer Sentiment Survey which dipped slightly to 57.5 in their preliminary October reading. Business inventories for August increased by 0.5 percent, also supportive of Q3 GDP.

Click the link for the complete CEW for Friday, October 14, with forecasts for next week’s economic indicators and our monthly calendar of economic data.  CMAEconWeekly101411.


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