Tapping the Brakes
- Retail sales fell slightly more than expected in October, declining 0.3 percent. Sales were dragged down by a 1.5 percent decline in auto sales, but even when stripping out this sector, sales disappointed with a flat reading.
- The latest PPI and CPI reports show that inflation continues to present little challenge to Fed policy. Lower gas prices pushed down the pace of CPI growth, while the PPI fell 0.2 percent in October. On a year-over-year basis, consumer prices have risen 2.2 percent and producer prices have increased 2.3 percent. Additional Fed asset purchases are likely on the way.
Japanese Economy Shrinks
- Japanese real GDP posted its fastest pace of contraction since the earthquake and tsunami took major factors of production offline in early 2011.
- In this week’s global review section, we look at the various components of Japanese GDP and consider what this week’s disappointing print means for monetary and fiscal policy.