US data review / GDP tracking update - Nomura
|Analysts at Nomura noted the day's data from the US and offered their review / GDP tracking update while we await the US CPI and retail sales up next.
Key Quotes:
"NFIB small business survey: According to the NFIB, small business optimism increased marginally in October, up 0.8pp to 103.8. Those reporting that now is a good time to expand and those expecting higher real sales in six months both increased 6pp, indicating a healthy outlook over the near to medium term. Moreover, the net percentage of small businesses planning to raise worker compensation over the next three months increased 3pp to 21%, the highest level since December 2015. However, the percentage planning capital expenditures over the next 3-6 months remained unchanged at 27%, 5pp below the recent peak of 32%. Overall, small businesses remain upbeat about the economic outlook.
PPI: PPI increased by 0.4% m-o-m in October, exceeding the market expectation of +0.1%. Although energy prices were flat, food prices rose strongly by 0.5% m-o-m and trade prices which represent margins of retailers and wholesalers jumped by 1.1% m-om. However, stripping out those volatile components, core PPI which excludes food, energy and trade prices continued to increase only moderately by 0.2% m-o-m, suggesting that the underlying pace of inflation hasn't changed. As for implications to CPI, finished consumer food prices, a proxy of food-at-home prices, rose steadily by 0.6% m-o-m, broadly in line with our expectation. On the other hand, a 0.2% increase in residential electricity prices came in slightly below our forecast. While the details of PPI suggest only a small downside risk, we are comfortable with our current forecast for the October CPI.
GDP tracking update: Relevant inventory deflators from today’s PPI data were stronger than our expectations, implying less real inventory investment in Q4. Thus, we lowered our Q4 GDP tracking estimate 0.2pp to 2.3% q-o-q saar."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.