US: Disappointing Retail Sales in September – ING
|James Knightley, the chief international economist at ING, suggests that the disappointing run of US data has continued with today’s retail sales numbers for September, which posted the first decline for seven months.
Key Quotes
“Rather than rise 0.3% month-on-month as expected, they actually contracted 0.3% with the report showing broad-based weakness.”
“Stripping out the volatile components we find that the “control” group, which better reflects movements in the broader consumer spending component of GDP, was flat on the month versus expectations of a 0.3% MoM gain. With the rate of employment growth clearly slowing and the latest wage growth coming in much softer than expected, there are have been valid questions regarding how long consumer spending can continue to prop up the economy. Today’s report is not encouraging.”
“With the major business surveys such as the ISM and National Federation of Independent Business reports seemingly in freefall and investment lead indicators pointing to contraction, we expect to see the economy to experience sub 2% growth in 4Q19. Add in weaker global growth, the strong dollar and a nagging doubt about the imminent prospects of a meaningful de-escalation of trade tensions and we see the economy expanding just 1.3% in 2020.”
“We expect the Federal Reserve to follow up the July and September rate cuts with a further 25bp move in October and another in December.”
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.