US retail sales and PPI help cement expectations of stable Fed policy - ING

Sandeep Kanihama FXStreet Contributor

James Knightley, Senior Economist at ING, notes that the US retail sales undershot expectations, falling 0.3%MoM, while PPI showed pipeline price pressures remain limited, meaning little need for urgent Fed policy action.

Key Quotes

“US retail sales fell 0.3%MoM in August, worse than the -0.1% consensus. In terms of the 14 main components, nine saw falls, led by miscellaneous stores (-2.4%), sporting goods (-1.4%) and autos (-0.9%). One was unchanged, while the other four categories saw a rise, led by a 0.9% increase at restaurants.

Ahead of time we had suspected that we would get a soft report given that the volume of car sales had fallen 5%, gasoline prices were a touch lower, meaning the value of sales would be down, and consumer confidence hadn’t really moved.

We also have the PPI report, which showed that pipeline inflation pressures are weak with headline producer price inflation running at 0.0%YoY and core (ex food and energy) rising just 1%YoY. A combination of weak consumer spending and benign price pressures should cement expectation of “no change” from the Federal Reserve next week.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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