A Lot of US Econ Releases Today…Let’s Do a Roundup

On the margin, the releases today weren’t very pretty. We will begin with the biggest surprises of the day: retail sales and industrial production. Retail sales were expected to fall by 0.1% month-over-month in August and ended up actually falling by -0.3%. Core retail sales have lost some momentum as well. In June the 6-month annualized rate 5.3% and it has since fallen to 4.7%. Lastly, our 1-year diffusion index that tracks whether a retail sales category has either grown or shrunk from a year earlier has dropped to just +4 which is the lowest level since March. This means that nine categories have seen growth over the past year and five have experienced a decline.



Industrial production also surprised to the downside as economist were expecting a -0.2% decline and instead got a -0.4% MoM decline. The year-over-year rate in industrial production has now been negative for 11 straight months. This is the longest such streak that has occurred without a recession happening at the same time. The 3-month annualized rate of change has also turned over from a recent 18-month high in July. Capacity utilization also surprised to the downside as the headline number declined 0.4. Capacity has expanded by just 0.4% year-over-year. This is the slowest ear-over-year growth rate since 2011.