Today's Economic Data Highlights
Quiet day: Retail sales, Empire manufacturing, and business inventories. New $7-9 billion POMO launches, hopefully without glitches this time, at 10:15 am.
8:30am -- October retail sales… which indicators to believe? Vehicle sales were substantially better in October, with the 12.3m SAAR the best rate recorded in two years, leaving aside the August 2009 ‘cash for clunkers’ bonanza. Yet retailers’ same-store reports were softer on average, with the International Council of Shopping Centers’ monthly roundup showing a small month-on-month seasonally-adjusted decline. Of course, both of these numbers can be right, since they refer to different products, but they nonetheless paint a very different picture of consumer strength. We lean toward the more favorable interpretation, also because of better news from the labor market in October.
Total retail sales: Consensus +0.7%.
Ex-auto retail sales: Consensus +0.4%.
8:30am -- Empire mfg survey. consistent with reacceleration? Last month’s ISM manufacturing index was substantially better than expected, raising the possibility that the industrial cycle bottomed out sooner (and stronger) than expected. The New York Fed’s Empire manufacturing index is the first industrial-sector reading for November, so it will give us a clue as to whether this strength may be sustained. Consensus expects +14, similar to last month’s +15.7; we do not forecast this indicator given its considerable volatility.
10am -- Business inventories for September. In general, inventory measures have showed an unsustainably high rate of growth in the late summer; partial data available for September inventories are no different.