The economic data twofer this morning was a beat and a miss. Retail sales increased by 1.1% on expectations of a 0.8% increase, with the last month's data being revised from 1.2% to 0.9%. Headline retail sales, ex autos was up 1.1% on expectations of a 0.7% print, and up from an upward revised 1.0%. Some of the main drivers in the September retail sales pick up were in electronics and appliance stores, which rose 4.5% from August (thank you iPhone 5), Gasoline Stations +2.5%, and Motor vehicle and parts dealers 1.3%, which continue to be a notable driver of retail strength for the second month in a row.
Retail sales ex-auto/gas seems to hit a wall around+1.1%...
As for the miss, it came from the Empire Fed, which increased from September's -10.41, to -6.16, but missed expectations of a -4 print. New Orders improved modestly from -14.03 to -8.97, and ironically was the only subindex in the entire report that staged an increase. Shipments declined to a negative print, from 2.75 to -6.40. Declines were also recorded in Delivery Times, Unfilled Orders, Inventories, Prices Paid, Prices Received, the average Employee Workweek, and most importantly, Number of Employees which declined from 4.26 to -1.08. Not even the forward looking indicators, so critical to consumer "confidence" managed to rise, dropping from 27.22 to 19.42.
Empire Fed headline data has missed 3 months in a row...
From the report:
The general business conditions index was negative for a third consecutive month in October, pointing to a continued deterioration in business conditions for New York manufacturers. The index rose four points to -6.2, with 25 percent of respondents reporting that conditions had improved over the month and 31 percent reporting that conditions had worsened. The new orders index climbed five points but, at -9.0, remained negative, indicating that orders were continuing to decline. The shipments index fell below zero for the first time in more than a year, dropping nine points to -6.4—a sign that shipments were lower. The unfilled orders index was slightly lower at -18.3. The delivery time index fell six points to -4.3, and the inventories index edged down to -2.2.
Employment Indexes Weaken
The indexes for both prices paid and prices received were little changed. At 17.2, the prices paid index remained near its level of the past few months, suggesting that moderate input prices increases were continuing. The prices received index held at 4.3, indicating a small increase in selling prices. The index for number of employees fell for a second consecutive month and, at -1.1, suggested that employment levels were essentially fl at. Prior to September, this index had shown modest increases in employment throughout much of the year. The average workweek index fell three points to -4.3, signaling a shorter workweek.