Retail sales jumped 0.7% last month

Retail sales jumped 0.7% last month

Aug. 15:

With inflation and employment reports monopolizing headlines, sometimes we have to simply ask, “how’s business?” Per today’s advance retail sales numbers for July, it’s not bad. The 0.7% increase in sales far outstripped expectations.

Excluding autos and gas, sales were up a solid 1.0%, matching the growth in “control group” sales, used to calculate Gross Domestic Product. The increase in sales was broad-based, except at motor vehicle and parts dealers, furniture stores, electronics and appliance stores, and miscellaneous other retailers, which saw sales drop from June. 

It is worth noting that this set of retail sales data is not adjusted for inflation. While the growth supports the idea that a soft landing is possible, it also gives the Federal Reserve room to act if required to control inflation.

Outlook for manufacturing contraction continues in New York

The Empire State Manufacturing Survey’s most recent index was -19.0. Any negative number represents an outlook for contraction in manufacturing in New York state.

Import prices rose 0.4% last month

The Import Price Index rose 0.4% in July and dropped 4.4% year over year. Excluding petroleum, prices were flat for the month.

State of the market

The market, which has been monitoring the shaky state of the Chinese economy, was taken by surprise when the People’s Bank of China lowered its medium-term lending facility rate 0.15%.

This morning, the Dow traded down and Treasury yields were up relative to Monday morning.

Economic calendar

Wednesday, Aug. 16

  • Housing Starts/Building Permits
  • Industrial Production/Capacity Utilization
  • The Fed releases minutes from the July 26 Federal Open Market Committee meeting.

Thursday, Aug. 17

  • Philadelphia Fed Manufacturing Business Outlook
  • Weekly Initial Jobless Claims
  • Leading Indicators

Treasury calendar

There are no auctions of Treasury notes or bonds this week.

By Mike Kraft, Executive Director and Commercial Real Estate Treasurer for Commercial Banking

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