Sept retail sales better, Oct NY mfr’g worse

Retail Sales in Sept were better than expected headline and down to the core rate. Sales rose 1.1% m/o/m headline, 9% ex auto’s and gasoline and .9% ex auto’s, gasoline and building materials vs estimates of up .8%, .4% and .4% respectively. Also, Aug was revised up slightly. Sales were up almost across the board with only a .2% drop in department stores. Motor vehicles/parts were up 1.3% and electronics were higher by 4.5%. Building materials were up for a 3rd month and clothing sales rose for a 5th straight month. Bottom line, with personal spending being most of the US economy, this data point is obviously important and the better results will lead to an uptick to Q3 GDP estimates, all else equal, from the current median of 1.8%.

Separately, the 1st Oct industrial figure, the NY mfr’g survey, was -6.2, 2.2 pts worse than expected but up from -10.4 in Sept. It is the 3rd month in a row of contraction with New Orders negative for a 4th month at -9.0. Backlogs fell to the weakest since Nov’ 10 and Employment went negative for the 1st time since Nov ’11 at -1.1. The Avg Workweek fell 3 pts to -4.3. Prices Paid and Received fell a touch. The overall Business Conditions 6 month outlook fell to 19.4 from 27.2 in Sept which jumped from 15.2 in Aug. Bottom line, ISM rose back above 50 in Sept but today’s NY reading, if followed by other regionals, imply it may not stay or at best be barely above.

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