- Paul Diggle, an economist at Capital Economics
Retail sales in the US dropped in September, recording the first decline since January, when a severe winter weather hit the nation's economy. Economists were forecasting a 0.1% fall in retail sales, but the number came in at 0.3% instead, a sign that recent job gains have yet to significantly fuel consumer spending. Sales have risen 4.3% in the past 12 months, slightly below the historical pace. Drops in receipts at gasoline stations and auto dealers dragged the reading into red territory for the first time since January. Auto production has cooled, with auto sales dropping 0.8% in September, after soaring 10.4% in August, and oil prices have fallen sharply in recent months on signs of slowing global economic growth. Core retail sales, which exclude autos, fell as much as 0.2% in the reported month, short of forecasts calling for a 0.2% increase. In August, the gauge rose 0.3%.
A separate report showed a decline of US producer prices in September, recording the first fall in over a year. US producer prices slipped 0.1% last month, the Labor Department said, a potentially worrisome sign for the economy. While many indicators have pointed to a strengthening US economy, policymakers at the Fed are worried that inflation has been stubbornly stuck below their 2% goal.
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