Commentary: Retail Sales grew at their fastest pace in seven months in September as consumers evidently shook off concerns about a weak stock market and political gridlock. Overall sales rose by 1.1% last month, driven higher by strong car sales. Most analysts had anticipated retail sales would improve in September - but by a far more modest 0.7%. Stripping out autos, the sales pace in September was up 0.6% -- double most economists forecast for an "ex. auto" sales gain of 0.3%. Ten of the top 13 major components of this data set showed increases last month.
Here is the "so what" factor associated with all this statistical mumbo-jumbo. Consumer spending accounts for about 70% of all U.S. economic activity, and this morning's data suggests domestic growth during the third-quarter may have doubled the first and second quarter pace combined - and that is definitely not the type of news that compels mortgage investors to push rates notably lower.
Looking ahead to next week - September's inflation data will be released in the form of Tuesday's Producer Price Index and Wednesday's Consumer Price Index. Both measures of inflation pressures - at the factory gate and on the front porch - are expected to be well behaved. If so, they can be expected to exert little, if any meaningful upward pressure on the current level of mortgage interest rates.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
