New Retail Sales numbers for November were released before today’s opening bell, and the results are not good: -1.1% on the headline is almost three times worse than the -0.4% expected, which was already the lowest estimate since the spring. In fact, coming off a downwardly revised -0.1% headline for October (originally reported at +0.3%), today’s -1.1% is the worst monthly Retail Sales total we’ve seen since April, which hit an all-time-low -14.7%.
Stripping out autos and gas prices, -0.8% was the print. Just subtracting auto sales, it’s -0.9%. The “control” number, which figures strongly in Fed decision-making, was -0.5% on the month. None of these are good retail figures. Autos, clothing and general merchandise all struggled for the month; we’ll see if holiday shopping season can revive some of these numbers going forward.
But the key takeaway here is the U.S. economic tank is now running on fumes. Without a new “stimulus” package from Congress — which really would count as more of a “relief” package, as so many Americans currently require funds just to feed their families and not get kicked out of their homes — we can expect more of the same in the months ahead.
Luckily, it appears as if this need not be the case. News out of Washington DC is that a $900 billion coronavirus rescue package may be passed this morning, including direct payments to U.S. households but no state and local aid included. This has been a sticking point for some time, as Republicans on the Hill are not interested in providing bailout funds for states that mismanaged their economies — they want these new funds to go to Covid-19-affected issues only.
After the opening bell this morning, we’ll see new data on PMI Manufacturing and Services, Business Inventories and a new NAHB Home Builders Index read. But the biggest news of all is expected to be this afternoon’s press release from Fed Chair Jay Powell. After months of keeping borrowing costs extremely low, inflation is measuring but a trickle in the overall economy.
What does Powell do? If he promotes more borrowing and further entice inflation, with a Covid-19 vaccine now on our shores and likely to immunize millions and millions of Americans by mid-2021, is this adding too much inflation risk? If he decides the Fed has done enough and stands pat, is he relying on Congress to come through to rescue the economy, knowing their track record is not exactly stellar? New economic projections from the Fed Chair are also expected today; it will be interesting to see in real time if any of these latest economic metrics are weighing on the Fed’s decision making.
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Retail Sales in November Disappoint
New Retail Sales numbers for November were released before today’s opening bell, and the results are not good: -1.1% on the headline is almost three times worse than the -0.4% expected, which was already the lowest estimate since the spring. In fact, coming off a downwardly revised -0.1% headline for October (originally reported at +0.3%), today’s -1.1% is the worst monthly Retail Sales total we’ve seen since April, which hit an all-time-low -14.7%.
Stripping out autos and gas prices, -0.8% was the print. Just subtracting auto sales, it’s -0.9%. The “control” number, which figures strongly in Fed decision-making, was -0.5% on the month. None of these are good retail figures. Autos, clothing and general merchandise all struggled for the month; we’ll see if holiday shopping season can revive some of these numbers going forward.
But the key takeaway here is the U.S. economic tank is now running on fumes. Without a new “stimulus” package from Congress — which really would count as more of a “relief” package, as so many Americans currently require funds just to feed their families and not get kicked out of their homes — we can expect more of the same in the months ahead.
Luckily, it appears as if this need not be the case. News out of Washington DC is that a $900 billion coronavirus rescue package may be passed this morning, including direct payments to U.S. households but no state and local aid included. This has been a sticking point for some time, as Republicans on the Hill are not interested in providing bailout funds for states that mismanaged their economies — they want these new funds to go to Covid-19-affected issues only.
After the opening bell this morning, we’ll see new data on PMI Manufacturing and Services, Business Inventories and a new NAHB Home Builders Index read. But the biggest news of all is expected to be this afternoon’s press release from Fed Chair Jay Powell. After months of keeping borrowing costs extremely low, inflation is measuring but a trickle in the overall economy.
What does Powell do? If he promotes more borrowing and further entice inflation, with a Covid-19 vaccine now on our shores and likely to immunize millions and millions of Americans by mid-2021, is this adding too much inflation risk? If he decides the Fed has done enough and stands pat, is he relying on Congress to come through to rescue the economy, knowing their track record is not exactly stellar? New economic projections from the Fed Chair are also expected today; it will be interesting to see in real time if any of these latest economic metrics are weighing on the Fed’s decision making.