Consumer Economy
Retail Sales (RSAFS); $714B, +0.43% m/m, (prior +0.06% m/m)
Industrial Production (INDPRO); -0.28% m/m, (prior +0.34% m/m)
Retail Sales (not indexed for inflation) grew by an annualized 5.16% (0.43% x 12) this month. This was a new all-time high, although the recent gains have been very modest; in spite of this month’s “pre-election” move, the change y/y is 1.58%.
So since (12-month) retail sales went up by 1.58% – with fake-CPI inflation at 1.93%, and Jimmy Carter (shadowstats.com) inflation is perhaps 10% – the “rise” in sales is just an inflation artifact. And for this “surprisingly” large jump (0.43% m/m) to appear weeks before the “Joy” election… it’s probably just a coincidence. BLS economists are baffled. ALT: bureaucrats may be running scared. More on that later.
Industrial Production has been chopping slowly lower since the recent highs set in late 2022 – which were slightly below the highs set back in 2018. INDPRO is an index, not a dollar amount.
Looks like we hit “Peak INDPRO” back under Evil Orange Hitler. Note – this index is not population-adjusted. Our pop keeps rising, and yet – INDPRO is edging slowly lower.
Credit & Rates
Fed Balance Sheet (WALCL); 7039.3B, -7.6B, (-0.11% w/w), (prior -0.00% w/w)
Total Bank Credit (TOTBKCR); 17903.0B, +8.8B, (+0.05% w/w), (prior +0.12% w/w), +534.2B [+2.98%] y/y
30 Year Mortgage Rate (MORTGAGE30US); 6.44%, unchanged.
10 Year Treasury Rate (DGS10); 4.08%; unchanged.
Slight QT at the Fed, bank credit barely expanded (2.6% annualized), and rates were mostly unchanged this week. That said – Thursday’s “fantastic” Retail Sales report caused a big drop in TLT, which erased the gains that happened on Tuesday.
CME Fedwatch Tool (still) projects a 90% chance of one 25 bp cut at the November 7th meeting.
Currencies
The buck deconfettied for the third week in a row, jumping 0.63 (+0.61%) to 103.31. That said, the buck appeared to run into resistance at the 200 MA, causing it to retreat on Friday. The buck has been up (or flat) for the past 14 days in a row.
