Interesting Times. Econo-Reports, Last Week and This Week.
The high cost of energy not only figured into Friday's CPI whopper, but also assuredly factored into last week's retail sales number from the Commerce Department, where higher spending on gasoline was behind much of the increase.
That American consumer, short on savings and high on debt, just keeps on spending, though the retail sales increase for September of 0.2% was short of the consensus estimate of a 0.5% increase. August's US Trade Deficit number, at $59 billion for the month, the third highest in history, underscores the profligate consumption of resources, goods, and services by the United States; the "global imbalances" drumbeat is now heard almost daily in the previously oblivious mainstream media's finance reports.
The Fed reported that Industrial production dropped 1.3%, due largely to the two hurricanes and resultant ripple-through impacts. Industrial capacity utilization fell to an anemic 78.6%, after taking the same hits from the storms.
Longer interest rates rose last week, with the Ten-year Treasury Note yield closing at 4.48% on Friday, erasing again, according to some, almost half of Greenspan's "conundrum."
This week, Tuesday gives us the Producer Price Index (PPI), Wednesday gives us new home construction and the Fed's Beige Book, and Thursday gives us the Conference Board's Index of Leading Economic Indicators. Will the Beige Book and the Leading Indicators tell similar or contradictory stories? Will the PPI send the markets into a tizzy? And what will be the longer term impacts of the hurricanes, energy prices, and the coming winter heating crunch on economic growth? That word "stagflation" is getting some play these days, as is the word "recession."