Forex News – US retail sales for September good, August house prices higher
October 29, 2013 2:52 pm
(Source: ThomsonReuters)
Retail sales were down 0.1% versus expectations for a gain of 0.1%. However, excluding automobile sales, which were down 2.2% on the month, retail sales were up a respectable 0.4%. According to the media, the figures were boosted by sales of electronics and software, such as Apple’s new iPhone and a new release of the popular videogame “Grand Theft Auto”.
Although automobile sales were weak, some of the drop could be attributed to calendar issues like labor-day weekend (30 August- 2 September) sales counting towards the August numbers instead of September.
Overall retail sales in September were up by an annual 3.2% compared to the same month a year ago. The figures did show some resiliency, as ex-autos the number was relatively healthy.
Looking ahead, while the October numbers may have some shutdown-related issues, the November and December periods of holiday shopping will be absolutely critical for retailers and 4th quarter economic growth.
To housing data, the release of the S&P Case-Shiller index confirmed that the market was recovering at a brisk pace during August. Indeed during August alone, house prices had risen by 0.9%, bringing the annual rise to a relatively high 12.8% on a nationwide sample of 20 metropolitan areas.
Given that residential real estate prices took a significant hit during the 2007-2009 crisis, their recovery is helping to repair the balance sheets of US households.
Higher home prices, together with higher stock prices has been one the targets of the Federal Reserve’s Quantitative Easing campaigns.
It’s also interesting to note that the Fed recently took fright and retreated from its tapering intentions after an almost 1% rise in mortgage rates, highlighting the importance of the housing recovery for the economy.
However, if the improvement in asset prices is being driven mostly by ever-increasing liquidity rather than improvements in economic fundamentals, it could lead to bubble-like phenomena down the line.
For now it appears that at least the stock market clearly prefers more liquidity to an improving economy. This was evident by the rally in risk assets due to the prospect of delayed tapering caused by the government shutdown and a mediocre employment report.
It will be interesting to ask at what point this kind of behavior will start to make the Federal Reserve wonder if additional liquidity merely serves to inflate asset prices at the risk of future economic harm.
(Source: ThomsonReuters)
Retail sales were down 0.1% versus expectations for a gain of 0.1%. However, excluding automobile sales, which were down 2.2% on the month, retail sales were up a respectable 0.4%. According to the media, the figures were boosted by sales of electronics and software, such as Apple’s new iPhone and a new release of the popular videogame “Grand Theft Auto”.
Although automobile sales were weak, some of the drop could be attributed to calendar issues like labor-day weekend (30 August- 2 September) sales counting towards the August numbers instead of September.
Overall retail sales in September were up by an annual 3.2% compared to the same month a year ago. The figures did show some resiliency, as ex-autos the number was relatively healthy.
Looking ahead, while the October numbers may have some shutdown-related issues, the November and December periods of holiday shopping will be absolutely critical for retailers and 4th quarter economic growth.
To housing data, the release of the S&P Case-Shiller index confirmed that the market was recovering at a brisk pace during August. Indeed during August alone, house prices had risen by 0.9%, bringing the annual rise to a relatively high 12.8% on a nationwide sample of 20 metropolitan areas.
Given that residential real estate prices took a significant hit during the 2007-2009 crisis, their recovery is helping to repair the balance sheets of US households.
Higher home prices, together with higher stock prices has been one the targets of the Federal Reserve’s Quantitative Easing campaigns.
It’s also interesting to note that the Fed recently took fright and retreated from its tapering intentions after an almost 1% rise in mortgage rates, highlighting the importance of the housing recovery for the economy.
However, if the improvement in asset prices is being driven mostly by ever-increasing liquidity rather than improvements in economic fundamentals, it could lead to bubble-like phenomena down the line.
For now it appears that at least the stock market clearly prefers more liquidity to an improving economy. This was evident by the rally in risk assets due to the prospect of delayed tapering caused by the government shutdown and a mediocre employment report.
It will be interesting to ask at what point this kind of behavior will start to make the Federal Reserve wonder if additional liquidity merely serves to inflate asset prices at the risk of future economic harm.
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