2024-02-15 11:45:00 ET
Summary
- January retail sales and manufacturing output were quite a lot weaker than expected, but we are coming off strong levels after upside surprises in late 2023.
- The outlook remains one of a slowing growth story as high borrowing costs, tight credit conditions and reduced support from pandemic-era accrued savings create a more challenging environment.
- Mining output fell 2.3% MoM, but utilities output jumped 6% so in aggregate industrial production fell 0.1% MoM.
Retail sales fall much more than expected
January's US retail sales report looks soft, falling 0.8% month-on-month versus the 0.2% drop expected while December's growth rate was revised down to +0.4% MoM from +0.6%. The 'control group', which excludes volatile items such as autos, food service, gasoline and building supplies, has a better correlation with broader consumer spending trends - remember, retail sales is only around 45% of total consumer spending - fell 0.4% MoM versus expectations of a 0.2% increase. With inflation coming in on the hot side earlier in the week, this implies consumer spending fell in real terms in January, which would be the first decline since August....
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Weak Start To The Year For U.S. Retail Sales And Manufacturing