Prices rose, but retail sales sputtered in September. Here are the five things we learned from U.S. economic data released during the week ending October 14.
Consumer prices rose in September. The Consumer Price Index (CPI) grew a seasonally adjusted 0.4 percent, its largest increase since June. The Bureau of Labor Statistics measure has risen 8.2 percent over the past year. A 4.9 percent drop in gasoline prices pulled down energy CPI 2.1 percent, while food CPI matched its August increase of 0.8 percent. Over the past year, energy prices have surged 19.8 percent and those for food have bloomed 11.2 percent. Net of both, core CPI jumped 0.6 percent in September and was up 6.6 percent from a year earlier. Rising were prices for transportation services (+1.9 percent), medical care services (+1.0 percent), new vehicles (+0.7 percent), and shelter (+0.7 percent). Prices fell for used cars/trucks (-1.1 percent), apparel (-0.3 percent), and medical care commodities (-0.1 percent).
Wholesale prices increased for the first time in three months in September. The Producer Price Index (PPI) for final demand grew a seasonally adjusted 0.4 percent after declining 0.4 percent and 0.2 percent in July and August, respectively. The Bureau of Labor Statistics index was up 8.5 percent from September 2021, its smallest 12-month comparable in over a year. The core wholesale price index—which removes energy, food, and trade services—was up 0.4 percent (its biggest advance since April). Energy and food prices rose 0.7 percent and 1.2 percent, respectively. PPI for other goods held steady. Services PPI increased 0.4 percent.
Retail sales were flat in September. The Census Bureau estimates retail and food services sales were at a seasonally adjusted $684.0 billion, mirroring August’s figures and up 9.2 percent from a year earlier. Lower prices at the pump pulled down gas station sales 1.4 percent in August (+20.6 percent vs. September 2021). (Note that this data series is not adjusted for inflation.) Removing that and a 0.6 percent drop at auto and parts dealers finds core retail sales up 0.3 percent for the month and 8.2 percent from a year earlier. Sales advanced at department stores (+1.3 percent), apparel retailers (+0.5 percent), health/personal care stores (+0.5 percent), restaurants/bars (+0.5 percent), and grocery stores (+0.4 percent). Sales fell at retailers focused on electronics/appliances (-0.8 percent), furniture (-0.7 percent), sporting goods/hobbies (-0.7 percent), and building materials (-0.4 percent).
Consumer sentiment remained stuck in neutral in early October. The University of Michigan’s Index of Consumer Sentiment adds 1.2 points to a seasonally adjusted 59.8 (1966Q1=100). The index has remained below a reading of 70 all year and was below its year-ago reading of 71.7. The current conditions index added 6.6 points to 65.3 (October 2021: 77.7), while the expectations measure lost 1.8 points to 56.2 (October 2021: 67.9). The press release noted consumers’ inflation expectations moved back up after falling back in recent months.
Small business owners’ moods remained dark. The Small Business Optimism Index added 3/10ths of a point in September to a seasonally adjusted reading of 92.1 (1986=100). The National Federation of Independent Business measure has been below 100.0 for 13 consecutive months. Five of the ten index components declined: plans to increase inventories, current job openings, current inventories, economic expectations, and plans to make capital outlays. Moving to the upside were measures for expected sales, plans to increase employment, expected credit conditions, earnings trends, and whether it is a good time to expand. The press release noted that 30 percent of survey respondents said that “inflation was their single most important problem in operating their business.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending October 8, 2022, First-Time Claims, seasonally adjusted): 228,000, +9,000 vs. the previous week, -89,000 vs. the same week a year earlier). 4-week moving average: 211,500 (-40.1% vs. the same week a year earlier).
- Import Prices (September 2022, All Imports, not seasonally adjusted): -1.2% vs August 2022; +6.0% vs. September 2021. Nonfuel Imports: -0.4% vs. August 2022; +3.4% vs. September 2021.
- Export Prices (September 2022, All Exports, not seasonally adjusted): -0.8% vs. August 2022; +9.5% vs. September 2021. Nonagricultural Exports: -0.9% vs August 2022; +9.2% vs. September 2021.
- Business Inventories (August 2022, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.453 trillion (+0.8% vs. July 2022; +18.2% vs. August 2021).
- FOMC Minutes
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What We Learned About the U.S. Economy Last Week 