More Than Leaves Fell in October: November 13 – 17

Retail sales chilled and inflation took the month off in October. Here are the five things we learned from U.S. economic data released during the week ending November 17.

Retail sales slipped in October. Retail and food services sales declined 0.1 percent to a seasonally adjusted $705.0 billion, leaving the Census Bureau measure 2.5 percent ahead of its year-ago pace. Sales over the past three months were up 1.7 percent from May through July and 3.1 percent over the comparable 2022 months. Sales at gas stations and motor vehicle dealer/parts stores fell 0.3 percent and 1.0 percent, respectively. Netting out both, core retail sales eked out a 0.1 percent gain in October and were up 3.5 percent over the past year. Sales improved at health/personal care retailers (+1.1 percent), grocery stores (+0.7 percent), electronics/appliance retailers (+0.6 percent), and restaurants/bars (+0.3 percent). Suffering sales declines were retailers focused on furniture (-2.0 percent), sporting goods/hobbies (-0.8 percent), and building materials (-0.3 percent), along with general merchandisers (-0.8 percent).

Consumer prices held steady in October. The Bureau of Labor Statistics’ Consumer Price Index (CPI) was flat on a seasonally adjusted basis, the first time prices failed to grow since last December. Gasoline prices fell 5.0 percent, leading to a 2.5 percent decline in energy CPI. Removing both energy and food prices (+0.3 percent) leaves core CPI up 0.2 percent in October (its smallest gain since July). Prices increased for transportation services (+0.8 percent), medical care commodities (+0.4 percent) and services (+0.3 percent), shelter (+0.3 percent), and apparel (+0.1 percent). Falling were prices for new (+0.1 percent) and used (-0.8 percent) vehicles. CPI has risen 3.2 percent over the past year, while the 12-month comparable for core CPI is +4.0 percent.

Wholesale prices declined in October. The Producer Price Index (PPI) for final demand fell a seasonally adjusted 0.5 percent after the Bureau of Labor Statistics measure had risen over the four prior months. The core wholesale price measure, which removes food, energy, and trade services, was up 0.1 percent during the month (its smallest gain since May). Wholesale goods prices plummeted 1.4 percent, with food (-0.2 percent) and energy (-6.5 percent) both falling. Services PPI was flat in October. PPI has grown a modest 1.3 percent over the past year, while the core wholesale price measure was up 2.9 percent over the same period.

Manufacturing output fell in October. The Federal Reserve reports manufacturing output declined a seasonally adjusted 0.7 percent after growing 0.2 percent in September. Output slumped for both durable (-1.7 percent) and nondurable goods, with the former pulled down by a 10.0 percent decrease for automobiles. Overall industrial production tumbled 0.6 percent as output at utilized sank 1.6 percent. Mining output gained 0.4 percent. Relative to a year earlier, manufacturing output was down 1.7 percent, while overall industrial production was off 1.8 percent.

Housing starts edged up for a second consecutive month in October. Privately owned housing starts increased 1.9 percent to a seasonally adjusted annualized rate of 1.372 million. Even with the increase, the Census Bureau measure was down 4.2 percent from a year earlier. Single-family and multi-family home starts were up 0.2 percent and 4.9 percent, respectively. Looking towards the future, the annualized count of issued building permits grew 1.1 percent to 1.487 million (-4.4 percent versus October 2022). Permits for single-family and multi-family homes increased 0.5 percent and 2.2 percent, respectively. Completions fell 4.6 percent for the month to an annualized 1.410 million (+4.6 percent versus October 2022).

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending November 11, 2023, First-Time Claims, seasonally adjusted): 231,000, +13,000 vs. the previous week, +20,000 vs. the same week a year earlier). 4-week moving average: 220,250 (+7.0% vs. the same week a year earlier).
• Import Prices (October 2023, All Imports, not seasonally adjusted): -0.8% vs. September 2023; -2.0% vs. October 2022. Nonfuel Imports: -0.2% vs. September 2023 -0.9% vs. October 2022.
• Export Prices (October 2023, All Exports, not seasonally adjusted): -1.1% vs. September 2023; -4.9% vs. September 2023. Nonagricultural Exports: -1.0% vs. September 2023; -4.5% vs. October 2022.
• Wholesale Inventories (September 2023, Merchant Wholesaler Inventories, seasonally adjusted): $901.8 billion (+0.2% vs. August 2023; -1.2% vs. September 2022).
• Small Business Optimism Index (October 2023, Index (1986=100), seasonally adjusted): 90.7 (September 2023: 90.8; October 2022: 91.3).
• State Employment (October 2023, Nonfarm Payrolls, seasonally adjusted): Increased in 1 state and unchanged in 49 states and the District of Columbia vs. September 2023. Increased in 34 states and unchanged in 16 states and the District of Columbia vs. October 2022.
• Treasury International Capital (September 2023, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): -$2.4 billion (August 2023: +$60.0 billion; September 2022: +$93.4 billion).

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