Economic Notes for the Week of August 20th

This week, a few indicators again surfaced that investors took as counter to the trend that the U.S. economy is in an extended soft patch.

Retail sales turned out being much better than expected in July, up +0.8% versus a forecast of +0.3%.  Non-core and core sales were roughly similar; pointing to across the board strength, but the best performances came from non-store (Internet) retail, sporting goods, furniture, and health/personal care items.

Industrial production was up solidly in July—by +0.6%, just a bit above the expected figure.  This was largely driven by manufacturing, much of which was due to an over-3% rise in vehicle production.  Mining and utilities output also gained.

From a regional side, the New York Fed’s Empire manufacturing survey weakened by -5.9 in August, which ran counter to expectations for a flat reading.  New orders and shipments declined, while inventories improved and employment index held steady.  The Philadelphia Fed index did improve, but not by as much as expected for August and remains negative.  Here, shipments fell, employment was flat and new orders improved a bit, however. Read more