Sunday, October 17, 2010

Retail Sales Higher In September and Inventory To Sales Higher

The U.S. Census Bureau reported advanced retail sales figures for September this past Friday. The preliminary results show retail sales rose .6% for the month while at the same time, the August sales figures were revised higher to +.7% from +.4%. Sales did get a lift from an increase in the automobile sales category; however, sales ex auto were still up +.4%.

Also business inventories and sales were reported on Friday. The total business inventories/sales ratio at the end of August was 1.27 which is lower than the August 2009 ratio of 1.31.

From The Blog of HORAN Capital Advisors

Core CPI remains flat and will give the Fed justification for more quantitative easing (QE2) in an effort to stimulate stronger economic growth at the expensive of higher inflation. QE has consequences as well.

In short, with the continued reporting of mixed economic data, one thing seems certain and that is economic growth is not occurring at a blistering pace. On the other hand, a double dip recession seems fairly remote at this point in time. Throw in the fact the U.S. has a mid term election in November, the election outcome could impact consumer confidence and future economic growth. The recent positive returns in the equity markets might be discounting this outcome though.

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