We just a slew of bad economic data.
Retail sales in September fell more than expected, producer prices unexpectedly fell, and the New York Fed’s Empire manufacturing report came in way below expectations.
Following these reports, the US dollar is falling against the Japanese yen, tumbling back below 107, while US stock futures are sharply lower.
Dow futures are down 145 points, S&P 500 futures are down 22 points, and Nasdaq futures are down 38 points.
Retail sales in September fell 0.3%, and fell 0.2% excluding autos.
Expectations were for sales to show a decline of 0.1% month-over-month, and growth of 0.2% when excluding auto sales.
Last month, retail sales grew 0.6%, and rose 0.3% excluding autos.
Following Wednesday’s retail sales report, Ian Shepherdson at Pantheon Macro said, “In one line: Slightly disappointing, but expect much better Q4 numbers… Overall we had hoped for slightly better core numbers, but it is hard to worry about these data given the sustained strength of chain store sales and the massive windfall from plunging gas price.”
This chart from the Census Bureau shows the decline in September sales on a month-over-month basis.
Producer prices fell 0.1% in September, below expectations for a 0.1% increase, and on a year over year basis producer prices rose 1.6% against expectations for a 1.8% increase.
Producer prices reflect the prices received for domestic producers of goods, services, and construction.
Following the report, Deutsche Bank economist Joe LaVorgna said:
The New York Fed’s latest Empire manufacturing report came in way below expectations at a reading of 6.17 against expectations for a 20.25 reading. This is also down from 27.54 the prior month.
The Fed’s latest report said, “After reaching a multiyear high last month, the general business conditions index plummeted twenty-one points to 6.2, pointing to a substantial slowing in the pace of growth in business activity for New York manufacturers.”
This chart from the NY Fed shows the steep drop off in this month’s report.