December 10, 2019

New Reports Hint Economy Lacks Energy

The sluggish pace of activity was underscored by another report on Friday showing an energy-led rise in wholesale prices last month, but subdued underlying inflation pressures.

The soft data, however, was unlikely to deter the Federal Reserve from cutting its huge bond-buying program as early as next week, analysts said.

“I don’t think that’s a red flag for the Fed. Over all, the data picture is mixed and supports our view that it will be a light taper,” said Thomas Costerg, a United States economist at Standard Chartered Bank in New York.

The Thomson Reuters/University of Michigan index of consumer sentiment fell 5.3 points to 76.8 in early September, the lowest since April. Economists pointed to worries over high interest rates and a possible military strike on Syria.

A separate report from the Commerce Department showed that retail sales rose 0.2 percent last month as Americans bought automobiles and other long-lasting goods like furniture and electronics and appliances.

But those purchases appeared to draw spending power away from other areas, and receipts for clothing, building materials and sporting goods all fell.

It was the fifth consecutive monthly rise in retail sales, which account for about 30 percent of consumer spending. They had gained 0.4 percent in July, and economists polled had expected them to rise 0.4 percent last month.

In a third report, the Labor Department said the Producer Price Index increased 0.3 percent last month after being flat in July.

“Price pressures are not dead, but they are taking a very long and heavy nap,” said Michael Montgomery, a United States economist at IHS Global Insight.

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