Retail sales weak, PPI down, confidence up
August retail sales were the bigger story, and they were generally disappointing. Overall sales fell 0.3% against forecasts for a 0.2% gain. Strip out autos and you got a 0.7% decline, compared with expectations for a 0.2% drop. Even if you strip out both autos AND gas, you still get a poor reading: -0.4%. Food and beverage spending (+0.7%) showed some strength, as did sporting goods (+0.5%). But spending on general merchandise was down (-0.2%), as was spending on clothing (-0.3%), building materials (-2.2%), and electronics (-1.3%)
On the other hand, the University of Michigan's consumer sentiment index brightened in August -- to 73.1 from 63 (and against forecasts of 64.1). Personally, I don't find the sentiment index very useful. It seems to just move up and down with the stock market (and more recently, gas prices).