The Day at a Glance | Sep 15 2022

The Top

*Retail sales in the US increased 0.3% monthly during August, with mixed data among the indicator´s components.

*The Central Bank of China maintained 1-year preferential interest rates unchanged (2.75%).

*Gabriel Makhlouf and Luis de Guindos, members of the ECB, agree that firm decisions are needed to contain inflation.

*China announced a package worth 200 billion Yuan for commercial banks to increase the economy´s supply of credit.

*Economic indicators: Industrial production data in the US will be made known (0.1% e. m/m).

Economic environment

Mixed consumption data in the United States. Retail sales during August logged a monthly 0.3% increase in the United States, above the estimated 0.1%. However, the greater part of the increase is explained by motor vehicle and auto part sales (2.8%), a component that tends to be very volatile in its monthly changes. Gas station sales decreased (-) 4.2% monthly, but the increase in sales among other components (construction materials +1.1%; miscellaneous stores +1.6%; food services +1.1%) suggest that lower fuel prices incentivized the consumption of other goods. In other words, there was no overall visible decrease or weakness in sales; despite the fact that the “control group”, which follows up on the economy´s consumption data more closely, increased less than estimated (0.1% m/m vs 0.5%e.). The underlying sales index increased 0.3% month to month, and at an annual rate, retail sales increased 9.1%. All in all, without considering the indicator´s most volatile components, there seems to have been a slightly lower than expected increase in retail sales, but still shows a relatively firm increasing trend in consumption. The data reinforces the FED´s need to maintain a firm stance against inflation.