Summary for Week Ending Sept 14th

The key event of the week was the FOMC announcement. Here were my posts:
' FOMC Statement: QE3 $40 Billion per Month, Extend Guidance to mid-2015
' FOMC Projections and Bernanke Press Conference
' Analysis: Bernanke Delivered

In other news, retail sales were strong due to higher gasoline prices. From Merrill Lynch:

Gasoline prices surged in the month, forcing consumers to spend more at the pump. Gasoline station sales climbed 5.5%, contributing to the majority of the gain in total sales. Netting out gasoline station sales, spending was only up 0.3%. ...

Outside of gasoline, autos and building materials, core control sales fell 0.1%. This was a decidedly weak report, showing a pullback in consumer spending. ...

The combination of weak August core retail sales and a downward revision to July and June (0.1pp in each month), slices 0.4pp from our Q3 GDP tracking model. We are now looking for GDP growth of only 1.1% in Q3.

Some of the other data was impacted by hurricane Isaac: Industrial production declined although this was partially due to the impact of Hurricane Isaac and weekly unemployment claims increased - also partially blamed on the hurricane.

In a little good news, consumer sentiment increased some in September.

Overall this suggests more sluggish growth.

Here is a summary of last week in graphs:

' Retail Sales increased 0.9% in August

Click on graph for larger image.

On a monthly basis, retail sales were up 0.9% from July to August (seasonally adjusted), and sales were up 4.7% from August 2011. This increase was largely due to higher gasoline prices.

Sales for July were revised down to a 0.6% increase (from 0.8% increase).

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales are up 22.7% from the bottom, and now 7.3% above the pre-recession peak (not inflation adjusted)

This was above the consensus forecast for retail sales of a 0.8% increase in August, and above (edit) the consensus for a 0.7% increase ex-auto.