What I Saw Last Week

Consumer Credit rose by $11.0 billion in September – below my forecast for an increase of $14.5 billion – after increasing by an upwardly revised $22.8 billion (from $20.1 billion) in August.

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The jump in consumer credit was driven entirely by non-revolving credit, which increased by $11.2 billion to $2.909 trillion as revolving credit decreased by $0.3 billion to $1.041 trillion.

The takeaway from the report is that it reflects a deceleration in credit expansion that could contribute to concerns about the U.S. economy hitting/nearing peak growth.

Consumer Sentiment in early November edged down to 98.3 from the final October number of 98.6.  I had forecast a drop to 98.0.

The Current Economic Conditions Index edged up to 113.2 from 113.1 while the Index of Consumer Expectations slipped to 88.7 from 89.3.

Con Sent

The takeaway from the report is that stock market sell-off in October had no real impact on consumer sentiment, which was rooted more in favorable views about income expectations and job growth that are key drivers of consumer spending.

What to Watch for This Week

Inflation – as measured by the Consumer Price Index – rose by 0.1% in September with the core rate up by 0.1%.  The October number is likely to show the total rate rising by 0.3% and the core rate up by 0.2%.

U.S. Retail Sales in September rose by 0.1% with core sales (ex-auto) dropping by 0.1%.  I am looking for the October figures to show total sales rising by 0.6% and core sales up by 0.5%.

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