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US PPI Falls Sharply, Retail Sales Dip, Manufacturing Grows Modestly

By:
James Hyerczyk
Updated: Nov 15, 2023, 15:45 UTC

October saw a 0.5% PPI drop and 0.1% retail sales dip in the US, while NY manufacturing grew modestly despite fewer orders.

PPI FACTORY

Highlights

  • PPI falls 0.5%, largest decrease since April 2020
  • Retail sales slightly down by 0.1% from September
  • Modest growth in NY manufacturing activity

PPI Indicates Price Decline in October

In a significant shift, the US Producer Price Index (PPI) for final demand fell 0.5% in October, the most considerable decrease since April 2020, as reported by the Bureau of Labor Statistics. This decline contrasts with the 0.4% rise in September. Over the past year, the final demand index has risen by 1.3%, indicating a modest increase. The decline was mainly in the final demand goods, which fell by 1.4%, whereas service prices remained steady.

Retail Sales Show Slight Dip

US retail and food services sales in October 2023 slightly dipped by 0.1% from September but showed a 2.5% increase from October 2022. This marginal decline reflects cautious consumer spending amidst economic uncertainty. Retail trade sales also saw a slight decrease from the previous month, with a notable decline in gasoline station sales, offset by a significant increase in nonstore retail sales.

Manufacturing Activity in New York

The Empire State Manufacturing Survey for November 2023 indicated modest business activity growth in New York. The general business conditions index saw an increase, although new orders continued to drop marginally. Notably, unfilled orders decreased significantly, and labor market indicators suggested a slight reduction in employment and working hours.

Short-term Economic Outlook

The data presents a mixed economic outlook. The drop in PPI suggests easing inflationary pressures, while the retail sales figures point to cautious consumer behavior. The manufacturing survey from New York shows modest growth but with a cautious future outlook. Overall, these indicators suggest a complex economic environment with both bullish and bearish signals.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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