Citing global economic concerns, the Federal Reserve held off on hiking rates for the first time since June 2006 at this week’s FOMC meeting.
Inflation declined for the first time since January, as the consumer price index slipped .1%, mainly on a drop in gasoline prices. After rising for three straight months, gas prices fell 4% – the biggest drop since January, while food prices picked up .2%.
Homebuilder confidence continued to rise in September, reaching the highest level since October 2005. Measures of buyer traffic and current sales conditions both rose, while a gauge of sales expectations slipped. According to the NAHB: “Our members continue to tell us that they are concerned about the availability of lots and labor… Today’s report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.”
Housing starts slipped in August, while permits for new construction rebounded. Starts fell 3% to an annual pace of 1.13 million units, though holding above a one million-unit pace for the fifth straight month. At the same time, permits for new construction recovered 3.5% after plunging 15.5% in July, signaling strength in the market.
Factory production slipped in August, falling by the most since January of last year as automakers scaled back.
After falling sharply in August to the lowest level since 2009, a measure of business conditions in the New York region inched up slightly for September. The Empire State Manufacturing Survey headline index remained well below zero at -14.7 as gauges of orders, inventories and shipments declined.
Source: Federal Reserve Bank of New York
A measure of manufacturing activity for the Philadelphia area slipped into negative territory for September. According to the Philadelphia Fed, its manufacturing index dropped from positive 8.3 to negative 6 (the first negative reading since February 2014), and stock market volatility is to blame: “Evidence suggests that the responses regarding general activity that were received earlier in the month may have been negatively affected by the volatility in the stock market and international news reports”.
Source: Federal Reserve Bank of Philadelphia
Retail sales edged up modestly in August, picking up .2% as consumers spent more on cars and trucks, while spending less on gasoline. Excluding autos, gas and food, sales rose .4%.