PSCD

Industrial production has a 100-year-plus record of measuring the production side of the economy.Similarly, retail sales have a 70-year-plus record of measuring the consumption side of the economy.In September, both surprised, as production failed to confirm leading indicators and declined, while sales boomed despite the ending of emergency Congressional assistance.I am inclined to take both with extra grains of salt as potentially impacted by pandemic-related seasonal distortions.

US retail sales are incredibly strong, rising 1.9% month-on-month versus 0.8% consensus.Strength was broad based with 12 out of 13 categories reporting a rise.Nonetheless, we shouldn't take too much away from what was a very good report, which saw sporting goods up 5.7%, health spending up 1.7% and eating/drinking out up 2.1%.

August Retail Sales reported with data on Inventory/Sales ratio from July.While a lagging indicator and not historically a good indicator of future economic activity, the July 2020 report emerges as underscoring a unique forecast for accelerated future economic activity.Total Business Inventories are reported at historic lows of 1.23, only slightly above the June level of 1.22.