Retail sales for August 2019:
- Prior was +0.7% (revised to +0.8%)
- Ex autos 0.0% vs +0.1% expected
- Prior ex autos 1.0%
- Ex autos and gas +0.1% vs +0.2%
- Prior ex autos and gas +0.9%
- Control group +0.3% vs +0.3% expected
- Prior control group +1.0% (revised to +0.9%)
The headline is on the strong side and the prior was revised higher as well. Digging into the control group, that was in-line with estimates and the prior was revised a tick lower. Building material sales rose 1.4%.
Overall, the consumer remains very strong and that is going to give the Fed some pause. A cut next week is a done deal but there’s a very good case for Powell to push back against an October cut.
A look at the control group with the 6-month moving average shows how surprising it is that the Fed is cutting.
