UBS (Briefly) On The Week's Data
Week ahead: Retail sales payback, CPI tame, IP up, Michigan down a bit?
Retail sales probably fell in September (UBSe: -3.0%, cons: -2.1%) after rising sharply in August (2.7%). The pattern largely reflects auto sales related to the "cash for clunkers" auto rebate program that ended in August. Excluding autos and gasoline, which is about unchanged in our forecast, we forecast a 0.4% gain (cons: 0.1%, after 1.1%). Industrial production probably rose for the third consecutive month in September (UBSe: 0.4%, cons: 0.1%, after 0.8% in Aug)—the first period of sustained increase since 2007; we expect regional manufacturing surveys to signal continued growth in October. However, the University of Michigan sentiment index likely fell in early October, reflecting the pattern in the daily Rasmussen measure (UBSe: 72.5, cons: 73.0, after 73.5 in Sep). We estimate that the total (UBSe: 0.1%, cons: 0.2%, after 0.4% in Aug) and core CPI (cons and UBSe: 0.1%) rose only modestly in September. Minutes to the Sept. 22-23 FOMC meeting will be released.
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