Data released today showed that retail sales dropped 0.3% in September, against expectations of a modest increase. Amid the ongoing trade war and worries about a potential recession, the strength of consumer spending has been a needed counterweight, explains analysts at Wells Fargo.
Key Quotes:
“The first decline in seven months for retail sales follows on the heels of an upward revision to August which softens the blow somewhat. Still, with the recent deterioration in consumer confidence and broad-based declines across various types of merchants, this report is the first hard data to indicate cracks in one of the key pillars of the economy that, so far, had been holding up rather well.”
“Today’s report is right in line with our forecast for the annualized pace of PCE growth to slow to about 2 ½% in the third quarter before settling to a 2% pace in the further out quarters.”
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