Retail Sales numbers were published this morning, showing a headline increase of 0.7% month-over-month. We were expecting a 0.6% reading, which is 0.1% higher than last month’s 0.5% increase. So people are continuing to spend money, which is good for our economy, great for a well-stocked Christmas tree, but is also inflationary. Those of us hoping for lower interest rates still don’t like inflation.
Interestingly enough, if you strip out vehicle purchases, the Core Retail Sales number was only up 0.2%, the same as the month prior. So most of the increase in the headline number comes from car sales. I am partially to blame for that, seeing as how I just purchased a new car last week. They are outrageously expensive; one car costs more than the rest of your yearly budget combined.
Tomorrow is Fed day. Thursday is GDP, and Friday is PCE. There continues to be upward pressure on mortgage rates, despite the expectation of a Fed rate cut tomorrow. You’ll see here that pricing has deteriorated for the last week and sent rates close to last month’s highs.
