US Retail Sales fall, Producer Prices decline. US Dollar gains in Fx Trading. | CountingPips Forex Blog

October 15, 2008 - Forex Economic News

US Retail Sales fall, Producer Prices decline. US Dollar gains in Fx Trading.

U.S. Retail Sales decreased more than expected in September according to a report by the U.S. Commerce Department released today. Advance estimates of September retail sales showed that sales decreased by 1.2 percent to $375.5 billion from August. Market forecasts were expecting a decline of 0.7 percent for September following August's revised decrease of 0.4 percent. On an annual basis, retail sales have fallen 1.0 percent below the September 2007 level.

USD gains against euro, pound in fx trade September's retail sales numbers were weighted down by a 3.8 percent decrease in automobile sales, a 2.3 percent decrease in furniture & home furnishings stores, a 2.3 percent decrease in clothing & clothing accessories stores and a 1.5 percent decrease in electronics & appliance stores. Health & personal care stores and gasoline station sales provided a positive contribution to the September report as these sectors showed increases by 0.4 percent and 0.1 percent, respectively. Retail sales excluding automobiles fell by 0.6 percent in September following August's revised 0.9 percent decline and surpassed forecasts expecting sales minus automobiles to register only a 0.2 percent decrease. On an annual basis, retail sales minus automobiles has advanced by 3.6 percent over the September 2007 level.

The Producer Price Index, released in a separate report by the Department of Labor, also fell in September as energy costs declined and eased inflation on finished goods. Producer prices decreased by 0.4 percent in September following a decrease of 0.9 percent in August and an increase of 1.2 percent in July. The annual rate of increase for September showed that producer prices were 8.7 percent higher than September of 2007 after August's annual rate registered a 9.6 percent increase. Market forecasts were expecting monthly producer prices to decline by 0.4 percent and the annual rate of increase to register 8.6 percent.

Helping to contribute to the lower ppi in August was the cost of energy which decreased by 2.9 percent for the month after decreasing by 4.6 percent in August. Core producer prices, excluding food and energy prices, rose by 0.4 percent in September following a rise of 0.2 percent in August and surpassed market forecasts expecting a 0.2 percent gain. On an annual basis, core producer prices advanced by 4.0 percent in September compared with an increase of 3.6 percent in August and above market expectations of a 3.8 percent increase.

Empire Manufacturing Survey falls more than expected.

New York manufacturing activity fell to a record lowpoint in October as sentiment among New York manufacturers declined by more than expected according to data released today by the New York Federal Reserve. The Empire State Manufacturing Survey, a monthly business survey of New York State manufacturers, showed that the general business index in New York declined by 17 points from August to September to register a record low -24.6 score. The October index score was below economic forecasts that were predicting a score of -10.0 for the month. August's survey had registered a score of -7.4.

The new orders index also dropped to a new record low level this month at a -20.5 score. The shipments index fell by 9 points in October to -8.9 while the unfilled orders index declined to -12.2. The prices paid index declined for the month to register a 31.7 score while the prices received index fell by 3 points to a 20.7 score. The future general business index also decreased for the month as the business outlook fell 19 points to a 24.2 score. The Empire State Manufacturing Survey is a monthly business assessment of New York State manufacturers produced by the New York Federal Reserve.

Dollar gains in Forex Trading today against most majors.

The U.S. dollar has been gaining ground today in the forex market against most of the major currencies despite the negative retail sales and Empire manufacturing data released. The euro fell to the dollar for the second straight day as the EUR/USD pair trades around the 1.3492 level near the end of the U.S. trading session at 5pm ET. The EUR/USD opened trading today(00:00 GMT) at approximately 1.3577. The British pound sterling also has declined for the second day in a row verses the dollar as the GBP/USD trades at 1.7267 today after opening at 1.7429. The dollar has fallen verses the Japanese yen in today's trading as the USD/JPY has declined from the open at 101.39 to approximately 99.93. Elsewhere, the USD/CAD has broken above the 1.1900 threshold and trading at 1.1907 while the USD/CHF has declined today to 1.1315. The AUD/USD has fallen to trading at approximately 0.6609 while the NZD/USD has also declined to trading below the 0.6000 level at 0.5989 at 5pm ET.

USD/CAD Chart - The US dollar gains against the Canadian dollar in forex trading breaking through the 1.1900 level today(Daily Chart).

Today's Forex Chart

tags: retail sales, producer prices, inflation, manufacturing, forex

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