The October 10 week starts with the federal holiday of Columbus Day on Monday. Banks and the bond market will be closed but not the stock market which will be open. Retailers are likely to use the three-day weekend to stir up some sales in advance of Halloween, Thanksgiving, and Christmas. Consumers could well respond given lean inventories of some goods. There may also be a bump higher in online promotional sales with Amazon’s second Prime Day event on October 11-12. Other e-tailers will be offering competitive deals. This may be good for retail sales data in October, but it could borrow some activity from November and December.
The retail and food services sales report for September at 8:30 ET on Friday will help complete the numbers for consumer spending in the third quarter. September should get a lift from the uptick in motor vehicle sales. Sales of gasoline should level out as recent price declines slowed. Sales of building materials and garden supplies should still be healthy as homeowners repair and renovate, and they prepare for adverse weather conditions – like Hurricane Ian or expected winter storms. On the other hand, slowing in the housing market is likely to have a negative impact on home furnishings, appliances, and electronics.
Three reports on inflation will be released in the week. Final-demand PPI is at 8:30 ET on Wednesday, the CPI is at 8:30 ET on Thursday, and import and export prices at 8:30 ET on Friday. The most watched of these is the CPI where Fed policymakers will be looking for any evidence that rate hikes are having an impact on demand-side inflation. Recent drops in energy have looked better for total prices than for the core – excluding food and energy. Various Fed officials have said they are concerned about the persistence of underlying inflation and that rate hikes will not stop until there is a “meaningful” and/or “sustained” decline in upward price pressures.
The minutes of the September 20-21 FOMC meeting are set for release at 14:00 ET on Wednesday. There probably will be little new between the content of the September 21 statement, the quarterly summary of economic projections, Chair Jerome Powell’s post-meeting press briefing, and a series of speeches by FOMC participants in the last three weeks.
The third quarter 2022 ended on September 30. Now that the September employment situation has been released, GDP nowcasts from Fed district banks are firming up. It looks like the advance report on third quarter GDP at 8:30 ET on Thursday, October 27 could well be for a modest expansion after two quarters of contraction.
