Announced this morning, Retail Sales for August increased 0.7%, higher than expected. Nonstore retailers were especially strong during the month, while Motor vehicle & parts dealers were weak. In addition, Food services & drinking places were flat during the month. The Control Group, which is a closer measure of the inputs for GDP by excluding sales for food, autos, building materials, and gas stations, increased 2.5% in August, also higher than expected. Meanwhile, Initial Jobless Claims were 332,000 for the week ending Sept 11th, a bit higher than expected but still in the low 300k range. Overall, a decent reading on retail sales in August even with lower revisions in the previous month. With nonstore retailers strong and food service & drinking places flat, it supports the premise that some people stayed home in August, partially due to increasing coronavirus cases. In addition, the weakness in motor vehicles echoes the supply chain problems surrounding the industry, which appear to be persisting and impacting inflation pressures. Whether these pressures persist or wane in the months ahead will be watched closely by market participants and the Federal Reserve. In all, the 10-year US treasury yield ticked higher following the report and equity futures are lower as we head into the market open.
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