US: CPI and retail sales to be the data highlight - BBH

The US data highlight from the week ahead will be the CPI and retail sales report on October 13 and To be sure, the data will not be clean in the sense that some components will be distorted by the storms, according to analysts at BBH.  

Key Quotes

“The distortion will likely be on the upside.  Gasoline prices surged, which will help flatter the headline, but there is more.”  

“The market for products that are necessities in the storm-ravaged areas, such as household appliances and the like, appear relatively tight in terms of inventory/sales ratios.  That said, the transitory headwinds that some Fed officials had noted dampening inflation, are in fact subsiding.  Also, related to this is the fact that the breadth has been increasing.”  

“Investors already know that US auto sales surged in September.  This, and the rise in gasoline prices, will lift the headline rate, possibly by the most in a couple of years.  The economic dynamics of what we discussed above will spill over and help accelerate the gains in the measure used for GDP purposes, which excludes, autos, gasoline, building materials.  The average gain of this core measure of retail sales this year has been a 0.23%, identical to last year's average.  The median forecast in the Bloomberg survey is for a 0.4% increase after a 0.2% decline in August.”