OCTOBER 21, 2024 – RETAIL SALES UP, JOB CLAIMS DOWN IN SEPTEMBER
Retail sales in September were up 0.4 percent, beating expectations, and an improvement over the 0.1 percent rise in August. The economy seems to be holding its own as consumers keep spending. This is good news, as consumers are responsible for two-thirds of all economic activity in the US. The Labor Department also reported last week that jobless claims fell by 19,000 to a seasonally adjusted 241,000, lower than expectations for 260,000.
The policymakers are confident inflation is trending down to the 2 percent target but are concerned about a weakening labor market. As such, they remain hesitant to act aggressively in lowering interest rates.
Federal Reserve Governor Christopher Waller spoke last week, confirming future rate cuts will be smaller than the 50 basis point reduction announced in September. Waller said, “the data is signaling that the economy may not be slowing as much as desired.” A stronger economy means there is less urgency to act. Expectations remain for a quarter of a percent decrease at the next Federal Reserve meeting in November.