US retail sales remained surprisingly strong in October. On a monthly basis, retail sales jumped by 0.5% M/M, while the consensus was looking for a softer 0.3% M/M increase. Core retail sales, excluding gas and autos, came out even stronger, rising by 0.7% M/M in October. The breakdown shows that strength was led by electronics (3.7% M/M), building materials (1.5% M/M), sporting goods (1.3% M/M) and food & beverages (1.1% M/M), while sales of clothing (0.7% M/M), furniture (-0.7% M/M) and gasoline (-0.4% M/M) dropped in October. After a dip in the second quarter, US consumers started to spend again during the summer months despite weak sentiment and fears for a new recession. Also in October retail sales remained surprisingly strong, posting a strong start to the final quarter and easing fears for a new recession.
In November, the US Empire State manufacturing index jumped back into positive territory, for the first time in six months. The headline index rose from -8.48 to 0.61, while the consensus was looking for a rebound to only -2.0. The details show a more mixed picture as shipments (9.43 from 5.33), delivery time (0.00 from -1.12) and average workweek (2.44 from -4.49) improved, while new orders (-2.07 from 0.16), inventories (-12.2 from -8.99), unfilled orders (-7.32 from -4.49) and number of employees (-3.66 from 3.37) deteriorated. The forward looking index improved significantly, from 6.74 to 39.02. Price indices show a mixed picture with prices paid falling from 22.47 to 18.29, while prices received picked up from 4.49 from 6.10.