Retail Sales Increase 1.7%…Consumer spending remains strong even as stimulus effects fade.
What it means— There’s no doubt that consumers are still ordering goods with abandon, as is evidenced by strong results from Amazon, Walmart, and Home Depot. But part of rising retail sales has to do with that other trend, rising inflation.
More than half of the increase in retail sales can be attributed to prices, which rose 1% in October, leading to the biggest annual inflation jump in more than three decades. Still, consumers spread the spending love around, with sales up 4% at online sellers, 3.8% at electronics stores, and 2.2% in department stores. Sales rose for gasoline and autos as well, but those numbers were pushed up by higher-than-average inflation.
Is this the Christmas rush? Will sales peak early this year as consumers worry about delivery issues? We can’t know until year-end, but with so much stimulus cash stuffed in bank accounts, expect holiday sales to surprise to the upside.
Industrial Production Up 1.6% in October, Capacity Rebounds from 75.2% to 76.4%… Manufacturing, mining, and utilities bounced back in October as the Louisiana Gulf Coast recovered from Hurricane Ida.
What it means— Most of the gains were about reopening the oil industry in Louisiana, but other sectors also gained ground. Motor vehicle production and parts jumped 11% after falling 7.1% in September, and utility output rose 1.2%. The rising numbers reflect strong retail sales. Still, it’s worth remembering that before the Great Financial Crisis, U.S. capacity utilization averaged 80%, as it had since the 1960s. We’ve not been near that level in more than a decade.
October Housing Starts Dipped 0.7%, Up Just 0.4% Over Last Year… Home builders started construction at an annualized rate of 1.52 million homes last month, virtually unchanged from last fall, while building permits rose 4% for the month and are up 3.4% over last year.
What it means— Home builders are warning about supply chain issues and labor shortages. Those excuses sound tired. While there’s no denying such issues, there’s also something to be said for not overbuilding in a toppy market. Demand and prices remain elevated, and no one knows how long that will last.
With inflation above 6%, the Fed tapering bond purchases, and several Fed governors calling for faster rate hikes, home builders are likely taking the cautious path so that they don’t get stuck with expensive, unsold inventory. It probably doesn’t hurt the feelings of builders that by throttling supply, they support high prices.
Seniors Are More Likely to Die on their Birthdays… For anyone who thinks hiding in bed is a great way to spend the anniversary of their birth, there’s now a valid reason to stay tucked in. Researchers in Switzerland analyzed more than 2.5 million deaths between 1969 and 2008 and found that people over 60 are 14% more likely to die on their birthdays than any other day.
Deaths due to falling jumped 44% on that day. The researchers think the results, which were confirmed by a Canadian team, are due either to overindulgence or exhaustion. They think people might go “all-out” during birthday celebrations, with bad consequences, and people in poor health might be holding out to make it to their next birthday and then are exhausted. No matter the reason, if you’re over 60, it might be a good idea to take it easy leading up to and on your birthday…and avoid hazards that might lead to a fall. Spending the day in bed is looking better all the time.
Data supplied by HS Dent Research
“When the facts change, I change my mind.
What do you do?” ~ John Maynard Keynes
Our plan is “the plan will change.”
What is your plan?
Relative strength measures the price performance of a stock against a market average, a selected universe of stocks or a single alternative holding. Relative strength improves if it rises faster in an uptrend, or falls less in a downtrend. It is easily applied to individual positions in your portfolio and to sectors and asset classes.
Investor Resources, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion.