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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (9458)	9/12/1997 9:58:00 AM
From: Brian Fukuba	of 50167

Economic calendar: Retail Sales 0.4%, Ex-Auto Retail Sales 0.3%, PPI 0.3%, Core PPI 0.1%, Atlanta Fed Index 16.9 Week of September 8 - September 12 Actual Date Time Release Period Forecast Market Previous 9/08 10:00 Challenger Layoffs Aug 27K N/A 48K 9/08 15:00 Consumer Credit Jul $6.5B 5.0B 0.8B R 9/09 09:00 Mitsubishi Index 09/06 0.4% N/A -0.2% 9/09 10:00 Wholesale Inv Jul -0.6% N/A 1.9% 9/09 10:00 Productivity (Rev) Q2 2.7% N/A 0.6% 9/09 14:55 LJR Redbook 09/06 0.1% N/A 1.0% 9/11 08:30 Initial Claims 09/06 310K N/A 324K R* 9/11 10:00 Current Account Q2 -39.0B -38.0B -40.0B R* 9/11 16:30 M2 09/01 18.0B 6.0B 5.8B R 9/12 08:30 Retail Sales Aug 0.4% 0.6% 0.9% R 9/12 08:30 Ex-Auto Retail Sal Aug 0.3% 0.5% 0.6% R* 9/12 08:30 PPI Aug 0.3% 0.3% -0.1% 9/12 08:30 Core PPI Aug 0.1% 0.1% -0.1% 9/12 09:00 Atlanta Fed Index Aug 16.9 23.0 23.4 R* 9/12 10:00 Michigan Sentiment Sep 105.0 N/A 104.4 Retail Sales Review The August retail sales report revealed a 0.4% overall increase and a 0.3% gain excluding autos. The overall July increase was revised to 0.9% from 0.6% and the ex-autos increase was revised to 0.6% from 0.5%. Only the food stores component failed to post an increase in July. Increases in sales of autos, building materials, and furniture all contributed to a 0.7% increase in sales of durables. Sales at general merchandise stores and apparel sales contributed most to the 0.2% increase in sales of nondurables. Expectations were high enough for this report that we will have a hard time convincing most people that a 0.4%/0.3% performance is solid. Yet it is. Consider the overall 0.4% retail increase--in 1996 retail sales averaged exactly that and in 1994 they averaged a modestly higher 0.5%. Also consider the broad-based nature of the August increase--only one retail category failed to turn in an increase. As to the broader consumption picture: Sales of nonauto durables are on track to post a Q3 increase on the order of 5.5% and sales of autos are on track to post an increase of at least 7.0%. This will result in a third-quarter consumption increase in the 3.5%-4.0% range. The magnitude of the revisions to this series is approaching ridiculous levels. Consider these facts: 1.July sales were revised to 0.9% from 0.6%. 2.Ex-auto sales for both June and July were revised higher. 3.July autos sales were revised to 1.8% from 1.0%. 4.July furniture sales were revised to 1.3% from -0.4%. 5.July apparel sales were revised to 0.8% from 0.2%. 6.June drug-store sales were revised to 1.2% from 0.3%. Also note that every month year-ago retail sales are revised (July 1996 and August 1996 in this case). Those were almost universally revised higher. To its credit Census calls this release the advance report. Keep in mind that the figures released today will likely end up looking different one month from now. PPI Review The August producer price index revealed a 0.3% overall increase and a 0.1% core-rate gain. Energy prices rose 1.4% and food prices rose 0.3%. Prices for capital equipment held steady; prices for apparel and cars rose. The intermediate and core indices and their core counterparts all posted increases. The producer price index finally rose in August (the first increase this year), but the story generally remains the same: As of August the overall PPI was falling at a 0.2% year-on-year rate (versus a 2.8% increase in 1996) while the core PPI was neither accelerating nor decelerating (versus a 0.6% increase last year). These numbers are the same ones that prevailed a month ago. To be sure, the current wholesale price environment can be described as nothing but kind. But pipeline-good indices and price reports from purchasing managers suggest the degree of that kindness is waning. The NAPM price index is averaging 51.4% so far this year versus 45.3% in 1996. The core intermediate index is now rising 0.4% year-on-year-rate. This may not seem threatening until one considers that it fell 0.9% in 1996 and that a year ago it was falling at a 1.8% rate. Similarly, the core crude index is rising at a 3.3% year-on-year-rate (up from 1.8% in June and 3.0% in July). This follows a 5.6% decrease in 1996 and declines as severe as 14% a year ago. Wholesale inflation is not set to explode, but we will not soon see another string of seven straight declines. note: time reporting is Eastern time. This was captured from briefing.com. * Actual #'s R Revised #'s Will try to post #'s as soon as they are released. bri

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