Economic Data Releases Largely Weaker than Expected
· Following the impasse in Washington, we received a flurry of economic data this week. However, many of the releases came in weaker than expected as quibbling in the beltway has led to uncertainty. The recent soft economic data almost ensures the Federal Reserve will not announce tapering this year.
· Core retail sales, which directly feeds into the GDP report, increased at a 4.1 percent pace on a three-month annualized basis. We suspect consumer spending will likely rise at a 1.7 percent pace in Q3.
· Headline industrial production came in better than expected, but manufacturing posted a modest increase.