The Producer Price Index for final demand declined 0.5% in September, missing expectations on 0.2% decline. Final demand prices were unchanged in August and rose 0.2% in July. On an unadjusted basis, the final demand index fell 1.1% for the 12 months ended in September, the eighth straight 12-month decline. In September, two-thirds of the decrease in the final demand index is attributable to prices for final demand goods, which fell 1.2%.
Thursday brought CPI, Unemployment Claims, Empire State Manufacturing Index and Philly Fed Manufacturing Index figures. US CPI decreased 0.2% in September on a seasonally adjusted basis. Over the last 12 months, the all items index was essentially unchanged before seasonal adjustment. The energy index fell 4.7% in September, with all major component indexes declining. The gasoline index continued to fall sharply and was again the main cause of the seasonally adjusted all items decrease. The indexes for fuel oil, electricity, and natural gas declined as well. The index for all items less food and energy rose 0.2% in September. Analysts were predicting 0.1% increase.
In the week ending October 10, the advance figure for seasonally adjusted initial claims was 255,000, a decrease of 7,000 from the previous week's revised level. Analysts were expecting increase to 269,000. The previous week's level was revised down by 1,000 from 263,000 to 262,000. The 4-week moving average was 265,000, a decrease of 2,250 from the previous week's revised average. This is the lowest level for this average since December 15, 1973 when it was 256,750. The previous week's average was revised down by 250 from 267,500 to 267,250.
Separate report on Empire State Manufacturing Index indicates that business activity declined for a third consecutive month for New York manufacturers. The headline general business conditions index edged up three points, but remained negative at -11.4. However, increase to -7.6 points was anticipated.The survey indicated that new orders, shipments, and unfilled orders all declined at a steeper pace than last month.
Philly Fed Manufacturing Index remained negative for the second consecutive month, although it edged slightly higher from -6.0 in September to -4.5, missing expectations on increase to -1.8 points. The indexes for current new orders and shipments showed notable deterioration this month, with both indexes falling below zero, marking the first negative reading for the new orders index since May 2013. Indicators for delivery times and unfilled orders were also negative. Thirty percent of the firms reported a decline in inventories this month, and the current inventories index declined 15 points.
Friday's session was marked by Industrial Production and Consumer Sentiment figures were released. Industrial production decreased 0.2% in September after edging down 0.1% in August. This was in line with market expectations. The decline in August is smaller than previously reported. In September, manufacturing output moved down 0.1% for a second consecutive monthly decrease; the index for mining fell 2.0%, while the index for utilities rose 1.3 percent. For the third quarter as a whole, total industrial production rose at an annual rate of 1.8%, and manufacturing output increased 2.5%.
Consumer sentiment climbed more than forecast in October as lower-income Americans projected wage gains will accelerate and falling energy prices helped stretch paychecks.The University of Michigan’s preliminary consumer sentiment index for this month rose to 92.1, the first advance in four months, from 87.2 in September, a report showed Friday. The median projection called for 89.
This week markets will be looking at:
Building Permits/Housing Starts (Tuesday 14:30)
Unemployment Claims (Thursday 14:30)
