Consumer mood perks up as holiday shopping season approaches

Economy watchers had plenty of news to follow last week as the government issued reports on retail sales, producer prices and consumer prices, but it was consumers themselves who spoke the loudest and they had encouraging things to say.

Economy watchers had plenty of news to follow last week as the government issued reports on retail sales, producer prices and consumer prices, but it was consumers themselves who spoke the loudest and they had encouraging things to say.

The mood of the American public, as measured by the University of Michigan’s preliminary Consumer Sentiment Index for October, has brightened considerably. The index rose to 92.1, the first advance in four months, from 87.2 in September. Bloomberg said lower-income Americans projected that wage gains will accelerate.

“Consumers have concluded that the fears expressed on Wall Street do not extend to Main Street,” Richard Curtin, director of the Michigan Survey of Consumers, said in a statement. “Continued job growth remains the key, especially since consumers have become more concerned that the pace of future job growth will slow.”

Reuters said the report suggested that the economic recovery remains on track despite a strong dollar and weak global demand.

"This suggests that U.S. household sentiment has turned an important corner and is a hopeful sign on the outlook for consumer spending activity going forward, given signs of weakness in other parts of the economy," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.

Consumer spending accounts for more than two-thirds of U.S. economic activity and has been the bright spot in the economy. If consumers soon begin to match their spending to their mood — and the all-important holiday shopping season is approaching — the economy could start to generate increasingly consistent growth that lasts into the new year.

The Commerce Department’s retail sales report for September showed that the public remained cautious as summer was ending. The department said retail sales showed little growth for the month, rising just 0.1 percent, although Reuters reported that consumers bought more cars and furniture and spent more on hobbies, clothing and eating out. That points to underlying strength in domestic demand, which Reuters said should provide some cushion against softening global growth.

Separately, the Labor Department said the producer price index fell 0.5 percent in September. The drop was the largest since January.

On Thursday the Labor Department said the consumer price index fell by a seasonally adjusted 0.2 percent in September in what was the second consecutive month of overall price declines. The Wall Street Journal said the monthly pace of inflation has been steadily falling since May, when renewed weakness in gas prices took hold.

Excluding the volatile food and energy categories, however, prices rose a relatively firm 0.2 percent in the month and a moderately healthy 1.9 percent during the past year.

"Today's reports strengthen our view that the U.S. economy remains on the right track and should help to bolster the [Federal Reserve’s] confidence that it is getting ever closer to meeting both of its mandates [on employment and inflation]. We expect the first rate hike in December," Harm Bandholz, chief economist at UniCredit Research in New York, told Reuters.

The Fed will hold its next-to-last meeting of 2015 on Oct. 27-28. The final meeting will be on Dec. 15-16.

Reuters said the Fed tracks the personal consumption expenditures price index, excluding food and energy, which is lower than the core CPI. Inflation has consistently run below the Fed’s 2 percent target, discouraging the central bank from following through on its announced plans for a rate increase.


Yanmar Names Power Solutions Division Manager

Carl J. Micu will oversee sales and the development of long-term growth plans.

Lippert Components Rebrands

The company’s core line of marine, RV and commercial products, including Lewmar and Taylor Made, will be branded as Lippert.

‘A Strong Finish to a Strong Year’

Booming demand for boats continued as the year ended, with the industry posting the highest number of sales since 2007.

Culture Summit 2.0

Correct Craft will gather “organizational culture drivers” for its second summit, which will take place virtually March 3.

Quick Hits: January 22, 2021

B.A.S.S. now taking noms for ‘21 Bassmaster High School All-American Fishing Team and Yacht Sentinel teams with Fountaine Pajot to equip its lineup with connected boat technology.

Teak Isle Expands Operations

The Florida-based manufacturer purchased a 45,000-square-foot facility and two additional CNC routers.