- Retail sales rose 1.9% in September from the prior month
- The IMF now predicts that world GDP will decline by 4.4% in 2020
- The Consumer Price Index increased 1.4% in September from the prior year
Top Three Market Headlines
Retail Sales Jump in September: According to the U.S. Department of Commerce, spending at online retailers, restaurants, and brick-and-mortar stores increased 1.9% in September from the prior month, marking the fifth straight month of expansion and the fastest pace in three months. Versus the prior year, sales rose a hearty 5.4%. Excluding the often-volatile categories of automobiles and fuel, sales rose 1.5% from August and 5.9% over the prior year. Areas of strong growth in September included clothing, which picked as cooler weather begins to approach, along with sales in bars and restaurants, with more establishments opening up following state-mandated lockdowns.
IMF Upgrades Global Economic Outlook: The International Monetary Fund (IMF) predicted last week that the global economic collapse spurred by COVID-19 will not be as severe as previously estimated. According to the IMF, the world’s gross domestic product is now forecasted to decline by 4.4% in 2020, a better scenario than the 5.2% drop that was predicted in June. Several factors have bolstered the IMF’s global outlook, including unprecedented global fiscal and monetary intervention and a swift economic recovery in China, which is predicted to be the only major economy to grow this year, mainly because it reopened first.
Rising Used Vehicle Prices Drive Higher Consumer Prices: The consumer price index (CPI) rose a seasonally adjusted 0.2% in September over the prior month, a deceleration from the 0.4% rise in August. The rate of increase over the prior year was 1.4%, a modestly larger increase than the 1.3% rise in August. Rising used vehicle prices served as a key factor behind the index’s rise in September, jumping 6.7% for the month. After excluding the food and energy sectors, the “core” rate rose 0.2% in September and 1.7% versus the prior year. Offsetting some of the effect of rising used vehicles, prices for apparel, airline fares, and motor vehicle insurance have declined over the last 12 months.