US retail sales, industrial output data point to slowing growth

WASHINGTON: US retail sales barely rose in November and industrial production recorded its biggest drop in eight months, suggesting some loss of momentum in economic growth in the fourth quarter.
The weak retail sales and industrial output readings reported on Wednesday, however, did not deter the Federal Reserve from raising interest rates by 25 basis points and signalling a faster pace of increases in 2017, against the backdrop of steadily rising inflation and a tightening labour market.
Other data showed producer prices notching their largest increase in five months in November amid a jump in the cost of services. The moderation in retail sales came after two straight months of strong gains. With incomes rising, household wealth at record highs and robust consumer sentiment, the cool-off in retail sales is likely to be temporary.
Retail sales edged up 0.1 per cent last month as households cut back on motor vehicle purchases after a rise of 0.6 per cent in October, the Commerce Department said. Sales were up 3.8 per cent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales also nudged up 0.1 per cent last month after gaining 0.6 per cent in October.
Manufacturing production slipped 0.1 per cent, held back by a 2.3 per cent drop in motor vehicle output. Excluding autos, manufacturing output rose 0.2 per cent. Mining production surged 1.1 per cent amid rising oil and gas well drilling as the drag from last year’s collapse in oil prices fades.
A third report from the Labour Department showed its producer price index for final demand increased 0.4 per cent last month, the largest gain since June, after being unchanged in October.
In the 12 months through November, the PPI rose 1.3 per cent, the biggest gain in two years. The PPI rose 0.8 per cent in the 12 months through October.
A 0.5 per cent increase in the cost of services accounted for more than 80 per cent of the rise in the final demand PPI last month. — Reuters