Week Ahead: Retail Sales and Consumer Sentiment

Economic Indicators FOXBusiness

A slow economic calendar next week is highlighted by just a handful of data reports, including August retail sales and an updated consumer sentiment figure.

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Analysts believe retail sales likely increased by 0.5% last month based upon the fact that unit auto sales in August surged to the highest rate in nearly nine years.

The problem for retailers outside the auto industry, however, is that when consumers spend a lot of money on new cars they don’t have a lot of money left over for other discretionary purchases, which means retail sales excluding autos probably rose by just 0.1%.

Retail sales figures are due to be released on Friday.

Also out on Friday is the Reuters/University of Michigan Consumer Sentiment Index, which analysts believe likely ticked higher to 83.0 in its preliminary September reading, up from 82.5 in August.

The survey was taken before Friday’s jobs report revealed weak labor market growth last month so the consumer index is unlikely to be affected by the disappointing report. Besides, the August jobs report is widely viewed as a one-month anomaly impacted by several one-time, temporary events. Consequently consumer optimism that had been rising on positive economic data all summer is likely to continue to rise.

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“Despite disappointing progress on jobs in August, consumers are feeling better about the economy’s general direction. Falling gasoline prices further help the situation,” analysts at IHS Global Insight said in a report to clients.

Due on Tuesday is the National Federation of Independent Business’ small business optimism index.

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