Comerica Economic Weekly

September 15, 2017
By Daniel Sanabria

We are starting to see the effects of Hurricanes Harvey and Irma show up in some of the U.S. data. However, many of the storm effects are estimated by the data agencies involved. As field data is collected, these estimates will be revised in the coming months.

Retail sales data was mostly normal, but auto sales fell more than expected as South Texas auto dealers lost the last weekend of the month to the storm. Total retail sales for the U.S. dipped by 0.2 percent for the month. The dollar value of retail sales for autos fell by 1.6 percent. We expect to see stronger U.S. auto sales in September as Texas, Louisiana and Florida residents and businesses replace their storm damaged vehicles.

Industrial production dipped by 0.9 percent in August with declines across the three broad industry groups, manufacturing, mining and utilities. We expect to see more drag in manufacturing in September as refineries and petrochemical plants slowly resume normal operations. The lasting power outages in Texas, Louisiana and Florida (due to Harvey and Irma) will likely weigh on utility output in September.

The headline Consumer Price Index for August came in warmer than expected, increasing by 0.4 percent for the month. It was the strongest monthly gain since January. Energy prices provided a push as gasoline was up 6.3 percent for the month.

The Producer Price Index for Final Demand increased by 0.2 percent in August. The PPI for energy goods increased by 3.3 percent in August, reversing three consecutive monthly declines.

Initial claims for unemployment insurance fell by 14,000 for the week ending September 9, to hit 284,000. This comes after a surge in initial UI claims the previous week, gaining 62,000 after Hurricane Harvey hit South Texas. We expect to see another surge in weekly UI claims related to Hurricane Irma over the next couple of weeks.

Mortgage applications jumped for the week ending September 8, with gains in both purchase and refi apps. Purchase apps were up 10.9 percent for the week. Refi apps increased by 8.9 percent. According to the Mortgage Bankers Association, the rate for a 30-year fixed rate mortgage fell to 4.03 percent.

The Bank of England hinted that it would raise its benchmark lending rate soon. We expect the European Central Bank to announce the schedule for QE tapering in October.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: Comerica_Economic_Weekly_ 09152017.


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