Retail sales came out at 0.6% ahead of the expected 0.4%. A rise in sales for three months straight, as retailers slash prices and offer deals ahead of holiday season. Lower prices have set the CPI down to 0.1% v. expected 0.2%. This is an uncomfortable price level for Fed Chairman Bernanke who aims to keep inflation within a long term range of 1.7-2%. Clearly, the consumer needs incentive to buy considering weak employment numbers; it makes sense that pressure is placed on businesses to lower prices.
The dollar advanced against most major currencies this morning. Traders are bullish on the dollar for the time being, while Bernanke is scrambling through the Fed's toolkit. There is more talk of the Fed remaining committed to pursuing monetary policy aimed at boosting inflation at desirable levels to spur a recovery, and maximizing employment.
Michigan Consumer Confidence report came out lower than expected at 67.9 v. 68.9 and prior 68.2.
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