US goods exports dropped USD -2.8B to USD 177.6B in September. Goods imports rose USD 2.2B to USD 269.8B. Trade deficit came in at USD -92.2B, larger than expectation of USD -87.8B.

Wholesale inventories rose 0.8% mom to USD 921.7B, below expectation of 1.3% mom. Retail inventories rose 0.4% mom to USD 744.0B.

Full release here.

US Conference Board Consumer Confidence dropped from 107.8 to 102.5 in October, below expectation of 105.6. Present Situation index declined sharply from 150.2 to 138.9. Expectations index fell slightly from 79.5 to 78.1.

“Consumer confidence retreated in October, after advancing in August and September,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4. Consumers’ expectations regarding the short-term outlook remained dismal. The Expectations Index is still lingering below a reading of 80—a level associated with recession—suggesting recession risks appear to be rising.”

“Notably, concerns about inflation—which had been receding since July—picked up again, with both gas and food prices serving as main drivers. Vacation intentions cooled; however, intentions to purchase homes, automobiles, and big-ticket appliances all rose. Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers. And, given inventories are already in place, if demand falls short, it may result in steep discounting which would reduce retailers’ profit margins.”

Full release here.

US PMI Manufacturing dropped from 52.0 to 49.9 in October, a 28-month low. PMI Services dropped from 49.3 to 46.6, a 2-month low. PMI Composite dropped from 49.5 to 47.3, a 2-month low.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

“The US economic downturn gathered significant momentum in October, while confidence in the outlook also deteriorated sharply. The decline was led by a downward lurch in services activity, fuelled by the rising cost of living and tightening financial conditions. While output in manufacturing remains more resilient for now, October saw a steep drop in demand for goods, meaning current output is only being maintained by firms eating into backlogs of previously placed orders. Clearly this is unsustainable absent of a revival in demand, and it’s no surprise to see firms cutting back sharply on their input buying to prepare for lower output in coming months.

“One upside of this drop in input buying has been a further alleviation of supply constraints, which alongside the stronger dollar have helped cool price pressures in the manufacturing sector.

“Although price pressures picked up slightly in the service sector due to high food, energy and staff costs, as well as rising borrowing costs, increased competitive forces meant average prices charged for services grew at only a fractionally faster rate. Combined with the easing of price pressures in the goods-producing sector, this adds to evidence that consumer price inflation should cool in coming months.

“The surveys therefore present a picture of the economy at increased risk of contracting in the fourth quarter at the same time that inflationary pressures remain stubbornly high. However, there are clearly signs that weakening demand is helping to moderate the overall rate of inflation, which should continue to fall in the coming months, especially if interest rates continue to rise.”

Full release here.