Another catchup report today following the government shutdown, this one on retail sales. The leading attack on Trump pushed by Dems and the traditional media that are always at their beck and call is affordability. This report won’t help the Dems. The headline and “core” numbers were below expectations, meaning that inflation appears to be lessening. Year-over-year topline inflation, which I think is more important to track than month-over-month ones, was 2.7% in November, well below consensus expectations. Core YOY was 2.6%. Another bit of good news is that energy prices were actually up in the report, but we all know that gas prices have declined significantly recently, so future reports should reflect that. In addition, rents and housing prices are also projected to decline. One negative is that medical care prices continue to increase pretty rapidly. Meanwhile, real income increases, the wages workers receive after inflation is accounted for, have risen almost 1% YOY. That is a fact that should be promoted by the administration, because if income is rising faster than inflation, people are better off, although for many low and middle income workers, the inflation basket may not reflect the expenses that are most important to them. And money supply growth is relatively modest, which should ease inflation pressures as well.
