Economy withstands the storms

Resilient and adaptable are two words that describe how well the US economy continues to react in the face of hurricanes and geopolitical storms. 

September retail sales rose more than expected, gaining 0.4%—0.7% if volatile gasoline and auto components are excluded. There was little apparent impact, positively or negatively, from preparation or clean-up of Hurricanes Helene and Milton. The strong 1.2% gain in July sales likely points to solid third-quarter gross domestic product growth, reducing—or at least postponing—fears of the economy falling into a recession or experiencing a hard landing. 

Weekly jobless claims fell 258,000 to 241,000, but in states affected by the two hurricanes, claims remain elevated. Industrial production fell 0.3% in September, but the Boeing strike and the effects of the storms each cut about 0.3% from production. So, hopefully these are temporary disruptions that will not disrupt the pace of growth. 

Markets took the data in stride and reacted as would be expected, with Treasury yields rising, expectations for fed funds cuts slipping and the S&P 500 index hitting new highs.