Economic data suggests heighted US recession scenario

Two series released yesterday came in weaker than expected. This raises the fear that the US is already in recession.

Industrial production missed forecast, printing at -0.7% m/m (-0.1% m/m -forecast) and lower than the previous (and revised lower number) of -0.6% m/m.

This came on the back of lower retail sales. Core retail sales (retail sales less autos), came in at -1.1% m/m (-0.5% - forecast), compared with last month's -0.6% m/m.


The top chart shows US industrial production y/y and the bottom chart shows US retail sales adjusted for inflation (rr). Both series show down trends, with retail sales's downside momentum waning. However, rr shows a -0.5 contraction y/y.

The data implies a possible recession scenario. The Fed pivot is still a distinct possibility.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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