The amount of money that has been promised to back stop the financial system is unreal. The logic behind these sums is that the fear engulfing the financial system was unwarranted. But now data has come out showing that the real economy started cliff diving before the financial system started to unravel.
The retail sales report, released by the Commerce Department, showed that automobile sales took the biggest hit last month, falling about 4 percent. A broad range of products sat unsold in stores as well, including furniture, electronics, and clothing. At department stores, sales fell 1.5 percent.
“There is almost nothing positive to say about these figures,” Rob Carnell, an economist at ING Bank, wrote in a note.
Even a sharp drop in gasoline prices did not lure Americans back to the mall. A measure of inflation at the producer level, the Producer Price Index, fell 0.4 percent in September as energy prices fell on the back of cheaper oil.
But prices for many other products stayed high; outside of energy products, businesses and wholesalers paid 0.4 percent more for finished goods in September than in August, according to the Labor Department.
In the last year, producer prices are up 8.7 percent, a big jump and a sign of faster inflation. Even outside of gasoline, prices are up 4 percent for the year.
A measure of conditions in the manufacturing industry, released by the Fed on Wednesday, plunged to the lowest level since the survey began in 1991. The Empire State survey dropped to minus 24.6 as demand for factory orders plummeted in October. The reading was at minus 7.4 in September.