Latest / Markets with Megan: A Quick Financial Markets Update / Inside October Retail: Weak Headline, Strong Core | S2 E107 | 12-17-25

Transcript

Inside October Retail: Weak Headline, Strong Core | S2 E107 | 12-17-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: There's a lot of economic data to report this week because the government data is finally coming back.
• 0:05
  Megan Horneman: It is Wednesday, December the 17th, and this is Markets with Megan.
• 0:09
  Megan Horneman: We talked about the labor market reports that we got for October and November, but today we want to focus on the retail sales report.
• 0:17
  Megan Horneman: If you like this podcast, please subscribe, hit that alarm bell, share with friends, your family or colleagues, anybody who wants to know about what that economic data means and what it means for the markets.
• 0:29
  Megan Horneman: So we did get the retail sales data for the month of October.
• 0:33
  Megan Horneman: So it's very lagged.
• 0:35
  Megan Horneman: What we saw is in the headline data that actually the retail sales were basically unchanged.
• 0:41
  Megan Horneman: So they didn't rise at all, 0.0%.
• 0:44
  Megan Horneman: But we did see big declines in not only gasoline stations, and that's because the price of oil has been down, health and personal care, and then building materials as well.
• 0:54
  Megan Horneman: Now on the core side, this is what we like to look at because it gives us a better indication on really what the consumer is spending on.
• 1:03
  Megan Horneman: That excludes not only gas, but food, building materials, and autos.
• 1:08
  Megan Horneman: So you can also say this is almost like a discretionary side of spending.
• 1:12
  Megan Horneman: That rose 0.8% in the month of October.
• 1:15
  Megan Horneman: That's the highest since June of this year.
• 1:17
  Megan Horneman: Now, the only things in that big report that did decline, when you look at autos, so there was a roll-off of the electric vehicle credit.
• 1:26
  Megan Horneman: So you did see a big decline in auto sales, the building materials as well.
• 1:31
  Megan Horneman: But restaurants, this is an area of retail spending that we've talked about a lot, where consumers just continue to go out and eat out at restaurants despite their stretched balance sheets and their high credit card balances.
• 1:46
  Megan Horneman: That actually fell the most since the month of February.
• 1:50
  Megan Horneman: So what does this tell us?
• 1:51
  Megan Horneman: It tells us that the consumer is very tepid right now.
• 1:55
  Megan Horneman: There is some concern that their balance sheets are stretched, that they're concerned about the economy, and their spending isn't exactly where, I guess you could say, analysts expect it to be.
• 2:05
  Megan Horneman: What does it mean going forward?
• 2:07
  Megan Horneman: This means the economic growth for the fourth quarter.
• 2:10
  Megan Horneman: It could slow because the consumer makes up the majority of GDP.
• 2:14
  Megan Horneman: It probably does confirm that the Fed can still come in and cut interest rates in the early part of next year.
• 2:21
  Megan Horneman: But it also does tell us that the consumer needs that lifeline and they are expected to get that going into next year with the tax relief package.
• 2:29
  Megan Horneman: That's all we have today.
• 2:30
  Megan Horneman: If you want a history of our podcast, go to marketswithmegan.