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Under normal circumstances, this would be the morning I would slice and dice the first important consumer data for the month: retail sales. With the government shutdown continuing with no end in sight, all we have are several dart-throws. The Chicago Fed’s final Advanced Retail Trade report for September indicated +0.5% nominal growth, and +0.2% in real terms. Meanwhile, Morgan Stanley, apparently relying on credit card data, wrote that there was no growth at all.

There is a little more reliable evidence in the goods-producing sector, as both the NY and Philadelphia Feds have issued their monthly manufacturing surveys. In addition, the Department of Transportation did update their Freight Services Index earlier this week.

And the news was modestly good.

Let’s start with the headline numbers. The NY Index (dark blue) came in at +10.7, while the Philadelphia Index (light blue) slid to -12.8. But the averages for the past few months are clearly, if slightly, positive. Meanwhile, the Freight Services Index (red, right scale) declined a slight -0.1% for the month, but remains at one of the five highest readings in the past 5 years:
 

This is significantly positive for the sector.

Additionally, new orders for both regional Fed indexes remained positive, suggesting the good news will continue a couple more months:
 

And the average of employment for the two Fed regions was also positive, among its best readings of the past 2.5 years:
 

The big fly in the ointment likely can be directly tied to tariffs, as the prices paid components on both regions continues at levels equivalent to the beginning of 2023. Note that the big surge in cost coincided exactly with the beginning of tariff-palooza:
 

All of this is no substitute for the more comprehensive data we deserve, but the data is reliable enough to indicate - surprisingly - modest positive momentum in the goods-producing sector.

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