US retail sales beat expectations in August, rising for third straight month. “The American consumer appears to be in good spirits. That’s good news for the economy, but it may heighten debate over how aggressively the Fed needs to cut rates,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.

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The Federal Reserve is expected to announce a cut in interest rates at its policy announcement this afternoon at 2:00 pm eastern, based on Fed funds futures. Softer hiring in recent months is said to be a key reason for easing policy. “The Fed knows that when the labour market turns, it turns very quickly, so they’re wanting to make sure they’re not stepping on the brakes of the economy at the same time the labour market has already slowed,” said Sarah House, senior economist at Wells Fargo, which is predicting the Fed’s target rate will fall 0.75 percentage points by the end of the year.

Industrial production in the US unexpectedly edged up in August, in the month of August, according to Federal Reserve data. Output rose 0.1% after falling by a downwardly revised 0.4% in July.

US import prices posted a stronger-than-expected rise in August. “The import price data support our expectations for pressure on consumer prices to accelerate in the months ahead,” said Grace Zwemmer, associate US economist at Oxford Economics.

Homebuilder sentiment remained steady in September, but holding near the lowest level in over a decade, according to polling by the National Association of Home Builders. A possible bright spot for the industry: future sales expectations rose to their highest level in six months.

US recession risk remains low, according to a new business-cycle risk indicator developed by TMC Research, a unit of The Milwaukee Company, a wealth manager. The Recession Probability Indicator (RPI) has been edging up lately, albeit from a low base, but the current 5% reading continues to reflect long odds that an NBER-defined recession has started or is imminent.

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