Retail Sales
September's Retail Sales report was posted at 8:30 AM ET, revealing a 0.3% decline that came as a surprise to many in the markets. Analysts were expecting to see a 0.3% increase in sales. Even a secondary reading that excludes more costly and volatile auto transactions showed a decline when forecasts were calling for a rise. This means consumers spent noticeably less last month than thought. An upward revision to August’s sales may be preventing a stronger a reaction to the news. However, a decline in consumer spending is great news for bonds and mortgage rates because it is a sign of economic weakness. Since consumer spending makes up almost 70% of the U.S. economy, the weaker reading is a sign of softer economic growth that makes bonds more attractive to investors.