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Key takeaways
- U.S. retail sales slowed in September and were worse than economists had expected, indicating that consumer momentum may be waning.
- Meanwhile, wholesale inflation rose as expected in the September data released on Tuesday, following a delay due to the government shutdown.
- Economists said the data could strengthen the case for the Federal Reserve to cut interest rates next month.
Consumers lost some of their heat as summertime faded, which could help pave the way for another interest rate cut.
Federal Reserve officials likely gained a clearer view of the economy in September after the release of data on Tuesday that had been delayed by the government shutdown. Retail sales came in slower than expected, and inflation at the wholesale level remained tame. Economists suggested the data put the Fed on track to cut interest rates again when it next meets in a few weeks.
Why This Matters for the Economy
Cooling consumer spending could signal a broader economic slowdown, perhaps leading to job losses and reduced business investment.The Federal Reserve closely monitors these indicators when making decisions about monetary policy,such as adjusting interest rates.
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