Ready to fall
The Russell 2000 (NYSE: IWM) futures are lower and the small-cap index will likely open with a drop following news of disappointing August retail sales.
Retail sales posted a smaller-than-expected increase of 0.3% in August, the U.S. Census Bureau reported this morning. Excluding sales of motor vehicles and automotive parts, retail sales tumbled 0.4%.
The numbers disappointed economists, who were projecting retail sales to move up 0.4%. Sales excluding cars and parts were projected to add 0.2%.
The data suggest that the American consumer is growing tired as a result of ongoing slump in the U.S. housing sector and the recent financial turmoil. That’s bad news for the economy, because consumption accounts for about 70% of gross domestic product.
Investors will also be paying attention to the University of Michigan’s index on consumer sentiment for September for more clues on Americans’ spending habits. Those numbers will be released at 10 a.m. ET.
In other economic news, the price of goods imported into the United States unexpectedly fell 0.3% in August, according to the Labor Department. That’s the first decline since January, a sign that cheap imports can be counted on to slow down U.S. inflation only temporarily.
