Much ado about affordability

What It Covers

Marketplace examines September economic data showing retail sales growth slowing to 0.2%, producer price inflation at 0.3%, and consumer confidence dropping to April lows, while politicians increasingly use "affordability" to describe economic struggles.

Key Questions Answered

• •Wholesale Inflation Data: Core Producer Price Index came in softer than expected in September, giving Federal Reserve hawks evidence that inflation remains controlled, potentially supporting a December rate cut despite missing key employment data due to government shutdown.
• •Retail Sales Weakness: September retail sales grew only 0.2%, down from August, with car sales falling 0.3%, electronics down 0.5%, and clothing dropping 0.7%. Components feeding into GDP consumer spending calculations registered essentially zero growth, signaling consumer fatigue heading into holiday season.
• •Dollar Strength Dynamics: US dollar gained 3% since mid-September as investors bet Fed will hold rates steady, boosting demand for short-term Treasury bonds. European economic stagnation and Japanese stimulus weakened competing currencies, making dollar the "least dirty shirt in laundry basket."
• •Affordability Linguistics: Politicians now use "affordability" instead of "economy" because it focuses on one subjective dimension voters experience daily. Since 2015, grocery prices rose 30%, shelter costs 50%, and medical care 30%, making affordability resonate more than macro indicators like GDP or unemployment.