Since governments around the world came together and saved the world from the brink of financial armageddon, (yes I'm being sarcastic) we can afford to briefly shift focus back to the economy. Since credit markets froze over in September there has been a perception that the US and global economy fell off a cliff.
Today we got some data to confirm that. US retail sales fell -1.5% in Spetember and is down -1.0% from a year ago - the first year over year decline since October 2002. US consumers have been on the ropes for a while but with rising unemployment and a lack of credit they are finally tanking big time.
Also out yesterday the Empire State manufactuing index fell to an all time low of -24.6. If that wasn't enough The Fed's Beige book was released yesterday and the outlook was equally grim. This from the report:
Reports indicated that economic activity weakened in September across all twelve Federal Reserve Districts. Several Districts also noted that their contacts had become more pessimistic about the economic outlook.
Expect more of this kind of nasty economic data going forward in the coming months and expect Australia to follow not too far behind.