Activity in the domestic US economy during September was modestly positive as retail sales in September rose a mere 0.1% m/m and 4.7% y/y. This compares with a 0.1% monthly increase in August and a 6.5% year-on-year advance. These numbers are not surprising considering that consumer sentiment in October was down slightly from the month before.

Business inventories in August climbed slightly by 0.5% for the month, following a 0.7% increase in July. Stocks on hand went up at retailers by 0.7%, at wholesalers by 1% and for autos and parts, but fell 0.1% at manufacturers. Retail inventories excluding cars, which go into the calculation of GDP, were flat.

Meanwhile, the housing market does not look good with new home sales expected to be down in October. This helps explain why, according to the University of Michigan’s monthly consumer sentiment survey, home buying attitudes recently fell to their worst reading since the end of 2008.

Industrial production in September rose 5.1% y/y after increasing 4.9% in the prior month. It was the sharpest increase in industrial production since December 2010. Manufacturing rose 3.5%, utilities advanced 5.4% and mining jumped 13.4%. Meanwhile, capacity utilization in September remained unchanged at 78.1%.

All these numbers imply that GDP growth for Q3 will probably be up only slightly if not flat.