No Need To Rewrite Economic Forecasts

By John S. McClenahen Most business economists didn't spend the past weekend overhauling their U.S. forecasts for the rest of 2003. Yet there's no denying that last Friday's reports on retail sales, lower than anticipated, and inflation figures, higher than expected, were a surprise. Retail sales in August totaled $319.2 million, an increase of 0.6% from July, the U.S. Commerce Department reported. Retail sales gained 1.3% in July, and economists generally expected something very close to that figure in July. As August retail sales were falling short of expectations, inflation in August was coming in higher than anticipated. The Producer Price Index for finished goods rose 0.4% last month, four times July's 0.1% rate and slightly higher than the 0.3% rate economists generally anticipated for August.

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