Financial and Economic Brief - September 19, 2017by © Liberty Publishing, Inc.
August Retail Sales Fell More Than Expected
According to The Commerce Department, U.S. retail sales fell 0.2% in August, more than forecasted, suggesting “moderation” in consumer spending in Q3. Data for July was revised to show sales increasing 0.3% instead of the previously reported 0.6%. The Commerce Department said it had received indications from companies that the hurricane had “both positive and negative effects on their sales data while others indicated they were not impacted at all.” Consumer spending increased at a 3.3% annualized rate in Q2. That boosted GDP growth to a 3.0% rate in the April-June 2017 period.
Gas Prices Coming Down… Slowly
Gas prices rose quickly after Hurricane Harvey, but are slowly coming down. “Prices go up like a rocket and come down like a feather,” said Tom Kloza, chief oil analyst for the Oil Price Information Service. Prices jumped 32 cents a gallon in two weeks as refineries in the Houston area were closed. The average price of a gallon of regular gas fell about a penny to $2.65 a gallon according to AAA's Thursday reading, down two cents from a week ago. Kloza expects that half the country will be paying less than $2 a gallon by Christmas.
Northrop Grumman to Buy Orbital
U.S. defense contractor Northrop Grumman Corp said on Monday it would buy missile and rocket maker Orbital for $7.8 billion in cash. The move gives Northrop access to contracts with NASA and the U.S. Army. The deal comes as North Korea tests threatening missiles and will help Northrop increase its arsenal of missile defense systems. Northrop will assume $1.4 billion in Orbital’s net debt and the deal is expected to close in the first half of 2018. The two companies’ complementary offerings will help increase efficiency, boost revenue and save costs, according to Northrop Chief Executive Wes Bush.