October Surprise: Sharpest Drop in Inflation in Decade

A record-tying drop in producer prices and slowing retail spending prompt Action Economics to lower its GDP and consumer-inflation forecasts

Two U.S. data reports released on Nov. 14 point toward a slower pace in both economic growth and inflation. A larger-than-expected drop in retail sales for October—and a sizable downward revision to the September figures—have taken a chunk out of the U.S. gross domestic product forecasts for both the third and fourth quarters. The recent weakness has reduced upside risk for GDP growth over the near term, and should keep the "hard landing" scenario alive in the financial markets.

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