James Knightley, the chief international economist at ING, notes that the U.S. retail sales rose more strongly than expected in August, posting a 0.4% month-on-month gain versus the 0.2% consensus expectation.

• “July’s growth rate was also revised up by a tenth of a percentage point. The report again underlines the point that while not everything is rosy in the US economy, overall it remains some way off recession and market expectations for aggressive Federal Reserve policy stimulus may be misplaced. Together with yesterday’s inflation data, it takes the already remote prospect of a 50bp rate cut next week firmly off the table.
• Overall the data suggest that consumer spending will make another decent contribution to GDP growth in the third quarter. The “control” group that better correlates with consumption rose 0.3% MoM after increasing 0.9% in July. As such we remain on course for a 3Q US GDP figure just above 2%.