Today’s releases are causing analysts to reduce their GDP forecasts for Q3, which ended Sept 30. Note the difficulty in forecasting the past when considering the difficulty in forecasting the future…

This was released yesterday, turned down from not so good levels:

NFIB Small Business Optimism Index

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Mtg purchase apps down and cash sales down as well, makes it problematic for total sales to rise?

MBA Purchase Applications

The steep drop underway in mortgage rates is sharply stimulating demand for refinancing but isn’t yet doing much for home purchases. The refinancing index surged 11.0 percent in the October 10 week as the average rate for conforming loans ($417,000 or less) fell 10 basis points in the week to 4.20 percent which is the lowest average since June last year. But in contrast, the purchases index fell 1.0 percent in the week for a year-on-year decline of 4.0 percent.

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Bank mtg lending way down from a year ago, flattish this year:

At Wells Fargo and Chase, mortgage lending inches up

By Ruth Mantell

Oct 14 (MarketWatch) — Wells Fargo the country’s No. 1 mortgage originator, said it made $48 billion in new home loans in the third quarter, a hair up from the prior quarter, and down 40% from the year-earlier period. Meanwhile, J.P. Morgan Chase JPM the second-largest mortgage lender, said its third-quarter originations hit $21 billion, up from $17 billion in the second quarter, and down 48% from a year earlier. Some qualified borrowers can’t get a mortgage because of many lenders’ strict standards that aim to shield banks from the financial risks that come with the possibility of having to buy back a questionable loan, said John Stumpf, chairman and chief executive at Wells, on aTuesday conference call.

Recall last month when retail sales were up an unexpected .6% I wrote about how 13 state had tax holidays in August which may have moved sales forward from September, which just came out weaker than expected at -.3%, leaving the down trend intact:

Retail Sales

As expected, auto sales and gasoline sales tugged down on retail sales in September. But core numbers were weaker than expected. Retail sales in September declined 0.3 percent after jumping 0.6 percent in August. Analysts forecast a 0.1 percent dip for September. Excluding autos, sales slipped 0.2 percent after gaining 0.3 percent in August. Expectations were for a 0.3 percent increase. Excluding both autos and gasoline sales dipped 0.1 percent, following a jump of 0.5 percent in August. Expectations were for 0.5 percent.

Within the core, softness was seen in declines furniture & home furnishings, building materials, nonstore retailers, clothing & accessories, and sporting goods & hobbies. Gains were posted for electronics & appliances (likely iPhones), health & personal care, general merchandise, and food services & drinking places.

Today’s report is very mixed. It was not surprising that a downswing in autos after a strong August pulled down sales. And the same was expected for gasoline prices pulling down sales. But core sales eased despite a surge in electronics sales. Core sales eased after a very strong August. On a very positive note, food services & drinking places gained a robust 0.6 percent, matching the pace for August.

I don’t put much stock in these as they seem to follow the stock market, as this exceptional drop seems to confirm. Or maybe the stock market leads weakness…