Still, the Retail Sales data yesterday was flat and a case could be made that if it weren't for higher prices at the gas pump the report might have been negative.
Of greater import to me was the PPI (producer price index) data today. The PPI measures the average change over time in the prices received by domestic producers of goods and services. The index came in flat versus an expectation of a 0.3% increase. Moreover, the year over year change for the index less the volatile food and energy complex is running at only 1.2% versus June's 1.6%.
The market is more fixated on the CPI (Consumer Price index) which is set to be released tomorrow. The CPI is already running below the Fed's target rate of 2% and is reflective of the disinflationary pressures the US economy has been enduring.
Up to this point the Fed has dismissed the low inflation numbers as "transitory". Jim Bullard of the St. Louis Fed is the only governor who has raised concerns about it and was grudgingly afforded a blurb in the latest FOMC announcement, mostly to placate him.
Regular readers of my commentary know that I have been concerned about global deflation and the recent disinflationary trends in this country for some time. My most recent commentary in which I addressed these issues can be found here: http://equitymaven.blogspot.com/2013/07/of-central-banks-asset-bubbles.html
The following is a weekly ratio chart of the iShares Barclays TIPS Bond ETF (TIP) divided by the iShares Barclays 7 to 10 Year Treasury Bond ETF (IEF):