When investors are overly concerned about the Federal Reserve’s jawboning about higher interest rates, they need to keep in mind that the Fed’s official stance is that it remains data dependent and that rates, even if hiked, will remain lower than historical norms for a much longer period.

Two more pieces of data are signaling a Fed that is going to have a harder and harder time justifying immediate rate hikes ahead of the November 2016 election. This is on the heels of a weak wholesale inflation reading as well.

Retail sales were down 0.3% on an overall reading in August, versus July and on a seasonally adjusted basis. This was the first actual drop since March. As a reminder, consumer spending and consumption account for close to 70% of gross domestic product.

Sales at the retail level in July were revised up to a gain of 0.1% from an initial 0.0% reading. If you exclude autos, retail sales were down by 0.1% in August, and the same 0.1% drop was seen if you exclude the autos and gasoline.

The annualized readings look better, with retail sales up by some 1.9% from August of 2015, but that was down from the 2.4% gain in an annualized reading in July.

Industrial production was also weak, which confirms some of the weaker manufacturing readings seen over the summer. August’s industrial production reading was −0.4%, worse than the −0.2% consensus estimates from both Bloomberg and Dow Jones. July’s industrial production was revised to a gain of 0.6% rather than the 0.7% originally shown.

Another issue considering industrial production was demand weakness in manufactured goods via textiles and machinery, and also from utilities. The output from utilities, supposedly from weather rather than the economy, was down 1.4%. Mining production rose by 1.0% in August, but this is actually still a whopping 9.3% below the reading from a year earlier.

Federal Reserve officials have gone out of their way to push for interest rate hikes sooner rather than later. Unfortunately, they have continued to be data dependent, and the underlying economic data is hardly strong enough to merit much on the tightening front. Stay tuned.

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