Core retail sales were better than expected in October by 4 tenths with its 7 tenths gain and September was revised up by 2 tenths to a rise of .6%. The y/o/y gain was 6.5%. Sales for autos and building materials, not included in the core figure, both were up m/o/m a bit more than 1%. Headline sales which also includes gasoline stations were up 1.3% m/o/m and 8.3% y/o/y. Sales rose too for restaurant/bars, online retailing and furniture. They declined in electronics, sporting goods, department stores and were flat for clothing.
Bottom line, most but not all, of the sales gains is inflation. Over the past two months, headline retail sales were up 1.3% while goods prices ex food and energy were higher by .9%, food prices at home were up by 1.1%, those away from home by 1.9% and energy prices were lower by .3%. Stretching this out over the past 6 months, headline retail sales are up 2.9% while core goods prices are up 1.8%, energy prices by .9%, food prices away from home are up 5.2% and food at home by 5.7%. Q3 GDP estimates will like shift up somewhat on this data point. But, if Target is a bellwether and their sales in the last weeks of October were as soft as they say, that of course will likely be a tell for not just November but the entire holiday season.
With regards to October import prices, they fell m/o/m but not as much as expected. Import prices ex petro fell .2% m/o/m vs the estimate of down .8% and September was revised up by 2 tenths. They are up by 3% y/o/y with a stronger dollar helping to keep a lid on the cost of these imports.
The 10 yr yield jumped right after the retail sales figure but has since given back that rise and is flat on the day.
Import Prices ex Petro
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.