U.S. Retail Sales, Producer Prices Signal No Taper

100267991According to today's report from the U.S. Census Bureau and the Department of Commerce, seasonally adjusted retail and food services sales in August rose 0.2% month-over-month and 4.7% compared with August 2012. Economists had been expecting a month-over-month increase of 0.5%. Excluding sales of cars and auto parts, sales were up just 0.1%, below the 0.3% improvement expected by economists.

Auto sales rose 1% month-over-month and were up 12.3% year-over-year. Furniture and home furnishings rose 0.9% above July sales and non-store sales (e-commerce) rose 0.5% over July and were 10.2% higher than August 2012.

Gasoline sales were flat month-over-month and down 1.5% year-over-year, largely a result of significantly lower pump prices compared with last year. The AAA Daily Fuel Gauge report shows a price of nearly $3.87 a gallon last year, compared with $3.54 today.

Sales fell 0.9% month-over-month at building and home improvement stores but were up 7.6% year-over-year. Electronics store sales rose 0.8% over July sales and 3.1% over August 2012.

Producer prices rose 0.3% in August, a bit higher than the 0.2% rise expected by economists. Excluding food and energy, prices were flat with July.

Energy prices rose by 0.8% after dropping in July. Gasoline prices were up 2.6% month-over-month.

The core rate held steady at 1.2% annual rate in August, and it will provide another reason for the Fed to maintain its asset buying program at the current level of $85 billion a month. The tepid growth in retail sales further signals no change at next week's FOMC meeting.

Filed under: Economy
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