830am data has been released.
Total Advance Retail Sales for November beat median economist estimates but failed to match the October month to month gain. When removing autos from the tally, retail sales jumped by a larger than expected 1.2%. That is double the market's forecast and better than the October improvement.October sales were also revised higher from +1.2% to +1.7%
Gasoline sales were the largest contributor with a 4.0% gain. Excluding gasoline, total retail sales rose by a modest 0.5%. Holiday spending was obvious. Clothing, sporting goods and general merchandise/department stores contributed notable $$$ but electronics and appliances receipts disappointed as did building materials and gardening equipment (better in the spring). It is encouraging to see year over year gains across the board though.
Take a peek at the unadjusted data. There was a significantly larger jump in retail sales receipts vs. the uptick seen in the seasonally adjusted data...in the Electronics and Home Furnishing categories specifically. But those two also have the largest standard errors of the group aka the largest adjustment for unknown variability in the survey sample. Also...gasoline sales actually FELL when looking at the unadjusted data.
Reuters Quick Recap...
RTRS-US NOV RETAIL SALES +0.8 PCT (CONSENSUS +0.6 PCT) VS OCT +1.7 PCT (PREV +1.2 PCT)
RTRS-US NOV RETAIL SALES EX-AUTOS +1.2 PCT (CONS +0.6 PCT) VS OCT +0.8 PCT (PREV +0.4 PCT)
RTRS-US NOV RETAIL SALES EX-GASOLINE +0.5 PCT VS OCT +1.7 PCT
RTRS-US NOV GASOLINE SALES +4.0 PCT, LARGEST GAIN SINCE NOV 2009, VS OCT +1.3 PCT
RTRS-US NOV CARS/PARTS SALES -0.8 PCT VS OCT +5.6 PCT
RTRS-TABLE-U.S. Nov retail sales up 0.8 pct
The November Producer Price Index rose 0.8% vs. calls for a print of +0.6% and the October read of +0.4%. Exluding the volatile food and energy category, the PPI ticked higher by only 0.3%.
About two-thirds of the November advance in the finished goods index can be traced to prices for energy goods, which rose 2.1 percent. Also contributing to the broad-based November increase in the finished goods index, prices for consumer foods and for goods other than foods and energy advanced 1.0 percent and 0.3 percent, respectively.
The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 1.1 percent in November, its fourth consecutive monthly increase. The November advance was broad-based, with prices for intermediate energy goods rising 2.8 percent, the index for intermediate materials less foods and energy increasing 0.7 percent, and prices for intermediate foods and feeds climbing 1.9 percent. On a 12-month basis, the index for intermediate goods moved up 6.3 percent in November.
The Producer Price Index for Crude Materials for Further Processing rose 0.6 percent in November. For the 3 months ended in November, crude goods prices increased 4.3 percent following a 2.3-percent advance for the 3 months ended in August. Leading the monthly November rise, the index for crude nonfood materials less energy climbed 3.1 percent. Also contributing to higher crude goods prices, the index for foodstuffs and feedstuffs moved up 0.7 percent. By contrast, prices for crude energy materials decreased 1.3 percent.
On an unadjusted basis, prices for finished goods rose 3.5 percent for the 12 months ended November 2010, their smallest 12-month increase since a 3.1-percent advance in August.
08:30 14Dec10 RTRS-U.S. NOV PPI +0.8 PCT (CONSENSUS +0.6 PCT) VS OCT +0.4 PCT
08:30 14Dec10 RTRS-U.S. NOV PPI EXFOOD/ENERGY +0.3 PCT (CONS +0.2 PCT) VS OCT -0.6 PCT
08:30 14Dec10 RTRS-U.S. NOV YEAR-OVER-YEAR PPI +3.5 PCT (CONS +3.3 PCT), CORE +1.2 PCT (CONS +1.2 PCT)
08:30 14Dec10 RTRS-U.S. NOV PPI INTERMEDIATE GOODS +1.1 PCT, EXFOOD/ENERGY +0.7 PCT
08:30 14Dec10 RTRS-U.S. NOV PPI CRUDE GOODS +0.6 PCT, EXFOOD/ENERGY +3.1 PCT
08:30 14Dec10 RTRS-U.S. NOV PPI ENERGY +2.1 PCT, GASOLINE +4.7 PCT, HEATING OIL +7.0 PCT
08:30 14Dec10 RTRS-US NOV PPI FOOD +1.0 PCT, TOBACCO +0.1 PCT, PASSENGER CARS +1.7 PCT, LIGHT TRUCKS +0.3 PCT
08:30 14Dec10 RTRS-TABLE-U.S. Nov producer prices rose 0.8 pct
Plain and Simple: Retail Sales show strong gains in seasonal consumer spending but larger sales volumes also reflect rising energy costs. At the moment this supports the Fed's call for improved GDP in 2011, but that assumes consumers will keep spending after the holiday season. Producer level inflation rose more than expected thanks to rising food and energy costs. These costs are being passed down to consumers (necessities) which steals spending money (demand) from discretionary items like electronics.
Market Reaction...
RATES HIGHER!
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