CPI Up Less Than Expected

December 11, 2003

· Retail sales jumped 0.9% last month and the previously reported 0.3% October decline was revised up to little change. Consensus expectations were for a 0.6% November increase.

· Excluding motor vehicles & parts dealers, sales rose 0.4% last month and the previously reported 0.2% October gain was doubled. Consensus expectations were for a 0.4% rise.

· Sales at food services & drinking places rose 0.3% (9.5% y/y) following a 2.2% October increase that was revised up.

· Apparel and accessory store sales surged 1.1% (5.7% y/y), the strongest gain since July. Apparel prices recently have been firming. Sales of furniture and home furnishings jumped 1.0% (8.9% y/y) and sales of electronics ballooned 2.2% (15.0% y/y). Sales at general merchandise stores rose 0.1% (4.9% y/y) following a slight October decline.

· Motor vehicle dealers' sales rose 2.6% m/m in November on the strength on a 7.7% jump in unit sales of light vehicles. Sales at gasoline service stations rose 1.6% (5.9% y/y) though gasoline prices fell slightly m/m.

· Sales of building materials rose 0.3% (11.0% y/y) following a 1.5% surge the prior month that was little revised.

· Sales of nonstore retailers fell 0.4% (6.7% y/y) following five months of strong increase.

	Nov	Oct	Y/Y	2002	2001	2000
Retail Sales & Food Services	0.9%	-0.0%	6.9%	3.1%	2.9%	6.7%
Excluding Autos	0.4%	0.4%	6.5%	3.6%	2.9%	7.4%

Initial Claims for Jobless Insurance Up Again

December 11, 2003

By Tom Moeller

· Initial claims for jobless insurance rose 13,000 last week to 378,000. That followed an unrevised 11,000 increase the prior week. Consensus expectations had been for claims of 365,000.

· The four-week moving average of initial claims rose again to 364,750 (-8.1% y/y).

· Continuing claims for unemployment insurance rose 11,000. The prior week was revised to a decline of 4,000 versus the 44,000 increase reported initially.

· The insured rate of unemployment was unchanged at 2.6% from a downwardly revised level the week prior.

Unemployment Insurance (000s)	12/06	11/29	Y/Y	2002	2001	2000
Initial Claims	378.0	365.0	-11.9%	404.3	406.0	299.7
Continuing Claims	--	3,346	-2.1%	3,575	3,022	2,114

Import Prices Strengthen

December 11, 2003

By Tom Moeller

· Prices for imported commodities rose last month by double the Consensus expectation for a 0.2% increase. The 0.4% m/m gain was fueled by a surprising 1.1% jump in petroleum import prices.

· So far in December, the price of Brent Crude Oil is up from the $28.71/bbl averaged in November.

· Non-petroleum import prices rose 0.3%, the strongest one month gain since June. Capital goods prices rose for the first time since June, up 0.2% (-0.9% y/y). Non-auto consumer goods prices also were up a strong 0.3% (0.2% y/y), the most for any month since mid-2000.

· Export prices rose 0.5% led by another jump in food prices (11.0% y/y). Export prices elsewhere were tame.

Import/Export Prices (NSA)	Nov	Oct	Y/Y	2002	2001	2000
Import - All Commodities	0.4%	0.0%	2.1%	-2.5%	-3.5%	6.5%
Petroleum	1.1%	1.4%	11.9%	3.0%	-17.2%	66.5%
Non-petroleum	0.3%	-0.1%	1.1%	-2.4%	-1.5%	1.0%
Export - All Commodities	0.5%	0.3%	1.8%	-1.0%	-0.8%	1.6%

U.S. Business Inventories Accumulate

December 11, 2003

By Tom Moeller

· Total business inventories rose 0.4% in October for the second consecutive month. The rise was double Consensus expectations for a 0.2% increase.

· Retail inventories added 0.6% in October to the prior month's 1.1% rise. Rising inventories of motor vehicles and parts led the gains in both months.

· Excluding autos, retail inventories rose 0.2% following the 0.9% September surge. Inventories of furniture have been quite strong, up 1.9% (7.2% y/y) after a 1.0% gain in September. Conversely, inventories of apparel (+2.2% y/y) have fallen in six of the last seven months.

· Overall business sales jumped 0.7% (5.1% y/y) following the 0.9% September gain. Factory shipments and wholesale sales were strong in both months.

· The inventory-to-sales ratio fell to 1.35, a new record low.

Business Inventories	Oct	Sept	Y/Y	2002	2001	2000
Total	0.4%	0.4%	1.9%	2.1%	-4.7%	5.1%
Retail	0.6%	1.1%	5.1%	7.6%	-2.9%	6.0%
Retail excl. Autos	0.2%	0.9%	3.4%	2.5%	-1.2%	3.7%
Wholesale	0.5%	0.3%	1.9%	0.4%	-4.9%	6.1%
Manufacturing	0.0%	-0.3%	-1.1%	-1.8%	-6.1%	3.8%

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