Retail Sales Unchanged M/M, but Healthy

Retail sales were slightly stronger last month than Consensus expectations for a 0.2% decline. The sharp drop in September retail sales was little revised. Total retail sales were up at a 2.6% annual rate YTD through October.

Sales last October were lifted by the huge 22.5% gain in sales of motor vehicles. The record auto sales rate last year of 21.10 mil. units was the result of new zero percent financing incentives. Unit vehicle sales last month ran at a 15.34 mil. unit rate.

Sales excluding motor vehicles and parts dealers rose more than twice expectations for a 0.3% gain. September sales were revised down slightly. Year to date nonauto retail sales were up at a 4.6% annual rate through October.

Strong apparel store sales, up 4.0%, provided the lift to nonauto sales. That gain was a rebound from sales declines in six of the prior seven months. Apparel store sales were up at a 2.1% rate YTD through October.

Strong sales at general merchandise stores, up 1.1%, also were a bounce back from prior weakness. Nevertheless, year to date sales were up at a healthy 4.6% rate through October.

Furniture and home furnishing store sales were flat after a slight September decline (0.2% YTD, AR).

Motor vehicle dealers' sales declined 1.9% following a 5.0% drop in September. Year to date sales were down at a 3.4% rate.

Sales at gasoline service stations rose 1.5% reflecting sharp 5-7% gains in wholesale gasoline prices. Less gasoline, nonauto retail sales rose 0.6%.

Prices for imported commodities rose slightly last month, right on Consensus expectations for a moderate 0.1% gain. September figures were unrevised.

Petroleum import prices posted the smallest monthly gain this year, except for a 3.5% decline in June. Nevertheless, they are up at a 82.1% rate since December. So far in November the price of Arab Light crude oil has run below $23.00/bbl versus $25.39 in October.

Nonpetroleum import prices fell for the first month since May (0.2% YTD, AR).

Prices of imported foods and beverages fell last month as did capital good prices. Nonauto consumer goods prices rose a slight 0.1% (-0.7% YTD, AR) and auto prices were up 0.3% (0.7% YTD, AR).

Export prices were unchanged (1.4% YTD, AR). Food and capital goods prices fell. Only prices of industrial supplies prices rose meaningfully.

Initial claims for unemployment insurance fell more than expected in the latest week. Claims in the prior week were revised up slightly.

The four-week moving average of initial claims dropped to 396,750, down 12.6% y/y.

Continuing claims for unemployment insurance rose a sharp 2.5% w/w, but the prior week's unchanged level was revised down.

The insured rate of unemployment rose slightly to 2.9% following three weeks unchanged at 2.8%.