Core Retail Sales Higher Amid Mixed Data
Wholesale Prices Unchanged
U.S. retail sales rose 0.2% in July, an uptick that represents the measure's fourth straight monthly gain, according to the Commerce Department. Closely-watched core retail sales, which strip out spending on autos, gasoline and building materials, jumped 0.5% in the largest gain this year. Meanwhile, passenger cars saw the largest wholesale price drop since 2009, declining 1.1% in July, a signal of increased industry discounting, analysts said.
Separately, the U.S. Department of Labor reported that U.S. wholesale prices overall were unchanged last month. Wholesale energy prices actually declined 0.2% in July, led down by residential natural gas. Wholesale residential natural gas prices fell 3.9%, the largest drop since February of 2009. Crude energy materials, though, saw a 4% price gain in July, led by higher petroleum. Taking a broader view, U.S. wholesale inventories unexpectedly fell 0.2% for a second straight month in June, data showed, prompting economists to again trim their second-quarter economic growth estimates.
Finally, the core producer-price index, which excludes food and energy, increased just 0.1% in July, signaling that inflation is not occurring in the economy. Still, a large majority of economists believe the Federal Reserve will, in fact, begin paring back its monthly bond purchases next month – a move that could put pressure on a still recovering housing market. Fed officials have said they will base their decision on several factors, including the unemployment rate, inflation or a lack thereof, as well as the central bank's own balance sheet.