After 3 months in a row of declines, July Retail Sales were better than expected. Headline sales rose .8% and were up .9% ex auto’s and gasoline. The core figure which excludes auto’s, gasoline and volatile building materials, was also up .9% vs the estimate of .5%. June data was revised lower however, partially offsetting the upside surprise in July. Off the easy comparison of declines in June, sales rose across the board m/o/m in July. Bottom line, in the context of the fear of the global economic slowdown, its good to see retail sales bounce back from 3 months in a row of declines.
Separately, July PPI rose .3% headline and .4% core, both above estimates. The core rate in particular is up 2.5% y/o/y while the headline figure, up just .5%, is still being suppressed by the decline in food and energy prices which has since reversed. Wholesale inflation in the pipeline fell m/o/m but with a 12.5% increase in the CRB index since the June lows, the fall will likely be limited.