REPEAT: MNI ANALYSIS: US Oct Retail Sales Up 0.2%; CPI +0.1%>

Repeats Story Initially Transmitted at 13:30 GMT Nov 15/08:30 EST Nov 15

--Core CPI +0.2% M/M; Overall CPI +2.0% Y/Y, Core +1.8% Y/Y

--October Retail Sales +0.1% Ex. Mtr Veh; Ex. MV, Gas, Bldg Mat +0.3%

By Kevin Kastner and Holly Stokes

     WASHINGTON (MNI) - The value of retail sales rose 0.2% in October 

and were up 0.1% excluding motor vehicle sales following an upward 

revision to sales in September, data released by the Commerce Department 

Wednesday morning shows. 

     At the same time, the BLS'S Consumer Price Index came in exactly as 

expected, with a 0.1% rise for the overall reading and a 0.2% gain for 

the core reading. As a result, the year/year rate for overall CPI 

slipped back to 2.0% from 2.2% in September, while the core rate rose to 

1.8% from 1.7%, the first increase since January and the strongest pace 

since 1.9% in April. 

     Overall, the CPI data points to contained core consumer inflation, 

with the year/year rate remaining well below the 2% threshold, allowing 

the FOMC to maintain a slow pace of policy tightening. 

     October motor vehicle sales posted a 0.7% gain in the month, a 

sharp slowdown from the 4.6% jump in the previous month, but still 

strong. 

     Excluding motor vehicles, gasoline, and building materials, "core" 

retail sales were up 0.4%. And for good measure, excluding food services 

as well as those three measures, retail sales were up 0.3%, suggesting 

underlying sales growth slowed, but remained positive. 

     Building materials sales fell 1.2% in October following a 3.0% jump 

in September, while gasoline store sales fell 1.2% in October following 

a 6.4% jump in September, both giving back some of their September 

gains. Food services and drinking places sales were up 0.8% after a 0.1% 

September rise. Sales were up for most of the other categories, with the 

exception of a 0.3% decline in nonstore retailer sales. 

     Within core CPI, owners equivalent rents rose 0.3%, while the 

lodging away from home category rose 1.6%. Prices of new vehicles were 

down 0.2% while medical care prices rose 0.3%. 

     Energy prices fell 1.0% in the month, with a 2.4% decline in 

gasoline prices offsetting a 2.3% rise in fuel oil prices. Excluding 

only energy prices, the October CPI would have been up 0.2%. 

     Food prices were flat in October, with food at home flat and food 

away from home up 0.1%. Meat prices were higher, but fruit and vegetable 

prices were flat. 

     The retail sales data suggest that fourth quarter consumption 

started off well ahead of the third quarter average. Incorporating the 

revisions to August and September, October sales were up 6.0% at an 

annual rate from the third quarter average. At the same time, sales 

excluding motor vehicles were up 4.2% from the third quarter, while 

sales excluding autos, gas and building materials were up 2.8% and sales 

also excluding food services was up 2.6%. 

     ** MNI Washington Bureau: 202-371-2121 **