Economic Roundup - November 22, 2010

Better-than-expected retail sales data led the week's financial headlines, with advance estimates for October's retail and food services sales hitting $373.1 billion, a respectable 1.2 percent jump from September and a 7.3 percent increase over October 2009.
 
On their own, retail trade sales were up 1.3 percent (0.5%) from September 2010, and 7.7 percent above last year; auto and other motor vehicle dealers sales were up 14.7 percent from October 2009; and nonstore retailer sales were up 13.5 percent from last year.
 
In related news, October's Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent, the Bureau of Labor Statistics reported last week. While this was slightly below the 0.3 gain experts were hoping for, last month's gain perpetuated a healthy trend.
 
The Bureau noted in its report for October that, as has often been the case in recent months, an increase in the energy index was the major factor in the overall CPI increase. The gasoline index rose for the fourth month in a row and accounted for almost 90 percent of the "all items" increase, and the household energy index rose as well.
 
The Producer Price Index for Finished Goods in October - also released by the Bureau last week - showed improvement similar to October's CPI, with a PPI increase of 0.4 percent showing improvement, but not as much as experts' expectations of a 0.8 increase. This continued a positive trend, with October's advance following a 0.4 percent rise for both September and August.
 
Meanwhile, in housing news, the Census Bureau reported that construction was down for October, with construction starts on privately owned homes at a seasonally adjusted annual rate of 519,000. This was a whopping 11.7 percent below September's revised estimate of 588,000. That said, starts on single-family homes in October were at a rate of 436,000, which is only 1.1 percent below September's revised figure of 441,000.
 
However, permits were up for October, with the Census Bureau reporting that authorizations for privately owned homes were at a seasonally adjusted annual rate of 550,000. This was 0.5 percent above September's revised rate of 547,000. Likewise, October's authorizations for single-family homes were at a rate of 406,000, which was 1.0 percent over September's revised figure of 402,000.
 
This week's big financial and economic headlines lead tomorrow with the Bureau of Economic Analysis's second estimate on gross domestic product for the third quarter, which is expected to increase by 2.3 percent. Despite the sometimes volatile nature of quarterly GDP data, given that the previous quarter enjoyed 2 percent growth, a follow-up increase could point to a developing trend.
 
Another important figure to be released tomorrow is the National Association of REALTORS®'s existing home sales data for October, which is expected to show a very slight gain. October's home sales data from the Census Bureau will be released the day before Thanksgiving, and are expected to show an increase, as well (in terms of volume, market watchers are hoping for 320,000).