Consumer prices were up +0.4% in October after being unchanged in September, with yearly inflation increasing +0.1% to +1.8%. Although yearly energy costs have decreased -4.2%, with gasoline costs dropping an even more steep -7.3%, more than half of October’s monthly increase was due to a +2.7% increase in energy costs, which itself was largely due to a +3.7% increase in gasoline prices. Core inflation, which removes the food and energy components, accelerated from September’s +0.1% gain to a +0.2% increase, but yearly inflation fell back from +2.4% in September to +2.3%. Within the core index, shelter costs were up +0.1% (+3.7% Y/Y) for renters, and +0.2% (+3.3% Y/Y) for homeowners, and medical costs were up +0.9% (+5.1% Y/Y). Prices also rose during the month for used cars (+1.3%) and motor vehicle repair, but dropped for apparel (-1.8%), tobacco (-0.4%), alcoholic beverages (-0.3%), and new vehicles (-0.2%).

Retail sales were $526.5 billion in October, up +0.3% from September with the yearly rate dropping from +4.1% in September to a five month low of +3.1%. Increasing gasoline prices helped boost gasoline sales up +1.1% for the month, but they were down -5.0% Y/Y. Sales gains were led by nonstore (e.g. online) retailers (+0.9%, +14.3% Y/Y), with additional gains for motor vehicles (+0.5%, +4.5% Y/Y), food and beverage stores (+0.5%, +3.2% Y/Y), and general merchandise stores (+0.4%, +0.9% Y/Y). Sales dropped for clothing (-1.0%, -2.7% Y/Y), furniture (-0.9%, +0.9% Y/Y), and miscellaneous stores (-0.6%, +4.3% Y/Y) which fall under NAICS code 453.

The GM auto strike was largely responsible for a -7.1% drop in motor vehicle production in October, which in turn dragged down manufacturing by -0.6% (-1.5% Y/Y) and overall industrial production by -0.8% to a yearly drop of -1.1%. Excluding motor vehicles, production was down -0.2% for the month, and -0.8% Y/Y, with gains for consumer goods (+0.5%, -0.2% Y/Y), and business equipment (+0.2%, -1.8% Y/Y), and drops for construction supplies (-0.4%, +1.1% Y/Y), business supplies (-0.6%, -1.7% Y/Y), and materials (-0.8%, -1.8% Y/Y). Mining output dropped -0.7%, and its capacity utilization fell to 88.8%, but overall output was up on a yearly basis by +2.7%. Utilities were down -2.6%, with a +5.0 increase in natural gas production somewhat offsetting a -4.0% drop in electric production, although on a yearly basis both electric production and natural gas production fell (-3.5% and -7.3%, respectively), bringing yearly utility output down -4.1%.