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Consumer Prices, Retail Sales Up Slightly in October

Economy: Food, energy costs outpace other sectors, however. Jobless claims fall for a second week.

November 15, 1996|From Associated Press

WASHINGTON — The first increase in gasoline prices since May helped push consumer prices up 0.3% in October, and retail sales posted a modest advance, the government reported Thursday.

The Labor Department said the moderate 0.3% rise in its consumer price index for October is identical to September's advance.

Excluding food and energy, inflation was even better behaved. The so-called core rate of consumer prices rose just 0.2% in October, reflecting declines in the prices of new and used cars.

Gasoline and overall energy prices rose for the first time since May, reflecting concerns about new tensions in the Middle East and worries about demand for home heating oil this winter.

Gasoline was up 0.7% at the pump, and home heating oil prices surged by 7%. But crude oil prices have already started to retreat from their recent highs, and analysts said the outlook is good for further moderation.

Economists are also optimistic that September's 0.6% rise in food costs won't be repeated in light of the fact that bumper harvests have sent grain prices tumbling of late.

The Labor Department also reported that new claims for unemployment benefits fell by 4,000 last week, the second straight weekly improvement.

The Commerce Department report on retail sales shows that they rose 0.2% in October, much less than the 0.8% increase for September. Much of the slower growth reflects the fact that auto sales fell by 0.3% after having surged 1.7% in September. Aside from autos, retail sales were up a more respectable 0.4%, which analysts said is a good sign for the all-important holiday season.

"Brisk sales of Halloween merchandise and early indications of strength in winter apparel and accessories confirm our forecast of a very positive holiday season," said Rosalind Wells, chief economist at the National Retail Federation trade group.

Other analysts said that with consumer confidence now at high levels and layoffs lessening, the slowing in consumer demand seen in summer figures should be temporary and not an indicator that something more severe looms.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Consumer Prices

Month-to-month percent change, seasonally adjusted:

October: 0.3%

Source: Bureau of Labor Statistics, AP

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