U.S. Retail Sales, Producer Prices Signal No Taper

Auto sales rose 1% month-over-month and were up 12.3% year-over-year. Furniture and home furnishings rose 0.9% above July sales and non-store sales (e-commerce) rose 0.5% over July and were 10.2% higher than August 2012.

Gasoline sales were flat month-over-month and down 1.5% year-over-year, largely a result of significantly lower pump prices compared with last year. The AAA Daily Fuel Gauge report shows a price of nearly $3.87 a gallon last year, compared with $3.54 today.

Sales fell 0.9% month-over-month at building and home improvement stores but were up 7.6% year-over-year. Electronics store sales rose 0.8% over July sales and 3.1% over August 2012.

Producer prices rose 0.3% in August, a bit higher than the 0.2% rise expected by economists. Excluding food and energy, prices were flat with July.

Energy prices rose by 0.8% after dropping in July. Gasoline prices were up 2.6% month-over-month.

The core rate held steady at 1.2% annual rate in August, and it will provide another reason for the Fed to maintain its asset buying program at the current level of $85 billion a month. The tepid growth in retail sales further signals no change at next week’s FOMC meeting.