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From Staff Reports
The U.S. Commerce Department reported a big jump in September retail sales Thursday, according the Associated Press. The 0.6% increase outpaced projections and doubled the rise in sales seen in August. The positive news warded off much of the recession talk looming over the credit crunch and housing market.
Weak sales in department stores and specialty clothing shops were offset by strong auto sales, which were up 1.2% in September and 3.3% in August. Sales of gasoline in September jumped 2%, after sinking 2.6% the month prior.
The positive report is good news for the economy, but will disappoint some investors hoping for another rate cut.
"This was a solid report that seems to point to continued consumer spending," said Joel Naroff, president of Naroff Economic Advisors Inc., an econometric-research firm based in Holland, Pa. "As a consequence, the chances of a Fed ease on October 31st seem to be fading."
Also, the Labor Department said core prices, which exclude food and energy, rose just 0.1% – less than many analysts anticipated. Fueled by soaring food and energy costs, the overall wholesale inflation figure rose 1.1%. That increase was driven by a 4.1% surge in energy prices in September, and an 8.4% rise in the cost of gasoline. Still, the Federal Reserve and its Chairman Ben S. Bernanke prefer to gauge the core inflationary rate.
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