Separate reports showed simultaneous improvements and declines in the U.S. economy.
First the good news. The Commerce Department reported that retail sales rose 1.4% in October, after falling 2.3% in September. It must be noted that September sales were revised downward from a previous -1.5%.
The boost came for auto sales, which rose 7.4%, after a drop of 14.4% in September. The sharp drop in September was mainly due to the termination of the "cash for clunkers" program.
Sales at gasoline stations rose 0.9%, mainly due to higher gas prices. Building materials fell 2.4%.
Excluding autos, retail sales rose only 0.2%, after a 0.4% rise in September.
On the other hand, the manufacturing sector showed a sharp decline. The Empire Manufacturing State Index fell to 23.5 from 34.57 the previous month.
Overall the results are still dismal, especially the manufacturing numbers. We could infer from this that companies are still drawing down inventories. This is keeping a lid on expansion in manufacturing.
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