U.S. retail sales and CPI higher in September

U.S. retail sales and CPI higher in September

US producer prices rose in September as the price of gasoline recorded its biggest gain in more than two years amid hurricane-related production disruptions at oil refineries in Texas.

The harmonized index of consumer prices in September 2017 compared to August 2017 was 99.8%, i.e. the monthly inflation was -0.2%. But when excluding food and energy, prices rose 1.7% from a year earlier.

Excluding food and energy prices, core producer prices still rose by 0.4 percent in September after inching up by 0.1 percent in August. Shelter prices advanced 0.3% over the month.

Spot gold was up 0.5 percent at $1,300.40 an ounce at 1302 GMT after $1,302.40, the highest since September 26.

Policymakers could, however, find solace from another report indicating that the U.S. economy was swiftly recovering from the damage inflicted by Hurricanes Harvey and Irma, with a strong rebound in retail sales last month.

Silver was up 0.5 percent at $17.26 an ounce after hitting a three-week high of $17.35.

The closely watched core CPI was up only 0.1%, leaving the annnual rate of inflation at only 1.7%.

"With growth and the domestic economy booming, wages recently increasing, Fed officials appeared hawkish running into year-end, and understandably so".

"It all comes out to the economic data that came out today", said Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners, in Huntersville, NC, referring to moves in bonds, currency and stocks.

Ten-year yields had jumped to 2.402 percent on October 6, their highest level since May 11, after the government's employment report for September showed a rise in wages that boosted expectations for rising inflation.

Benchmark 10-year notes last rose 6/32 in price to yield 2.3248 percent, from 2.345 percent late on Wednesday.

"Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent", said the Minutes of the Fed's September 19-20 meeting published on Wednesday. That inflation gauge has undershot the target for all but two months since early 2012.

Oil prices rebounded from earlier losses, although they were still down on the session, after the U.S. Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production. USA crude jumped 2 percent to $51.59 a barrel.

Data from Friday's report will be used to calculate next year's cost-of-living adjustment for the 66.7 million Americans who receive Social Security benefits.

Meanwhile, Americans' inflation-adjusted incomes slipped for the second straight month, the Labor Department said in a separate report Friday.