Inflation Tame, Retail Hot, Employment Stable

- The Consumer Price Index for June was unchanged versus estimates of a .2% increase and a .1% decline in May.
- The CPI Ex Food & Energy for June rose .1% versus estimates of a .2% increase and a .1% gain in May.
- Advanced Retail Sales for June rose 1.7% versus estimates of a 1.0% increase and a upwardly revised .3% decline in May.
- Retail Sales Less Autos for June rose .7% versus estimates of a .6% gain and an unchanged reading in May.
- Initial Jobless Claims for last week rose to 336K versus estimates of 322K and 320K the prior week.
- Continuing Claims rose to 2617K versus estimates of 2600K and 2572K prior.

BOTTOM LINE: US consumer prices were unchanged in June as companies discounted products such as clothing and cars to boost sales. Consumer prices were up 2.5% for the 12 months ended in June. As I predicted at the beginning of the year, inflation will likely rise this year less than the long-term average of 3.0%. The cost of all goods including cars, apparel and food fell .2% last month.

US retail sales rose a greater-than-expected 1.7% in June, led by spending on cars, furniture and gasoline. An improving job market, a rising stock market and booming housing market are helping to boost consumer sentiment and spending. Retail sales account for about half of all consumer spending.

The number of US workers filing jobless claims rose to 336,000 last week, reflecting a temporary shutdown of auto plants. The four-week moving average of claims rose to 320,750 from 320,500. The insured employment rate, which tracks the US jobless rate, rose to 2.1%.