Prices went up and sales went down last month, the government said in separate reports.

Retail sales fell 0.3% in October, compared with economists' forecasts for a 0.2% drop. Minus autos, sales rose 0.2%, as forecast. September's 0.2% decline was revised down to 0.4%. Retail trade sales led the overall decrease.

Meanwhile, the producer price index rose 0.8% in October, vs. the consensus forecast of 0.2% and a revised 0.3% rise in September. The core rate -- minus food and energy -- was up 0.5%, vs. a forecast of up 0.1%. Higher beef and veal prices were behind the surge in the headline rate.

The closely watched inflation reports come amid continuing concerns about disinflation, and the remote possibility of deflation -- economic conditions the Federal Reserve has been highlighting since the spring and a key consideration in keeping interest rates at a 45-year low.

Economic growth picked up significantly in the third quarter, when the economy grew at more than a 7% annualized rate, the best pace in almost 20 years. Additionally, the struggling job market has shown recent signs of a long-awaited pick-up, with the economy creating about 125,000 jobs in each of the past two months.

The Bush administration's summer tax cuts have fueled consumer spending and analysts have been upgrading retailer shares in recent weeks.