The broad indices all ended lower, after the Department of Commerce said October retail sales rose 0.4% from September and were up 3.9% from October 2012. This was the largest sequential increase in consumer spending in four months. The consensus among economists polled by Thomson Reuters was for consumer spending during October to be unchanged from September.
A sharp decline in gasoline prices helped push the U.S. Consumer Price Index down for the first time in six months. The Bureau of Labor Statistics said the October CPI was down 0.1% from September, although it was up 1% from October 2012. "The gasoline index fell 2.9 percent in October and led to the seasonally adjusted decline in the all items index," The Bureau of Labor Statistics said in its press release, while "Other energy indexes were mixed, with the electricity index rising, but the indexes for fuel oil and for natural gas declining."
Economists had expected no change in the October CPI from September.
Lower fuel and oil prices during October were especially timely, and could bode well for holiday sales in November and December.
The negative reaction to a decent set of economic numbers in the broad market reflects continued uncertainty over the timing of the expected tapering of Federal Reserve bond purchases. The central bank has been making net monthly purchases of long-term U.S Treasury bonds and agency mortgage-backed securities since September 2012. The Federal Open Market Committee's next meeting will take place Dec. 17-18, but most economists expect no change this year in the Fed's "QE3" stimulus policy.