Inflation hot, sales strong, NY-area manufacturing improves
* Retail sales surged 2.7% in August. That was much stronger than the 1.9% gain that was expected and the biggest rise in three years. But even if you exclude autos (where sales were boosted by the "Cash for Clunkers" program), you still get an increase of 1.1%, much hotter than the 0.4% rise that economists were looking for. That was the biggest rise in six months.
* The Empire Manufacturing index of New York-area activity rose to 18.9 in September from 12.1 in August. That was hotter than the 15 reading people were looking for and the highest reading in almost two years. The "prices paid" subindex jumped to 20.2 from 13.8, while the new orders subindex climbed to 19.8 from 13.4.
* The Producer Price Index surged 1.7% in August. That was more than double the 0.8% gain that was expected and a big swing from the -0.9% reading in July. The "core" PPI, which excludes food and energy, rose 0.2% against a forecast for 0.1%.
The aftermath? Stock futures are popping, while bond futures are down two-thirds of a point. The dollar is picking up a bit.