Two Reports Upbeat On State of Economy: Retail Sales Up 0.4%; Inflation Under Control STII
The U.S. economy continued to hum along last month as consumers stepped up their spending at the nation's retail outlets, particularly at auto dealers, while inflation remained under tight control, according to two government reports released yesterday.</br></br>The Commerce Department said retail sales rose 0,4 percent, to $213.7 billion, the third monthly gain in a row. However, that was a smaller increase than in June or July, which was revised upward in yesterdayÛªs report to show a 0.9 percent gain for July, and was consistent with an overall pattern of moderate, noninflationary economic growth, a number of analysts said.</br></br>Meanwhile, the Labor Department said prices charged by producers when they first sell a completed item rose 0.3 percent last month after an unprecedented string of seven straight monthly declines. The increase, which followed a cumulative drop of almost 2 percent in the producer price index in thejanuary-July period, was largely the result of a jump in energy prices, some of which have already been reversed.</br></br>Over the past 12 months, producer prices for finished goods were down 0.2 percent Excluding volatile food and</br></br>Economists at Donaldson, Lufkin & Jenrette Corp., a New York brokerage firm, called it ÛÏanother phenomenal inflation report." The increases in both sales and prices were smaller than many financial analysts had expected and the reports triggered a rally in the bond market as investors apparently decided the figures made it less likely that the Federal Reserve would raise interest rates in coming weeks. The valuejof a 30-year U.S. Treasury bond rose $12.81 per $1,000 face value as its yield, which goes down when its price goes up, fplljo' 6.58 percent from 6.69 percent ThtirS-day.	v'j.