The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $347.5 billion, an increase of 1.4 percent (±0.5%) from the previous month, but 1.7 percent (±0.5%) below October 2008.

That doesn't sound so awful, but...

The August to September 2009 percent change was revised from -1.5 percent (±0.5%) to -2.3 percent (±0.3%).

Oops.

building material and garden equipment and supplies dealers were down 15.0 percent (±1.8%) from last year.

Uh, I thought that construction had turned the corner?  Uhhhhhh...

The internals are interesting.  Cars rebounded from the cratering that occurred in September (expected), while there was a material weakness in Electronics (also expected; back-to-school is now over.)  But building materials dropping significantly is a yellow-light warning on the claims that construction and housing have turned.  Really?  Hmmmm..... yes, I know, seasonality - but remember, permits/starts were claimed to be up.  Where's the material coming from?

Food purchases were up, which leads one to question whether the so-called "inflation" numbers are real or not (grocery demand is typically stable - so dollar amount typically translates quite cleanly through to inflation in food prices.) 

Ex-autos the gains were about half of what was anticipated.  My read on the report is that it isn't a disaster, but the year/over/year comparisons are quite weak - more so than I expected, given that October of last year was well into the "shock collapse" period.

The Empire Index came in significantly under expectations, down to 23.5.  Forward expectations, however, remain buoyant.  We'll see.  One troubling sign is that both prices paid and received are expected to move strongly higher - is that a whiff of "inflation expectations" I smell?