Inflation remains subdued.  The Bureau of Labor Statistics reported the Consumer Price Index (CPI) rose 0.3 percent in October.  After consecutive monthly declines in March and April, the CPI has risen 1.7 percent during the last six months.  While increases in the CPI are not usually considered good news, these increases assuage fears of deflation that were raised early in the recession.  On a year-over-year basis, the CPI fell 0.2 percent in October, after falling over 1 percent on a year-over-year basis for the previous five months.  The October increase in CPI was largely due to a 1.5 percent rise in energy prices and a 1.4 percent rise in transportation prices (See Chart). Food prices rose less than 0.1 percent in October, reversing the previous months decline.  Excluding volatile food and energy prices, so-called “core CPI” rose 0.2 percent in October.  With consumer price inflation under control and no significant upward pressure on Treasury yields, the Federal Open Market Committee (FOMC), the policy setting arm of the Federal Reserve, renewed its commitment to purchase $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. 
 
Retail sales rise due to increased auto sales.  Sales at retail and food service establishments rose 1.4 percent from September to October, reversing the 2.3 percent decline during the previous month. The month-to-month increase in retail and food service sales largely reflects a 7.4 percent rise in motor vehicles and parts dealers. Excluding motor vehicles and parts, retail and food service sales rose 0.2 percent from September to October, the third consecutive month of increases.  While this month reflects a smaller increase than the 0.4 percent growth from August to September, this is the first time since July 2008 that sales have risen for three or more months in a row. Preliminary reports about Black Friday retail sales are mixed, with the National Retail Federation reporting a modest increase in overall spending from last year and a decline in average spending per shopper.   
 
New and existing home sales rise.    The Census Bureau reported that new single-family home sales rose 6.2 percent in October to an annual rate of 430,000.  The rise in single-family home sales reverses the 2.4 percent decline in new single-family home sales during September.  Since October 2008, new single-family home sales have risen 5.1 percent.  This is the first time since November 2005 that the number of new single-family homes sold has risen on a year-over-year basis.  Sales of existing home sales also rose in October to 6.1 million homes (on an annual basis), a more than 10 percent increase in existing home sales from the previous month.  Existing home sales have risen in six of the past seven months.  The October rise in existing home sales partly reflects purchases by families that took advantage of the first-time homebuyer tax credit—one of many government actions to stimulate the economy, and specifically the housing market-- before its initially scheduled expiration on November 30.  On November 6, President Obama signed legislation extending the first-time homebuyer tax credit through April 30, 2010.