People walk near Christmas stores in a holiday market featuring artisans from around the world at Bryant Park in New York City, U.S., November 16, 2025. REUTERS/Eduardo Munoz

NEW YORK (Reuters) -U.S. retail sales rose 0.2% after an unrevised 0.6% gain in August, the Commerce Department said on Tuesday, short of the 0.4% rise expected by economists polled by Reuters.

Separately, the Labor Department said the Producer Price Index for final demand increased 0.3%, which matched expectations, after an unrevised 0.1% drop in August.

In the 12 months through September, the PPI increased 2.7% after advancing by the same margin in August.

Both reports were delayed by the 43-day government shutdown.

MARKET REACTION:

STOCKS: S&P E-minis moved slightly lower and were last down 3.25 points, or 0.05%

BONDS: Treasury yields held declines and the yield on benchmark U.S. 10-year notes <US10YT=RR> was last off 2.3 basis points to 4.013%

FOREX: The dollar index briefly moved higher before paring gains after a brief spike and was last 0.29% lower at 99.91

COMMENTS:

SLAWOMIR SOROCZYNSKI, HEAD OF FIXED INCOME, CROWN AGENTS INVESTMENT MANAGEMENT, LONDON:

“There’s no real trade here, because this September data is not going to change the picture much here, I dare to say no matter how much it deviates from expectations, because if it is too far from expectations, the market will question its quality.”

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

"Pre-shutdown, retail sales rose a tepid 0.2% and producer prices rose an annoyingly firm 0.3%. The shutdown didn’t help the trend that has been forming of softer consumer spending. The inflation picture has changed more than the consumer spending picture has. With tariff exemptions for a lot of food products and the détente between the U.S. and China, the adjustment of prices to the new tariff reality may not be over, but it may be closer to the end than to the beginning.

"Taking a pause on rate cuts would probably do more damage to sentiment than a cut would help, but Powell doesn’t need to be the Grinch that stole Christmas."

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:

(On PPI) “Top line was a little bit more than we expected, but the core rate was actually a little bit cooler than expected. The good news is that year-on-year is under 3%, so it's a good reading. Of course it reflects September and we're in November, but nevertheless the trend seems to be that inflation is not worsening and that opens the door to a December rate cut.

“During the shutdown, if anything, inflation may have improved and not worsened because you had less demand. That's on the yes side. On the other hand (the data is) outdated news, so you have to look at it from that perspective. It is a guide.”

(On retail sales) “Going into the holiday season, I don't think this bodes well in terms of consumer spending increasing to an amount that would surpass last year. This has been an uneven economy where the wealthier (consumers) have been spending and holding up consumer spending while the weaker ones have held back and that's partly because of the shutdown.”

“A divided consumer and that means the economy has slipped and is slipping. And so that’s another point that supports the need to lower rates in December.”

ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK

"The (stock) market barely moved on the news. This is old news, and the market is a forward-looking mechanism. For now, a 0.3 percent (increase) in producer prices, it's not really moving the needle in any big way. It's September's data. We're going into December. The market's muted reaction tells me pretty much that investors are looking forward."

TIM GHRISKEY, SENIOR PORTFOLIO STRATEGIST, INGALLS & SNYDER, NEW YORK:

"The key number today was the weakness in retail sales. It’s a very broad definition of retail sales that was weak. I don't think it was a big surprise and was generally expected. It's from September, a dated number. Once we get something more recent, we'll have a better idea of what's going on.

"It's positive but below consensus. That's what's surprising people here. It's a knee jerk reaction but I don't think it’s going to become a big impact on the market as the day goes on because it is dated. We have almost two months of more recent still missing data."

(Compiled by the Global Finance & Markets Breaking News team)