INSTANT VIEW: Retail sales slip, import prices climb

NEW YORK (Reuters) - Total sales at U.S. retailers edged down 0.1 percent in July on another big drop in auto sales, according to a Commerce Department report on Wednesday that indicated consumers were straining to keep spending up amid rising prices.

U.S. import prices climbed a bigger-than-expected 1.7 percent in July, capping a 21.6 percent gain over the past 12 months that was the largest in the past 26 years, a Labor Department report showed on Wednesday.

KEY POINTS:

RETAIL SALES

* The decline in total July sales was in line with forecasts made by Wall Street economists.

* Auto and auto parts sales fell 2.4 percent, their biggest drop since April, after a revised 2.1 percent drop in June and were off a whopping 10.5 percent from year-ago levels.

* Excluding autos, retail sales were up 0.4 percent in July, which was roughly in line with forecasts, following a 0.9 percent rise in June.

* Economists said before the report was issued that spending has been supported by government stimulus checks but that was waning in July because most of the checks already have been issued.

IMPORT/EXPORT PRICES * Import prices for petroleum products, including crude oil, rose 4.0 percent in July and were up 79.2 percent over the past 12 months. * Economists polled ahead of the report were expecting overall import prices to rise 1.0 percent in July, when oil prices set a record above $147 per barrel. Since then, oil has fallen sharply and a big U.S. corn crop has pushed farm commodity prices lower.

COMMENTS: BORIS SCHLOSSBERG, DIRECTOR OF FX RESEARCH, GFT FOREX, NEW YORK:

"The number was in line with expectations, but it pretty much suggests that the trend in retail sales is to the downside. The pressure on the dollar especially against the yen continues. There is very little organic consumer demand coming out of the U.S. economy and we think it's going to deteriorate further as the year progresses. For that reason we are very confident that the Fed will stay stationary for much longer than the market thinks. The end result is that the low yielders like the yen and Swiss franc are going to outperform against the dollar as the market realizes that there is no Fed rate hike forthcoming for much longer. The import prices are a little hotter-than-expected, but well off their highs. The market is basically looking at the price of oil as the key component of import prices and as long as oil prices do not reignite the worries about import driven inflation are going to fade away."

MARC PADO, U.S. MARKET STRATEGIST, CANTOR FITZGERALD & CO, SAN FRANCISCO:

"A little disappointing on the headlines.

"Obviously gasoline is the issue, especially in those import-export numbers. I think the market's going to be able to take it with a little grain of salt, just because with crude being such a major component of these numbers, gasoline prices at the pump, etc., we know that prices are coming down, that actually helps.

"There's a little bit of a lag in consumer sentiment... Yes, prices went down aggressively late in July at the pump, but that's didn't translate into running out and buying clothes. That takes time.