INSTANT VIEW: Retail sales rise; PPI jumps in June

NEW YORK (Reuters) - Sales at U.S. retailers rose a stronger-than-expected 0.6 percent in June, boosted by a big jump in auto sales, Commerce Department data showed on Tuesday.

U.S. producer prices jumped by twice as much as expected in June on a big rise in finished energy prices, a government report showed on Tuesday.

KEY POINTS:

RETAIL SALES * Economists polled by Reuters had expected a 0.4 percent gain, after a 0.5 percent advance in May. * Excluding autos and parts, which recorded a 2.3 percent gain, retail sales were up a more modest 0.3 percent, short of analysts' expectations for a 0.5 percent advance. * Gasoline stations showed strong gains, helped by rising prices. The average price per gallon of gas rose to $2.68 in June from $2.32 in May, according to government data.

PPI * The seasonally adjusted index for prices paid at the farm and factory gate increased by 1.8 percent, the steepest gain since November 2007. * Core prices, which strip out volatile food and energy, also rose a much greater-than-expected 0.5 percent, boosted by car and truck sales. * Analysts polled by Reuters were expecting a 0.9 percent rise in producer prices and a 0.1 percent rise in core producer prices.

COMMENTS:

JACOB OUBINA, SENIOR CURRENCY STRATEGIST, FOREX.COM, BEDMINSTER, NEW JERSEY:

"The 'control' retail sales came in at -0.1 percent on the month and this is the number that excludes the volatile gasoline, auto dealer, and building material components. this points to underlying weakness in the retail space despite so-called stimulus from the U.S. government. Equity futures remain in positive terrain but are lower post-numbers. Euro/dollar remains heavy while below $1.40."

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL RESEARCH, SHREWSBURY, NEW JERSEY:

"Right now (PPI) it's being viewed as an aberration because of oil prices. The preponderance of evidence is that the economy is still weak, and ultimately it's going to inject more uncertainty into the situation. It may indicate a little bit of strength, but I don't think this is going to take inflation to the forefront. It won't have a major effect because it's just one number. People are going to see what CPI looks like later this week.

"Retail sales was up a little bit, but nothing major, and previous reports have shown that there's weakness in the economy. The market will view this as a blip. Also, when you saw retail-sales ex autos, retail sales were actually down. The only thing it can do is add uncertainty to the situation, which will probably put a certain amount of pressure on the market. You've seen that since the Goldman announcement -- futures have backed off a little bit, because people are now awaiting to see what other earnings look like. Right now the earnings versus the economy, and the economy seems to be weighing more heavily than anything else."

OMER ESINER, SENIOR CURRENCY ANALYST, TRAVELEX GLOBAL BUSINESS PAYMENTS, WASHINGTON:

"The headline figures for retail sales are clearly better than expected. However, it looks like a large portion of that was driven by higher gasoline sales. I think the same is true for the PPI. We saw a hotter-than-expected month-over-month rise in producer prices, but ex-food and energy was a little bit more in line with expectations, especially year-over-year. I think the initial knee-jerk reaction to sell off the dollar will not be sustained."

BRET BARKER, PORTFOLIO MANAGER, METROPOLITAN WEST ASSET MANAGEMENT, LOS ANGELES:

"Retail sales looked mixed, the auto sector had a huge month but it is bouncing off the floor. One-time event or can you expect that much in the future? I don't think so. But looking at consumer activity, not so good. You have clothing flat and general merchandise down, department stores down and building materials down as well. I think the market will trade off the headline and the Goldman news though and then add in PPI. PPI is gasoline on the headline and core PPI looks like car related as well... light trucks. Both numbers are driven by higher gasoline prices and a jump in auto sales. I view it as more of a bounce back from a sector that has been beaten up lately and not sign inflation is building."

ALAN GAYLE, SENIOR INVESTMENT STRATEGIST, RIDGEWORTH INVESTMENTS, ATLANTA: