A pair of government reports this morning (Dec. 12) painted a mixed picture of the U.S. economy, with the Commerce Department putting retail sales up 1.2% in November from October and 6.3% from November, 2006 and the Labor Department putting a damper on that news with estimates that wholesale prices jumped 3.2%, the fastest pace since 1973.

Commerce said that total retail and food service sales, adjusted for seasonal differences, were were $385.8 billion. Total sales for the September through November 2007 period were up 5.4 percent (+/-0.5%) from the same period a year ago. Analysts took the news to mean that consumer spending was holding up in the face of the housing and credit market slumps.

Not surprisingly, the retail advance was led by a 6.8% month-to-month increase in sales at gasoline stations, but consumer bellwethers such as electronics and appliance stores, clothing and clothing accessory stores and sport goods, hobby, book and music stores were also up strongly at 2.5%, 2.6% and 2.2% respectively.

Meanwhile, the Labor Department's Producer Price Index jumped 3.2% in November, led by the energy sector, which was up 14.1%, easily dwarfing all other categories. Two components of that sector, gasoline and heating oil, were up 34.8% and 32% respectively. Diesel fuel was up 35%. However, when food (which was essentially flat) and energy are excluded, the index was up only 0.4%.

Still, suggesting further price increases to come, the index for Intermediate Materials, Supplies and Components, rose 3.7%, which the Labor department said could be traced largely to rising prices for energy.