Federal Reserve Chairman Ben Bernanke said that despite a 26-year high unemployment rate, the economy is most likely growing that the recession is “very likely over.” Wall Street and exchange traded funds (ETFs) turned slightly positive as a result.

The Commerce Department reported that retail sales climbed 2.7% last month, outperforming the 2% expected by analysts.  To decipher this a bit more, retail sales excluding automobiles, which got a huge jump from the “cash for clunkers” program, rose by 1.1% topping the 0.4% forecast, reports Christopher S. Rugaber for the Associated Press.

These overall jumps were despite the worse-than-expected earnings report released by consumer electronic outfit Best Buy (NYSE: BBY).  Profits for the second quarter were $0.37/share compared to the $0.42/share predicted by analysts.  The good news was that Best Buy stated that customer traffic is stabilizing. Business inventories also rose for the 12th consecutive month in July, which means that companies could soon start to increase orders.

The news didn’t have much effect on the SPDR S&P Retail (NYSEArca: XRT) which was down 0.06% in morning trading.

In further news, the Labor Department announced that wholesale prices rose by 1.7% in August, much higher than the 0.8% predicted by analysts.  Excluding energy and food costs, core inflation rose by 0.2%, while energy prices were up 8% and food costs edged up 0.4%.  Traditionally, these increases are signs of inflation, but with unemployment rates at elevated levels and a weak labor market, inflationary pressures could be under control.

To further support the notion that the economy is recovering, manufacturing in the New York region grew in September at the fastest pace in two years.  The Federal Reserve Bank of New York’s general economic index rose to 18.9 from a 12.1 in the previous month.  Looser credit markets, increases in business spending and a stabilizing economy are all pushing manufacturing up.

Overall, the Dow Jones Industrial Average was down 0.2%, the S&P 500 dropped 0.1% and the Nasdaq added 0.2% in morning trading.

For more stories on manufacturing, visit our manufacturing category.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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