Investing.com - Odds for a rate hike at the Federal Reserve's December policy meeting improved on Tuesday, after data showed that U.S. retail sales rose more than expected in October, boosting optimism over the health of the economy.
The U.S. Commerce Department said that retail sales rose 0.8% last month, compared to expectations for a 0.6% increase. September retail sales increased 1.0%, whose figure was revised from an initial 0.6% rise.
Core retail sales, which exclude automobile sales, increased 0.8% in October, compared to forecasts for an advance of 0.5%. Core sales in September were revised to a 0.7% advance from the prior 0.5% gain.
A separate report showed that an index of New York-area manufacturing conditions turned positive in November for the first time in four months.
The Empire Fed index rose 8.3 points to 1.5, on a scale where any reading above zero indicates improving conditions, the New York Fed said Tuesday.
The data comes after reports earlier this month showed a rapidly tightening labor market and signs of a recovery in the manufacturing sector, underscoring the economy's strength at the start of the fourth quarter.
According to Investing.com's Fed Rate Monitor Tool, odds for a rate hike at the Fed's December 13-14 meeting rose to 85.8%, up from 81.1% ahead of the reports.
The U.S. dollar turned higher against a basket of major currencies in wake of the upbeat data, rising back towards an 11-month high.
Meanwhile, the yield on the U.S. 10-year Treasury was up 0.6 basis points at 2.228% in early morning trade in New York.