TREASURIES-U.S. bonds slip after unexpectedly strong retail sales
* October retail sales slightly stronger than expected
* Consumer prices fell in October, core CPI rose 0.1 percent
NEW YORK, Nov 20 (Reuters) - U.S. Treasuries briefly extended early losses on Wednesday after the government's retail sales report turned out to be stronger than economists had forecast.
The Commerce Department said retail sales rose 0.5 percent last month and that so-called core sales rose 0.5 percent.
The October Consumer Price Index, released at the same time as the retail sales report, showed inflation to be quite subdued. The CPI fell 0.1 percent last month.
The core CPI, which excludes more volatile food and energy prices, rose a slight 0.1 percent, continuing to give the Federal Reserve leeway to conduct an accommodative monetary policy until it is confident that a more robust, sustainable economic recovery is underway.
"The Consumer Price Index came in on the friendly side, as expected, but perhaps a bit friendlier than expected given the month over month decline in the headline rate which had no impact on the year over year gain of 1 percent," said David Ader, Treasury strategist at CRT Capital Group.
"Overall retail sales was fimer than anticipated but ... this probably doesn't add much, if anything, to GDP," he said.
"The market is weaker in the wake of all this, focusing on retail sales," Ader said.
Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania, said inflation was too low and would garner "more and more attention from the Fed.
"They want to see inflation closer to its target," he said.
Sweet said the Fed would likely strengthen its "forward guidance" to hammer home the point that interest rate increases will not happen anytime soon, "maybe in late 2015 to early 2016, depending on what the economy does."
The benchmark 10-year Treasury note, down 5/32 before the figures were released, was down 7/32 afterwards. Its yield rose to 2.74 percent.
The 30-year bond was down 8/32 in price. Its yield rose to 3.82 percent.