Federal Reserve: US retail sales miss expectations; producer prices accelerate

| US retail sales rebounded less than expected in February and consumer spending appeared to be slowing in the first quarter amidRetail sales rose 0.6 per cent last month, the Commerce Department’s Census Bureau said. Data for January was revised lower to show sales tumbling 1.1 per cent instead of the previously reported 0.8 per cent.

The labour market also remains fairly tight. Initial claims for state unemployment benefits fell 1000 to a seasonally adjusted 209,000 for the week ended March 9. Economists had forecast 218,000 claims for the latest week. Consumer spending is holding up despite higher inflation, though households are increasingly focusing on essentials and cutting back on discretionary spending.

Retail sales excluding automobiles, gasoline, building materials and food services were unchanged in February.A 1.2 per cent jump in the prices of goods accounted for nearly two-thirds of the increase in the PPI. Goods prices were driven by energy products, which surged 4.4 per cent after declining 1.1 per cent in January. Goods prices had edged down 0.1 per cent in January.In the 12 months through February, the PPI shot up 1.6 per cent after advancing 1 per cent in January.

Services gained 0.3 per cent in February after rising 0.5 per cent in the prior month. A 3.8 per cent increase in the cost of hotel and motel rooms accounted for a quarter of the increase in services prices.

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