Retail sales rebounded weaker than expected in February, but new jobless claims fell to very low levels and prospects for Federal Reserve interest rate cuts are mixed. Producer price index data also showed a mixed picture for the Fed’s key inflation measure, the core PCE price index.
X
S&P 500 futures remained marginally higher after a burst of data at 8:30 a.m. ET.
This story is being updated. Check back soon for more details and analysis.
retail sales
Overall sales increased by 0.6% in February, but the originally announced 0.8% decline in January was revised to -1.1%. Economists had expected a 0.7% rise, according to Econoday.
Excluding autos, sales rose 0.3% versus the expected 0.4%, despite January’s slump being revised to -0.8% from -0.6%. Accounting for spending on both cars and gasoline, sales rose 0.3% versus the expected 0.2%, with January data revised to -0.8% from -0.5%.
Restaurant sales increased by 0.4% in February, but sales for January have been revised from +0.7% to -1%.
Weather and seasonal adjustment challenges hurt sales in January, but the excuses for February’s lackluster recovery are less clear.
Applying for unemployment insurance
The number of new unemployment insurance claims was revised downward by 7,000 to 209,000 from the previous week’s total of 210,000. Wall Street expected a print run of 215,000 copies.
The four-week moving average of applications decreased by 500 from the previous week’s revised total to 208,000.
The Labor Department revised the number of continued applications for unemployment benefits for the last week of February to 1,794,000, down 112,000, in an adjustment to the seasonal adjustment method.
PPI inflation data
The producer price index for final demand rose 0.6% in February, compared to expectations of 0.3%. Producer prices, which exclude food and energy, rose 0.3%, beating expectations for a 0.2% rise.
Medical services prices, airline passenger services, and portfolio management services are three notable components of PPI that feed into the Fed’s main inflation measure, the Core PCE Price Index.
The composite PPI measure of prices in certain healthcare industries rose 0.3% in February, not adjusting for seasonal fluctuations. The year-over-year increase was 3.2%, up from the 12-month increase of 2.8% reported in the previous month.
Fed rate cut odds
Following retail sales and other data, the market has just 6% odds There is a 63% chance that the Fed will cut interest rates on May 1st, down from 67% before the announcement. For the full year, the market is pricing in at least three quarters of rate cuts (70%, down from 73%).
S&P500
S&P 500 futures rose 0.1% in the stock market early Thursday, but fell slightly on retail sales and jobless claims.
The 10-year Treasury yield rose 5 basis points to 4.24%.
Be sure to read IBD’s The Big Picture column after each trading day to stay up to date on general trends in the stock market and what they mean for your trading decisions.
You’ll probably also like:
These are the 5 best stocks to buy and watch now
Join IBD Live every morning to get stock updates before the open
How to make money in stocks in 3 easy steps
AI News: Artificial Intelligence Trends and AI Stocks to Watch
