US retail sales, produces prices rise; jobless claims lower than forecast
NEW YORK (Reuters) — A slew of U.S. economic data showed stronger-than-expected numbers that stoked worries about sticky inflation and reinforced the view that the Federal Reserve is likely to keep interest rates higher for longer.
U.S. producer prices rose 0.7% in August, compared with expectations of a 0.4% increase. U.S. retail sales also climbed 0.6% last month, against estimates of a 0.2% rise, while initial jobless claims for the latest week fell to 220.000. Economists polled by Reuters had estimated 225,000 claims.
MARKET REACTION
STOCKS: U.S. stock futures pared gains after the data.
FOREX: The dollar index rose 0.33% to 105.080
TREASURIES: The yield on 10-year Treasury notes initially rose after the data, but was last flat at 4.24%.
COMMENTS:
PETER ANDERSEN, FOUNDER, ANDERSEN CAPITAL MANAGEMENT, BOSTON
«I'm hoping that the Fed will take the data as trying to discern the general trend and not necessarily react to one set of data points that have come out this week.»
«If the Fed were to look at this as a trend, I believe they still will be on pause in September next week. As we approach the last quarter of the year, I would expect that they would continue to pause based on my estimate that the economy will show continued strength, but also subdued inflation.»
«We still have many rate hikes that have not even matured to a year, and so time is our friend in the sense that the prior hikes that are less than a year old are coming up to be a year old, and as they work their way through the economy, the Fed should be satisfied that the prior hikes have done the job.»
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, CONNECTICUT
«Most of the rise in prices is coming from energy. A lot of people are not really
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