14thMarch 2024
Thursday
On Thursday, the United Statesis set to unveil several key economic indicators that could significantlyimpact market sentiments. The scheduled releases include the Core ProducerPrice Index (PPI) and Retail Sales figures on a month-over-month basis,alongside the broader PPI and Retail Sales data. Additionally, the latestfigures on Unemployment Claims will also be made public. These reports areeagerly anticipated by investors and analysts alike, as they provide crucialinsights into the health of the US economy and could influence future monetarypolicy decisions.
USD - Core PPIm/m
The monthly report, released approximately 13 days after the end of each month, focuses on the price fluctuations of finished goods and services offered by producers, excluding food and energy components. It's noteworthy that, starting from February 2014, there has been a change in the calculation formula for this particular data series. It is referred to as Core Finished Goods PPI or Core PPI for Final Demand and provides valuable insights into producer price movements, discounting the influence of food and energy prices, which constitute approximately 40% of the overall Producer Price Index (PPI) and therefore diminish their significance in the Core data analysis.
In January 2024, experiencing a reversal from the previous month's 0.1% decrease, the US core producer price index, which omits food and energy costs, climbed by 0.5% on a monthly basis. This leap, far outpacing the anticipated modest 0.1% rise, signaled the most pronounced increase in core producer prices since July 2023 and marked an end to the disinflationary trend in key business costs within the US. Annually, the index recorded a 2% growth from the same period in the previous year, a notable acceleration from December's 1.7% increase, and highlighted the first enhancement in producer price inflation since September.
TL;DR
US core producer price index increased by 0.5% month-on-month in January 2024, reversing a 0.1% decrease from the previous month.
The increase was significantly higher than the anticipated 0.1% rise.
This marks the most pronounced increase since July 2023.
Year-on-year, the index rose by 2%, accelerating from December's 1.7%.
This ends the disinflationary trend seen since September.
The upcoming forecast for the CorePPI m/m basis is projected at 0.2%, marking a decrease from the previous rate of 0.5%. This change indicates a moderation in the pace of price changes at the production level, excluding volatile food and energy prices.
The next Core PPI m/m is set to be released onThursday at 12:30 PM GMT.
USD - CoreRetail Sales m/m
This data is released monthly, approximately 16 days after the close of the month. While automobile sales contribute around 20% to Retail Sales, their inherent volatility can skew the underlying trend. Consequently, the Core data, which excludes automobile sales (Retail Sales Ex Autos), is considered a more reliable indicator of spending trends.
In January 2024, U.S. retail sales, when excluding motor vehicles and parts, experienced an unexpected downturn, dropping by 0.6% from the previous month. This decline came as a surprise, particularly after a 0.4% increase in December and contrary to the analysts' forecasts of a 0.2% increase. Despite this monthly setback, the annual perspective showed a more positive outlook, with these sales recording a 1.2% growth year-over-year, suggesting a certain degree of resilience in consumer spending habits.
TL;DR
U.S. retail sales excluding motor vehicles and parts fell by 0.6% month-on-month in January 2024.
This decline was unexpected, following a 0.4% increase in December and contrary to forecasts of a 0.2% rise.
Year-over-year, sales grew by 1.2%, indicating resilience in consumer spending.
The projected figure for CoreRetail Sales m/m basis is set at 0.3%, showing an improvement from the previous result of -0.6%.
The next Core Retail Sales m/m data comes out on Thursdayat 12:30 PM GMT.
USD - PPI m/m
The monthly release, typically available around 13 days following the conclusion of each month, quantifies the variations in pricing for finished goods and services within the domain of producer sales. This economic indicator serves as a leading gauge for potential consumer inflation, as elevated prices at the producer level often result in corresponding increases in consumer costs. It is alternatively referred to as Finished Goods PPI, Wholesale Prices, or PPI for Final Demand.
In January 2024, the US witnessed a notable uptick in producer prices for final demand, escalating by 0.3% on a month-to-month basis, the most substantial increase observed in the past five months. This development contrasted with the 0.1% decline seen in December, and exceeded expectations which had predicted a modest 0.1% rise. The service sector led this upswing with a 0.6% increase, the most significant since July, driven primarily by a notable 2.2% jump in outpatient care prices at hospitals. Additionally, there were increments in the costs associated with wholesaling of chemicals and allied products, machinery and equipment, as well as in portfolio management, traveler accommodation services, and legal services. In contrast, goods prices dipped by 0.2%, marking the fourth consecutive month of decline, with gasoline prices decreasing by 3.6% and leading the downward trend. Other declines were noted in the prices of electric power, hay and its seeds, oilseeds, beef and veal, ethanol, and iron and steel scrap. On a yearly scale, producer prices increased by 0.9%, slightly below December's 1% rise yet above the 0.6% that had been projected. The core Producer Price Index (PPI), excluding food and energy, saw a month-over-month increase of 0.5%, pushing the annual increase to 2%, with both metrics exceeding the anticipated figures.
TL;DR
US producer prices for final demand rose by 0.3% month-on-month in January 2024, marking the largest increase in five months.
Service sector prices led the rise with a 0.6% increase, notably outpatient care prices jumped by 2.2%.
Goods prices fell by 0.2%, with gasoline prices dropping 3.6%, continuing a four-month decline trend.
Yearly, producer prices were up by 0.9%, slightly under December's 1% but above the 0.6% forecast.
Core PPI, excluding food and energy, rose by 0.5% month-on-month, leading to a 2% increase on a yearly basis.
The latest projection for the PPIm/m basis remains steady at 0.3%, mirroring the rate observed in the previous period.
The forthcoming release of the PPIm/m data is scheduled for Thursday at 12:30 PM GMT.
USD - RetailSales m/m
The Advance Retail Sales report, published on a monthly basis approximately 16 days after the close of each month, offers the earliest and most comprehensive insight into essential consumer spending data. Serving as the principal indicator of consumer expenditure, which constitutes the majority of overall economic activity, it is also commonly referred to as Advance Retail Sales.
In January 2024, US retail sales fell by 0.8% from the previous month, marking a reversal from the revised 0.4% increase in December and performing worse than the expected 0.1% decline. This drop, the largest since March of the previous year, was largely influenced by the post-holiday season slowdown and cold weather conditions. The most significant reductions were seen in sales of building materials and garden equipment (down 4.1%), various store retailers (down 3%), gasoline stations (down 1.7%), and motor vehicles and parts (down 1.7%). Additionally, there were declines in sales at health and personal care stores (down 1.1%), online retailers (down 0.8%), electronics and appliance stores (down 0.4%), as well as clothing and sporting goods, hobby, musical instruments, and book stores (each down 0.2%). On the brighter side, furniture stores saw a 1.5% increase in sales, followed by food services and drinking places (up 0.7%), and food and beverage stores (up 0.1%), while sales at general merchandise stores remained steady. It's important to note that these retail sales figures are seasonally adjusted but do not account for inflation.
TL;DR
US retail sales fell by 0.8% month-on-month in January 2024, a significant downturn from December's revised 0.4% increase.
The decline, the largest since March of the previous year, was attributed to post-holiday slowdowns and cold weather.
Notable decreases occurred in building materials and garden equipment (-4.1%), various store retailers (-3%), gasoline stations (-1.7%), and motor vehicles and parts (-1.7%).
Additional drops were seen in health and personal care stores (-1.1%), online retailers (-0.8%), electronics and appliance stores (-0.4%), and clothing and sporting goods stores (-0.2% each).
Conversely, furniture stores saw a 1.5% increase in sales, with food services and drinking places up 0.7%, and food and beverage stores up 0.1%.
Sales at general merchandise stores remained unchanged.
These figures are seasonally adjusted but do not reflect inflation adjustments.
The upcoming forecast for RetailSales m/m shows an anticipated increase of 0.3%, a significant improvement from the previous decline of -0.8%.
The next Retail Sales m/m is scheduled for release on Thursday at 12:30 PM GMT.
USD -Unemployment Claims
The Initial Jobless Claims, released weekly on the first Thursday after the week ends, signify the earliest economic data for the nation. Market impact varies but garners more attention during significant developments or extreme readings. Despite being considered a lagging indicator, the number of new unemployment insurance filings is vital for assessing overall economic well-being, as it strongly relates to consumer spending and influences monetary policy decisions. It is also known as Jobless Claims.
The latest report for the week ending March 2 shows that the number of Americans filing for unemployment benefits remained steady at 217,000, mirroring the previous week's figures after a slight upward revision. The four-week moving average, which smooths out week-to-week fluctuations, slightly decreased to 212,250. The insured unemployment rate held firm at 1.3 %, with a minor uptick in the number of insured unemployed individuals to 1,906,000.
Unadjusted data reveals a nearly 9% increase in initial claims from the previous week, although this was slightly below seasonal expectations. The unadjusted insured unemployment rate remained at 1.4 %, with a modest rise in total individuals receiving unemployment benefits.
Comparatively, the total continued claims in all programs slightly decreased from the previous week. No states activated the Extended Benefits program, indicating stability in the overall unemployment landscape.
Notably, certain states exhibited higher insured unemployment rates, with New Jersey and Rhode Island topping the list. The most significant increases in initial claims were observed in Massachusetts and Rhode Island, while notable decreases were reported in states like Oklahoma and Texas.
This steady state of unemployment claims suggests a stable labor market, with slight regional variations in initial claims and unemployment rates.
TL;DR
The number of Americans filing for unemployment benefits remained stable at 217,000 for the week ending March 2.
The four-week moving average slightly decreased to 212,250, and the insured unemployment rate stayed at 1.3%.
The total number of insured unemployed individuals slightly increased to 1,906,000.
Unadjusted initial claims rose nearly 9% from the previous week, slightly below seasonal expectations, with the unadjusted insured unemployment rate steady at 1.4%.
Total continued claims in all programs saw a slight decrease, with no states activating the Extended Benefits program.
Higher insured unemployment rates were noted in New Jersey and Rhode Island, with significant initial claim increases in Massachusetts and Rhode Island and decreases in Oklahoma and Texas.
The data indicates a stable labor market with minor regional variations in unemployment claims and rates.
The forecast for Unemployment Claims suggests 219,000, a slight increase from the previous figure of 217,000.
The upcoming Unemployment Claims report is set to be published on Thursday at 12:30 PM GMT.
Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
