Retail sales rose less than expected in January as consumers cut back on car purchases and did less online shopping.
Import prices rose a touch more than expected in January as petroleum and food rebounded strongly, a government report showed on Tuesday, but underlying imported inflation pressures remain muted.
BORIS SCHLOSSBERG, DIRECTOR OF FX RESEARCH, GFT, JERSEY CITY
The headline number was a little weaker than expected but the core figure was better so net-net it was not entirely a negative report. We're still seeing month-on-month growth and the data shows that the U.S. consumer is slowly but surely getting back on track. We had a little sell-off in the euro after the report, but that's partly on the back of the risk-off selling the last half hour. Overall, the report is not broadly negative.
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK
Retail sales were pretty underwhelming versus expectations. The main surprise that we see is really on the motor vehicles, which dragged down the headline a bit even though we saw pretty strong numbers from the industry reports earlier in the month. There could be some effects from prices that we don't know until we get CPI, but here it shows a 1.1 decline whereas we were looking for about a 0.3 percentage point boost from autos.
The state of the consumer is still pretty mild. We have had some good economic news but still pretty mild trends all around.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
ON IMPORT PRICES:
The 0.3% rise in January import prices is not significantly different from a 0.2% consensus estimate, and shows a mostly subdued picture outside a bounce in petroleum, with prices unchanged excluding petroleum. The rise in import prices marginally outpaced a 0.2% rise in export prices, with that figure also soft on an underlying basis, unchanged excluding agricultural products. The modest gains in the headline figures will not raise any inflationary alarm bells in a mostly dovish Fed.
WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK
Slightly disappointing, but more or less in line. I don't think there's anything here that really brings into question the fact that the economy has been improving. This could just be a blip. I don't think this will be a big issue today, but the rally is starting to get tired. This could be an excuse for people to take profits.
(Americas Economics and Markets Desk)