From our colleagues at our sister company, Argent Trust:
In this morning’s data, Retail Sales for January increased 3.0% which is higher than expected and a nice rebound from the previous month. In the month, Motor Vehicle & Parts Dealers, up 5.9%, and Furniture & Home Stores, up 4.4%, were strong while spending at Gasoline Stations, flat for the month, was relatively weak. Also, Food Services & Drinking Places increased 7.2% in the month. The Control Group, which is a closer measure of the inputs for GDP that excludes sales for food, autos, building materials, and gas stations, increased 1.7% in January, also higher than expected and rebounding from the previous month. Meanwhile, yesterday the Consumer Price Index increased 0.5% in January as expected and increased 6.4% on an annual basis. The core rate, which excludes food and energy prices, increased 0.4% for January as expected and increased 5.6% on an annual basis.
Overall, a rebound for retail sales in January following last month’s declines. Consumers were active, especially in dining out given the increase in food service and drinking places, which was also highlighted by comments in recent earnings reports on credit card activity. Meanwhile, inflation figures were as expected and ticked a bit higher from the previous month; however, a downward trend remains in place. Given these data points, the Federal Reserve is likely to keep rates higher for even longer to ensure that inflation continues its downward trend and a lower level can be sustained that is closer to their target.
In all, the 10-year US treasury yield ticks higher following the report and equity futures are lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.