12/02/2021

Weak US Retail Sales, Inflation Data Cloud Rate Hike Outlook

U.S. retail sales barely rose in September and producer prices recorded their biggest decline in eight months, raising further doubts about whether the Federal Reserve will raise interest rates this year.

The weak reports on Wednesday were the latest suggestion that the economy was losing momentum in the face of slowing global growth, a strong dollar, an inventory correction and lower oil prices that are hampering capital spending in the energy sector. Job growth braked sharply in the past two months.

“The softness of September’s figures supports our view that the Fed probably isn’t going to hike interest rates until early next year,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

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