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Fan Yang

Soft US Data Rounded out the Week

Last week closed with inflation and retail sales data from the US, both underwhelming forecasts, but were better than the previous reports. 

Comsumer Price Index News Release (5/12)
The consumer price index grew 0.2% when comparing the CPI in April with the CPI in March. Economists' average forecast was 0.3%. Previously, during the March month, there was a -0.3% rate of deflation compared to the CPI in February. Core inflation had a similar story, missing forecast but still better than the previous month's. The core CPI grew 0.1% vs. forecasts around 0.2%. The previous month's core CPI deflated at -0.1%. 

Advance Monthly Sales for Retail and Food Services, April 2017 (5/12)
Retail sales grew 0.4% in April compared to March. The average forecast was 0.6%. The March reading was revised up to 0.1% from a -0.2% reading. Meanwhile, core retail sales came in at 0.3% vs. forecast of 0.5%. The previous reading was revised up to 0.3% from a flat reading of 0.0%. 

Both the inflation and retail sales reports suggest that the March reports could have been one-offs. There is no trend of deflation or softer retail sales. While Friday's data releases were not spectacular, it should support the Fed's guidance for 2 more rates hikes in 2017.

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