US: Retail sales expands surprisingly at a stronger pace of 0.6% vs. expectations of 0.2%

• In August, consumer spending grew at a healthy pace of 0.7%.
• Initial Jobless Claims remained higher than the prior week's figures after declining straight for five weeks.

The US Bureau of Labor Statistics reported on Thursday that the Producer Price Index (PPI) for final demand in the US rose 0.7% on a monthly basis from expectations and July’s print of 0.4%. Annualized headline PPI accelerated to 1.6% vs. estimates of 1.2% and the former reading of 0.8%.

The annual Core PPI decelerated to 2.2%, as expected by market participants vs. July’s figure of 2.4%.

Retail Sales in the US outperformed expectations of 0.2% and July’s reading of 0.5%, landing at 0.6% on a monthly basis in July, according to the data published by the US Census Bureau.

Retail Sales Ex-Autos rose 0.6% in the same period, compared to analysts' estimate of 0.4%, while Retail Sales Control Group increased 0.1%.

The US Department of Labor showed that individuals claiming jobless benefits for the first time rose by 220K while investors anticipated higher jobless claims at 225K. In the previous week, jobless benefits were recorded at 216K. Jobless claims remained higher than the prior week's figures after declining straight for five weeks.

Further details of the publication revealed that “the 4-week moving average was 224,500, decreased by 5,000 from the previous week's revised average.”

Continuing claims increased by 4K in the week ending September 8 to 1.688 million, but remained below market expectations of 1.695 million. 

Market reaction

The US Dollar Index (DXY) shoots above the 105.00 resistance and refreshes a six-month high at 105.30, 0.42% higher from Wednesday’s closing.