US retail sales, consumer sentiment up

The US consumer remains alive and well. Reuters reports:

The Commerce Department said overall retail sales rose 0.6 percent last month after a revised 0.8 percent February fall that had been reported as a much steeper 1.4 percent drop...

Brighter consumer spirits appeared to carry over into the second quarter, according to a subscriber-only report by the University of Michigan that sources said showed its preliminary April index of consumer sentiment at 89.2, up from March's final reading of 88.9.

A relatively resilient labour market helps.

Separately, the Labor Department said new claims for unemployment pay rose by an unexpectedly large 12,000 last week to 313,000.

But a broader, four-week moving average that smooths weekly volatility to give a better picture of underlying conditions told a different story, contracting 1,500 to 307,500.

Bond markets did not like the news.

Bond prices sank, fearful that rising retail sales will keep the U.S. central bank on track for more interest-rate rises. The 30-year U.S. Treasury bond was off 26/32s of a point to yield 5.12 percent while the bellwether 10-year U.S. Treasury note lost 17/32s and was yielding 5.05 percent.

But at least bond investors appear to have little to fear from imported inflation.

Another report from the Labor Department showed prices for imported goods fell unexpectedly by 0.4 percent in March as natural gas costs dropped sharply and petroleum prices dipped. It was the third decline in the past four months and followed a 0.5 percent fall in February.

And businesses seem to see little urgency in building up inventories.

A separate report from the Commerce Department said business inventories in February were flat after rising 0.6 percent in January. Business sales fell 0.6 percent in February after climbing 1.2 percent in January so that the inventory-to-sales ratio edged up to a still relatively lean 1.26 months from 1.25 months.

In any case, according to Reuters, Fed officials at least think that rate hikes could be nearing an end.