Retail Sales Surged With Inflation Last Month

In a report this morning, the Census Bureau reported that Retail Sales grew 5.3% last month as December’s drop of 0.7% was revised to a drop of 1%. Surveys suggested that January’s growth rate would be 1.1%. Without autos, Sales grew by 5.9% while December’s dip of 1.4% was revised to a dip of 1.8%. Analysts were only expecting 1% for January’s growth. The control group, without food, autos, gas, and building materials leaped by 6% against an expectation of just 1% while December’s drop of 1.9% was revised to a drop of 2.4%.

Along with that, the Bureau of Labor Statistics reported that its Producer Price Index leaped by 1.3% in January against an expectation of just 0.4%. Year-over-year, headline PPI surged to 1.7% versus an estimate of only 0.9%. Without food and energy, core PPI grew 1.2% last month against an expectation of just 0.2%. Year-over-year, core PPI grew by 2% and beat the forecasts looking for just 1.1%. In December, year-over-year headline PPI was 0.8% while that month’s core PPI twelve-month rate was 1.2%.

But before any of that, the Mortgage Bankers Association reported that new Mortgage Applications fell by 5.1% last week with Purchase applications down 6.1% and Refi applications down 4.7%.

After yesterday’s sell-off, Treasury prices have been bouncing around this morning. Currently, the Thirty-Year is yielding around 2.07%, the Ten-Year is little changed at 1.32%, while the Two-Year anchors the short-end at 12 basis points. Crude oil is up not quite a dollar to $60.90 while gold continues to drift down to $1,776. Equity markets may open a bit on the weak side.