USA: Weak data will probably not bring the boat into the waver – ING

FXStreet – today’s economic data fell short of expectations, should not bring the boat to the US Central Bank, the Fed, to falter, said James Smith, an Economist at Dutch Bank ING. This means that there are fewer and fewer reasons to speak out against a rate increase in June.

Important Quotes:

Superficially, today’s US economy are unusual data is quite disappointing. The consumer price index fell from 2.4 to 2.2 percent. By the reporting month of March, the hotel prices are still one of the main stress factors were recovered, whereas, in April. But that was not enough to compensate for the width weakness, which led to the fact that the core rate fell below 2 percent at 1.9 percent.

Also disappointing in both retail sales as well as the core sales down (0.4 percent and 0.2 percent). However, the strong revisions to the previous month, which make us hope that the consumer should celebrate a solid Comeback, after it came in the first quarter to a slowdown. It is hard to say whether this lack of drive is due to a fundamental Blip, or inaccurate seasonal adjustment factors. One way or the other, it should be clear that this effect was only of a temporary nature, and against the Backdrop of a healthy consumer confidence and a robust labour market, consumption will tighten again in the coming months.

This supports the Federal Reserve, which had stressed in the past weeks that you would like to turn this year, twice at the interest rate screw. An increase in June will, therefore, always more likely.

** FXStreet News Editorial, FXStreet**

Leave a Reply