Three major economic reports were released this morning:
1) Headline consumer inflation jumped sharply higher last month, the Bureau of Labor Statistics reports. On closer inspection, however, it’s all about energy. The so-called core reading of inflation (excluding the volatile energy and food sectors) still looks tame.
2) Retail sales in December continued forging higher, reaching a new all-time high, according to the Census Bureau.
3) Industrial product rose at a healthy clip last month, advancing the most since last July, the Federal Reserve reports.

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►Uncle Sam Wants His AAA Rating
Two major credit ratings agencies warned Thursday that the United States might tarnish its triple-A credit rating if its national debt kept growing…But many economists say the reckoning, if it comes, is still years or even decades away. The bond market shrugged at Thursday’s news. Indeed, even some experts who want to see the deficit reduced said now is not the time to cut federal spending drastically, given the weakness in the economy and high unemployment.
New York TImes, Jan 14
►New Hit to Strapped States
With the market for municipal bonds tumbling, cities, hospitals, schools and other public borrowers are scrambling to refinance tens of billions of dollars of debt this year, another sign that the once-safe market is under duress. The muni bond market was hit with the latest wave of bad news Thursday, prompting a selloff that sent the market to its lowest level since the financial crisis. A New Jersey agency was forced to cut the size of a bond issue by about 40% because of mediocre demand, and pay a higher rate than expected. And mutual fund giant Vanguard Group shelved plans for three new muni bond funds, citing market turmoil.
Wall Street Journal, Jan 14

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