US economic data has been a bit wobbly lately—the unexpected slide in February retail sales, which marks the third straight month of red ink, for instance. The optimists say this is just a soft patch for spending, weighed down by a harsh winter. The encouraging figures in other key indicators imply as much, including the upbeat numbers for payrolls. Perhaps, then, it’s no surprise to find that the real monetary base for the US continued to decline through February, laying the groundwork for the Federal Reserve’s first interest rate hike in nearly a decade. The arrival of policy tightening could come as early as June, according to some forecasters… assuming, of course, that economic growth holds up.
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● Cold Temperatures Hurt U.S. Retailers as Sales Drop | Bloomberg
● US Jobless Claims Fell More Than Forecast Last Week | Bloomberg
● US Import Prices Rise 0.4% Amid Rebound In Fuel Prices | RTT
● Eurozone industrial production in slow recovery | City AM
● US Consumer Comfort Index Little Changed Amid Weaker Buying | Bloomberg
● Bank of England’s Carney Sees Gentle Upward Path For Rates | MNI

Today’s US economic updates offer a profile of extremes. Initial jobless claims pulled back from the brink of what would have been a dark signal if new filings for unemployment benefits posted another rise. Instead, claims tumbled sharply last week, falling substantially more than expected, the Labor Deparment reports. As a result, it appears that claims are again flashing a bullish signal for the labor market after several weeks of worrisome gains. But any celebration should be muted in the wake of this morning’s monthly update on retail sales, which fell in February for the third month in a row–the longest stretch of monthly red ink in nearly three years. And this time we can’t blame weak gasoline sales, which increased last month. In short, the trend in retail spending is looking genuinely shaky for the first time in several years.
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US equities have been trending lower so far in March, and no sector has been immune to the selling. But the relative strength in healthcare stocks continues to stand out. Energy companies, meanwhile, are still the weakest corner of the market among the major equity sectors, based on a roundup of trailing 252-day (1 year) periods through Mar. 11 via our usual set of ETF proxies.
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● US mortgage application slip in early Mar after Feb losses | HousingWire
● Euro hits fresh 12-year low against dollar | MarketWatch
● S. Korea joins global easing with surprise rate cut as growth falters | Reuters
● Germany Feb Consumer Prices Rebound As Expected | RTT
● France Consumer Prices Fall For Second Straight Month | RTT
● Technocrats due in Athens on Thursday after start of Brussels talks | Ekathimerini

US retail sales are expected to rise 0.5% in tomorrow’s February report vs. the previous month, according to The Capital Spectator’s median point forecast for several econometric estimates. The median prediction reflects a substantial rebound vs. the previous month’s 0.8% decline.
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The possibility that the Federal Reserve may start raising interest rates in the near future continues to resonate among investors and in the news media. But the view remains nuanced from the vantage of yields in the Treasury market. Although market rates have bounced higher off the lows in late-January/early February, yields have backed off their recent highs, suggesting that there’s still uncertainty about the timing for a change in Fed policy.
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● US Job Openings Rise to the Highest Level in 14 Years | WSJ
● February US Small Business Optimism Ticks Higher | 24/7 Wall St
● US wholesale inventories rise; labor market tightening | Reuters
● China’s Industrial Output, Retail Sales Growth Slows | RTT
● UK industrial production falls 0.2% in December | Guardian
● Draghi Says ECB Action Can and Will Return Inflation to Goal | Bloomberg

Economic growth in the US remains on a steady path, according to a markets-based estimate of the macro trend. The Macro-Markets Risk Index (MMRI) closed at +6.8% yesterday (Mar. 9). The benchmark’s readings so far this year have remained in a tight band of roughly +5% to +10% — a signal for anticipating ongoing economic growth. A decline below 0% in MMRI would indicate that recession risk is elevated; readings above 0% imply that the economy will expand in the near-term future.
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● Fed’s labor-markets conditions index slows in February | MarketWatch
● US Employment Trends Index Increased in February | Conference Board
● OECD: Euro zone growth gaining pace, others stable | Reuters
● French Industrial Output Rises Unexpectedly In January | RTT
● China February consumer inflation rebounds | Reuters
● EU, Greece to start technical loan talks Wednesday | Reuters