US Dollar Weakens on Retail Sales Plunge, Jobless Claims Jump

The US dollar is weakening against a basket of currencies on Thursday as new data is souring economic outlooks. Retail, inflation, and even jobs impacted the greenback towards the end of the trading week, leaving investors concerned that a contraction is on the horizon.

According to the US Census Bureau, retail sales tumbled 1.2% in December, recording their biggest decline in nine years. The market had expected the data to be flat. The declines were seen in nearly every category: gas stations (5.1%), ecommerce (3.9%), department stores (3.3%), and restaurants (0.67%). Auto dealers did enjoy a 1% jump, and home-center sales tacked on 0.3%.
The Bureau of Economic Analysis (BEA) reported that the producer price index (PP) slipped 0.1% last month, stemming mostly from lower energy prices. The market had penciled in a 0.1% jump. Gas prices plunged 7.1%, wholefood costs slid 1.7%, and wholesale prices rose 0.1%. The increase in the 12-month wholesale inflation rate slumped to 2%, down from 2.5%., and the yearly rate of increase in core prices slowed to 2.5%, down from 2.8%.
Jobless claims rose in February as monthly averages reached a one-year high, reports the Department of Labor. The four-week average of new jobless claims surged by 6,750 last week to 231,750, the highest level since January 2018. The report further showed that weekly jobless claims added 4,000 to a seasonally-adjusted 239,000 in the week ending February 9. The market had expected new claims to decrease to 225,000.
On Thursday, the Atlanta Federal Reserve Bank slashed the nation’s gross domestic product (GDP) forecast for the fourth quarter from 2.7% to 1.5%.
The data is weighing on US stock indexes as the Dow Jones and S&P 500 fell and the Nasdaq was flat.
The USD/CAD currency pair rose 0.26% to 1.3292, from an opening of 1.3254, at 16:43 GMT on Thursday. The EUR/USD surged 0.26% to 1.1292, from an opening of 1.1262.

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