US retail slows but Fed official calls for interest rates increase
US retail sales were unexpectedly flat in July as Americans cut back on purchases of clothing and other goods, pointing to a moderation in consumer spending that could temper expectations of acceleration in economic growth in the third quarter.
Other data yesterday showed producer prices recorded their biggest drop in nearly a year in July amid declining costs for services and energy goods.
Cooling consumer spending and tame inflation suggest the Federal Reserve will probably not raise interest rates anytime soon despite a robust labour market.
Earlier San Francisco Fed President John Williams said the Federal Reserve should raise rates further this year, reflecting the improved labour market conditions and the likelihood that inflation is heading higher.
"As the economy gets closer to its goals, we can again pull our foot off the gas a bit and hopefully execute a nice, soft landing over the next couple of years," he said.
Asked if gradual rate increases should include any rate hikes this year, Mr Williams said, "In my view, it does," the paper reported.
The Fed raised benchmark US rates last December for the first time in nearly a decade, but did not continue to lift them as it had anticipated in order to cushion the economy from the slowdown in China and financial market turmoil. (Reuters)