Producer price inflation across the world’s largest economy overshot and US retail sales came in soft, key data released on Thursday showed.

The warm PPI report should be a source of consternation. It came on the heels of a CPI release that showed price pressures are still percolating and beyond that, the wholesale inflation figures suggest the update on PCE price growth later this month may not offer much in the way of a reprieve.

Headline PPI rose 0.6% last month from January, double the 0.3% economists expected.

Stripping out food and energy, the month-to-month increase was 0.3%, a touch higher than the 0.2% consensus. The ex-trade services print was a warm 0.4%.

Most of the gain on the headline was attributable to the goods index, which rose 1.2%, the largest monthly gain since August. You can thank energy (and specifically gas) for a lot of that, but the food gauge rose the most since November of 2022. The 0.3% increase on the services gauge was the fourth MoM increase in five months.

The YoY pace of headline factory gate inflation was 1.6% in February, meaningfully above the 1.2% consensus.

Once again, I’m compelled to suggest the data simply isn’t cooperating with sundry disinflation narratives. The PPI release isn’t consistent with incremental progress towards price stability, and when taken with the CPI report and rising medium- and long-term inflation expectations in the New York Fed survey (maybe University of Michigan expectations will allay concerns on Friday, maybe not), the odds of the new dot plot reflecting two cuts in 2024 versus three (in the December vintage) are surely higher than they were a week ago.

Meanwhile, retail sales rose 0.6% in February from January. That was below the 0.8% rebound economists expected. Recall that January’s release reflected a sharp slowdown in nominal spending. That drop was revised to show an even steeper decline and December’s 0.4% gain was revised away almost entirely.

Given the downward revision and the muted (relative to consensus anyway) bounce in February, it’s fair to suggest the spending impulse receded materially over the first two months of 2024.

Note that the control group showed no change for February. Consensus saw a 0.4% increase. That’s a notable miss and will weigh on Q1 GDP estimates. The ex-autos print, 0.3%, was likewise cool. Economists wanted 0.5% from that aggregate.

Finally, initial jobless claims for the week to March 9 slipped to 209,000, easily below the expected 218,000 and still nowhere close to levels indicative of recession. Continuing claims, which rose to the second-highest since 2021 late last month, were 1.811 million in the week to March 2, well below the 1.9 million estimate. The prior week’s jump was revised away.

All in all, Thursday’s data was ambiguous. You could argue, I suppose, that the cool read on nominal consumption offset the warm PPI prints for the purposes of the Fed’s narrative. That is: Yes, PPI constituted yet another indication that the disinflation process has stalled, but if spending’s going into reverse, the problem should take care of itself.

The sarcastic among you will doubtlessly note that the combination of stubbornly high inflation and lackluster growth indicators has a name in the macro discourse. It’s called “stagflation.”