U.S. retail sales were unexpectedly flat in July as Americans cut back on discretionary spending, pointing to a moderation in consumption that could temper expectations of a sharp pickup in economic growth in the third quarter.
Other data on Friday showed that 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 labor market.
"Fed members are afraid to come out from under their rocks until growth is sustainably solid and inflation in, near or at their target, and today's reports don't provide them with any comfort that will happen soon," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
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Other data on Friday showed that 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 labor market.
"Fed members are afraid to come out from under their rocks until growth is sustainably solid and inflation in, near or at their target, and today's reports don't provide them with any comfort that will happen soon," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
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