NewsMine — economy — united-states — 2005 — 2005-apr-july — Viewing Item

Weak consumer spending damps speculation of quickening inflation Original Source Link: (May no longer be active)    http://quote.bloomberg.com/apps/news?pid=10000006&sid=a2RouoVjggwI&refer=home http://quote.bloomberg.com/apps/news?pid=10000006&sid=a2RouoVjggwI&refer=home U.S. Treasury Notes Rise as Retail Sales Are Short of Forecasts April 13 (Bloomberg) -- U.S. Treasury notes rose after a government report showed retail sales in March rose less than forecast, boosting speculation the Federal Reserve can stick to a policy of gradually raising interest rates. Signs of weaker consumer spending may damp speculation that inflation is quickening. Even as inflation risks are ``now tilted a little to the upside,'' Fed policy makers said ``a degree of economic slack apparently remained'' and an ``accelerated pace'' of rate increases is not necessary for the time being. ``You'd probably see yields come down a little bit'' in the event the retail sales report is weaker than expected, Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York, said before the report. ``It might mean the Fed would keep raising rates for now, but would stop sooner rather than later.'' The benchmark 4 percent note due February 2015 rose about 1/8, or $1.25 per $1,000 face amount, to 97 11/32 as of 8:31 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield fell 2 basis points to 4.34 percent. A basis point is 0.01 percentage point. A Commerce Department report showed retail sales rose 0.3 percent in March after rising 0.5 percent a month earlier. Sales were expected to increase 0.8 percent, according to the median forecast of 73 economists surveyed by Bloomberg News. Excluding autos, sales gained 0.1 percent, less than the median 0.5 percent forecast. Also, the Labor Department reported the weekly number of claims for first-time unemployment benefits dropped. The retail report comes a day after Treasury 10-year notes had their biggest gain in more than two months, when minutes of the Fed's March rate meeting suggested policy makers see no need to move faster on rate increases. They may even pause in raising rates ``if the data warrants,'' according to the minutes. Yesterday's rally pushed yields to a five-week low as minutes of the Fed's March 22 meeting eased concern the central bank may shift to half-percentage point increases in its interest- rate target rate to stem inflation after seven quarter-point boosts since June. Last Updated: April 13, 2005 08:35 EDT

120 thousand united airline employees lose pensions { May 11 2005 } American obesity sending health costs soaring Consumer prices rise greater than expected Dow has biggest 2 day drop in two years Durable goods orders fall by most in 2 years Economy drags heels and inflations fears rise { April 29 2005 } Fed raises key rate on inflation fears { May 3 2005 } Fed raises rates to 3 and half as measured plan Fed says inflation pressures could be intesnifying { April 12 2005 } General motors shifts engineer positions to brazil { June 29 2005 } General motors to cut 25 thousand jobs { June 8 2005 } Greenspan says fed will keep raising rates Greenspan will keep raising rates he says Housing prices loom as concern { July 20 2005 } Huggies cuts six thousand jobs Industry squeezed by soaring energy prices { June 26 2005 } Kodak lays off 10 thousand workers { July 20 2005 } London blasts help dollar and stock gains Manufacturing slow down boosted stocks they say Manufacturing weakest since 2003 { June 1 2005 } Massachusetts homes sales plunge 11 percent { June 24 2005 } Real wages falling at fastest rate in 14 years { May 10 2005 } Sales of homes hit record as prices soar { May 24 2005 } Snow says oil prices hurting economy { June 28 2005 } States costs soar under drivers license law Stocks continue april decline hitting 2005 lows Stocks fall amid oil price worries { June 21 2005 } Stocks head lower on surging oil Stocks rise on jump in oil prices { June 17 2005 } Student loan interest will double Trade deficit unexpectedly shrank to 55b Trade gap widens more than expected US stocks fall as IBM earnings drag tech shares down US tourism losing billions because of image { May 8 2005 } Wages lagging behind inflation { April 11 2005 } Weak consumer spending damps speculation of quickening inflation Files Listed: 36

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