RETAIL

U.S. sales increased slightly in January

U.S. retail sales rose modestly in January, evidence that Americans kept shopping despite tumbling stock prices.

The Commerce Department said Friday that retail sales increased a seasonally adjusted 0.2 percent last month, the same as in December. Excluding the effect of falling gas prices, sales rose 0.4 percent.

Sales in December were revised higher from an initial estimate of a 0.1 percent drop.

Steady hiring and signs that employers are finally handing out higher wages means that Americans have more money to spend. A key question is whether consumer spending can keep growing and offset the effects of stock market volatility and slowing growth overseas.

Americans stepped up their purchases in January of autos, home supplies and groceries, and spent more online. They spent less at restaurants and bars, probably because of harsh snowstorms on the East Coast.

Gas prices averaged $1.70 a gallon nationwide Thursday, according to AAA. That’s down 27 cents in just the past month.

Excluding the impact of cheap gas, retail sales rose 4.5 percent in January from 12 months earlier. That was the best year-over-pace since September.

— Associated Press

FEDERAL RESERVE

Talk of negative rates too early, official says

The U.S. economy has the momentum to weather stormy global financial markets, and policymakers have many other options before they would consider driving borrowing costs below zero to protect growth, Federal Reserve Bank of New York President William Dudley said Friday in New York.

“I just find that an extraordinarily premature conversation to be having,” Dudley said. “There are a lot of things that we would do long before we would really think about moving to negative interest rates.”

Financial markets have been routed in recent weeks by concerns over the global economic outlook. Dudley said that the Fed is “definitely aware of what’s going on internationally” and would take that into account when the policy-setting Federal Open Market Committee meets March 15 and 16.

Dudley also said that the outlook for how quickly inflation would rise has been dimmed by recent market developments.

“Inflation is probably going to take a little bit longer to get back to our 2 percent objective, everything equal, than maybe what you thought a few months ago,” he said.

The Fed raised interest rates in December for the first time since 2006 after growing in confidence that inflation would rise back to 2 percent over the medium term. Investors see zero chance that the Fed will increase them again next month, based on pricing in fed funds futures.

— Bloomberg News

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— From news services