Weak US retail sales dent dollar

Mixed US economic data released on Thursday put a dent in the dollar. Retail sales fell for a third consecutive month, due to bad weather in February. Meanwhile, initial jobless claims data showed a larger decrease than forecast but this was not enough to prop up the greenback.

According to a report issued by the Commerce Department, retail sales unexpectedly dropped 0.6 percent last month.
The bitter cold weather especially in the Northeast and Midwest, affect sales for auto dealers, building-material outlets and department stores.

The dollar dropped across the board after the data but soon steadied as investors also digested the jobless claims data which gave hope that a strengthening job market and still-low gasoline prices are among reasons most economists remain optimistic on the outlook for consumer spending, the biggest part of the economy.

The Labor Department report showed that the number of Americans filing for unemployment benefits declined by 36,000 to 289,000 in the period ended March 7, the fewest in three weeks. Applications had shot up to a nine-month high of 325,000 the previous week. Last week’s decrease sent claims back to the level that economists say is consistent with a rapidly improving job market. That’s the main reason most economists believe retail sales will soon rebound.

Last week’s nonfarm payrolls report highlighted the recovering job markets. The Labor Department’s February employment report issued March 6 indicated hiring remains robust. Employers added 295,000 jobs, exceeding expectations, while the unemployment rate fell to an almost seven-year low of 5.5 percent.

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