-James Bullard, St. Louis Fed President
Welcome to the club! The annual inflation rate in the world's number one economy turned negative in January for the first time since 2009. The Labor Department reported that consumer price index dropped 0.1% in the reported month from a year earlier. However, core inflation, which strips out energy and food costs, stayed positive at 1.6% on an annual basis, but below the Fed's 2% goal. Deflation was not the only negative piece of news, as the number of Americans who applied for unemployment benefits in the week ending February 20, rose more than expected, pushing the reading back above 300,000. The Labor Department said weekly applications jumped 31,000 to a seasonally adjusted 313,000, the highest in six weeks. The four-week average, a less volatile measure, increased 11,500 to 294,500. Meanwhile, continuing claims for the week ending February 7 came in at 2.401 million, compared to the preceding week's revised reading of 2.422 million.
US durable goods were the only positive data among the plethora of Thursday's fundamentals. Demand for big-ticket manufactured goods rebounded in January, for the first time in three years. Bookings for goods meant to last at least three years advanced 2.8% following a revised 3.7% drop in the preceding month, the Commerce Department reported. Excluding the volatile transportation sector, orders ticked up 0.3%.
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