Economic Data Review – May 15, 2025

Today’s US economic data came in significantly softer than expected, pointing to weakening inflationary pressures and a slight deceleration in consumer activity:

* PPI MoM (Apr): -0.5% (vs 0.2% forecast)

* Core PPI MoM (Apr): -0.4% (vs 0.3% forecast)

* Retail Sales MoM (Apr): 0.1% (vs 0.0% expected, but sharply down from 1.7% prior)

* Initial Jobless Claims: 229K (in line with consensus, but above 220K forecast)

Market Implications:

📉 Stock Market:

This is a bullish mix for equities. Sharp downside surprises in PPI and Core PPI suggest inflation is cooling faster than expected, which could reignite rate-cut expectations from the Fed. That softens financial conditions and supports risk assets.

📉 Dollar:

Negative for USD. The Fed may be pressured to adopt a more dovish stance if disinflation persists. With both headline and core producer prices declining, real yields could drop, weakening dollar demand.

📊 Summary:

* Disinflationary surprise = good for stocks

* Softer retail and flat jobless claims = neutral to slightly bearish for economic momentum

* Dollar may weaken in the near term unless hawkish Fed speak offsets this data

Expect markets to start pricing in increased chances of rate cuts in Q3 if this trend continues.