New unemployment claims for the week ending January 7th rose to 247,000, which was less than the expected 255,000 and dropped the 4-week moving average to 256,000. New claims below 300,000 are considered a sign of a healthy labor market, and claims have now been below this threshold for 97 consecutive weeks. Coming in on the heels of last week’s monthly jobs report, indicators continue to point to a tightening labor market.

The December Producer Price Index (PPI) report found that wholesale prices increased by 0.3%, with nearly half of the December increase due to a 7.8% rebound the index for gasoline. Prices were up by 1.6% for 2016, but the index is low compared to previous years, and below the target rate of 2.0%.

The December Retail Sales report results were disappointing for discretionary holiday spending. The 0.6% M/M overall increase dropped to 0.0% when excluding autos and gasoline. Department stores, electronics/appliance stores and restaurants all had decreased sales vs. November, while non-store retail (e.g. online stores), building/garden supplies, and furniture showed increased sales. Retail sales for 2016 were 3.3% higher than 2015.