U.S. Retail Sales Fell 3% in February – Wall Street Journal, 3/16/2021

• U.S. shoppers pulled back sharply on retail spending during February, but a broader economic rebound appears poised to accelerate this spring because of the easing pandemic and another round of government stimulus.
• Retail sales—a measure of purchases at stores, at restaurants and online—fell by 3% in February compared with the prior month, the Commerce Department said Tuesday.
• January sales advanced a revised 7.6%, up from the earlier estimate of a 5.3% increase.
• Retail sales were up 6% over the last three months compared with the same period a year ago.

U.S. business inventories rise moderately in January as sales surge – Reuters, 3/16/2021

• U.S. business inventories rose moderately in January amid a sharp rebound in consumer spending at the start of the year, and it is now taking businesses the shortest time in nearly nine years to clear shelves.
• Business inventories increased 0.3% in January after rising 0.8% in December, the Commerce Department said on Tuesday.
• Inventories fell 1.8% on a year-on-year basis in January.
• Retail inventories decreased 0.5% in January, instead of 0.6% as estimated in an advance report published last month. That followed a 1.7% increase in December.
• Motor vehicle inventories dropped 1.5%, rather than 1.4% as previously reported. Retail inventories excluding autos, which go into the calculation of GDP, dipped 0.1%, instead of slipping 0.2% as estimated last month.
• Business sales shot up 4.7% in January after rising 1.0% in December. At January’s sales pace, it would take 1.26 months for businesses to clear shelves. That was the shortest time since April 2012 and was down from 1.32 months in December.

U.S. import prices rise strongly in February, boosted by crude oil, commodities – Reuters, 3/16/2021

• U.S. import prices increased strongly in February, boosted by higher costs for crude oil and commodities, strengthening expectations for an acceleration in inflation this year.
• The Labor Department said on Tuesday import prices rose 1.3% last month after surging 1.4% in January.
• Economists polled by Reuters had forecast import prices, which exclude tariffs, advancing 1.2% in February.
• In the 12 months through February, import prices accelerated 3.0%.
• That was the largest gain since March 2012 and followed a 1.0% rise in January.
• Imported fuel prices surged 11.1% last month after advancing 9.0% in January. Imported food prices shot up 1.6%.
• Excluding fuel and food, import prices climbed 0.3%. The so-called core import prices rose 0.9% in January.

Winter storms hammer U.S. manufacturing production – Reuters, 3/16/2021

• Output at U.S. factories plunged in February, depressed by winter storms in Texas, which put some petroleum refineries, petrochemical facilities and plastic resin plants out of commission for the rest of that month.
• Manufacturing production dropped 3.1% last month, also weighed down by a global semiconductor shortage, the Federal Reserve said on Tuesday. That followed a 1.2% jump in January and ended nine straight monthly increases in factory output.
• Excluding the weather impact, manufacturing output fell 0.5%, the U.S. central bank said.
• Production at auto plants continued to be hampered by a shortage of semiconductors, tumbling 8.3% last month.
• The weakness in manufacturing output combined with a 5.4% dive in mining to push down industrial production by 2.2% in February. That followed a 1.1% jump in January. Bitterly cold temperatures boosted utilities output 7.4%.

Homebuilder confidence drops as interest rates and lumber prices rise – CNBC, 3/16/2021

• A monthly index measuring homebuilder confidence in the single-family housing market fell, as builders face rising interest rates and rising costs for materials, especially lumber.
• The National Association of Home Builders/Wells Fargo Housing Market Index fell 2 points to 82 in March.
• Anything above 50 is considered positive sentiment. The index stood at 72 in March 2020 and hit a high of 90 in November.
• Of the index’s three components, current sales conditions fell 3 points to 87.
• Sales expectations in the next six months increased 3 points to 83, and buyer traffic was unchanged at 72.

Fed Seen Standing Firm on Interest Rates, Bond Purchases – Wall Street Journal, 3/16/2021

• Federal Reserve officials will likely note an improving economic outlook at their policy meeting this week, while also stressing that it is too early to change their plans for interest rates and bond purchases.
• Fed Chairman Jerome Powell has said repeatedly in recent weeks that he wants to see “substantial further progress” in the recovery before the central bank begins scaling back its $120 billion a month in bond purchases.
• The Fed, meanwhile, won’t raise rates until its goals of maximum employment and sustained 2% inflation have been reached—a scenario officials have described as a long way off.
• The officials also will be updating their projections for the path of short-term interest rates, a guide to how Fed policy might evolve in the next couple of years.
• The so-called dot plot, which garners a great deal of market attention, in December showed 12 of 17 Fed officials anticipated their benchmark federal-funds rate would remain pinned near zero through 2023.

EUROPE & WORLD

Nokia to Cut Up to 10,000 Jobs to Offset 5G Investment – Wall Street Journal, 3/16/2021

• Nokia plans to cut between 5,000 and 10,000 jobs over the next two years, a move it said would make it more competitive in the 5G equipment market against rivals Huawei Technologies and Ericsson.
• The job cuts would reduce the Finnish company’s current workforce of about 90,000 workers by as much as 11% and lower its cost base by around $700 million, the company said Tuesday.
• It said the savings would offset increased investment in research and development, among other areas.

China Appears to Block Signal, One of Last Popular Encrypted Messaging Apps – Wall Street Journal, 3/16/2021

• Messaging app Signal became unusable for many people in mainland China this week, stifling one of the last widely used messaging apps that could send and receive encrypted messages in the country without a virtual private network.
• The government’s apparent move to block Signal intensifies its hold on public and private discourse in China, where many social-media and messaging apps, including Facebook, Twitter and, most recently, the popular social-audio platform Clubhouse, have been banned.
• Signal users in mainland China started reporting around Monday evening problems with sending and receiving messages in the app. Using a virtual private network, or VPN, a tool that enables internet users to circumvent China’s elaborate system of web filters, resolved those issues, which led users to conclude that the app had been blocked in China.

Huawei announces royalty rates for 5G phone technology – Reuters, 3/16/2021

• Huawei Technologies announced royalty rates for the use of its 5G phone technology for the first time, in a move its chief legal officer said was an effort to increase transparency at an event on Tuesday.
• The company was put on an export blacklist by former U.S. President Donald Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.
• But, Huawei is looking to showcase its own research achievements, with the company expecting to receive around $1.3 billion in revenue from patent licensing between 2019 and 2021, according to its head of IP, Jason Ding.
• For every phone that uses Huawei’s 5G technology, which are capable of working the company will receive up to $2.5 in royalties, Ding said.

Volkswagen looks to electric vehicles, cost cuts for profit recovery – Reuters, 3/16/2021

• Volkswagen is confident that cost cuts will help it raise profit margins in the coming years, the world’s second-largest carmaker said on Tuesday, a day after outlining an ambitious electric mobility expansion.
• Preferred shares in the company rose as much as 6.5% to their highest level since July 13, 2015, giving the carmaker a market valuation of more than 118 billion euros ($141 billion). They are up more than a third year-to-date.
• Volkswagen aims to more than double deliveries of electric vehicles to 1 million this year, it said, adding it would also apply a standardized platform model introduced for vehicle production years ago to software, batteries and charging.
• Volkswagen confirmed it aimed for an operating margin of 7%-8% by 2025, adding it would likely end 2021 at the upper end of a 5%-6.5% target corridor.
• Diess’ comments come a day after Volkswagen unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla.

Factmonster – TODAY in HISTORY

• Ferdinand Magellan reached the Philippines. (1521)
• Adolf Hitler cancelled the military clauses of the Treaty of Versailles. (1935)
• The My Lai massacre occurred in Vietnam. (1968)
• Lieutenant Colonel Oliver L. North and Vice Admiral John M. Poindexter of the National Security Council are indicted on charges of conspiracy to defraud the United States for their role in the Iran-contra affair. (1988)