INDICATOR:  February Retail Sales, Import and Export Prices and Weekly Jobless Claims

KEY DATA:  Sales: -0.6%; Excluding Vehicles: -0.1%/ Import Prices: +0.4%; Non-Fuel: -0.3%; Export Prices: -0.1%; Farm: -2.0%/ Claims: 289,000 (down 36,000)

IN A NUTSHELL:  "Let's hope the slowdown in spending is simply a result of the horrible winter."

WHAT IT MEANS:   For the third consecutive month, consumers decided to keep their money in their pockets.  Retail sales were down even when you exclude vehicles, and that was with gasoline purchases up, as prices rose.  The report was littered with negative numbers as just about every category was down.  There was a solid increase in online demand and supermarket sales, which seem to make the argument that people hunkered down to deal with the incessant cold and snow.   
If the Fed wants to see inflation pick up a bit, they got mixed news on the import side.  Prices rose, but that was due largely to a jump in fuel costs.  Excluding energy, prices were down.  However, this report was somewhat mixed.  Food prices eased a touch but meat and fish costs were up.  Capital goods prices declined, as did vehicles, but consumer prices rose.  Basically, there is neither any clear upward or downward pressure on prices that is coming form imports.  On the export side, farmers continue to get battered by declines prices for their products.  Over the year, farm export prices are down 9.5%.
On the labor front, it looks like the jump in unemployment claims was a temporary phenomenon.  The level dropped sharply and is now down to where we should expect continued strong job gains and a declining unemployment rate.

MARKETS AND FED POLICY IMPLICATIONS: If investors are fearing the Fed, then today's reports should ease those concerns a touch.  However, there is growing expectation that the FOMC will drop the term "patient" soon, possible at the next week's meeting.  If that is the case, then there is little reason for the FOMC not to do that.  But that doesn't mean a rate hike two meetings later - in June - will absolutely occur.  All the Fed members will have done is provide themselves with the flexibility to raise rates when they want to.  So investors can worry all they want, but the reality is that rates are going up, like it or not.  Maybe people should start making plans for that day?  You think?  We have less than a week to wait before the statement comes out next Wednesday afternoon and Janet Yellen meets the press, so caution makes a whole lot of sense.