It is no secret that the Federal Reserve has had its hands tied on its desire to raise interest rates. Now data has come out that was marginally positive on the wholesale inflation front, via the Producer Price Index (PPI), and there was a positive report on retail sales.

The U.S. Department of Labor report that wholesale inflation, or PPI, rose by 0.2% in April’s headline report. This was a tad under expectations, but it was the first positive reading in three months, on the monthly reporting basis. Still, the headline PPI report on the year-over-year report was flat versus April 2015.

There was a slight gain in the core PPI. Excluding food and energy, the PPI rose by 0.1% in April. The year-over-year report was different on the core price index: producers paid 0.9% higher than in April of 2015.

Both PPI readings are well off the 2.0% inflationary target. Still, it’s better than the readings seen in prior months, when deflation pressures were obvious.

Perhaps the big surprise was a positive reading in retail sales, with a surprise 1.3% boost in April. Bloomberg was calling for a mere 0.8% gain. This was said to be the largest monthly pop higher in 13 months. Retail spending was up 3% on an annualized basis.

If you were just looking at the retail numbers from big department stores and chains, it seems impossible that retail sales are up this much. Auto sales rose by 3.2% in April, and they offset a 3.2% drop in March. Excluding autos, retail sales were up by 0.8%, still above the 0.5% expected by Bloomberg.

Gas station sales were up by 2.2% in April, but they were up by 3.1% in March. Excluding gasoline, April’s retail sales were up by 1.2% in April — and ex-cars and ex-gasoline, retail sales were up by a more modest 0.6% in April.

This is far from inflationary so far, and far from a hot economy. Just ask the major department store retailers out there that offered up poor earnings report this week.

Stifel’s Lindsey Piegza commented on both reports. She described the PPI report and retail sales report saying:

After reaching a one-year high at the start of the year, producer prices appear to have lost momentum, now hovering around zero. While even a minimal decline (or no change) in inflation is a welcome improvement from the outright deflation through most of 2015, prices have been unable to break into positive territory or indicate signs of underlying momentum to spark an upward trajectory near-term. The recent improvement in commodities prices coupled with a weaker dollar appear to be helping to provide a floor for producer costs, however, against the back drop of a significant pullback in consumer demand January to March, underlying price pressures are likely to remain subdued for some time. For the Fed, anxious to continue with a removal of accommodation, this morning’s modest PPI report offers little sense of immediacy to continue with rate hikes near-term.

Consumer comeback? Not so fast. While retail sales buoyed nicely in April, following three consecutive months of minimal or negative growth, one month’s improvement centered on autos and gasoline purchases is not enough to be considered a comeback. After all, in many cases, the gains in April sales simply helped to offset declines in March or earlier weakness. While April’s rise is a welcome improvement from disappointing spending activity early on in the year, a full-scale come back, it is not.

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