Wholesale prices fell 0.1%, retail sales fell

A customer inspects merchandise at a store in Miami, Florida, on March 14, 2023.

Joe Raeder | Getty Images

Wholesale prices unexpectedly fell in February, providing some encouraging inflation news as the Federal Reserve weighs its next interest rate move.

Producer prices fell 0.1% for the month, compared with a Dow Jones estimate for a 0.3% gain, compared with a 0.3% gain in January, Labor Department Wednesday. On a 12-month basis, the index rose 4.6%, well below last month’s downwardly revised 5.7%.

Excluding food, energy and trade, the index rose 0.2 percent, down from a 0.5 percent gain in January. On an annualized basis, the reading rose 4.4%, the same as in January.

The overall decline was driven by a 0.2 percent drop in commodity prices, a sharp pullback from January’s 1.2 percent gain. Final demand Food fell 2.2%, while energy fell 0.2%.

The drop in commodity prices was largely driven by a 36.1 percent plunge in egg prices, which have soared over the past year.

In a separate significant data point on Wednesday, Ministry of Commerce reports Retail sales fell 0.4% in February, according to data not adjusted for inflation. The total was in line with expectations but was weighed down by a 1.8 percent decline in auto sales.

Food service and drinking establishments, which have had strong revenues over the past year, declined 2.2 percent for the month, but were still up 15.3 percent year-over-year. Furniture and home improvement stores fell 2.5 percent, while miscellaneous retailers fell 1.8 percent.

also, Imperial Manufacturing Survey The index measuring activity in the New York area was -24.6 in March, down 19 points from a month earlier. The reading represents the percentage difference between companies reporting expansion versus contraction. Dow Jones estimated -7.8 levels.

The big drop came from a sharp drop in new orders and shipments, as well as inventories. Hiring numbers edged lower, as did the price index.

The message was stated in the Department of Labor Consumer prices rose another 0.4% In February, the annual inflation rate reached 6%.

While that was well above the 2% the Fed considers ideal, the 12-month CPI rate was the lowest since September 2021.

Despite the decline in annual inflation and the recent banking turmoilfinancial markets still expect the Federal Reserve to raise interest rates when it meets next week.

Market pricing points to a 0.25 percentage point increase in the federal funds rate, bringing benchmark borrowing levels into the target range of 4.75%-5%.

However, futures contracts on Wednesday morning also hinted at a peak or terminal rate of about 4.77%, suggesting that the March increase would be the last before the Fed emerges from the tightening it began a year ago.

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