On March 12, 2024, a customer purchased groceries at a grocery store in San Rafael, California.
Justin Sullivan | Getty Images News | Getty Images
Wholesale prices rose faster than expected in February, another reminder that inflation remains a thorny issue for the U.S. economy.
The U.S. Department of Labor’s Bureau of Labor Statistics reported Thursday that the producer price index, which measures the cost of raw materials, intermediate goods and finished goods pipelines, rose 0.6% this month. That was higher than the Dow Jones forecast of 0.3% and followed a 0.3% gain in January.
Excluding food and energy, core PPI rose 0.3%, compared with expectations for a 0.2% rise. Another indicator excluding trade services rose 0.4%, after rising 0.6% in January.
Compared with the same period last year, the overall index rose 1.6%, which was the largest increase since September 2023.
The morning’s busy economic data also showed that retail sales rebounded, rising 0.6% monthly, according to Commerce Department data (seasonally adjusted but not taking into account inflation). The increase helped reverse January’s downwardly revised 1.1% decline, but was still below expectations for a 0.8% gain.
Additionally, the Labor Department reported that initial jobless claims fell slightly to 209,000 last week, a decrease of 1,000 and below expectations of 218,000.
Market focus was on the release of the Producer Price Index (PPI), which came two days after the release of the Consumer Price Index (CPI), which measures what consumers are paying in the market, which showed inflation was slightly higher year-on-year. expected.
PPI is considered a leading indicator of inflation because it shows costs early in the supply chain.
The U.S. Bureau of Labor Statistics reported that about two-thirds of the overall PPI increase came from a 1.2% increase in commodity prices, the largest increase since August 2023. Like CPI, higher energy prices contributed to the 4.4% increase. The final measure of demand. Wholesale gasoline prices rose 6.8%.
Driven by a 3.8% increase in passenger accommodation services, service costs increased by 0.3%.
Retail industry rebounds
In terms of retail sales, data shows that consumers continue to lead CPI inflation, with CPI rising 0.4% this month, but sales are still sluggish.
Excluding autos, retail sales rose 0.3%, one-tenth of a percentage point less than expected. Auto parts and dealers grew 1.6% this month, second only to building materials and garden centers, which posted a 2.2% gain.
Despite the price drop, gas stations reported a 0.9% price increase. Sales of electronic products and appliances increased by 1.5%, sales of miscellaneous stores increased by 0.6%, and sales of restaurants and bars increased by 0.4%.
Retail sales grew 1.5% year-on-year, lower than the 3.2% increase in CPI.
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