Day: March 14, 2024

A report released by the Labor Department on Thursday showed producer prices in the U.S. increased by much more than expected in the month of February.

The Labor Department said its producer price index for final demand climbed by 0.6 percent in February after rising by 0.3 percent in January. Economists had expected producer prices to rise by another 0.3 percent.

The report also said the annual rate of producer price growth accelerated to 1.6 percent in February from a revised 1.0 percent in January.

Economists had expected the year-over-year price growth to rise to 1.1 percent from the 0.9 percent originally reported for the previous month.

The stronger than expected monthly producer price growth partly reflected a substantial rebound by energy prices, which spiked by 4.4 percent in February after slumping by 1.1 percent in January.

Prices for food also jumped by 1.0 percent in February following a 0.3 percent decrease in the previous month.

Excluding food and energy prices, prices for final demand goods rose by 0.3 percent in February, matching the increase seen in January.

The Labor Department said prices for final demand services also grew by 0.3 percent in February after climbing by 0.5 percent in January.

While prices for trade services fell by 0.3 percent, prices for transportation and warehousing services advanced by 0.9 percent and prices for other services increased by 0.5 percent.

Excluding prices for food, energy, and trade services, core producer prices rose by 0.4 percent in February after climbing by 0.6 percent in January.

The annual rate of core producer price growth crept up to 2.8 percent in February from 2.7 percent in January.

“Overall, following the CPI print earlier this week, this likely continues to provide support for the Fed remaining on pause for the next few meetings,” said Rob Swanke, Senior Equity Strategist for Commonwealth Financial Network.

A separate report released by the Labor Department on Tuesday showed consumer prices in the U.S. increased in line with economist estimates in the month of February.

The Labor Department said its consumer price index climbed by 0.4 percent in February after rising by 0.3 percent in January. The advance matched expectations.

Excluding food and energy prices, core consumer prices also rose by 0.4 percent in February, matching the increase seen in January. Economists had expected core prices to rise by 0.3 percent.

The report also said the annual rate of consumer price growth ticked up to 3.2 percent in February from 3.1 percent in January. The year-over-year growth was expected to be unchanged.

Meanwhile, the annual rate of core consumer price growth slowed to 3.8 percent in February from 3.9 percent in January. Economists had expected the pace of growth to decelerate to 3.7 percent.

The Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended February 9th.

The report said initial jobless claims slipped to 209,000, a decrease of 1,000 from the previous week’s revised level of 210,000.

Economists had expected jobless claims to inch up to 218,000 from the 217,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also dipped to 208,000, a decrease of 500 from the previous week’s revised average of 208,500.

Meanwhile, the report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose by 17,000 to 1.811 million in the week ended March 2nd.

The four-week moving average of continuing claims also crept up to 1,799,250, an increase of 2,000 from the previous week’s revised average of 1,797,250.

“This week’s jobless claims report included annual revisions that had only a minor impact on previously reported data for initial claims over the past year,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. “The revisions to continued claims were more significant, with much of the previous volatility smoothed out, and the more recent level of claims revised lower by more than 100,000.”

“The revised data for continued claims are consistent with a job market that is showing some signs of loosening but is still relatively strong,” she added. “Our current forecast is for the Fed to begin lowering rates at its May meeting, but a healthy labor market and sticky inflation data have increased the risk the first cut comes later.”

Last Friday, the Labor Department released a separate report showing employment in the U.S. increased by much more than expected in February, although the report also showed notable downward revisions to job growth in the two previous months.

The Labor Department said non-farm payroll employment surged by 275,000 jobs in February, while economists had expected employment to jump by 200,000 jobs.

However, the report also said job growth in December and January was downwardly revised to 290,000 and 229,000 jobs, respectively, reflecting a net downward revision of 167,000 jobs.

The report also said the unemployment rate climbed to 3.9 percent in February from 3.7 percent in January. Economists had expected the unemployment rate to come in unchanged.

The Labor Department also said the annual rate of wage growth slowed to 4.3 percent in February from a downwardly revised 4.4 percent in January.

Economists had expected wage growth to slow to 4.4 percent from the 4.5 percent originally reported for the previous month.

Retail sales in the U.S. rebounded in the month of February, according to a report released by the Commerce Department on Thursday, although the increase fell short of economist estimates.

The Commerce Department said retail sales climbed by 0.6 percent in February after slumping by a revised 1.1 percent in January.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.8 percent decrease originally reported for the previous month.

“The consumer has a bit more capacity to spend but the consistent downward revisions should tell us the economy is slowing,” said Jeffrey Roach, Chief Economist for LPL Financial.

“A helpful indicator to watch in the coming months is auto sales,” he added. “If the economy is truly slowing, expect to see vehicle inventories swell and dealers offer more incentives.”

Sales by motor vehicle and parts dealers led the rebound, surging by 1.6 percent in February after tumbling by 2.1 percent in January.

Excluding the jump in auto sales, retail sales rose by 0.3 percent in February after falling by 0.8 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

The report showed sharp increases in sales by building material and garden equipment and supplies dealers and furniture and electronic and appliance stores as well as a notable rebound in sales by gas stations.

Meanwhile, sales by furniture and home furnishing stores saw a steep drop during the month, while sales by clothing and accessories stores and health and personal care stores saw further downside.

Core retail sales, which exclude automobiles, gasoline, building materials and food services, came in unchanged in February after falling by 0.3 percent in January.