A customer shops for groceries at a grocery store on March 12, 2024 in San Rafael, California.
Justin Sullivan | Getty Images News | Getty Images
Wholesale prices rose faster than expected in February, further evidence that inflation remains a problematic issue for the U.S. economy.
The producer price index, which measures pipeline costs for raw, intermediate and finished goods, rose 0.6% month over month, the Labor Department’s Bureau of Labor Statistics reported Thursday. That was higher than the Dow Jones’ 0.3% forecast and follows a 0.3% rise in January.
Excluding food and energy, core PPI rose 0.3%, compared with an estimated increase of 0.2%. Another measure that also excludes commercial services rose 0.4%, compared with January’s 0.6% gain.
Year-on-year, the overall index rose 1.6%, the largest increase since September 2023.
A busy morning of economic data also showed retail sales rebounding, rising 0.6% from the previous month, according to Commerce Department data that is seasonally adjusted but not adjusted for inflation. The increase helped reverse a downwardly revised 1.1% plunge in January, but was still below estimates for a 0.8% rise.
Additionally, initial claims for unemployment insurance fell to 209,000 last week, down 1,000 and below the estimate of 218,000, the Labor Department reported.
The market focused on the PPI release, which comes two days after the consumer price index, which measures what consumers pay in the market, and showed year-on-year inflation was slightly higher than expected.
The PPI is considered a leading indicator of inflation because it shows costs early in the supply chain.
The BLS reported that about two-thirds of the increase in overall PPI came from a 1.2% increase in goods prices, the largest increase since August 2023. Like the CPI, the acceleration was driven by energy prices, which increased by 4% .4% recorded the final demand measure. At the wholesale level, gasoline prices rose 6.8%.
Cost of services increased by 0.3%, driven by a 3.8% increase in accommodation services for travelers.
Retail trade fairs are recovering
Turning to retail sales, the data suggests consumers remained above CPI inflation, which rose 0.4% month-on-month, although sales were still sluggish.
Excluding cars, retail sales rose 0.3%, a tenth of a percentage point below expectations. Automotive parts and dealers posted a 1.6% increase, only outpacing the 2.2% increase for building materials and garden centers for the month.
Despite falling prices, gas stations recorded an increase of 0.9%. Sales of electronics and home appliances rose 1.5%, while sales at miscellaneous stores rose 0.6% and restaurants and bars rose 0.4%.
Retail sales rose 1.5% year-on-year, falling short of the 3.2% rise in the CPI.
This is breaking news. Please check back here for updates.
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2024-03-14 12:55:12
www.cnbc.com
