Wholesale inflation rose 0.6% in February, much more than expected

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Wholesale prices accelerated astatine a faster-than-expected gait successful February, different reminder that ostentation remains a troublesome rumor for nan U.S. economy.

The producer value index, which measures pipeline costs for raw, intermediate and vanished goods, jumped 0.6% connected nan month, nan Labor Department’s Bureau of Labor Statistics reported Thursday. That was higher than nan 0.3% forecast from Dow Jones and comes aft a 0.3% summation successful January.

Excluding nutrient and energy, nan halfway PPI accelerated by 0.3%, compared pinch nan estimate for a 0.2% increase. Another measurement that besides excludes waste and acquisition services roseate 0.4%, compared pinch nan 0.6% summation successful January, and was supra nan estimate for a 0.2% advance.

On a year-over-year basis, nan header scale accrued 1.6%, nan biggest move since September 2023.

The information did small to dent what looks for illustration a affirmative unfastened connected Wall Street. Futures tied to awesome banal marketplace indexes each were positive, though Treasury yields roseate arsenic well.

A engaged greeting for economical information besides showed that unit income rebounded, up 0.6% connected nan month, according to Commerce Department information that is adjusted seasonally but not for inflation. The summation helped reverse a downwardly revised 1.1% slump successful January, but was still beneath nan estimate for a 0.8% rise.

Also, initial filings for unemployment insurance nudged little to 209,000 past week, a alteration of 1,000 and beneath nan estimate for 218,000, nan Labor Department reported. Continuing claims edged higher to 1.81 million, though nan erstwhile week’s count was revised sharply lower.

The marketplace focused connected nan PPI release, which comes 2 days aft nan user value index, which measures what consumers salary successful nan marketplace, showed that ostentation was somewhat higher than anticipated connected a year-over-year basis.

The PPI is considered a starring parameter for ostentation arsenic it indicates costs early successful nan proviso chain.

The BLS reported that astir two-thirds of nan emergence successful nan header PPI came from a 1.2% surge successful equipment prices, nan biggest summation since August 2023. As pinch nan CPI, nan acceleration was traced to power prices, pinch saw a 4.4% summation successful nan last request measure. Gasoline prices jumped 6.8% astatine nan wholesale level.

Services costs accrued 0.3%, boosted by a 3.8% surge successful traveler accommodation services.

Retail shows rebound

On nan unit income side, nan information indicated that consumers kept up of CPI inflation, which accrued 0.4% connected nan month, though income were still sluggish.

Excluding auto, unit income roseate 0.3%, one-tenth of a percent constituent beneath expectations. Motor conveyance parts and dealers saw an summation of 1.6%, 2nd only to nan 2.2% summation for building worldly and plot centers connected nan month.

Despite slumping prices, gasoline stations reported an summation of 0.9%. Electronics and appliance income roseate 1.5% while various shop income climbed 0.6% and restaurants and bars were up 0.4%.

Retail income posted a 1.5% summation connected a year-over-year basis, beneath nan 3.2% summation successful nan CPI.

Inflation-related information is being watched intimately connected Wall Street, up of nan Federal Reserve’s two-day argumentation gathering starting adjacent Tuesday.

While nan cardinal slope is almost definite to clasp its benchmark liking complaint successful place, markets will beryllium looking for clues astir nan early of monetary policy. Futures pricing is pointing toward nan rate-setting Federal Open Market Committee to commencement cutting liking rates successful June, pinch 3 quarter-percentage constituent decreases expected this year.

At nan meeting, policymakers will update their outlooks for rates, economical growth, ostentation and unemployment.

Jeff Cox, CNBC

Jeff Cox is simply a finance editor pinch CNBC.com wherever he covers each aspects of nan markets and monitors sum of nan financial markets and Wall Street. His stories are routinely among nan most-read items connected nan tract each time arsenic he interviews immoderate of nan smartest and astir well-respected analysts and advisors successful nan financial world.

Over nan people of a publicity profession that began successful 1987, Cox has covered everything from nan illness of nan financial strategy to statesmanlike authorities to section authorities battles successful his autochthonal Pennsylvania.