Mikkel Rosenvold
9 weeks ago

PPI shocker - rise twice as high as expected

Inflation remains a key challenge for the U.S. economy as February sees a sharper increase in wholesale prices than anticipated.

In February, the Producer Price Index (PPI), a gauge of the costs at different production stages, witnessed a 0.6% rise, surpassing Dow Jones' expectation of a 0.3% increase. This uptick, reported by the Labor Department’s Bureau of Labor Statistics, highlights an acceleration from January's 0.3% growth, writes CNBC.

Excluding food and energy, core PPI rose by 0.3%, against predictions of a 0.2% hike. An alternative measure excluding trade services climbed 0.4%, exceeding the forecasted 0.2% rise and marking the most significant year-over-year increase since September 2023 at 1.6%.

Despite these inflationary pressures, Wall Street appeared optimistic, with futures tied to major indexes showing positive movement. This data release follows the consumer price index (CPI) report, indicating that consumer-level inflation was also higher than expected on a year-over-year basis.

Retail sales data from the Commerce Department offered a mixed view, showing a 0.6% increase, which fell short of the anticipated 0.8% rise. This rebound in sales comes after a revised 1.1% decline in January. Meanwhile, unemployment claims slightly decreased, with continuing claims showing a slight increase.

The majority of the PPI's monthly rise stemmed from a 1.2% increase in goods prices, notably energy, which surged 4.4%. Gasoline prices at the wholesale level spiked by 6.8%, significantly impacting the overall increase. Services saw a modest 0.3% increase, driven by a 3.8% jump in traveler accommodation services.

Retail sales exhibited resilience, slightly outpacing CPI inflation, with notable increases in motor vehicle parts and building material sales. Year-over-year retail growth was 1.5%, trailing behind the CPI's 3.2% rise.

With the Federal Reserve's upcoming policy meeting, all eyes are on potential signals for future monetary policy. Market predictions lean towards interest rate cuts starting in June, amidst close monitoring of inflation indicators.

This development underlines the ongoing battle with inflation and its implications for monetary policy and economic growth. CNBC reports on these latest economic indicators, emphasizing their significance in the broader context of U.S. economic health and Federal Reserve policy decisions .


The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

3 days ago Europe Market Open: May 17, 2024 - European Stocks Start Lower Daily update from the European market open.
3 days ago Will Europe cut rates before US? Analyst Ulrik Simmelholt from Steno Research argues that the ECB should initiate rate cuts without fearing wider real rates spread with the USD, emphasizing the importance of commodity prices and energy dependencies over monetary policy in determining Euro strength.
3 days ago Crypto, Currently: May 17, 2024 - Mixed Signals in the Crypto Market Daily update the cryptocoin market.
3 days ago FX Daily: May 17, 2024 - Key Currency Movements and Analysis Daily update from the foreign exchange markets
4 days ago China Exporting Inflation Again: Global Markets on Alert Analyst Andreas Steno from Steno Research warns that China's rising industrial production and strategic resource stockpiling could trigger global inflationary pressures and impact market dynamics.
4 days ago EU Designates Booking as Gatekeeper; Opens Investigation Into X EU cracks down on Booking under Digital Markets Act, investigates other tech giants.
4 days ago Freddie Mac Proposes Unleashing Trillions to Stimulate US Consumption As U.S. excess savings diminish, Freddie Mac's new proposal might unlock vast consumer potential—could this be the spark for the next economic boom?