Gasoline prices rose while core inflation remained modest in February. Here are the five things we learned from U.S. economic data released during the week ending March 12.
Higher energy prices drove up both consumer prices. The Bureau of Labor Statistics reports that the Consumer Price Index (CPI) increased by a seasonally adjusted 0.4 percent in February, its biggest single-month gain since last August. Energy PPI rose 3.9 percent, including surges for gasoline (+6.6 percent), utility natural gas (+1.6 percent), and electricity (+0.9 percent). Food prices increased 0.2 percent. Core CPI, net of both energy and food, edged up by a modest 0.1 percent. Rising were prices for medical care services (+0.5 percent) and shelter (+0.2 percent). Prices fell for used cars/trucks (-0.9 percent), apparel (-0.7 percent), medical care commodities (-0.7 percent), and transportation services (-0.1 percent). Over the past year, CPI has risen 1.7 percent, while the 12-month comparable for core CPI was more modest at +1.3 percent.
…and wholesale prices. The Producer Price Index (PPI) for final demand jumped a seasonally adjusted 0.5 percent in February after surging 1.3 percent during the prior month. The Bureau of Labor Statistics’ core measure of wholesale prices (net of food, energy, and trade services) inched up by a more moderate 0.2 percent. Energy PPI rose 6.0 percent (gasoline: +13.1 percent) while food PPI swelled 1.3 percent (with beef and eggs leading the way). Net of both energy and food, core goods PPI had its smallest monthly rise (+0.3 percent) since November. Services PPI advanced 0.1 percent. PPI has jumped 2.8 percent over the past year (its biggest year-to-year gain since November 2018), with the core measure up 2.2 percent over the same period.
The count of job openings approached pre-pandemic levels in January. The Bureau of Labor Statistics estimates there were a seasonally adjusted 6.917 million open jobs at the end of the month, up 165,000 from December but 3.3 percent under January 2020 levels. Private-sector employers had 6.236 million job openings, 1.6 percent below year-ago levels. Simultaneously, hiring slowed by 110,000 in January to 5.301 million (-11.3 percent versus January 2020). Private-sector hiring declined by 107,000 to 4.965 million (-11.1 percent versus January 2020). Also falling were the count of people leaving their job, slowing by 277,000 to 5.307 million (-7.1 percent versus January 2020). Private-sector job separations were 7.3 percent below the year-ago pace. 1.687 million people were affected by layoffs and discharges in January, down 136,000 for the month and 5.6 percent from a year earlier.
Consumer confidence jumped in early March. The preliminary March reading of the University of Michigan Index of Consumer Sentiment of 83.0 (1966Q1=100) was not only up 6.2 points from February but also represented the high-water mark since the start of the pandemic. The current conditions index added 5.3 points to 91.5, while the expectation index swelled by 6.8 points to 77.5. The press release tied the solidifying sentiment to “the growing number of vaccinations as well as [the then] anticipated passage of Biden’s relief measures.” Lower income respondents and those aged over 55 were most likely to signal growing confidence, but the “gains were widespread across all socioeconomic subgroups and all regions.”
Small business owner sentiment edged up in February. The Small Business Optimism Index from the National Federation of Independent Business increased by 8/10ths of a point to a reading of 95.8 (1986=100). The index was remained in the mid-90s for the past three months and was well below the year-ago mark of 104.5. Five of ten index components improved during the month, led by current job openings and earning trends. Four others fell, with the biggest decline coming from expectations surrounding credit conditions. The press released blamed “unexpected weather conditions” on holding back respondents’ sentiment.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 6, First-Time Claims, seasonally adjusted): 712,000, -42,000 vs. the previous week, +501,000 vs. the same week a year earlier). 4-week moving average: 759,000 (+251.8% vs. the same week a year earlier).
- Wholesale Trade (January 2021, Total Inventories of Merchant Wholesalers, seasonally adjusted): $661.7 billion (+1.3% vs. December 2020, +0.6% vs. January 2020).
- Monthly Treasury Report (February 2021, Federal Budget Deficit Through 1st 5 Months of FY2021): -$1.047 trillion (vs. 1st 5 Months of FY2020: -$624.5 billion).
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.