Rising gasoline prices led the way in February. Here are the five things we learned from U.S. economic data released during the week ending March 11.
Inflation hit a four-decade high in February. The Consumer Price Index (CPI) jumped 0.8 percent on a seasonally adjusted basis during the month. The Bureau of Labor Statistics measure has risen 7.9 percent over the past year, its largest 12-month comparable since 1982. Prices for food and energy swelled 1.0 percent and 3.5 percent, respectively. The latter included the impact of higher prices for gasoline (+6.6 percent) and natural gas (+1.5 percent). Gasoline prices have surged 38.0 percent over the past year. Net of energy and food, core CPI increased 0.5 percent in February and 6.4 percent from year-ago levels. Rising were prices for transportation services (+1.4 percent), apparel (+0.7 percent), shelter (+0.5 percent), new vehicles (+0.3 percent), and medical care services (+0.1 percent).
Jobs remained unfilled as near-record levels of people quit in January. The Bureau of Labor Statistics reports that there were a seasonally adjusted 11.263 million open jobs at the end of January. While declining by 215,000 from December, the number of open jobs was 55.7 percent ahead of year-ago levels and near its record high. Industries with at least 1 million open positions included retail, health care/social assistance, professional/business services, accommodation/food services, and the government. Hiring in January nearly matched that of December at 6.450 million (+12.9 percent versus January 2021). Meanwhile, 6.058 million people separated from their jobs (also mirroring December, but 17.1 percent ahead of year-ago levels). Layoffs gained 152,000 to 1.414 million (-10.6 percent versus January 2021). The number of people quitting jobs declined by 149,000 to a still near-record 4.252 million (+28.4 percent).
Inflation and the Russian invasion of Ukraine suppressed consumer sentiment. The University of Michigan’s Index of Consumer Sentiment shed 3.1 points in early March to a seasonally adjusted 59.7 (1966Q1=100). Most of the loss came from consumers’ outlook for the future—the expectations index lost 5.0 points, while the present conditions slipped 4/10ths of a point to 67.8. All three measures were approximately 30 percent below their year-ago levels. The press release noted that consumers’ inflation expectations were at 41-year highs. Further, the percentage of survey respondents expecting personal finances to deteriorate was at its highest reading ever. A quarter of survey respondents “spontaneously” noted the war in Ukraine when asked about the economic outlook.
The U.S. trade deficit swelled to a record in January. The Census Bureau and the Bureau of Economic Analysisestimate exports declined $3.9 billion to a seasonally adjusted $224.4 billion (+15.4 percent versus January 2021) and imports increased $3.8 billion to $314.1 billion (+21.0 percent versus January 2021). The resulting trade deficit of -$89.7 billion was 9.4 percent for the month and 37.7 percent from the same month a year earlier. The goods deficit ballooned by $7.1 billion in January to -$108.9 billion, while the services surplus narrowed by $0.6 percent to +$19.2 billion. The former included a $3.0 billion drop in pharmaceutical preparations exports and increased imports for automotive vehicles/parts, crude oil, natural gas, copper, food, and capital goods. The U.S. had its largest goods deficits with China, the European Union, Mexico, Japan, and Canada.
Small business owner sentiment took another hit in February as prices rose. The Small Business Optimism Index lost 1.4 points to a seasonally adjusted reading of 95.7 (1986=100). The National Federation of Independent Businessmeasure has not been this low since January 2021. Only one of ten index components grew during the month (current job openings), while six others declined. Suffering significant losses were measures for plans to increase employment, expected real sales, expectations for the economy, and plans to make capital outlays. A net 68 percent of small business owners reported raising prices, the highest percentage indicating so in the survey’s history.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 5, 2022, First-Time Claims, seasonally adjusted): 227,000, +11,000 vs. the previous week, -507,000 vs. the same week a year earlier). 4-week moving average: 231,250 (-70.1% vs. the same week a year earlier).
- Consumer Credit (January 2022, Outstanding Non-Real Estate Back Consumer Credit Balances, seasonally adjusted): $4.441 trillion (+6.8 billion vs. December 2021; +6.1% vs. January 2021).
- Wholesale Inventories (January 2022, Merchant Wholesalers’ Inventories, seasonally adjusted): $799.9 billion (+0.8% vs. December 2021; +18.1% vs. January 2021).
- Monthly Treasury Statement (February 2022, Federal Government Budget Deficit Over First Five Months of FY22): -$475.6 billion (vs. first five months of FY21: -$1.047 trillion).
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