Inflation moderated in February, but consumers expect prices to surge in the future. Here are the five things we learned from U.S. economic data released during the week ending March 14.
Consumer prices grew at a slower rate in February. The Consumer Price Index (CPI) advanced a seasonally adjusted 0.2 percent, its smallest increase since last October. Both food and energy prices grew 0.2 percent, as did core CPI. Rising were prices for used cars/trucks (+0.9 percent), apparel (+0.6 percent), shelter (+0.3 percent), and medical care services (+0.3 percent) & commodities (+0.1 percent). Prices fell for transportation services (-0.8 percent) and new vehicles (-0.1 percent). Over the past year, the headline Bureau of Labor Statistics measure has risen 2.8 percent, while core CPI was up 3.1 percent.
Wholesale prices were flat in February. The Producer Price Index (PPI) for final demand was unchanged seasonally adjusted, leaving the Bureau of Labor Statistics measure up a still inflated 3.2 percent from a year earlier. The core wholesale price measure—which nets out food, energy, and trade services—grew 0.2 percent in February after rising 0.3 percent in January. Core PPI has risen 3.3 percent over the past year. Goods PPI increased 0.3 percent, with food prices swelling 1.7 percent and energy prices falling 1.2 percent. Services PPI fell 0.2 percent, including a 1.0 percent drop for trade services.
Consumers became increasingly pessimistic as inflation fears swelled in early March. The University of Michigan’s Index of Consumer Sentiment fell 6.8 points to a seasonally adjusted 57.9 (1966Q1=100). The index was down 27.1 percent from a year earlier. The declines were “consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions.” The current conditions index lost 2.2 points to 63.5 (-23.0 percent versus March 2024), while the expectations measure plummeted 9.8 points to 54.2 (-30.0 percent versus March 2024). In the face of the growing trade wars, inflation expectations skyrocketed. Survey respondents expect prices will rise 4.9 percent over the next 12 months (February 2025: +4.3 percent) and have long-run inflation expectations of 3.9 percent. Respondents noted a “high level of uncertainty around policy and other economic factors.”
Hiring held steady as unfilled jobs grew in January. The Bureau of Labor Statistics reports there were a seasonally adjusted 7.740 million open jobs, up 232,000 for the month but off 8.6 percent from a year earlier. Private sector employers reported 6.860 million unfilled jobs, with a million-plus opportunities available in leisure/hospitality, health care/social assistance, and professional/business services. Hiring totaled 5.393 million, up a modest 19,000 for the month and down 3.2 percent from a year earlier. Private sector employers hired 5.016 million people. 5.252 million workers separated from their jobs in January, up 170,000 for the month but off 3.3 percent from a year earlier. This included 3.266 million people quitting their jobs (+171,000 versus December 2024 and -2.6 percent versus January 2024) and 1.635 million layoffs (-34,000 versus December 2024 and -3.4 percent versus January 2024).
Small business owner sentiment—particularly for economic expectation—slipped in February. The Small Business Optimism Index lost 2.1 points to a seasonally adjusted 100.7 (1985=100). While remaining above its 51-year average of 98 for four straight months, the National Federation of Independent Business has shed 4.4 points since December. Seven of ten index components declined in February, including sharp drops for both “expect the economy to improve” and expected real sales. The three expected components to improve were current job openings, earning trends, and expected credit conditions. Small business owners cited “problems” with “labor quality” and inflation.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 8, 2025, First-Time Claims, seasonally adjusted): 220,000, -2,000 vs. the previous week, +8,000 vs. the same week a year earlier). 4-week moving average: 226,000 (+8.3% vs. the same week a year earlier).
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What We Learned About the U.S. Economy Last Week 