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US INFLATION
WHOLESALE PRICES DECLINE 0.1% IN REBRUARY 2023 CNBC US ECONOMY: Wholesale prices posted an unexpected decline in February, providing some encouraging news on inflation as the Federal Reserve weighs its next move on interest rates. 
A customer looks over merchandise at a store on March 14, 2023 in Miami, Florida. ... Joe Raedle | Getty Images Original article: https://www.cnbc.com/2023/03/15/ppi-february-2023-.html Peter Burgess COMMENTARY The headline news is typical of most media analysis about US inflation at this time ... super-superficial. I am waiting for the media to 'get it' that the core driver of inflation as measured by consumer prices is because of the huge embedded profits that exist in almost all segments of the modern US economy. I used to buy gas for 27 cents a gallon in the 1970s when I lived in Trenton and was commuting to work in Metuchen in North Jersey. A few months ago I was buying gas in North East Pennsylvania not that far away for $4.50 a gallon. In the elapsed 50 years the technology used by the petroleum industry has become much more productive so base extraction costs will not have increased that much and in some cases will be lower than 50 years ago. The oil companies were earning profits when they were selling at retail at 27 cents a gallon, and the profits they were earning at $4.50 a gallon is absolutely huge. The March news is that inflation is down ... good! But I am still paying around $3.50 a gallon for gas and the oil company profits remain obscenely high. Before the pandemic in January 2020 I was paying around $2.50 a gallon in my part of Pennsylvania ... so it would seem that the oil companies are still operating with an unaccceptably high level of embedded profit unless, of course, you are an oil company investor or an employee involved with some sort of profit sharing arrangement. The good news is that in the modern economy there has been an impressive improvement in productivity decade after decade after decade. From 1945 to around 1975 the benefits arising from is improvement in productivity were shared reasonably equitably between 'owners' and 'workers' but this changed dramatically in the early 1980s starting in the Reagan Administration. Since then what was billed as a Trickle Down economy has proved to be nothing of the sort ... with most of productivity benefit flowing to the top of society with essentially nothing remaining for most of society. Republican 'talking points' have not acknowledged any of the above and from my perspective there are few Republicans in positions of power in politics that are engaging with economic, social anbd environmental realities. This strategy may get Republicans elected, but it will result in more and more social malaise and worse. Peter Burgess | ||
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US ECONOMY: Wholesale prices post unexpected decline of 0.1% in February; retail sales fall
Jeff Cox ... @JEFF.COX.7528 ... @JEFFCOXCNBCCOM
PUBLISHED WED, MAR 15 2023 8:33 AM EDT
Wholesale prices posted an unexpected decline in February, providing some encouraging news on inflation as the Federal Reserve weighs its next move on interest rates.
The producer price index fell 0.1% for the month, against the Dow Jones estimate for a 0.3% increase and compared to a 0.3% gain in January, the Labor Department reported Wednesday. On a 12-month basis, the index increased 4.6%, well below the downwardly revised 5.7% level from the previous month.
Excluding food, energy and trade, the index rose 0.2%, down from the 0.5% gain in January. On an annual basis, that reading was up 4.4%, the same as in January.
A 0.2% drop in goods prices helped fuel the headline decrease, representing a sharp pullback from the 1.2% surge in January. Final demand foods tumbled 2.2%, while energy declined 0.2%.
Most of the drop in goods stemmed from a 36.1% plunge in chicken egg prices, which had soared over the past year.
This is breaking news. Please check back here for updates.
---------------------------------------------- MIAMI, FLORIDA - MARCH 14: A customer looks over merchandise at a store on March 14, 2023 in Miami, Florida. The Labor Department announced that the consumer-price index measured 6% for the year ended in February, down from January’s 6.4% and in line with economists’ expectations. (Photo by Joe Raedle/Getty Images) Wholesale prices posted an unexpected decline in February, providing some encouraging news on inflation as the Federal Reserve weighs its next move on interest rates. The producer price index fell 0.1% for the month, against the Dow Jones estimate for a 0.3% increase and compared with a 0.3% gain in January, the Labor Department reported Wednesday. On a 12-month basis, the index increased 4.6%, well below the downwardly revised 5.7% level from the previous month. RELATED INVESTING NEWS The market is facing new headwinds with the collapse of SVB — but there is a silver lining CNBC Investing Club The market is facing new headwinds with the collapse of SVB — but there is a silver lining Zev Fima A DAY AGO Excluding food, energy and trade, the index rose 0.2%, down from the 0.5% gain in January. On an annual basis, that reading was up 4.4%, the same as in January. Excluding food and energy, PPI was flat, vs. the estimate for a 0.4% gain. A 0.2% drop in goods prices helped fuel the headline decrease, representing a sharp pullback from the 1.2% surge in January. Final demand foods tumbled 2.2%, while energy declined 0.2%. Most of the drop in goods stemmed from a 36.1% plunge in chicken egg prices, which had soared over the past year. In a separate important data point Wednesday, the Commerce Department reported that retail sales fell 0.4% in February, according to data that is not adjusted for inflation. The total was in line with expectations and dragged down by a 1.8% slide in auto sales. Food services and drinking establishments, which had seen strong receipts over the past year, fell 2.2% for the month, though they were still up 15.3% on an annual basis. Furniture and home furnishing stores were off 2.5%, while miscellaneous retailers saw a 1.8% decline. Also, the Empire State Manufacturing survey for March, a gauge of activity in the New York region, posted a -24.6 reading, down 19 points from a month ago. The reading represents the percentage difference between companies reporting expansion versus contraction. The Dow Jones estimate was for a -7.8 level. The big drop came from precipitous decreases in new orders and shipments as well as inventories. Hiring edged lower as did the prices index. The news comes a day after the Labor Department said consumer prices rose another 0.4% in February, bringing the annual inflation rate to 6%. Though that’s well above the 2% level the Fed considers ideal, the 12-month CPI rate was the lowest since September 2021. Despite the downward drift in the annual inflation rate, and recent banking industry turmoil, financial markets still expect the Federal Reserve to increase interest rates when it meets next week. Market pricing is pointing to a 0.25 percentage point hike in the federal funds rate, taking the benchmark borrowing level to a target range of 4.75%-5%. However, futures contracts Wednesday morning also implied a peak, or terminal, rate of about 4.77%, indicating that the March increase would be the last before the Fed pivots away from a tightening regime that began a year ago.
| The text being discussed is available at | https://www.cnbc.com/2023/03/15/ppi-february-2023-.html and |