Key inflation measure shows wholesale prices fell last month

[mahatmakanejeeves]

Source: CNN

Key inflation measure shows wholesale prices fell last month

By Lucy Bayly, CNN

Published 8:38 AM EDT, Wed March 15, 2023

New York (CNN) -- A key measure of inflation fell dramatically in February, according to the latest Producer Price Index, which tracks what America's producers get paid for their goods and services.

Producer price increases slowed to an annual pace of 4.6% last month, significantly down from 6% in January, the Labor Department reported Wednesday. February prices fell by 0.1% after rising 0.7% in January.

Economists surveyed by Refinitiv had been expecting the 12-month rise in wholesale prices to slow to a 5.4% increase.

This story is developing and will be updated.

Read more: https://www.cnn.com/2023/03/15/economy/ppi-producer-inflation-wholesale-prices-february

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Better headline, but -- you know --

ECONOMY Published March 15, 2023 8:33am EDT

Wholesale inflation unexpectedly falls 0.1% in February

Producer price index projected to incre0.3% in February

https://www.foxbusiness.com/economy/wholesale-inflation-unexpectedly-falls-february

Inflation at the wholesale level posted a surprise decline in February, a sign that painfully high consumer prices are beginning to loosen their stranglehold on the U.S. economy.

The Labor Department said Wednesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, fell 0.1% in February from the previous month. On an annual basis, prices are up 4.6%.

This is a developing story. Please check back for updates.

[IronLionZion]

1. We'll see if Fed changes course next week

since claiming they will increase rates again, we've had bank failures and lower inflation.

[BumRushDaShow]

2. Here was CNBC's take

Wholesale prices post unexpected decline of 0.1% in February; retail sales fall


Published Wed, Mar 15 20238:33 AM EDT Updated 12 Min Ago



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.

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.

(snip)

https://www.cnbc.com/2023/03/15/ppi-february-2023-.html

[progree]

3. From the source, and also the *CORE* PPI

Last edited Wed Mar 15, 2023, 12:19 PM - Edit history (6)

CORE PPI (PPI less food, energy, and trade services): February: +0.2% (January was +0.5%), 12 months: +4.4%
So good there too.

As everyone hopefully knows by now, the Fed looks at CORE measures in projecting future inflation. What weight they give to the core PPI, I have no idea.



The last 3 months of the CORE PPI annualize to a 3.74% rate (calculated using the actual index numbers).

BTW, the CORE CPI (yesterday's report), shows a rewarming over the last 3 months
https://www.democraticunderground.com/10143045881#post6
(the CPI/CORE CPI graph at the above link is now updated for the March 14 CPI report numbers)
Monthly increases:
Oct   Nov   Dec    Jan   Feb
0.3% 0.3% 0.4% 0.4% 0.5%

The last 3 months of the core CPI averages to an annualized 5.2%, which is 2.6 times their 2% target (though they target the core PCE, not the core CPI. There will not be a new PCE report before the Fed's March 22 rate-hike meeting, so the reports we've seen yesterday and today is the latest they will be looking at inflation-wise unless they have some pipeline into some March preliminary numbers which they well might have).

==== From the source ===
Latest PPI summary http://www.bls.gov/news.release/ppi.nr0.htm

Producer prices front page: http://www.bls.gov/ppi/

Producer Price Index (PPI), seasonally adjusted http://data.bls.gov/timeseries/WPSFD4?output_view=pct_1mth

OLD CORE PPI - Producer Price Index, seasonally adjusted - Final demand goods less foods and energy -
http://data.bls.gov/timeseries/WPSFD413?output_view=pct_1mth

CORE PPI - Producer Price Index, seasonally adjusted - Final demand less foods. energy. and trade services -
http://data.bls.gov/timeseries/WPSFD49116?output_view=pct_1mth

[progree]

4. PPI graph added to the above post /nt