Former White House Chief Economist Joe LaBogna and JPMorgan’s Kelsey Bello discuss whether strong consumer spending is a “money-making” concern for the Fed.
Inflation at the wholesale level picked up steam in March, the latest sign that price pressures within the economy remain uncomfortably high and difficult to control.
The Labor Department announced Thursday that it will measure the producer price index. Inflation at the wholesale level In March, until it reached consumers, it rose 0.2% from the previous month. On an annual basis, prices continued to rise by 2.1%, the largest annual increase since April 2023.
Both of these figures are slightly below the 0.3% monthly increase and 2.2% annualized increase expected by LSEG economists.
Rising inflation is costing Americans an extra $1,000 a month.
In another sign of the persistence of high inflation, core prices, which exclude the more volatile indicators of food and energy, rose 0.2% in the month. This is in line with expectations, but lower than the 0.3% recorded last month.
However, this number was up 2.4% on a 12-month basis, well above February’s 2%.
Why are groceries still so expensive?
An employee arranges produce at a Costco store on Wednesday, February 28, 2024, in Teterboro, New Jersey, USA. (Photographer: Stephanie Keith/Bloomberg via Getty Images / Getty Images)
caused by high inflation severe financial pressure Most American households are being forced to pay more for everyday necessities like food and rent. The burden falls disproportionately on low-income Americans, whose already maxed-out paychecks are heavily affected by price fluctuations.
The data was released two days after the Labor Department said it was monitoring the situation more closely. consumer price indexThe value, which measures prices paid directly by consumers, rose by 0.4.% From last month to March. Prices rose 3.5% year-on-year, exceeding the 3.2% recorded in February.
Both announcements are considered important indicators of inflation, and the PPI is considered a leading indicator of inflationary pressures as costs are passed on to consumers. Various gauges show that it is still above the rate of inflation. federal reserve Desirable 2% target.
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As policymakers try to decide what to do next with interest rates in 2024, the Fed signaled it is closely monitoring evidence that inflation continues to subside.
Central bank officials have said they expect to cut interest rates this year, but have signaled they won’t do so until they are confident inflation has been overcome.
Stock futures were little changed even though Thursday morning’s inflation data was better than feared.
