{"id":1226,"date":"2023-02-18T08:02:35","date_gmt":"2023-02-18T13:02:35","guid":{"rendered":"https:\/\/embarrdowns.com\/cpi-and-ppi-data-raise-concerns-of-economic-recession\/"},"modified":"2023-02-18T08:02:35","modified_gmt":"2023-02-18T13:02:35","slug":"cpi-and-ppi-data-raise-concerns-of-economic-recession","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/cpi-and-ppi-data-raise-concerns-of-economic-recession\/","title":{"rendered":"CPI and PPI Data Raise Concerns of Economic Recession"},"content":{"rendered":"

The Consumer Price Index (CPI) rose 0.5% in January, its highest increase in three months, according to data released by the Bureau of Labor Statistics on Tuesday.[0]<\/a><\/sup> The year-over-year rate dropped to 6.2% from 6.5% in December, though the Core CPI, which excludes food and energy, was up 5.6% from a year earlier.<\/p>\n

The Federal Reserve has been jacking up interest rates to try and tame inflation and prevent a recession, but economists are still concerned that the sources of inflation are tied to the hot labor market and rising wages, which will be difficult to bring down.[1]<\/a><\/sup><\/p>\n

The Fed has hinted at further rate hikes, with Federal Reserve Bank of Cleveland President Loretta Mester saying she saw a “compelling economic case” for rolling out a 50-basis-point hike, and St. Louis President James Bullard saying he would not rule out supporting such an increase in March.[2]<\/a><\/sup> The markets are currently pricing in a 18% chance of a 50-basis-point rise at the March meeting, with odds of approximately 82% that the increase will be 25 basis points.[3]<\/a><\/sup><\/p>\n

Meanwhile, the Producer Price Index (PPI) came in hot for the month of January, topping average economist estimates of 5.5%. The number was up 0.7% on a seasonally-adjusted month-over-month basis, versus estimates for a 0.4% increase. On an annualized basis, PPI likely rose 0.4%, a jump from a decline of 0.5% reported in December.[4]<\/a><\/sup> It is predicted by economists that the annual rate will decrease to 5.4%, lower than the 6.2% reported in<\/p>\n

Overall, the economic data released this week has given more ammunition to the theory that the Fed\u2019s campaign to raise interest rates and slow the economy will drag the economy into a recession this year.[5]<\/a><\/sup> Wall Street may desire a conclusion to Federal rate hikes, however, they also do not want to see the economy suffer.[6]<\/a><\/sup> It remains to be seen if the Fed will be able to bring inflation under control in the near future.<\/p>\n

0. <\/span>“U.S. Treasury yields slip as investors digest inflation data” CNBC, 17 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/17\/us-treasury-yields-investors-digest-inflation-data.html<\/a><\/a><\/p>\n

1. <\/span>“Wholesale prices surge again, PPI shows, in sign U.S. inflation is unlikely to ease quickly” MarketWatch, 16 Feb. 2023, https:\/\/www.marketwatch.com\/story\/wholesale-inflation-surges-in-early-2023-ppi-shows-2efefb24<\/a><\/a><\/p>\n

2. <\/span>“Dollar soars to six-week high on hawkish Fedspeak By Investing.com” Investing.com, 17 Feb. 2023, https:\/\/www.investing.com\/news\/forex-news\/dollar-soars-to-sixweek-high-on-hawkish-fedspeak-3006414<\/a><\/a><\/p>\n

3. <\/span>“S&P 500, Dow, Nasdaq finish mixed as Fed debate continues” Seeking Alpha, 17 Feb. 2023, https:\/\/seekingalpha.com\/news\/3937828-sp-500-dow-nasdaq-finish-mixed-as-fed-debate-continues<\/a><\/a><\/p>\n

4. <\/span>“Inflation data will test ‘disinflation’ optimism: What to know this week” Yahoo News, 12 Feb. 2023, https:\/\/news.yahoo.com\/stock-market-week-ahead-consumer-price-index-inflation-retail-sales-172419890.html<\/a><\/a><\/p>\n

5. <\/span>“Consumers May Face ‘Reckoning’ As Inflation’s Descent Slows” Investopedia, 14 Feb. 2023, https:\/\/www.investopedia.com\/consumers-face-reckoning-as-inflation-descent-slows-7109620<\/a><\/a><\/p>\n

6. <\/span>“Dow Jones Futures Fall But Market Rally Keeps Climbing; Shopify Leads 10 Earnings Movers | Investor’s Business Daily” Investor’s Business Daily, 16 Feb. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-futures-market-rally-keeps-climbing-shopify-roku-cisco-are-key-earnings-movers<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Consumer Price Index (CPI) rose 0.5% in January, its highest increase in three months, according to data released by the Bureau of Labor Statistics on Tuesday.[0]<\/a><\/sup> The year-over-year rate dropped to 6.2% from 6.5% in December, though the Core CPI, which excludes food and energy, was up 5.6% from a year earlier.<\/p>\n

The Federal Reserve has been jacking up interest rates to try and tame inflation and prevent a recession, but economists are still concerned that the sources of inflation are tied to the hot labor market and rising wages, which will be difficult to bring down.[1]<\/a><\/sup><\/p>\n

The Fed has hinted at further rate hikes, with Federal Reserve Bank of Cleveland President Loretta Mester saying she saw a “compelling economic case” for rolling out a 50-basis-point hike, and St. Louis President James Bullard saying he would not rule out supporting such an increase in March.[2]<\/a><\/sup> The markets are currently pricing in a 18% chance of a 50-basis-point rise at the March meeting, with odds of approximately 82% that the increase will be 25 basis points.[3]<\/a><\/sup><\/p>\n

Meanwhile, the Producer Price Index (PPI) came in hot for the month of January, topping average economist estimates of 5.5%. The number was up 0.7% on a seasonally-adjusted month-over-month basis, versus estimates for a 0.4% increase. On an annualized basis, PPI likely rose 0.4%, a jump from a decline of 0.5% reported in December.[4]<\/a><\/sup> It is predicted by economists that the annual rate will decrease to 5.4%, lower than the 6.2% reported in<\/p>\n

Overall, the economic data released this week has given more ammunition to the theory that the Fed\u2019s campaign to raise interest rates and slow the economy will drag the economy into a recession this year.[5]<\/a><\/sup> Wall Street may desire a conclusion to Federal rate hikes, however, they also do not want to see the economy suffer.[6]<\/a><\/sup> It remains to be seen if the Fed will be able to bring inflation under control in the near future.<\/p>\n

0. <\/span>“U.S. Treasury yields slip as investors digest inflation data” CNBC, 17 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/17\/us-treasury-yields-investors-digest-inflation-data.html<\/a><\/a><\/p>\n

1. <\/span>“Wholesale prices surge again, PPI shows, in sign U.S. inflation is unlikely to ease quickly” MarketWatch, 16 Feb. 2023, https:\/\/www.marketwatch.com\/story\/wholesale-inflation-surges-in-early-2023-ppi-shows-2efefb24<\/a><\/a><\/p>\n

2. <\/span>“Dollar soars to six-week high on hawkish Fedspeak By Investing.com” Investing.com, 17 Feb. 2023, https:\/\/www.investing.com\/news\/forex-news\/dollar-soars-to-sixweek-high-on-hawkish-fedspeak-3006414<\/a><\/a><\/p>\n

3. <\/span>“S&P 500, Dow, Nasdaq finish mixed as Fed debate continues” Seeking Alpha, 17 Feb. 2023, https:\/\/seekingalpha.com\/news\/3937828-sp-500-dow-nasdaq-finish-mixed-as-fed-debate-continues<\/a><\/a><\/p>\n

4. <\/span>“Inflation data will test ‘disinflation’ optimism: What to know this week” Yahoo News, 12 Feb. 2023, https:\/\/news.yahoo.com\/stock-market-week-ahead-consumer-price-index-inflation-retail-sales-172419890.html<\/a><\/a><\/p>\n

5. <\/span>“Consumers May Face ‘Reckoning’ As Inflation’s Descent Slows” Investopedia, 14 Feb. 2023, https:\/\/www.investopedia.com\/consumers-face-reckoning-as-inflation-descent-slows-7109620<\/a><\/a><\/p>\n

6. <\/span>“Dow Jones Futures Fall But Market Rally Keeps Climbing; Shopify Leads 10 Earnings Movers | Investor’s Business Daily” Investor’s Business Daily, 16 Feb. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-futures-market-rally-keeps-climbing-shopify-roku-cisco-are-key-earnings-movers<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1225,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1226"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1226"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1225"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}