Chief Economist Scott Brown discusses the latest market data.
Tensions in Ukraine remained at the forefront for investors
The Consumer Price Index rose 0.8% in February (+7.9% y/y), up 0.5% (+6.4% y/y) ex-food and energy. The Bureau of Labor Statistics noted that “virtually all” of the core CPI component indexes rose over the last year. The price index for shelter rose 4.7% y/y, its largest 12-month increase since May 1991. Several transportation indexes showed large increases over the past year, including used cars and trucks (+41.2%), new vehicles (+12.4%), and airline fares (+12.7%).
The U.S. trade deficit rose to a record $89.7 billion in January, with merchandise imports up 20.0% y/y. Jobless claims rose by 11,000, to 227,000, in the week ending March 5 – still a very low trend. The Job Opening and Labor Turnover Survey (JOLTS) data showed job openings little changed at 11.3 million in January. Quits were 4.3 million, totaling 48.8 million over the last 12 months.
Next week: The Federal Open Market Committee is widely expected to raise the target range for the federal funds rate by 25 basis points (to 0.25%-0.50%) and to signal that further rate increases are likely on their way. We’ll get revised economic projections from the senior Fed officials, including a new dot plot, and Chair Powell will expound on the Fed’s outlook in his press conference. On the data front, one should generally take February figures with a grain of salt (due to weather and seasonal adjustment issues), but the details should remain consistent with strong growth in the near term.
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