Exploring Economic Indicators: Inflation and Consumer Sentiment

Economic indicators provide insight into the overall health and performance of an economy. They are essential tools for policymakers, advisors, investors, and businesses because they allow them to make informed decisions regarding business strategies and financial markets. In the week ending on April 11, the SPDR S&P 500 ETF Trust (SPY) fell 0.08%, while the Invesco S&P 500 Equal Weight ETF (RSP) was down 1.08%.

Inflation continues to be a hot topic of conversation because of its role in the Fed’s interest rate policy. The Fed has been cautious about making any changes to monetary policy, emphasizing the need for inflation to continue to move towards their 2% target. This article will summarize three important economic indicators from the past week to provide insight into the latest inflation trends, consumer attitudes, and potential implications.

Economic Indicators: Consumer Price Index

Consumer prices rose more than expected for the third straight month as inflation remains stubborn. The Consumer Price Index (CPI) rose 3.5% in March, up from 3.2% in February and more than the expected 3.4% growth. On a monthly basis, consumer prices rose 0.4% which was higher than the forecasted 0.3% growth. The primary driver for the monthly increase was the continued rise in shelter and gasoline costs. When combined, these two contributed to over half of the headline increase.

Core inflation, which excludes food and energy prices, accelerated for the first time in 12 months. On an annual basis, core CPI inched up from 3.75% in February to 3.80% in March, just above the expected 3.7% growth. Additionally, core prices increased 0.4% from February, more than the anticipated 0.3% growth.