Retail sales posted a slight increase in March, while wholesale prices took a sharp jump.
Friday the U.S Commerce Department reported a 0.2% increase in retail sales for the month. The figure reverses a 0.2% drop the month before, previously reported as a 0.3% increase.
The figures are disappointing when compared to the final quarter of last year, when retail sales moved up by 1.7%, but that period was also driven by deep discounts at retailers and a wave of zero percent financing offers from car makers.
Newport Communications Senior Economist Jim Haughey says the news does not mean that sales volume was unchanged.
“High manufacturing productivity gains and falling import prices with an appreciating dollar keep retail prices falling,” he says. “The March volume gain was probably 0.1% to 0.2%, which is weak but still positive.”
Autos (-0.4%), clothing (-0.3%) and department stores (-0.2%) were the weak sectors. Non-store retailers (0.9%), building materials (0.7%), and electronics and appliance stores (0.4%) were the strong sectors.
Meantime, prices at the wholesale level in March posted their biggest increase in 14 months, driven mainly by higher fuel prices.
The Labor Department reported on Friday that its Producer Price Index moved up 1%, after posting a 0.2% increase for February. Excluding the volatile food and fuel, core prices rose 0.1% in March, the first rise in four months.
Haughey says oil prices have increased 10-15% since the March survey, so another large inflation gain should be expected in April.
“The accelerating recovery has already produced sharply higher prices for many internationally traded commodities," he says. "These price increases, as well as the recent oil price increases, will work their way into manufactured goods prices in the next few months,” he says.
Haughey notes the PPI declined 1.8% in 2001, but now deflation is over and we are beginning a battle against rising inflation in a strengthening economy.
Friday the U.S Commerce Department reported a 0.2% increase in retail sales for the month. The figure reverses a 0.2% drop the month before, previously reported as a 0.3% increase.
The figures are disappointing when compared to the final quarter of last year, when retail sales moved up by 1.7%, but that period was also driven by deep discounts at retailers and a wave of zero percent financing offers from car makers.
Newport Communications Senior Economist Jim Haughey says the news does not mean that sales volume was unchanged.
“High manufacturing productivity gains and falling import prices with an appreciating dollar keep retail prices falling,” he says. “The March volume gain was probably 0.1% to 0.2%, which is weak but still positive.”
Autos (-0.4%), clothing (-0.3%) and department stores (-0.2%) were the weak sectors. Non-store retailers (0.9%), building materials (0.7%), and electronics and appliance stores (0.4%) were the strong sectors.
Meantime, prices at the wholesale level in March posted their biggest increase in 14 months, driven mainly by higher fuel prices.
The Labor Department reported on Friday that its Producer Price Index moved up 1%, after posting a 0.2% increase for February. Excluding the volatile food and fuel, core prices rose 0.1% in March, the first rise in four months.
Haughey says oil prices have increased 10-15% since the March survey, so another large inflation gain should be expected in April.
“The accelerating recovery has already produced sharply higher prices for many internationally traded commodities," he says. "These price increases, as well as the recent oil price increases, will work their way into manufactured goods prices in the next few months,” he says.
Haughey notes the PPI declined 1.8% in 2001, but now deflation is over and we are beginning a battle against rising inflation in a strengthening economy.
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