- The CPI rose 7.9% on an annual basis in February
- The Index of Consumer Sentiment published by the University of Michigan slipped to 59.7 in March
- The U.S. trade deficit reached a record $89.7 billion in January
Top Three Market Headlines
Inflation Shows No Let-Up: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.8% in February from the prior month; on an annual (year-over-year) basis, the increase was 7.9%, a level not reached since 1982. The “core” CPI, which excludes energy and food costs, registered a 0.5% increase on the month and 6.4% on an annual basis, an acceleration from the 6.0% annual pace reported the previous month. The largest contributors to the February CPI increase included gasoline prices, food, transportation services, and apparel.
Consumer Sentiment Keeps Sliding: The Index of Consumer Sentiment published by the University of Michigan slipped to 59.7 in March, down from 62.8 in February. This was the third straight monthly decline in the index, which has now fallen more than 30% since April of last year. The index is based on surveys of consumers regarding their outlook on the U.S. economy. The March report highlighted that inflation has been the main driver of consumers' diminished optimism, noting that consumers expect prices to rise 5.4% in the coming year, the highest such estimate among survey respondents in 40 years.
U.S. Trade Deficit Pushed to Record High in January: The U.S. trade deficit widened to a record $89.7 billion in January, an increase of 9.4% from the prior month, according to data released last week by the U.S. Commerce Department. Imports of goods and services rose 1.2% to $315 billion, led by increased demand for foreign-made vehicles as well as industrial supplies like crude oil, natural gas, and copper. Meanwhile, exports fell by 1.7% to $224 billion, as demand for U.S.-produced consumer goods, notably pharmaceuticals, decreased over the month.