In a nation where 60 percent of the labor force works below the national wage average, economists are excited to see consumer price data tick higher in March. The cost of living in the US just got a little more expensive as food and rent increased. The consumer price index (CPI) rose to .2 percent after a .1 percent increase in the previous month, according to the Labor Department. Economists were looking for an increase of .1 percent.
Food prices have been increasing for some time in staples like milk, eggs and ground beef. The core CPI, which includes volatile items like food and energy, also increased .2 percent after a .1 percent in the previous month. Nearly two-thirds of the rise was due to increased demand for rent as home buyers continue to be priced out of the market due to decreased inventory and higher borrow costs.
According to Millian Mulraine, deputy head of US research and strategy at TD Securities, “[inflation is moving] in the right direction.” Who would have thought in an economy with slack and poor labor prospects inflation would be so welcomed. Hourly wages, adjusted for inflation, fell .3 percent. This was the biggest decrease since February 2013.
The Empire manufacturing index, which measures the strength for New York manufacturers, fell four points to 1.3. New orders declined to negative 2.8 on the index. In an index that can swing to either side, the most surprising factor was how wrong economists were (again). The general consensus was for the index to tick up to 8.2.
However, the six-month index outlook remains “fairly” optimistic.