Producer Price Index Indicates Inflationary Pressures, US Initial Unemployment Claims Unexpectedly Fall, and Shopify (SHOP) Tumbles
By The U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand increased 0.7 percent in January, seasonally adjusted.[0] This was an improvement from the 0.2 percent decline in December 2022 and the 0.3 percent increase in November. The index for final demand increased 6.0 percent over the course of the 12 months ending January 2023, without any adjustments.[1]
A 1.2-percent rise in prices for final demand goods led the advance in the final demand index, while prices for final demand services increased 0.4 percent.[2] The index for final demand less foods, energy, and trade services rose 0.6 percent, the largest advance since March 2022.[3]
Inflationary pressures continued to persist in the month of January, as indicated by the Producer Price Index. Core PPI (excluding the often-volatile categories of food, energy and supplier margins) climbed 0.6 percent in January from a month earlier and 5.4 percent from a year earlier.[4]
Meanwhile, U.S. weekly initial unemployment claims unexpectedly fell -1,000 to 194,000, showing a stronger labor market than expectations of an increase to 200,000.[5]
Shares of Shopify (SHOP) declined by over 9% in pre-market trading following their forecast of Q1 revenue growth in the high-teen percent range, which was lower than the anticipated 20%.[6]
Investors will focus on speeches from Fed officials Mester and Bullard for further clues on the Fed’s rate hike path.[6] Core PPI came in at 0.5 percent, the annual Core PPI edged lower to 5.4 percent in the same period from 5.5 percent, and food prices declined by 0.9 percent.[7] Excluding food and energy prices, final demand for goods rose 0.1 percent.
0. “U.S. Producer Prices Climb 0.7% In January, More Than Expected” RTTNews, 16 Feb. 2023, https://www.rttnews.com/3344710/u-s-producer-prices-climb-0-7-in-january-more-than-expected.aspx
1. “Producer Price Index – January 2023” Forex Factory, 16 Feb. 2023, https://www.forexfactory.com/news/1206036-producer-price-index-january-2023
2. “Producer Prices Rose 0.7% in January” Floor Focus, 16 Feb. 2023, https://www.floordaily.net/flooring-news/producer-prices-rose-07-in-january
3. “Producer price index reacclerates in January” Seeking Alpha, 16 Feb. 2023, https://seekingalpha.com/news/3937158-producer-price-index-reacclerates-in-january
4. “Producer Prices Rose, Pointing to Persistent Inflation” MarketWatch, 16 Feb. 2023, https://www.marketwatch.com/story/producer-prices-rose-pointing-to-persistent-inflation-4dda60ef
5. “Markets Today: Stock Index Futures Tumble as U.S. Jan PPI Exceeds Forecasts” Barchart, 16 Feb. 2023, https://www.barchart.com/story/news/14268583/markets-today-stock-index-futures-tumble-as-u-s-jan-ppi-exceeds-forecasts
6. “US open: Strong data sinks stocks” FOREX.com, 16 Feb. 2023, https://www.forex.com/en/market-analysis/latest-research/us-open-strong-data-sinks-stocks/
7. “US: Annual PPI declines to 6% in January vs. 5.4% expected” FXStreet, 16 Feb. 2023, https://www.fxstreet.com/news/us-annual-ppi-declines-to-6-in-january-vs-54-expected-202302161335
