This is becoming unrelenting, and there seems no end in sight. I'm worried. I really can smell recession. And look at the PPI, strip out food and energy and prices are still falling. Oh, oh!
The University of Michigan's preliminary March index of consumer sentiment fell for a third straight month, to 75.0, its lowest since October 1992, from 79.9 in February, market sources told Reuters on Friday. That was below expectations for a dip to 77.6. The slide in the index was due primarily to the current conditions index, which suffered an even bigger drop than after the Sept. 11 attacks. It fell to a preliminary reading of 87.1 in March from 95.4 in February, and economists blamed fears about war with Iraq.
The bad news has been relentless recently for households: the labor market shed 308,000 jobs in February while retail sales last month plunged 1.6 percent. Stocks fell close to their October lows before rallying in the past two days. Meanwhile, surging gasoline and other energy prices have pinched incomes. In a sign of consumer spending pull-back, anecdotal reports suggest auto sales may fall for a third straight month in March even as Detroit's automakers leave generous incentives in place. Ford Motor Co. said Thursday it was slashing production 17 percent this year because war worries have cut sales.
Source: Yahoo News
Prices paid to U.S. producers climbed more than expected in February, pushed up by soaring fuel costs, the government said on Friday in a report showing little sign of inflation outside the energy sector. Overall producer prices climbed 1.0 percent, the Labor Department (news - web sites) said, higher than analyst forecasts for a 0.7 percent rise. The number followed a 1.6 percent increase the previous month. But stripping out volatile food and energy costs, prices dropped 0.5 percent, pulled down by falling car, truck and computer prices. Analysts were expecting the so-called core inflation to be unchanged. "No price increases means no inflation and clearly this is a no-inflation report when excluding food and energy," said Timothy Ghriskey, money manager with Ghriskey Capital Partners LLC.
Source: Yahoo News