In February, US producer prices fell by 0.6% M/M, while a decline by only 0.2% M/M was expected. On a yearly basis, PPI dropped from 4.6% Y/Y to 4.4% Y/Y, while an increase to 4.9% Y/Y was forecasted. Core PPI, excluding food and energy, rose by 0.1% M/M as energy prices dropped by 2.9% M/M in February. In the core component, the largest gains were in passenger cars (0.5% M/M), sporting goods (1.4% M/M) and soaps (3.1% M/M). Although the sharp decline in producer prices was due to a drop in energy costs, price pressures remain moderate.
Other: BoE minutes show reduced risk for more QE
At its monetary policy committee meeting on the 3rd and 4th of March, the Bank of England decided to leave the size of the asset purchase programme unchanged at £200. The Minutes revealed today that the decision to halt quantitative easing was unanimous. Nevertheless, members were divided over how the balance of risks to inflation was evolving. Some members considered that the upside risks to inflation had increased slightly over the month, while others felt that the balance of risks had not changed materially. Interestingly, there was no case put forward for extending quantitative easing, which was the case in pervious months. The Minutes suggest that there is a reduced risk of the need for additional stimulus measures.
In February, UK jobless claims fell by 32 300, the sharpest decline since 1997, while an increase by 6 000 was expected. The previous figure was however downwardly revised from 23 500 to 5 300. The ILO unemployment rate, for January, stayed unchanged for the third consecutive month at 7.80%, while an increase to 7.90% was expected. This outcome raises expectations that the UK labour markets is stabilising more quickly than expected.
