Tom Moeller

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At today’s meeting of the Federal Open Market Committee, the targeted Federal Funds Rate was raised by 25 basis points to a range of 4.75%-5.00%. The increase followed a similar action at the last meeting, one 50 basis point increase at the prior meeting and four consecutive 75 basis point increases. The rate was set to the highest level since September 2007.

Following the meeting, the Fed stated,  “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”

“In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

In the aftermath of recent financial market events, the statement also indicated that “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.”
 
In addition, “The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously released plans.”

Today’s action was endorsed by each member of the FOMC.

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The Fed also updated its economic projections as follows:

FOMC Projections

- The FOMC raised the targeted Federal Funds Rate by 25 basis points to a range of 4.75%-5.00%. 
- Today’s decision was endorsed by each member of the FOMC.

FOMC Gradually Lifts Funds Rate

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Mortgage applications increased 3.0% (-51.6% y/y) in the week ended March 17 following a 6.5% advance in the prior week. It was the third consecutive weekly gain. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

Applications to refinance an existing loan increased 4.9% (-68.4% y/y) following a 4.8% gain. It also was the third straight weekly rise. Purchase loan applications improved for the third straight month. The 2.2% gain (-36.2% y/y) followed a 7.3% increase.

The percentage of applications for refinancing an existing loan rose to 28.6% in the week ended March 17 from 28.2% in the previous week. The percentage of ARM loan applications edged higher to 8.6% from 8.5% in the prior week.

The effective interest rate on a 30-year fixed-rate loan eased to 6.67% last week from 6.94% in the week previous. This compares to an average of 6.68% for the four weeks of February. The effective rate on 15-year fixed-rate mortgages declined to 6.17% from 6.33% in the prior week. It was the lowest rate in five weeks, down from a 6.77% high in the third week of October. The rate on 30-year Jumbo loans fell to 6.46% from 6.56% in the week of March 10. The rate on a 5-year ARM fell to 5.86%, down from a 6.21% high early in November.

The average loan size rose 1.8% (0.4% y/y) to $389,000 in the week ended March 17. The series high of $401,900 was reached in the week ended May 6, 2022. The average size of a purchase loan rose 1.6% (-4.9%) in the latest week to $437,700. The average loan size to refinance a mortgage gained 3.8% (-10.2% y/y) to $267,700.

The Mortgage Bankers Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's **SURVEYS** database.

- Refinancing & purchase loans both rise.
- Interest rates decline again.

Mortgage Applications Continue to Increase

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Despite higher mortgage rates, home demand has strengthened. Sales of existing homes increased 14.5% during February (-22.6% y/y) to 4.580 million (SAAR) after easing an unrevised 0.7% to 4.000 million in January. Sales stood at the highest level since September after falling in January to a roughly twelve-year low. The Action Economics Forecast Survey expected February sales of 4.20 million units.

Single-family home sales rose 15.3% (-21.4% y/y) to 4.140 million after weakening an unrevised 0.8% in January to 3.590 million units. Sales had fallen consistently in each month since early-2022. Condo and co-op sales improved 7.3% (-32.3% y/y) to 440,000 after holding steady m/m in January.

Sales rose m/m across the country. In the West, sales strengthened 19.4% (-28.3% y/y) to 860,000 after a 2.9% January improvement. Sales in the South increased 15.9% (-21.3% y/y) to 211,000 last month following a 1.1% January rise. Also strengthening by 13.5% (-18.7% y/y) in February were sales in the Midwest to 1.090 million after falling 5.0% in the prior month to 960,000. Sales in the Northeast posted a lesser 4.0% gain (-25.7% y/y) to 520,000 which recovered all of the January decline.

The number of existing homes for sale (NSA) held steady (+15.3% y/y) at 980,000 in February after increasing 2.1% in January, which was the first after five straight months of decline. The supply of homes on the market (NSA) fell to 2.6 months from 2.9 months at the current selling rate, but remained higher than the record low of 1.6 months reached in January of last year. These figures date back to January 1999.

The median price of an existing home (NSA) rose 0.5% (-0.2% y/y) to $363,000 following seven straight months of decline. They were 12.3% below the June peak of $413,800. Prices rose last month in most regions of the country except the Northeast where they declined 7.1% (-4.5% y/y). The median price of an existing single-family home rose 0.6% (-0.7% y/y) to $367,500 while the price of existing co-ops and condos were fairly steady (+2.5% y/y) at $321,000.
		
The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- Sales strengthen to five-month high.
- Improvement is widespread across regions.
- Home price decline stabilizes.

U.S. Existing Home Sales Surge During February

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Retail gasoline prices declined in the week ended March 20 to $3.42 per gallon (-19.3% y/y) after rising to $3.46 per gallon in the previous week. Prices, nevertheless, remained above the $3.34 low at the end of February. Gasoline prices remained below the mid-June 2022 peak of $5.01 per gallon but above their late December 2022 low of $3.09. The retail price of diesel fuel declined to $4.19 per gallon (-18.5% y/y) last week from $4.25 per gallon in the previous week. The price reached a recent peak of $5.81 per gallon in the third week of June 2022.

The average price of West Texas Intermediate crude oil weakened to $69.71 per barrel (-30.6% y/y) in the week ended March 17 from $77.35 in the prior week. Prices stood at the lowest level since the first week of December 2021, down by almost half from the recent high in the second week of June 2022. Yesterday, the price as $67.62 per barrel. The average price of Brent crude oil eased to $74.98 per barrel (-31.6% y/y) last week after easing to $82.86 per barrel in the previous week. The price peaked at $127.40 in mid-June of 2022. Yesterday, the price was $72.42 per barrel.

The price of natural gas was little changed at $2.47/mmbtu (-47.2% y/y) from $2.48/mmbtu in the prior week. Prices have fallen from their recent high of $6.78/mmbtu in the third week of December and from $9.56/mmbtu in the last week of August of 2022. The decline reflects unseasonably mild temperatures this winter and improved energy efficiency, which have reduced demand for natural gas. Yesterday, the price was $2.23/mmbtu.

In the four weeks ended March 10, gasoline demand declined 0.4% from a year earlier after having fallen 0.2% y/y in the prior week. These declines compare to 15.2% y/y growth at the end of 2021. Demand for all petroleum products fell 6.4% y/y in the latest four weeks in contrast to the 14.4% annual growth at the end of 2021. Crude oil input to refineries fell 2.1% y/y.

Gasoline inventories declined 2.1% y/y in the week ended March 10 compared to a 2.7% y/y decline in the prior week, while crude oil inventories fell a steady 14.1% y/y. Working the other way, inventories of distillate fuel oil increased 4.8% y/y and residual crude oil inventories rose 14.8% y/y.

Measured in days’ supply, gasoline inventories in the week ended March 10 fell to 26.8 days from 27.3 days in the previous week. It was the lowest level since late-December. The supply of crude oil eased to 31.8 days from 31.9 days in the prior week. It was increased from a low of 25.3 days at the end of last June.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price data can be found in Haver’s **WEEKLY** and **DAILY** databases. Greater detail on prices, as well as the demand, production and inventory data are in **USENERGY**.

- Retail gasoline prices weaken.
- Crude oil costs slip to late-2021 low.
- Natural gas prices	remain well below December high.

U.S. Gasoline & Crude Oil Prices Fall

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) fell 2.1% (-19.1% y/y) during the four weeks ended March 17 to the lowest level since early-November. The index has fallen 5.3% since early-February. The decline accompanied a 0.1% improvement in factory sector output in February which followed a 1.3% January increase.

Prices in the **crude oil & benzene** group weakened 5.3% (-13.3% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 9.4% in four weeks to $71.75 per barrel and fell 29.7% y/y, while the price of the petro-chemical benzene declined 8.7% (-5.5% y/y). Excluding crude oil & benzene, the industrial commodity price index weakened 1.6% (-18.3% y/y) over the last four weeks.

**Metals** group prices fell 3.6% (-25.6% y/y) in the last four weeks. Zinc prices declined 5.6% (-23.6% y/y) while aluminum prices fell 5.7% (-32.6% y/y). The cost of scrap copper declined 2.5% in the last four weeks (-13.5% y/y) and tin prices weakened 16.7% (-47.7% y/y). Lead prices slipped 0.1% (-8.6% y/y) in the last four weeks. Working higher, the cost of steel scrap strengthened 8.4% (-27.9% y/y) in four weeks.

Prices in the **textile** group slipped 0.9% during the last four weeks and fell 8.3% y/y. Cotton prices declined 5.8% and weakened 34.3% y/y. The cost of burlap improved 0.1% (-17.0% y/y) in the last four weeks.

The **miscellaneous** group price index eased 0.1% (-23.5% y/y) during the last four weeks. Framing lumber prices rose 3.7% (-63.7% y/y) but the cost of natural rubber fell 1.7% (-16.5% y/y) in four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

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- Crude oil prices touch 15-month low.
- Metals prices mostly weaken.
- Lumber prices improve.

FIBER: Industrial Commodity Prices Decline Broadly

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The Conference Board's Composite Leading Economic Indicators Index fell 0.3% (-6.5% y/y) during February after an unrevised 0.3% January weakening and a 0.8% December drop. The decline matched expectations in the Action Economics Forecast Survey.

Six of the Leading Index's ten components contributed negatively to the index change including the average workweek, initial claims for unemployment insurance, the ISM new orders index, the spread between the 10- Treasury note and the Fed funds rate, consumer expectations for business/economic conditions and the leading credit index. 

The Index of Coincident Economic Indicators edged 0.1% higher in February (1.4% y/y) following two consecutive 0.2% increases. Three of the four components of the index made positive contributions to the February increase including payroll employment, personal income less transfers and manufacturing & trade sales. Contributing negatively was industrial production.

The Index of Lagging Economic Indicators increased 0.2% (6.8% y/y) in February after a 0.1% January gain. Four of the index's seven components made positive contributions to the index change including the average duration of unemployment, the business inventory-to-sales ratio, banks’ prime rate and the consumer installment credit-to-income ratio. The change in factory sector unit labor costs, C&I loans outstanding and the change in the services CPI contributed negatively.

The ratio of the Coincident index to the Lagging index suggests economic weakness ahead as it shows how the economy is performing against the excesses that are building. The ratio held steady m/m in February but remained down sharply from its March 2021 high.

The Conference Board figures are available in Haver's **BCI** database; the components are available there, and most are also in **USECON**. The expectations are in the **AS1REPNA** database. Visit the Conference Board's [site](https://www.conference-board.org/) for coverage of leading indicator series from around the world.

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- Monthly decline is eleventh in a row. 
- Coincident indicators post minimal gain.
- Lagging indicators rise modestly.

U.S. Leading Economic Indicators Index Continues to Fall in February

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Total industrial production showed no increase during February (-0.2% y/y) following a 0.3% January rise, revised from no change, and a 1.4% December decline, revised from a 1.0% weakening, according to the Federal Reserve Board. A 0.4% increase had been expected in the Action Economics Forecast Survey.

By **industry groups**, manufacturing production increased 0.1% (-1.0% y/y) in February after strengthening 1.3% in January, revised from 1.0%. Durable goods output edged 0.1% higher (-0.5% y/y) after increasing 0.7% in January. Computer & electronic product production rose 1.2% (-6.0% y/y) after falling 1.7%. Electrical equipment & appliance production gained 0.9% (-1.6% y/y). Furniture production rose 0.3% (-10.9% y/y) but primary metals output held steady (-5.9% y/y). Machinery production weakened 0.4% (-1.9% y/y) after it rose 2.9% in January while motor vehicle & parts production fell 0.3% (+10.8% y/y).

Nondurable goods production increased 0.2% (-1.3% y/y) in February after rising 2.1% in January, reflecting a 0.8% decline (+10.8% y/y) in apparel & leather goods output. Textiles & product mills production weakened 2.1% (-12.2% y/y) and paper product production fell 0.9% (-11.2% y/y). Petroleum & coal production fell 0.4% (+1.3% y/y). To the upside, food, beverages & tobacco output edged 0.1% higher (-1.3 y/y) and chemicals production surged 1.2% (1.7% y/y). Production for printing & related support activities rose 0.5% (-1.5% y/y).

Utilities output increased 0.5% (-7.6% y/y) after declining 10.1% in January with warm temperatures. Meanwhile, mining activity fell 0.6 (+7.1% y/y) in February after rising 2.0% in January.

By **market groups**, consumer goods output edged 0.1% higher (-0.9% y/y) in February following three consecutive monthly declines. Nondurable consumer goods production rose 0.3% (-1.3% y/y) while durable consumer goods declined 0.5% (+0.6% y/y) with weakness in the auto sector. Business equipment output eased 0.2% (+1.4% y/y) in February following three consecutive m/m declines. Construction supplies production fell 0.5% (-2.6% y/y) while materials production edged 0.1% higher (0.3% y/y).

Amongst **special classifications**, factory output of selected high-tech industries declined 0.6% (-11.6% y/y) in February, the seventh successive m/m decline. Factory output excluding selected high-tech industries edged 0.1% higher (-0.7% y/y) and manufacturing production excluding both selected high-tech and motor vehicles & parts also rose 0.1% (-1.5% y/y) following a 1.6% increase.

Capacity utilization held steady m/m at 78.0% in February. A 78.5% rate had been expected. Manufacturing capacity utilization eased to 77.6% in February after rising to 77.7% in January.

Industrial production and capacity are located in Haver's **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

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- Production weakness is broad-based amongst market groups.
- Capacity utilization is unchanged.

U.S. Industrial Production Stalls in February

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Total housing starts increased 9.8% (-18.4% y/y) during February to 1.450 million units (SAAR) from 1.321 million in January, revised from 1.309 million. The increase followed declines in six of the prior seven months. They remained 19.7% below the April 2022 peak of 1.805 million units. The Action Economics Forecast Survey expected 1.319 million starts in February.

The increase in total starts last month was powered by a 24.0% rise (9.9% y/y) in multi-family starts to 620,000, bringing them to the highest level since April 2022. The gain followed a 7.1% January increase. Single-family starts rose 1.1% (-31.6% y/y) to 830,000 after falling 6.8% in January. They remained 36.5% below the December 2020 peak.

Starts in the Northeast fell 16.5% (-20.9% y/y) to 106,000 after falling 36.2% in January. Starts in the Midwest surged 70.3% (-14.1% y/y) to 201,000, following two months of decline as multi-family starts jumped. Starts in the South increased 2.2% (-20.3% y/y) to 796,000 following a 9.6% January rise. Starts in the West rose 16.8% (-15.4% y/y) to 347,000, also reflecting strength in the multi-family sector

Building permits rose 13.8% (-17.9% y/y) to 1.524 million units during February from an unrevised 1.339 million in January. Multi-family permits rose 21.1% (14.4% y/y) to 747,000 after a 1.8% January increase. Single-family permits gained 7.6% (-35.5% y/y) to 777,000 after falling for eleven consecutive months.

The housing starts and permits figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Multi-family starts surge; single-family rise moderately.
- Starts are mixed across the country.
- Building permits surge, also powered by multi-family.


U.S. Housing Starts Improve in February

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The Federal Reserve Bank of Philadelphia reported that its Composite Index of Business Conditions rose to -23.2 during March after plunging to -24.3 during February. The index remained near the lowest level since May 2020 and was below its peak of 45.6 in April of 2021. It has been negative for nine of the last ten months. A reading of -14.8 had been expected in the Action Economics Forecast Survey.

The ISM-Adjusted Composite Index, constructed by Haver Analytics, fell to 39.4 this month from 48.6 in February and, remaining below 50, continued to indicate a contraction in overall factory sector activity. It stood well below its high of 65.4 in November 2021.

The component series mostly weakened this month. The new orders series fell to -28.2 from -13.6 in February. A greatly lessened 7.0% of respondents reported orders improvement while a steady 35.2% reported orders deterioration. The shipments index fell sharply to -25.4 this month from +8.7 in February. It remained below 32.1 last May. A greatly lessened 5.8% of respondents reported shipments improvement while a sharply higher 31.2% reported a decline. The delivery times reading dropped to -24.3, indicating faster product delivery speeds. The unfilled orders index remained negative for the tenth straight month. The inventories index plummeted to -11.2 from +15.3, indicating a sharp pull-back in inventories.

On the labor front, the employment index fell to -10.3 in March, the weakest reading since May 2020. It remained well below its April 2022 peak of 38.4 as a greatly lessened 6.1% of respondents reported more hiring and a slightly increased 16.4% reported less. The hours-worked index plunged to -22.0 from -3.2 and remained below its high of +35.3 in March of 2021.

The prices paid index weakened to 23.5 from 26.5 in February. It has fallen from a high of 83.6 in November 2021. A slightly increased 34.8% of respondents reported higher prices while an increased 11.3% reported price declines. The prices received index fell sharply to 7.9 this month from 14.9 in February. It stood at its lowest point in nearly three years, down from a high of 65.8 in November 2021.

The future business conditions index declined to -8.0 this month from +-*/1.7 in February. This was the lowest level since October after rebounding to +4.9 in January. Movement amongst the component series was mixed. The new & unfilled orders, employment and inventories series each weakened while shipments and hours worked improved. The expected prices paid index rebounded after weakening sharply in February, but prices received plunged to a seven-year low.

These diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The Philadelphia Fed data can be found in Haver's **SURVEYS** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Index edges higher after plunging to lowest level since 2020.
- New orders, shipments and employment readings weaken.
- Prices paid index remains near recent low.


Philadelphia Fed Factory Index Stabilizes in March

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Consumers pulled back spending modestly in February, as overall retail sales fell 0.4% (+5.4% y/y). The decline followed a 3.2% January surge, revised from 3.0% reported last month. The decline matched expectations in the Action Economics Forecast Survey. Sales excluding motor vehicles eased 0.1% (+6.8% y/y) after rising 2.4% in January, revised from 2.3%. Expectations had been for a 0.1% dip. These latest results followed moderate declines in both December & November.

Last month’s sales decline reflected a 1.8% drop (-0.2% y/y) in motor vehicle sales after they surged 7.1% in January. Sales fell sharply in the prior two months. The latest decline compared to a 6.3% weakening in unit vehicle sales which also followed a January surge. Gasoline station sales eased 0.6% (-1.9% Y/Y) as gasoline prices weakened. It was the fourth consecutive monthly decline.

Sales amongst other stores were mixed. Spending in the retail control group, which excludes autos, building materials, gasoline & restaurants, rose 0.5% (7.0% y/y) after strengthening 2.3% in January. Sales here declined in December & November.

Sales of nonstore retailers rose 1.6% (8.5% y/y) last month after a 1.8% increase in January. Electronics and appliance store sales improved 0.3% (-2.8% y/y) after a 6.5% increase. Sales fell in each of the prior eight months. General merchandise store sales improved 0.5% (10.5% y/y) after rising 4.3% in January. However, within that category, department store sales declined 4.0% (+2.5% y/y) after an 18.1% January rise. Also falling were furniture and home furnishing store sales, off 2.5% (+0.1% y/y) after a 5.7% January surge. Apparel sales eased 0.8% (+4.3% y/y) in February following a 2.9% January gain. Sporting goods & hobby shop store sales fell 0.5% (+3.9% y/y) after modest increases in each of the prior four months. Building materials store sales eased 0.1% (+0.6% y/y) after January’s 0.4% gain.

In the nondiscretionary sales categories, health & personal care store sales rose 0.9% (8.0% y/y) after a 3.1% January surge. Food & beverage store sales increased 0.5% last month (5.5% y/y) after two months of moderate decline.

Consumer visits to restaurant & drinking places found them spending 2.2% less in February (+15.3% y/y) after a 5.6% January increase.

Retail Sales data can be found in Haver's **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Fewer motor vehicle sales & lower gasoline prices weigh on spending.
- Online sales surge again.
- Sales elsewhere are uneven.

U.S. Retail Sales Are Mixed in February

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The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo increased 4.8% (-44.3% y/y) to 44 during March following a 20.0% February increase. A reading of 40 had been expected in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 67% correlation between the y/y change in the home builders index and the y/y change in housing starts.

The index of present sales conditions in the housing market rose 4.3% (-43.7% y/y) to 49, up for the third straight month. The index for conditions in six months fell 2.1% (-32.9% y/y) to 47, after three months of strong increase.

Home builders reported that the traffic of prospective home-buyers index increased 10.7% to 31 (-53.0% y/y), the third consecutive monthly gain.

Amongst the regional indexes, the index for the South rose 8.7% (-38.3% y/y) while the Midwest index fell 2.8% (-52.7% y/y). The index for the West weakened 2.7% (-60.4% y/y) and the index for the Northeast held steady (-29.2% y/y).

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions asking builders to rate market conditions as "good," "fair," "poor" or "very high" to "very low." The figure is thus a diffusion index with numerical results six over 50 indicating a predominance of "good" readings. The weights assigned to the individual index components are .5920 for single-family detached sales, present time, .1358 for single-family detached sales, next months and .2722 for traffic of prospective buyers. The results are included in Haver's **SURVEYS** database. The expectations figure is available in Haver's **MMSAMER** database.

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- Current sales drive improvement.
- Regional readings are mixed.

U.S. Home Builder Index Increases in March

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The Consumer Price Index rose	0.4% in February, following a 0.5% increase in January. The 6.0% y/y increase remained below June’s high of 9.1%. Prices excluding food & energy rose 0.5% after increasing 0.4% in each of the prior two months. The 5.5% y/y gain was down from a 6.6% September high. A 0.4% increase in both measures had been expected in the Action Economics Forecast Survey.

The CPI less food, energy and shelter, another measure of core pricing power developed by Haver, increased 0.2% during February for a second month. The 3.7% y/y increase stands below the 7.6% peak in February of last year.

Service costs increased 0.6% (7.3% y/y). Shelter prices rose 0.8% (8.1% y/y) as owners’ equivalent rent of primary residences increased 0.7% (8.0% y/y). Rents rose 0.7% (8.2% y/y), up from 1.9% y/y in 2020. Education & communication prices increased 0.2% (2.9% y/y), while transportation service prices rose 1.1% (14.6% y/y). Recreation service prices improved 1.2% (6.3% y/y), but medical care service costs fell 0.7% (+2.1% y/y) for the second straight month.

Goods prices excluding food & energy eased slightly in February (+1.0% y/y). Used car & truck prices fell 2.8% (-13.6% y/y) but new vehicle prices improved 0.2% (5.8% 	y/y). Home furnishing prices rose 0.8% (6.3	% y/y) while appliance prices rose 0.7% (1.6% y/y). Apparel prices increased 0.8% (3.3% y/y) for a second straight month while recreation product prices rose 0.4% (2.9% y/y). Medical care product prices edged 0.1% higher (3.2% y/y) while sporting goods prices gained 0.2% (1.1% y/y).

Energy prices fell 0.6% last month (+5.2% y/y) following a 2.0% rise. Natural gas prices collapsed 8.0% (+14.3% y/y) following two months of strong gain. Gasoline prices rose 1.0% (-2.0% y/y). Fuel oil costs fell 7.9% (NSA) but rose 9.2% y/y and electricity prices increased 0.5% (12.9% y/y).

Food prices rose 0.4% in February (9.5% y/y) after a 0.5% January rise but egg prices fell 6.7% (+55.4% y/y). Meat, poultry & fish prices rose 0.6% (3.8% y/y) while cereal & bakery product prices rose 0.3% (14.6% y/y). Fruit & vegetable prices improved 0.2% (5.3% y/y) and dairy prices edged 0.1% higher (12.3% y/y). Nonalcoholic beverage prices strengthened 1.0% (12.3% y/y).

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

**A Tight Labor Market Could Keep Rent Inflation Elevated** from the Federal Reserve Bank of Kansas City is available [here](https://www.kansascityfed.org/Economic%20Bulletin/documents/9384/EconomicBulletin23BundickSmithVanderMeer0301.pdf).

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- Energy price decline restrains increase.
- Core goods price inflation is tame; core services prices pick up.
- Energy prices decline; food prices remain strong.


U.S. CPI Gain Eases in February; Core Prices Firm

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