US producer prices were unchanged in February for the first time in seven months, while fewer Americans filed claims for unemployment benefits last week, pointing to a stable economy that should allow the Federal Reserve to keep interest rates steady next week.
US producer prices were unchanged in February for the first time in seven months, while fewer Americans filed claims for unemployment benefits last week, pointing to a stable economy that should allow the Federal Reserve to keep interest rates steady next week.
But the calm painted by the reports from the Labor Department on Thursday could be upended by radical government spending cuts, which have pushed thousands of federal employees out of work, and an escalating trade war stemming from broad import tariffs.
The aggressive policies being pursued by President Trump’s administration have sent business and consumer confidence plummeting, and raised the chances of a recession. US airlines have cut their earnings estimates noting that corporations and consumers were scaling back spending because of mounting economic uncertainty.
“No factory inflation and no worrisome job layoffs either, so there is nothing to slow the economy’s advance for now,” said Christopher Rupkey, chief economist at FWDBONDS.
“Nevertheless, the radical, buzz-saw cuts in spending and personnel down in Washington could eventually spread to the rest of the private economy in the months to come and it has already created enough uncertainty for company CEOs to potentially halt the economy’s forward progress starting in the second quarter.”
The unchanged reading in the producer price index for final demand last month, the first since July, followed an upwardly revised 0.
