Sense on Cents

We received a mixed bag of economic news this morning. The WSJ provides a quick but fairly comprehensive analysis, U.S. Retail Sales Show New Weakness; Producer Prices Drop

In regard to the wholesale prices, the WSJ reports:

The Labor Department’s producer price index for finished goods fell 1.2% on a seasonally adjusted basis in March, after rising 0.1% in February. Core PPI, which excludes food and energy costs, was unchanged last month from February.

The PPI data showed energy prices sliding 5.5% last month, after rising 1.3% in February. Food prices were down 0.7%.

Prices of passenger cars fell 0.2%, while light truck prices declined 0.4%.

“Today’s PPI report emphasizes that deflation rather than inflation remains the primary risk for now,” IHS Global Insight economist Nigel Gault said.

On the retail sales front:

Retail sales fell 1.1% compared to the prior month, the Commerce Department said Tuesday. Economists expected a 0.3% increase in the key indicator of consumer spending.

The big drop followed increases in January and February that had ended a freefall in spending during the second half of 2008.

“It’s disappointing,” said Hugh Johnson, chairman of Johnson Illington Advisors in Albany, N.Y. “It tells us quite clearly that consumers continue to retrench, or are doing less borrowing and spending and more saving.”

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