U.S. Economy Edging Upward, Reports Show
A 0.5% rise in U.S. consumer prices, as reported by the Labor Department, was seen as a sign that the slack that hit the economy after Sept. 11 is lifting as the economy gains traction, Reuters said.
Trucking is extremely sensitive to economic conditions and signs of growth are good news for the industry.
The Labor Department reported that U.S. consumer prices rose 0.5% in April -- more than at any time in the last 11 months -- reflecting higher energy costs and a jump in tobacco prices.
And the Commerce Department said business inventories fell 0.3% in March, as stockpiles declined at clothing and department stores.
he increase in the CPI, which is the most widely followed gauge of U.S. inflation, followed a 0.3% gain in March. Excluding the volatile food and energy sectors, the core rate rose 0.3%. Economists were expecting a 0.4% increase in the CPI, Bloomberg said.
Analysts told Bloomberg that although there some sectors are seeing higher prices, it is not enough to be very concerned about inflation. Rising inflation would cause the Federal Reserve to raise interest rates.
So far this year, the CPI is running at a 3.8% annual pace, compared with a 3.5% rate in the same period last year. However, core inflation is running at a 2.4% rate of increase, down from 3% in 2001.
Energy prices jumped 4.5% in April after rising 3.8% in March. Gasoline prices surged 10.1%, the largest since June of 2000.
In its report, the Fed said that amount of industrial capacity in use rose to 75.5% in April from a revised 75.3% the month before. Production was helped by a 3.1% advance in auto and vehicle parts production, the report said.
March production was revised downward, to a 0.4% gain from the previously reported 0.7% gain. The actual numbers were nearly identical to Wall Street analysts' expectations, Reuters said.
This report shows the continued, gradual recovery of the factory sector as it shakes off the effects of a decline in output that started in late 2000, Reuters said.
Commerce said that the decrease to $1.117 trillion in business inventories followed a 0.2% decline in February. Business sales rose 0.3%, the second increase this year. Economists had expected a 0.2% drop, Bloomberg said.
The level of inventories is the lowest since October 1999, which means companies will need to ramp up production to restock shelves. This will increase the demand for trucking services.
The inventory-sales ratio, which measures the time goods sit on shelves, fell to 1.38 months in March from 1.39 in February. The March ratio matches a two-year low reached in January.
Stockpiles at manufacturers, which account for about 40% of the report, fell 0.6% in March after a 0.5% decrease the month before. Factory sales rose 0.7%.
