U.S. wholesale prices eased back 0.1 percent in February after adding 0.3 percent in January, the labor department reported. 

Dow Jones had predicted another 0.3-percent rise for last month.

On an annual basis, producer prices rose 4.6 percent, compared to January’s 5.7 percent. 

Ignoring the cost of energy and food, the “core” wholesale price index actually rose 0.2 percent, indicating that slackening food and fuel costs have not worked their way more broadly through the economy.

The core measure grew at an annual clip of 4.4 percent last month, equaling January’s increase. 

In February, the price of goods in general slipped 0.2 percent, compared to a 1.2-percent rise the month before. Much of the price decline was due to a startling 36.1-percent drop in the price of chicken eggs, CNBC reported.

The Empire State Manufacturing Survey, which measures factory activity, registered a -24.6 reading last month, down 19 points from January. Dow Jones had predicted a milder -7.4-percent outcome.

The survey measures the percentage difference between manufacturers reporting expansion versus contraction of their output. 

Drastic declines in shipments and new orders sank the survey’s outcome. 

The slackening of wholesale inflation pairs with a new survey from the Federal Reserve Bank of Philadelphia, showing 34 percent of manufacturers polled reported a drop in activity.

New orders as well as shipments both fell to their lowest ebb since May 2020 as the COVID-era lockdowns took hold.

A similar early warning sign appeared in each of the past eight recessions, according to economist David Rosenberg, president of Rosenberg Research and former chief economist at Merrill Lynch.

The survey “is eight for eight on the recession call with no head fakes,” he noted.

Instead of “a ‘soft’ landing or ‘no’ landing,” the economy is headed for “more like a crash landing,” he tweeted.

The updated wholesale price figure followed the Bureau of Labor Statistics’ announcement that U.S. inflation in February set an annual pace of 6.0 percent, the lowest since September 2021.

TREND FORECAST: The decline in factory orders reflects consumers’ reduction in the volume of goods and services they purchase and that retailers see no meaningful rebound in consumer purchasing in the near term.

Because consumer spending keeps the U.S. economy functioning, these figures indicate that the U.S. is continuing to shuffle toward recession. 

The summer travel and tourist season might inject some additional spending, but—because consumers have maxed out their credit cards (“Credit Card Debt Nears $1 Trillion, Sets Record,” 7 Feb 2023) and are close to tapping out their savings (“Americans are Tapping Their Savings to Meet Basic Expenses,” 21 Feb 2023)—summer spending will be less than historical averages.