Economic Warning Signs Flash as Inflation and Consumer Spending Falter

Retail sales and producer price inflation reports this week were worse than expected, sparking concerns about the health of consumers and inflation trends.

Producer price inflation rose more than forecast in February, ending the disinflationary trend in goods prices and putting hopes for imminent rate cuts on hold.

Retail sales grew just 0.6% month-over-month in February, less than forecast, marking the 4th straight downward revision and signaling slowing economic growth.

If businesses continue facing price hikes, they may pass those costs onto inflation-weary consumers, threatening consumer spending that has so far prevented recession.

Areas to monitor for further signs of economic weakness include auto sales, credit card delinquencies, and swelling vehicle inventories.