This morning’s closely watched report from the Bureau of Labor Statistics on February’s Consumer Price Index came in about as expected. Headline CPI rose by the estimated 0.4% last month with most of the rise coming from energy prices. Year-over-year, CPI rose to 1.7% from 1.4% and that was what analysts had predicted. Without food and energy, core CPI rose by 0.2% for the month versus an estimate of 0.1% while year-over-year, January’s 1.4% pace slowed to 1.3%. Inflation-adjusted Real Average Hourly Earnings grew 3.4% last month on a year-over-year basis and that was down slightly from the prior month’s 3.9%. Real Average Weekly Earnings had a 4.1% year-over-year growth rate and that was down from 5.7% in January.
Prior to the report, the Mortgage Bankers Association reported that for the week ending March 5th, Mortgage Applications fell 1.3%. Applications for purchase rose 7.2% as refis fell 5.0%. The average 30-year fixed rate was 3.26%.
Treasury prices were already slipping a little bit prior to this morning’s news and appear little affected since. The Two-Year’s yield has crept up slightly to 17 basis points with the Ten-Year at 1.55% and the Long Bond at 2.27%. This afternoon, the Treasury will be selling $38B Ten-Year notes and that auction will be closely watched in order to gauge investor demand. Crude oil is off a little bit to $64.64 and gold is little changed at $1,716. DJIA futures are flashing triple-digit green.