May 28, 2023

Nudged by Gas Prices, Wholesale Inflation Rises

Wholesale prices rose 0.8 percent in June compared with May, when prices rose 0.5 percent, the Labor Department reported on Friday. It was the biggest gain since a 1 percent increase in September and was driven by a 7.2 percent surge in gasoline prices.

Outside of the volatile energy and food sectors, core inflation was up just 0.2 percent in June.

Core prices have risen 1.7 percent over the last 12 months. Aside from sharp swings in gas prices, inflation has increased very slowly over the last year, giving the Federal Reserve the room to keep interest rates low to lift the economy.

The government’s Producer Price Index measures inflation before it reaches the consumer. Consumer prices have been rising at a modest rate as well. Over the 12 months ending in May, consumer prices outside of food and energy were up just 1.7 percent, below the Fed’s 2 percent target for inflation.

For June, energy prices at the wholesale level were up 2.9 percent, reflecting the big increase in gas prices. It was the biggest increase since February.

Food costs rose 0.2 percent in June, a moderation after a larger 0.6 percent May increase in food that had been driven in part by a surge in the price of eggs. For June, egg prices retreated, falling 26.8 percent, the biggest one-month drop in seven years.

The wholesale price of passenger cars rose 0.8 percent in June, the biggest increase since November 2011, but most other categories showed moderation. Furniture prices were up 0.3 percent.

Total wholesale prices were up 2.5 percent in June compared with a year ago.

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Bucks Blog: User Satisfaction With Online Brokerages Declines

Scottrade moved to the top of the rankings in an annual study of customer satisfaction with online brokerages, but satisfaction with the self-serve tools over all fell from last year.

The study from J.D. Power Associates found that the industry average for customer satisfaction, on an index of 1,000 points, was 752 this year, down from 768 last year. The index measures customer satisfaction of 10 “self directed” brokerages based on several factors, including customer interaction, trading charges and fees, and problem resolution. The findings are based on responses from 3,619 investors who make all of their decisions without help from an investment adviser. The study was fielded in January and February.

Charles Schwab was second and Vanguard third.

The overall decline in satisfaction stemmed broadly from “challenges with effective communication,” according to J.D. Power.

Unlike in the earlier days of online trading, many users of the services are not active traders; about 40 percent of those participating in the study said they had not made a trade in the past 12 months, said Craig Martin, director of the wealth management practice at J.D. Power. “They’re not day traders,” he said. Such users aren’t making hundreds of trades in a year, he said, but are using the accounts for information.

Some sites are offering more tools and information for investors who want to research stocks. But users may actually find it difficult to find the information they want if the Web site isn’t well organized and easy to navigate, he said. Brokerages also can do a better job of communicating with clients in the way they prefer, whether that is by e-mail, telephone or mail, the study found.

Users also seemed frustrated with the way the sites explained their fees. The percentage of investors who say they “completely” understand their brokerage’s fee structure dropped to 35 percent in 2013 from 39 percent in 2012. In addition to per-trade fees, the brokerages may also charge maintenance fees and inactivity fees.

Scottrade did well in communicating with customers, which helped it move from third to first in the rankings, Mr. Martin said. The service scored well in account offerings, trading charges and fees, and interaction. “They help customers completely understand the fees,” he said, and its fee structure is “simple and straightforward.”

The overall industry score suffered from declines in satisfaction at some of the larger players, which pulled down the index because those firms represent a large number of customers, he said. Fidelity, for instance, dropped from fifth place last year ( when it tied with T. Rowe Price) to seventh place this year, although it still ranked above the industry average.

Three firms ranked below average: ShareBuilder from Capital One (formerly owned by ING Direct), Merrill Edge and Wells Trade.

Do you use an online brokerage, and are you pleased with its service?

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