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Target Consumer Staples After Wholesale Prices Have Fallen

While consumer prices may have gone up in December, wholesale prices fell, much to the surprise of many economists. And this decline in wholesale prices should impact spending on consumer staples.

Consumer staples include food and beverages, nondurable household goods and personal products, food and drug retailers, and hypermarkets and consumer super centers.

The producer price index fell 0.1% in December, the Labor Department reported Friday. This drop comes as a surprise to many industry observers, since economists surveyed by Dow Jones had expected it to rise 0.1%, according to CNBC.

See more: “Economic Indicators Point to Easing Inflation & Increased Spending”

These wholesale figures come hot off the heels of the Labor Department revealing that consumer prices for goods and services increased by 0.3% in December, bringing the rate of inflation up 3.4% for the 12 months ended December. This remains above the Fed’s 2% inflation target.

“What inflation risks remain in the U.S. economy clearly cannot be sourced to any upward pressure in producers’ costs,” PNC Senior Economist Kurt Rankin told CNBC. “Whether surveying from producers’ intermediate or final demand perspective, there is little to no pricing pressure headed into the U.S. economy from the supply side entering 2024.”

Invest in Consumer Staples With Invesco ETFs

So, for investors looking to target the consumer staples sector, Invesco has some equity ETFs focused on this space. These include the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) and the Invesco Dorsey Wright Consumer Staples Momentum ETF (PSL). And for those that want to get small, there’s the Invesco S&P SmallCap Consumer Staples ETF (PSCC).

RSPS invests in stocks that comprise the S&P 500 Equal Weight Consumer Staples Index. The index equally weights stocks in the consumer staples sector of the S&P 500. PSL, meanwhile, invests in at least 30 consumer staples companies that demonstrate good relative strength or “momentum” characteristics.

And PSCC targets small-cap U.S. consumer staples companies. PSCC is based on the S&P SmallCap 600 Capped Consumer Staples Index, a subset of the S&P SmallCap 600.

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