Sunday, May 31, 2020

1st quarter GDP revision; April’s personal income and outlays, durable goods, and new home sales

The key economic releases of the past week were the second estimate of 1st quarter GDP from the Bureau of Economic Analysis and the April report on Personal Income and Spending, also from the BEA, which provides 23% of 2nd quarter GDP....other widely watched reports that were released this week included the April advance report on durable goods and the April report on new home sales, both from the Census bureau, and the March Case-Shiller Home Price Index from S&P Case-Shiller, which is a relative average of January, February & March home sales prices compared to home sales prices of previous 3 month periods; the Case Shiller index indicated that home prices nationally for those 3 months averaged 4.4% higher than prices for the same homes that sold during the same 3 month period a year earlier, up from the 4.2% year over year increase reported for the February index a month ago.....

This week also saw the release of Chicago Fed National Activity Index (CFNAI) for April, a weighted composite index of 85 different economic metrics, which fell to –16.74 in April, down from –4.97 in March, after the March index was revised down from the –4.19 reported last month, in an index wherein readings below –0.70 have historically been associated with a recession...after accounting for the March revision, the 3 month average of the CFNAI fell to –7.22 in April, down from –1.69 in March, which indicates that national economic activity has been at a historical low over the most recent months...

In addition to that, the last three regional Fed manufacturing surveys for May were also released this week: the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reported that its broadest composite index rose to −27 in May from a record low of −53 in April, still indicating the worst regional contraction since 2009; similarly, the Kansas City Fed manufacturing survey for May, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index rose to -19 in May from the record low of -30 in April, but was still down from the -17 reading in March, indicating an ongoing recession among that region's manufacturers, while the Dallas Fed released the Texas Manufacturing Outlook Survey, which indicated its general business activity index rose to -49.2 in May from a record low of -74.0 in April, still indicating a depression like contraction of the Texas economy...

1st Quarter GDP Revised to Show Our Economy Shrunk at a 5.0% Rate

The Second Estimate of our 1st Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services shrunk at a 5.0% annual rate in the 1st quarter, revised from the 4.8% contraction rate reported in the advance estimate last month, as inventories were revised much lower, more than offsetting moderating upward revisions to the quarter's shrinkage of personal consumption expenditures and nonresidential fixed investment....in current dollars, our first quarter GDP fell at a 3.53% annual rate, decreasing from what would work out to be a $21,729.1 billion a year output rate in the 4th quarter of last year to a $21,534.9 billion annual rate in the 1st quarter of this year, with the headline 5.0% annualized rate of decrease in real output arrived at after an annualized inflation adjustment averaging 1.4%, aka the GDP deflator, was computed and applied to the current dollar change...

As we review this month's revisions, remember that this release reports all quarter over quarter percentage changes at an annual rate, which means that they're expressed as a change a bit over 4 times of that what actually occurred from one 3 month period to the next, and that the prefix "real" is used to indicate that each change has been adjusted for inflation using price changes now chained from 2012, and then that all percentage changes in this report are calculated from those 2012 dollar figures, which would be better thought of as a quantity indexes than as any reality based dollar amounts....for our purposes, all the data that we'll use in reporting the changes here comes directly from the Full Release & Tables for the second estimate of 1st quarter GDP, which is linked to on the BEA's main GDP page...specifically, we’ll be using table 1, which shows the real percentage change in each of the GDP components annually and quarterly since the 2nd quarter of 2016; table 2, which shows the contribution of each of the components to the GDP figures for those months and years; table 3, which shows both the current dollar value and the inflation adjusted value in 2012 dollars of each of those components; and table 4, which shows the change in the price indexes for each of the GDP components...the full pdf for the 1st quarter advance estimate, which this estimate revises, is here...

The decrease of real personal consumption expenditures (PCE), the largest component of GDP, was revised from the 7.6% contraction rate reported last month to indicate PCE shrunk at a 6.8% rate with this month’s estimate…that contraction figure was arrived at by deflating the 5.6% contraction rate in the dollar amount of consumer spending with the PCE price index, which indicated consumer inflation grew at a 1.3% annual rate in the 1st quarter, unrevised from the PCE inflation rate published a month ago...real consumption of durable goods fell at a 13.2% annual rate, which was revised from the 16.1% drop shown in the advance report, and subtracted 0.98 percentage points from GDP, as a drop in real consumption of automobiles at a 29.1% rate accounted for nearly three-fourths the pullback in durable goods.....however, real consumption of nondurable goods by individuals rose at a 7.7% annual rate, revised from the 6.9% increase reported in the 1st estimate, and added 1.04 percentage points to 1st quarter economic growth, as a 29.6% real increase in consumption of food and beverages at home more than offset real decreases in consumption of clothing and energy goods….at the same time, consumption of services shrunk at a 9.7% annual rate, revised from the 10.2% contraction rate reported last month, and subtracted 4.57 percentage points from the final GDP figure, as an annualized 17.3% contraction in health care services accounted for 40% of the decrease in services...

At the same time, seasonally adjusted real gross private domestic investment shrunk at a 10.5% annual rate in the 1st quarter, revised from the 5.6% contraction estimate reported last month, as real private fixed investment fell at a 2.4% rate, rather than at the 2.6% rate reported in the advance estimate, while business and farm inventories fell by more than had been previously estimated...real investment in non-residential structures was revised from shrinking at a 9.7% rate to shrinking at a 3.9% rate, while real investment in equipment was revised to show it contracted at a 16.7% rate, revised from the 15.2% contraction rate previously reported...at the same time, the quarter's investment in intellectual property products was revised from real growth at a 0.4% rate to real growth at a 1.0% rate...meanwhile, growth in real residential investment was revised from a 21.0% annual rate to growth at a 18.5% rate…after those revisions, the contraction in investment in non-residential structures subtracted 0.11 percentage points from the increase in 1st quarter GDP and the decrease in investment in equipment subtracted 1.00 percentage points from the quarter's growth, while the increase in investment in intellectual property added 0.05 percentage points and the increase in residential investment added 0.66 percentage points to the 1st quarter's growth rate...

Meanwhile, the drop in real private inventories was revised from the originally reported $16.2 billion in inflation adjusted dollars to show inventories shrunk at an inflation adjusted $67.2 billion rate...this came after inventories had grown at an inflation adjusted $13.1 billion rate in the 4th quarter, and hence the $80.2 billion negative change in real inventories from those of the 4th quarter subtracted 1.43 percentage points from the 1st quarter's growth rate, revised from the 0.53 percentage point subtraction due to inventory growth shown in the advance estimate....however, since shrinking inventories indicates that less of the goods produced during the quarter were left "sitting on the shelf” or in a warehouse, that decrease by $80.2 billion meant that real final sales of GDP were actually greater by that much, and therefore the BEA found that real final sales of GDP only fell at a 3.7% rate in the 1st quarter, revised from the 4.3% rate of decrease shown in the advance estimate...

The previously reported decrease in real exports was little changed with this estimate, while the previously reported decrease in real imports was revised lower, and as a result our net trade was a somewhat larger addition to GDP rather than was previously reported...our real exports of goods and services shrunk at a 8.7% rate in the 1st quarter, same as was shown in first estimate, and since exports are added to GDP because they are part of our production that was not consumed or added to investment in our country, their decrease conversely subtracted 1.02 percentage points from the 1st quarter's growth rate, same as was shown last month...meanwhile, the previously reported 15.3% decrease in our real imports was revised to a 15.5% decrease, and since imports subtract from GDP because they represent either consumption or investment that was not produced in the US, their decrease conversely added 2.34 percentage points to 1st quarter GDP, revised from the 2.32 percentage point addition shown a month ago....thus, the improving trade balance that accompanied the collapse in trade added a rounded 1.32 percentage points to 1st quarter GDP, up from the 1.30 percentage point addition resulting from an  improving foreign trade balance that was indicated by the advance estimate..

Finally, there was also a small upward revision to real government consumption and investment in this 2nd estimate, as the entire government sector is now shown growing at a 0.8% rate, revised from the 0.7% growth rate for government indicated by the 1st estimate....real federal government consumption and investment was seen to have grown at a 1.9% rate from that of the 4th quarter in this estimate, which was revised from the 1.7% growth rate shown in the 1st estimate, as real federal outlays for defense grew at a 1.0% rate, revised from the previously reported 0.8% growth and added 0.04 percentage points to 1st quarter GDP, while all other federal consumption and investment grew at an unrevised 3.1% rate and added 0.08 percentage points to GDP...meanwhile, real state and local consumption and investment grew at a 0.2% rate in the quarter, revised from the 0.1% growth shown in the 1st estimate, and added 0.03 percentage points to 1st quarter GDP, which was revised from the 0.02 addition shown in the advance estimate...note that government outlays for social insurance are not included in this GDP component; rather, they are included within personal consumption expenditures only when such funds are spent on goods or services, thereby indicating an increase in the output of those goods or services...

April Personal Income Up a Record 10.5%, Personal Spending Down a Record 13.6%, Savings Rate Up a Record 33.0%

The April report on Personal Income and Outlays from the Bureau of Economic Analysis appears to have record setting data for just about every metric it tracks except for prices, which still tumbled by the most in five years...as you'll recall, this report includes the month's data for our personal consumption expenditures (PCE), which accounts for more than 69% of the month's GDP, and with it the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated...in addition, this release reports national personal income data, disposable personal income, which is income after taxes, and our monthly savings rate...however, because this report feeds in to GDP and other national accounts data, the change reported for each of those metrics is not the current monthly change; rather, they're seasonally adjusted amounts expressed at an annual rate, ie, they tell us how much national income and spending would change over a year if April's change in seasonally adjusted income and spending were extrapolated over an entire year.....however, the percentage changes are computed monthly, from one month's annualized figure to the next, and in this case of this month's report they give us the percentage change in each annualized metric from March to April..

Thus, when the opening line of the press release for the April report tell us "Personal income increased $1.97 trillion (10.5 percent) in April", that means that the annualized figure for seasonally adjusted national personal income in April, $20,674.5 billion, was $1.966 trillion, or a record 10.5% greater than the annualized personal income figure of $18,708.6 billion extrapolated for March; the actual, unadjusted change in personal income from March to April is not given...at the same time, annualized disposable personal income, which is income after taxes, rose by a record 12.9%, from an annual rate of an annual rate of $16,532.5 billion in March to an annual rate of $18,660.2 billion in April....the contributors to the annualized $1.966 trillion increase in personal income can be viewed in the Full Release & Tables (PDF) for this release, also as record-setting annualized amounts, and were led by a $2,999.1 billion increase to $6,347.1 billion in personal current transfer receipts from government programs, more than offsetting a $740.2 billion decrease to $8,482.0 billion in wages and salaries, a $197.6 billion decrease to $1,424.5 billion in farm and small business proprietor's income, and a $138.4 billion decrease to $1,995.9 billion in supplements to wages and salaries, such as employer contributions for employee pension and insurance funds...again, remember those are all annualized figures...

For the April personal consumption expenditures (PCE) that will be included in 2nd quarter GDP, BEA reports that they fell at a $1.89 trillion annual rate, or by a bit more than 13.6%, as the annual rate of national PCE decreased from $13,906.8 billion in March to $12,013.3 in April....March PCE was revised from $13,813.2 billion annually to $13,906.8 billion, while February PCE was revised from $14,940.5 billion annually to $14,938.4 billion, revisions that were already included in this week’s GDP report....total personal outlays for April, which includes interest payments and personal transfer payments in addition to PCE, fell by an annualized $1,914.1 billion to $12,511.2 billion annually, which left total personal savings, which is disposable personal income less total outlays, at a $6,149.0 billion annual rate in April, up from the revised $2,107.2 billion in annualized personal savings in March...as a result, the personal saving rate, which is personal savings as a percentage of disposable personal income, rose to 33.0% in April, after the previously reported 13.1% March savings rate was revised to 12.7%...

As you know, before those personal consumption expenditures are used in the GDP computation, they must first be adjusted for inflation to give us the real change in consumption, and hence the real change in goods and services that were produced for that consumption....that's done with the price index for personal consumption expenditures, which is a chained price index based on 2012 prices = 100, which is computed by the BEA and included in Table 9 in the pdf for this report....that index fell from 110.510 in March to 109.990 in April, a month over month deflation rate that's statistically -0.4705%, which BEA reports as a decrease of 0.5 percent, following the 0.2% decrease in the PCE price index reported for March...applying that -0.47% April inflation adjustment to the -13.6% nominal change in PCE left real PCE down by a rounded 13.2% in April, after the March real PCE change was revised to a decrease of 6.7%...note that when those PCE price indexes are applied to a given month's annualized PCE in current dollars, it yields that month's annualized real PCE in those familiar chained 2012 dollars, which are the means that the BEA uses to compare the goods and services produced in one month or one quarter to the real goods and services produced in another....that result is shown in table 7 of the PDF, where we see that April's chained dollar consumption total works out to 10,922.9 billion annually, 13.2077% less than March's 12,585.1 billion, a decrease that the BEA reports as -13.2%...

However, to estimate the impact of the change in PCE on the change in GDP, that month over month PCE change doesn't help us much, since GDP is computed & reported quarterly... thus we have to compare April's real PCE to the the real PCE of all 3 months of the first quarter....while this release reports PCE for all those amounts monthly, the BEA also provides the annualized chained dollar PCE for those three months in table 8 in the pdf for this report, where we find that the annualized real PCE for the 1st quarter was represented by 13,180.8 billion in chained 2012  dollars..(note that's the same as is shown in table 3 of the pdf for the 1st quarter GDP report)....when we compare April's adjusted PCE of 10,922.9 billion to the 1st quarter real PCE of 13,180.8 billion on an annual basis, we find that April real PCE has fallen at a 52.83% annual rate from that of the 1st quarter....that would means that if April real PCE does not appreciate during May and June, the drop in PCE would subtract 36.70 percentage points from the growth rate of the 2nd quarter...

April Durable Goods: New Orders Down 17.2%, Shipments Down 17.7%, Inventories Up 0.2%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for April (pdf) from the Census Bureau reported that the widely watched new orders for manufactured durable goods fell by $35.4 billion or 17.2 percent to $170.0 billion in April, the third decrease in four months, after durable goods orders for March were revised to show a 16.6% decrease to $205.3 billion, revised from the 14.4% decrease to $213.2 billion that was reported a month ago...note that other than the usual monthly revisions to the underlying data, this month's report also reflects the May 15th re-benchmarking of shipments and inventories data to the 2017 Economic Census data, and then adjusting the new orders data to be consistent with the re-benchmarked data...

As is usually the case, the volatile monthly change in April's new orders for transportation equipment led this month's headline change, as April transportation equipment orders fell $23.9 billion or 47.3 percent to $26.6 billion, on a $8.5 billion cancellation in orders for commercial aircraft and a 52.8% decrease to $22.6 billion in new orders for motor vehicles and parts....excluding new orders for transportation equipment, other new orders were down 7.4% in April, while new orders for nondefense capital goods excluding aircraft, a proxy for equipment investment, were down 5.8% to $61,944 million...

The seasonally adjusted value of April's shipments of durable goods, which will ultimately be inputs into various components of 2nd quarter GDP after adjusting for changes in prices, fell for the third time in four months, decreasing by $41.5 billion or 17.7 percent to $192.3 billion, after March shipments were revised from a decrease of 4.5% to $240.7 billion to a decrease of 5.5% to $233.8 billion...again, reduced shipments of transportation equipment led the April change, as they fell $31.4 billion or 42.7 percent to  $42.1 billion, as the value of shipments of motor vehicles fell 52.9% to $22,624 million…excluding that volatile sector, the value of other shipments of durable goods still fell 6.3%, and are now 1.7% lower year to date than a year ago....meanwhile, shipments of nondefense capital goods excluding aircraft, important in figuring equipment investment, fell 5.4% in April after falling a revised 1.2% in March...

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for a 2nd month in a row, increasing by $0.7 billion or 0.2 percent to $425.6 billion, after the value of end of March inventories was revised from $437.4 billion to $424.9 billion, still shown as a 0.6% increase from February...a $0.4 billion or 0.3% increase to $143.0 billion in the value of inventories of transportation equipment accounted for more than half of the April inventory increase..

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but volatile new orders, fell for the second consecutive month, decreasing by $17.5 billion or 1.6 percent to $1,107.8 billion, following a March drop which was revised from the 2.0% decrease to $1,135.2 billion reported last month to a 2.1% decrease to $1,125.3 billion...a $15.5 billion or 2.0% decrease to $759.9 billion in unfilled orders for transportation equipment was a major factor in the aggregate decrease, but unfilled orders other than transportation equipment also fell 0.6% to $347,949 million....compared to a year ago, the unfilled order book for durable goods is now 4.7% lower than the level of last April, with unfilled orders for transportation equipment 6.4% below their year ago level, on a 3.6% decrease in the backlog of orders for motor vehicles and a 11.0% decrease in the order book for commercial aircraft...

New Home Sales Reported Higher in April After Prior Months’ Sales were Revised Lower

The Census report on New Residential Sales for April (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 623,000 homes annually during the month, which was 0.6 percent (±14.9 percent)* above the revised March annual rate of 619,000 new home sales, but still 6.2 percent (±17.1 percent)* below the estimated annual rate that new homes were selling at in April of last year....the asterisks indicate that based on their small sampling, Census could not tell whether April new home sales rose or fell from those in March or from those in April a year ago, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series....with this report; seasonally adjusted estimates of housing units sold, housing units for sale, and the months' supply of new housing have been revised back to January 2015; as a result, sales of new single family homes in March were revised from the annual rate of 627,000 reported last month to an annual rate of 619,000, and sales in February, initially reported at an annual rate of 765,000 and revised to a 741,000 rate last month, were revised down to an annual rate of 717,000, while new home sales in January, initially reported at an annual rate of 764,000 and revised from a 800,000 rate to a 777,000 rate last month, were revised to a 774,000 a year rate with this release...

The annual rates of sales reported here are seasonally adjusted and extrapolated from the estimates of canvassing Census field reps, which indicated that approximately 59,000 new single family homes sold in April, down from the estimated 60,000 new homes that sold in March and down from the 64,000 new homes that sold in February....the raw numbers from Census field agents further estimated that the median sales price of new houses sold in April was $309,900, down from the median sales price of $326,900 in March and down from the median sales price of $339,000 in April a year ago, while the average new home sales price was at $364,500, down from the $377,400 average sales price in March, and down from the average sales price of $385,400 in April a year ago....a seasonally adjusted estimate of 325,000 new single family houses remained for sale at the end of April, which represents a 6.3 month supply at the April sales rate, down from the revised 6.4 months of new home supply now being reported for March...

For graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: New Home Sales at 623,000 Annual Rate in April and A few Comments on April New Home Sales...

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, May 24, 2020

April’s new housing construction and existing home sales

Just two widely watched reports were released this week: the April report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for April from the National Association of Realtors…other than those, another regional Fed manufacturing survey for May was also released this week: the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions rose to -43.1 in May from -56.6 in April, the third negative reading in a row, indicating a slightly smaller majority of the region's manufacturing firms reported a decrease in their activity this month than in April...in addition, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for April this week, which breaks down the two employment surveys from the monthly national jobs report by state and region....while the text of this report provides a useful summary of this data, the real meat can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands...

April Housing Starts and Building Permits Reported Much Lower

The April report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 891,000 in April, which was 30.2 percent (±11.0 percent) below the revised March estimated rate of 1,276,000 annually, and 29.7 percent (±8.1 percent) below last April's rate of 1,267,000 housing starts a year....the figures shown in parenthesis indicate the most likely range of the change indicated; in other words, April housing starts could have been down by 19.2% or by as much as 41.2% from those of March, with revisions of a greater magnitude in either direction from that range possible...with this report, the annual rate for March housing starts was revised from the 1,216,000 reported last month to 1,276,000, while February starts, which were first reported at a 1,599,000 annual rate, were revised from last month's initial revised figure of 1,564,000 annually to a 1,567,000 annual rate with this report....

The annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 81,800 housing units were started in April, down from the 105,000 housing units that were started in March and the 111,600 housing units that were started in February...of those housing units started in April, an estimated 60,400 were single family homes and 20,100 were units in structures with more than 5 units, down from the revised 73,000 single family starts in March and down from the 31,100 units started in structures with more than 5 units in March...

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data...in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,074,000, which was 20.8 percent (±0.9 percent) below the revised March rate of 1,356,000, and was 19.2 percent (±0.9 percent) below the rate of building permit issuance in April a year earlier...the annual rate for housing permits issued in March was revised from 1,353,000 to 1,356,000....again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 96,900 housing units were issued in April, down from the revised estimate of 115,900 new permits issued in March.... for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 891 Thousand Annual Rate in April  and Comments on April Housing Starts... 

Existing Home Sales Fell 17.8% in April, Now Down 17.2% Year over Year

The National Association of Realtors (NAR) reported that seasonally adjusted existing home sales fell by 17.8% from March to April, the largest month-over-month drop since July 2010, projecting that 4.33 million existing homes would sell over an entire year if the April home sales pace were extrapolated over that year, a pace that was also 17.2% below the annual sales rate projected in April of a year ago....the NAR also reported that the median sales price for all existing-home types was $286,800 in April, 7.4% higher than in April a year earlier, which they report "marks 98 straight months of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales Wane 17.8% in April", is in easy to read plain English, so if you're interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily read about them in that press release...as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

Since this report is entirely seasonally adjusted and at a not very informative annual rate, we usually look at the raw data overview (pdf) to see what actually happened during the month...this unadjusted data indicates that roughly 373,000 homes sold in April, down 10.3% from the 416,000 homes that sold in March, and down by 18.2% from the 456,000 homes that sold in April of last year, so we can see the effect of the seasonal adjustment on the reported sales decrease, as it anticipates that home sales would increase as spring progresses...that same pdf indicates that the median home selling price for all housing types rose by 2.2%, from a revised $280,700 in March to $286,800 in April, while the average home sales price rose 1.7% to $321,500, from the $316,100 average sales price in March, while it was up 5.4% from the $305,000 average April home sales price of a year ago...to view both seasonally adjusted and unadjusted graphs and additional commentary on this report, again see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 4.33 million in April and Comments on April Existing Home Sales...

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, May 17, 2020

April's consumer and producer prices, retail sales, and industrial production; March business inventories and JOLTS..

Regular monthly reports that were released this week included the the April Consumer Price Index, the April Producer Price Index and the April Import-Export Price Index from the Bureau of Labor Statistics, the Retail Sales report for April and the Manufacturing and Trade, Inventories and Sales report for March (pdf), both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, and the Job Openings and Labor Turnover Survey (JOLTS) for March, also from the BLS.…the week also saw the release of the first regional Fed manufacturing survey for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose to -48.5, up from a record low of -78.2 in April, but still the second worst reading in the survey’s history, indicating a slightly less severe depression in First District manufacturing this month than last...

Consumer Prices Fell 0.8% in April on Lower Prices for Gasoline, Clothing, & Airfares

The consumer price index fell 0.8% in April, the biggest CPI drop since December 2008, as lower prices for energy, clothing, lodging, transportation services and used vehicles were only partly offset by higher prices for food, rent, and medical services...the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices fell by 0.8% in April, after falling by 0.4% in March, rising by 0.1% in February, by 0.1% in January, by 0.2% in December, 0.2% in November, 0.2% in October, 0.1% in September, 0.1% in August and rising by 0.3% last July...the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, fell from 258.115 in March to 256.389 in April, which left it statistically 0.3291% higher than the 255.548 index reading of April of last year, which is reported as a 0.3% year over year increase, down from a 1.5% year over year increase a month ago....with lower prices for energy the largest drag on the overall index increase, seasonally adjusted core prices, which exclude food and energy, fell by 0.4% for the month, as the unadjusted core price index fell from  267.312 to 266.089, which left the core index 1.4322% ahead of its year ago reading of 262.332, which is reported as a 1.4% year over year increase, down from the 2.1% year over year increase that was reported for March...

The volatile seasonally adjusted energy price index fell 10.1% in April, after falling 5.8% in March, 2.0% in February and 0.7% in January, but after rising 1.6% in December, 0.8% in November and by 1.7% in October, but after falling 0.8% in September, falling 1.4% in August and rising 0.9% last July, and is now 5.7% lower than in April a year ago...the price index for energy commodities was 20.0% lower in April, while the index for energy services was 0.1% higher, after falling 0.5% in March....the energy commodity index was down 20.0% due to a 20.6% decrease in the price of gasoline, the largest component, and a 15.6% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 2.9% lower...within energy services, the price index for utility gas service rose 0.2% after falling 1.4% in March and is now 1.9% lower than it was a year ago, while the electricity price index rose 0.1% after falling 0.2% in March....energy commodities are now averaging 31.4% lower than their year ago levels, with gasoline prices averaging 32.0% lower than they were a year ago, while the energy services price index is still down 0.2% from last April, as electricity prices are still 0.2% higher than a year ago…

The seasonally adjusted food price index rose 1.5% in April, after rising 0.3% in March, 0.4% February, 0.2% January, 0.2% December, 0.1% in November, 0.2% October, 0.2% September, but being unchanged last June, July & August, as the price index for food purchased for use at home was 2.6% higher in April, the largest increase since February 1974, while the index for food bought to eat away from home was 0.1% higher, as average prices at fast food outlets were 0.7% higher while prices at full service restaurants fell 0.3% and food prices at employee sites and schools were on average 0.1% higher...

In the food at home categories, the price index for cereals and bakery products was 2.9% higher as average bread prices rose 3.7%, prices for fresh biscuits, rolls, muffins rose 4.7%, and the price index for cakes, cupcakes, and cookies rose 5.0%...at the same time, the price index for the meats, poultry, fish, and eggs group was 4.3% higher, egg prices rose 16.1%, chicken prices rose 5.8%, and the index for pork roasts, steaks, and ribs was 10.1% higher... meanwhile, the seasonally adjusted index for dairy products was 1.5% higher, as milk prices rose 1.5% and prices for cheese & related products rose 1.8%...in addition, the fruits and vegetables index was also 1.5% higher as the price index for fresh fruits rose 1.3%, the price index for fresh vegetables rose 1.1, the price index for canned fruits and vegetables rose 3.6% and the price index for frozen fruits and vegetables rose 2.6%...at the same time, the beverages index was 2.9% higher as the price index for carbonated drinks rose 4.5% and the price index for noncarbonated juices and drinks rose 3.6%....lastly, the index for the ‘other foods at home’ category was up 1.9%, as the price index for sugar and sugar substitutes rose 1.9%, the fats and oils including peanut butter but not including butter or margarine rose 2.6%, and the price index for snacks rose 3.8%...the itemized list for price changes of over 100 separate food items is included at the beginning of Table 2 for this release, which also gives us a line item breakdown for prices of more than 200 CPI items overall...since last April, only the price of eggs, which is up 17.3%, and the price index for the index for pork roasts, steaks, and ribs, which has risen 13.3%, are the only food items with a price change greater than 10% over the past year...

Among the seasonally adjusted core components of the CPI, which fell by 0.4% in April, after falling by 0.1% in March, rising by 0.2% in February, 0.2% in January, 0.1% December, 0.2% November, 0.1% October, 0.2% in September, 0.2% in August, and by 0.3% in July, the composite price index of all goods less food and energy goods was 0.7% lower in April, while the more heavily weighted composite for all services less energy services was down 0.4%....among the goods components, which will be used by the Bureau of Economic Analysis to adjust April’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.7% lower, as the price index for living room, kitchen, and dining room furniture fell 1.9% and the index for bedroom furniture fell 2.4%, while the price index for household paper products rose 4.5%....at the same time, the apparel price index was 4.7% lower on an 11.3% decrease in the price index for men's suits, sport coats, and outerwear, a 9.6% decrease in the price index for women's dresses, an 8.3% decrease in the price index for women's outerwear, and a 5.7% decrease in the price index for women's footwear...in addition, the price index for transportation commodities other than fuel was 0.2% lower as prices for new cars fell 0.2% as prices for used cars and trucks fell 0.4% and the price index for vehicle parts and equipment other than tires fell 0.4%....meanwhile, prices for medical care commodities were 0.1% lower, even as prescription drugs prices rose 0.6%, because non-prescription drugs prices fell 0.5% and the medical equipment price index fell 0.6%...at the same time, the recreational commodities index was 0.9% lower on a 2.7% decrease in the price index for pets, pet supplies, and accessories, a 1.0% decrease in the price index for sporting goods, and a 1.3% decrease in the price index for sewing machines, fabric and supplies...on the other hand, the education and communication commodities index was 0.2% higher on a 1.0% increase in the price index for college textbooks and a 0.7% increase in the price index for computers, peripherals, and smart home assistants...lastly, a separate price index for alcoholic beverages was 0.3% higher, while the price index for ‘other goods’ was 0.1% lower on a 0.4% decrease in the index for cosmetics, perfume, bath, nail preparations and implements and a 0.5% decrease in cigarette prices..

Within core services, the price index for shelter was unchanged even though rents rose 0.2% and homeowner's equivalent rent rose 0.2% because prices for lodging away from home at hotels and motels fell 8.1%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.1%, and other household operation costs were on average unchanged....meanwhile, the price index for medical care services was 0.5% higher, as the price index for hospital inpatient services rose 0.6%, the price index for nursing homes and adult day services rose 0.5% and the price of health insurance rose 1.1%... on the other hand, the transportation services price index was 4.7% lower as the price index for car and truck rental fell 16.6%, airline fares fell 15.2% and vehicle insurance costs fell 7.2%....however, the recreation services price index rose 0.2% as the index for video discs and other media rose 0.9% and the index for admission to sporting events rose 2.6%...at the same time, the index for education and communication services was 0.1% higher as technical and business school tuition and fees rose 0.7% and postage rose 0.4%....lastly, the index for other personal services was down 0.1% as the price index for legal services fell 0.4%, and the index for ax return preparation and other accounting fees was 1.0% lower...

Among core line items, prices for televisions, which are now averaging 16.2% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 14.2% since last April, the rental of video discs and other media, which has fallen 13.4% from a year ago, the price index for sewing machines, fabric and supplies, which is down 10.0% year over year, the price index for women's dresses, which has fallen by 17.8% in the past year, the price index for women's outerwear, which has fallen by 14.9% from a year ago, the price index for men's suits, sport coats, and outerwear, which has fallen by 13.1% in the past year, the price index for infants' and toddlers' apparel, which has fallen by 10.9% in the past year, airline fares, which are now down by 24.3% since last April and the price index for computer software and accessories, which is down 10.6% year over year, have all seen prices drop by more than 10% over the past year, while the cost of health insurance, which is now up by 20.2% over the past year, the price index for infants' equipment, which has risen 11.3% over the past year, and the price index for window coverings, which has risen 10.1% from a year ago, are the only line items to have increased by a double digit magnitude over that span.... 

Retail Sales Down 16.4% in April after Revisions to Prior Months Sales

Seasonally adjusted retail sales decreased by a record 16.4% in April after retail sales March were revised slightly higher while sales for February were revised lower ...the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $403.9 billion for the month, which was a decrease of 16.4 percent (±0.5%) from revised March sales of $514.3 billion and 21.6 percent (± 0.7 percent) below the adjusted sales of April of last year...March sales were originally reported at $483.1 billion, down 8.7% from February; they are now indicated to have fallen 8.3% to $483.5 billion, because February adjusted sales were concurrently revised from $529.3 billion to $527.3 billion....the net of those revisions February and March sales would subtract about 0.11 percentage points, give or take, from 1st quarter GDP when the 2nd estimate is released at the end of the month...estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated nominal dollar sales fell 16.6%, from $481,539 in March to $401,451 in April, while they down 21.2% from the $509,413 million of sales in April a year ago....

We are again including below the table of monthly and yearly percentage changes in sales by business type taken from the Census marts pdf....the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from March to April in the first column, and then the year over year percentage change for those businesses since last April in the 2nd column; the second pair of columns gives us the revision of last month’s March advance monthly estimates (now called "preliminary") as revised in this report, likewise for each business type, with the February to March change under "Feb 2020 r (revised)" and the revised March 2019 to March 2020 percentage change in the last column shown...for your reference, our copy of the table of last month’s advance March estimates, before this report's revision, is here....

April 2020 retail sales table

Looking at the first and third columns, representing the percentage change in sales in April and March, should give you an idea how thoroughly some parts of the consumer driven economy have shut down...and it's important to realize that the April decreases are from the already depressed March levels...for example, March sales at clothing stores were down 49.4% from February; April sale at clothing stores were down another 78.8% from that...in seasonally adjusted dollars, clothing store sales fell from $22,135 million in February to $11,209 million in March, and then to $2,371 million in April...similarly, sales at furniture stores fell from $10,133 million in February to $7,994 million in March, and then to $3,301 million in April...even sales at grocery stores, which had risen a revised 28.6% in March, gave almost half of that sales gain back in falling 13.2% in April...

To compute April's real personal consumption of goods data for national accounts from this April retail sales report, the BEA will use the corresponding price changes from the April consumer price index, which we reviewed earlier...to estimate what they will find, we’ll first separate out the volatile sales of gasoline from the other totals...from the third line on the above table, we can see that April retail sales excluding the 28.8% partly price-related decrease in sales at gas stations were down by 15.5%....then, removing the figures representing the 13.1% decrease in grocery & beverage sales and the 29.5% decrease in food services sales out from that total, we find that core retail sales were down by more than 14.1% for the month...since the April CPI report showed that the the composite price index of all goods less food and energy goods was 0.7% lower in April, we can thus figure that real retail sales excluding food and gasoline will show an decrease of around 13.4%...however, the actual adjustment in national accounts for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at clothing stores were 78.8% lower in April, the apparel price index was 4.3% lower, which means part of the sales decrease was price related and that real sales of clothing likely fell by around 77.9% (click for the math)...

In addition to figuring those core retail sales, we should adjust food and energy retail sales for their price changes separately, just as the BEA will do…the April CPI report showed that the food price index was 1.5% higher, as the price index for food purchased for use at home rose 2.6% while the index for food bought away from home was 0.1% higher...thus, while nominal sales at food and beverage stores were 13.1% lower, real sales of food and beverages would have been around 15.4% lower in light of the 2.6% higher prices…on the other hand, the 29.5% decrease in nominal sales at bars and restaurants, once adjusted for 0.1% higher prices, suggests that real sales at bars and restaurants actually fell around 29.6% during the month...and while sales at gas stations were down 28.8%, there was a 20.6% decrease in price of gasoline during the month, which would suggest that real sales of gasoline were down on the order of 10.1%, with a caveat that gasoline stations do sell more than gasoline, and we haven't accounted for those other sales…averaging real sales that we have thus estimated back together, and excluding food services, we'll then estimate, without doing the tedious math, that the income and outlays report for April will show that real personal consumption of goods fell by around 13.8% in April, after falling by a revised 2.1% in March, and after falling by a revised 0.8% in February...at the same time, the 29.6% decrease in real sales at bars and restaurants would have a substantial negative impact on April's real personal consumption of services, lowering it on the order of 3%...

Industrial Production Fell 11.2% in April after March Production was Revised Higher

Industrial production decreased in April after production for March was revised higher...the Fed's G17 release on Industrial production and Capacity Utilization for April reported that industrial production fell 11.2% in April, the largest monthly drop in history, after falling by a revised 4.5% in March, which left our total output 15.0% lower than a year ago...the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, came in at 92.6 in April, after the March index value was revised from the 103.7 reported last month up to 104.3, the February index was revised from 110.6 to 109.3, and the November index was revised down from 110.1 to 110.0...

The manufacturing index, which accounts for more than 75% of the total IP index, fell by 13.7% to 85.5 in April, after the March manufacturing index was revised from 98.3 to 99.1, while the February manufacturing index was left unchanged 104.9, and prior months were unrevised as well...the output of motor vehicles and parts fell more than 70 percent in April, while other manufacturing dropped 10.3 percent, leaving the manufacturing index 18.0% below its year ago level....meanwhile, the mining index, which includes oil and gas well drilling, fell 6.1%, from 131.5 in March to 123.4 in April, after the March index was revised up from from the originally reported 130.1, which still left the mining index 7.5% lower than it was a year earlier...finally, the seasonally adjusted utility index, which typically fluctuates due to deviations from normal temperatures, fell by 0.9% in April, from 100.2 to 99.3, after the March utility index was revised from 101.3 to 100.2, now a 1.9% decrease from February, while the February index was revised from 105.5 to 102.2, now up 3.6% from January....after this month's revisions, the utility index is now 3.8% below that of a year ago...

This report also includes capacity utilization stats, which are expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry fell to 64.9% in April from 73.2% in March, after capacity utilization for March was revised up from 72.7%...capacity utilization of NAICS durable goods production facilities fell from a revised 68.6% in March to 55.3% in April as capacity utilization for motor vehicles and parts manufacturers fell from 54.6% to 15.4%, while capacity utilization for non-durables producers fell from a revised 74.1% to 68.0%.. capacity utilization for the mining sector fell to 81.7% in April from 87.2% in March, which was previously reported at 86.3%, while utilities were operating at 71.1% of capacity during April, down from their 71.9% of capacity during March, which was previously reported at 72.7%...for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories..  

Producer Prices Down 1.3% in April on Lower Energy Prices, Lower Margins for Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand fell 1.3% in April, the largest drop in the history of the index, as prices for finished wholesale goods averaged 3.3% lower, and average margins of final services providers decreased by 0.2%...that follows a March report that had the PPI down 0.2%, as prices for finished wholesale goods averaged 1.0% lower, while average margins of final services providers increased by 0.2%, a February report that showed the PPI had fallen 0.6%, with prices for finished wholesale goods averaging 0.9% lower, while average margins of final services providers fell by 0.3%, a now revised January report that indicates the PPI had risen 0.4%, as prices for finished wholesale goods had been on average 0.3% higher, while margins of final services providers increased by 0.4%, and a re-revised December report that indicates the PPI was up 0.3%, with prices for finished wholesale goods up 0.2% while margins of final services providers were 0.3% higher....on an unadjusted basis, producer prices are now 1.2% lower than a year ago, a reversal of the 0.7% year over year increase indicated by last month's report, while, the core producer price index, which excludes food, energy and trade services, fell by 0.9% for the month, and is now 0.3% lower than in April a year ago, down from the 1.0% year over year increase shown in March...

As noted, the price index for final demand for goods, aka 'finished goods', was 3.3% lower in April, after being 1.0% lower in March, 0.9% lower in February, 0.3% higher in January, 0.2% higher in December, 0.3% higher in November, 0.5% higher in October, 0.2% lower in September, 0.3% lower in August, 0.3% higher in July, 0.5% lower in June, 0.2% lower in May, and 0.3% higher in April of last year....the finished goods index fell 3.3% in March because the price index for wholesale energy goods was 19.0% lower, after falling by 6.7% in Match, 3.6% in February but after rising by 0.2% in January and 1.1% in December, while the price index for wholesale foods fell 0.5%, after being unchanged in March, falling 1.6% in February, being unchanged in January, and falling 0.2% in December, and while the index for final demand for core wholesale goods (excluding food and energy) was 0.4% lower after rising 0.2% in March and falling 0.1% in February...wholesale energy prices were lower due to a record 56.6% drop in wholesale prices for gasoline, a 35.6% drop in wholesale prices for home heating oil, a 27.2% decrease in wholesale prices for liquefied petroleum gas, and a 27.8% decrease in wholesale prices for diesel fuel, while the wholesale food price index fell 0.5% on a 12.5% decrease in the wholesale price index for grains and a 10.5% decrease in the wholesale price index for fresh fruits and melons, which were only partly offset by a 31.8% increase in the wholesale price of eggs for fresh use....among wholesale core goods, the wholesale price index for industrial chemicals fell 11.5% and the wholesale price index for iron & steel scrap fell 15.6% while the wholesale price index for alcoholic beverages rose 1.4%%..

At the same time, the index for final demand for services fell 0.2% in April, after rising 0.2% in March, falling 0.3% in February, rising by a revised 0.4% in January, and rising by a revised 0.3% in December, as the index for final demand for trade services rose 1.6%, the index for final demand for transportation and warehousing services fell 3.5%, and the core index for final demand for services less trade, transportation, and warehousing services fell 0.9%... among trade services, seasonally adjusted margins for fuels and lubricants retailers rose 41.6%, margins for TV, video, and photographic equipment and supplies retailers rose 5.6%, and margins for computer hardware, software, and supplies retailer rose 5.1%, while margins for RVs, trailers, and campers retailers fell 15.2% ... among transportation and warehousing services, margins for airline passenger services fell 11.3%, margins for truck transportation of freight fell 0.8%, and margins for air transportation of freight fell 1.1% ...among the components of the core final demand for services index, margins for passenger car rental fell 20.5%, margins for portfolio management fell 12.0%, margins for traveler accommodation services fell 9.7%, and margins for arrangement of cruises and tours fell 5.5%, while margins for arrangement of vehicle rentals and lodging rose 3.9%...

This report also showed the price index for intermediate processed goods fell 3.7% in April, after falling 1.1% in March, 0.9% in February and 0.2% in January....the price index for intermediate energy goods fell 15.1%, as refinery prices for gasoline fell 56.6%, refinery prices for jet fuel fell 49.1% and refinery prices for No. 2 diesel fuel fell 27.8%, while producer prices liquefied petroleum gas fell 27.2%...meanwhile, prices for intermediate processed foods and feeds fell 0.1%, as the producer price index for processed fruits and vegetables fell 4.4% while the index for beef and veal rose 12.6%...at the same time, the core price index for intermediate processed goods less food and energy fell 1.5% as the producer price index for basic organic chemicals fell 13.5%, the producer price index for softwood lumber fell 10.8% and producer prices for building paper and board decreased 5.1%... prices for intermediate processed goods are now 7.3% lower than in April a year ago, the twelfth consecutive year over year decrease, following 29 months of year over year increases, which had been preceded by 16 months of negative year over year comparisons, as intermediate goods prices fell every month from July 2015 through March 2016....

Meanwhile, the price index for intermediate unprocessed goods fell 13.7% in April, after falling 8.0% in March, 7.7% in February and a revised 0.5% in January, but after rising a revised 1.2% in December....that was as the April price index for crude energy goods fell 27.5% as crude oil prices fell 48.9% and as unprocessed natural gas prices fell 20.4%, while the price index for unprocessed foodstuffs and feedstuffs fell 9.7% on a 17.4% decrease in producer prices for slaughter hogs, a 48.2% decrease in producer prices for slaughter chickens, and a 19.1% decrease in producer prices for corn...at the same time, the index for core raw materials other than food and energy materials fell 4.3%, as prices for wastepaper fell 50.4%, the price index for unprocessed iron & steel scrap decreased 15.6%, and the price of iron ore fell 7.2%....this raw materials index is now 28.2% lower than a year ago, as the year over year change on this index remained negative all last year...

Lastly, the price index for services for intermediate demand fell 1.6% in April after falling 0.1% in March, 0.1% in February, rising a revised 0.1% in January, and rising a revised 0.5 percent in December...the price index for intermediate trade services was 0.4% lower, as margins for intermediate metals, minerals, and ores wholesalers fell 5.6%, margins for building materials, paint, and hardware wholesalers fell 2.2% and margins for intermediate machinery and equipment parts and supplies wholesalers fell 2.0%...meanwhile, the index for transportation and warehousing services for intermediate demand was 1.4% lower, as the intermediate price index for transportation of passengers fell 11.3% and the price index for air mail and package delivery services other than USPS fell 3.4%...at the same time, the core price index for intermediate services less trade, transportation, and warehousing was 2.0% lower, as the intermediate price index for passenger car rental fell 20.5%, the intermediate price index for portfolio management fell 12.0%, the price index for television advertising time sales fell 11.0% and the price index for intermediate traveler accommodation services fell 9.7%, while the intermediate price index for internet advertising space sales, excluding internet ads sold by print publishers rose 5.5%...over the 12 months ended in April, the year over year price index for services for intermediate demand is now 1.2% lower than it was a year ago, the first year over year negative change in the history of this index.....

March Business Sales Fell 5.2%, Business Inventories Were Down 0.2%

After the release of the April retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for March  (pdf), which incorporates the revised March retail data from that April retail report and the earlier published March wholesale and factory data to give us a complete picture of the business impact on the economy for that month....for this report, we should note that wholesale sales and inventories were revised on April 27th, which thus revised the figures that were reported a month ago, even before the usual revisions to the prior month’s data that accompany this report...

According to the Census Bureau, total manufacturer's and trade sales were estimated to be valued at a seasonally adjusted $1,386.1 billion in March, down 5.2 percent (±0.2 percent) from February's revised sales, and down 4.9 percent (±0.3 percent) from March sales of a year earlier...note that total February sales were concurrently revised up from the originally reported $1,464.2 billion to $1,462.640 million, still a 0.5% decrease from January....manufacturer's sales fell 5.2% to $473,613 million in March; retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, fell 5.3% to $437,561 million, while wholesale sales fell 5.2% to $474,974 million...

Meanwhile, total manufacturer's and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,012.5 billion at the end of March, down 0.2% (±0.1%) from the end of February, and 0.3 percent (±0.4 percent)* lower than in March a year earlier...the value of end of February inventories was revised from the $2,012.7 billion reported last month to $2,016.7 billion, which is now 0.5% lower than January's inventory valuation....seasonally adjusted inventories of manufacturers were estimated to be valued at $693,481 million, down 0.8% from February, while inventories of retailers were valued at $668,320 million, 1.0% more than those of February, and while inventories of wholesalers were estimated to be valued at $650,703 million at the end of March, 0.8% less than in February...

Last week we figured that there would be little impact on 1st quarter GDP based on the inventory change the wholesales report showed, and that 1st quarter GDP was overestimated by around 0.16 percentage points based on what the factory inventories report showed...the BEA's Key source data and assumptions (xls) that accompanied the release of the advance estimate of 1st quarter GDP indicates that they had estimated that the value of retail inventories March would increase by $3.1 billion before adjustment with the PPI, so the $6.6 billion increase that this report shows means that they underestimated the 1st quarter retail inventory component at an annual rate of around $14.0 billion….with a minimal inflation adjustment, that would imply that the contribution of the retail inventory component of 1st quarter GDP was underestimated by around 0.25 percentage points, so after netting out the 3 inventory changes, this report indicates there should be a net upward adjustment of around 0.09 percentage points to 1st quarter GDP when the 2nd estimate is released at the end of May...

Job Openings, Hiring, & Job Quitting All Way Down in March, Layoffs at a Record High

The Job Openings and Labor Turnover Survey (JOLTS) report for March from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 813,000 to 6,191,000 in March, after February job openings were revised up by 122,000 from the originally reported 6,882,000...March's jobs openings were also 15.9% lower than the 7,364,000 job openings reported in March a year ago, as the job opening ratio expressed as a percentage of the employed fell to 3.9% in March, down from the 4.4% rate in February and the 4.7% rate of March a year ago...(details on job openings by industry and region can be viewed in Table 1)...like most BLS releases, the press release for this report is easy to understand and also refers us to the associated table for the data cited, which are linked at the end of the release...note that the BLS reports that the response to their survey for March was 57 percent, while response rates prior to the pandemic averaged 67 percent, so we should figure that this month's report will have a higher than normal margin of error than usual...

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and 'other separations', which includes retirements and deaths....in March, seasonally adjusted new hires totaled 5,206,000, down by 658,000 from the revised 5,864,000 who were hired or rehired in February, as the hiring rate as a percentage of all employed fell from 3.8% in February to 3.4% in March, which was also down from the 3.8% hiring rate in March a year earlier (details of hiring by sector since November are in table 2)....meanwhile, total separations rose by a record 8,922,000 to 14,517,000 in March, as the separations rate as a percentage of the employed rose from 3.7% to 9.6%, which was also up from 3.7% a year ago (see table 3)...subtracting the total hires of 5,206,000 from the 14,517,000 total separations would imply an decrease of 9,311,000 jobs in March, way more than the revised payroll job decrease of 870,000 for March reported in the April establishment survey last week, with the difference likely due to the date of the surveys, which is at month end for JOLTS but during the week of the 12th for the employment situation.....

Breaking down the seasonally adjusted job separations, the BLS found that 2,782,000 of us voluntarily quit our jobs in March, down from the revised 3,436,000 who quit their jobs in February, while the quits rate, widely watched as an indicator of worker confidence, fell from 2.3% to 1.8% of total employment, which was also down from 2.3% a year earlier (see details in table 4)....in addition to those who quit, a record 11,372,000 were either laid off, fired or otherwise discharged in March, up by 9,526,000 from the revised 1,846,000 who were discharged in February, as the discharges rate rose from 1.2% to 7.5% of all those who were employed during the month, which was also up from the discharges rate of 1.1% a year ago...meanwhile, other separations, which includes retirements and deaths, were at 363,000 in March, up from 313,000 in February, for an 'other separations rate’ of 0.2%, same as in February and as in March of last year....both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release... 

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, May 10, 2020

April’s jobs report; March's trade deficit, factory inventories and wholesale sales

Major economic reports released the past week include the Employment Situation Summary for April from the Bureau of Labor Statistics, and three March reports that include metrics which were estimated in last week's advance estimate of 1st quarter GDP:  the Commerce Dept report on our international trade in goods and services for March,  the Full Report on Manufacturers' Shipments, Inventories and Orders for March and the Wholesale Trade, Sales and Inventories report for March, both from the Census Bureau....in addition, the Consumer Credit Report for March was released by the Fed on Thursday of this week, and it showed that overall consumer credit, a measure of non-real estate debt, contracted by a seasonally adjusted $12.1 billion, or at a 3.4% annual rate, as non-revolving credit expanded at a 6.4% annual rate to $3,143.2 billion, while revolving credit outstanding shrunk at a 30.9% rate to $1,066.1 billion...

Privately issued reports released this week included the ADP Employment Report for April and the April Non-Manufacturing Report On Business from the Institute for Supply Management (ISM); which saw the NMI (non-manufacturing index) fall to 41.8% in April from 52.5% in March, indicating a significant plurality of service industry purchasing managers reported contraction in various facets of their business in April...we should note that the NMI is a an average of four equally weighted subindexes, and that their business activity, new orders and employment indices were all at record lows, while the supplier deliveries index was at a record high, which thus limited the decrease in the composite NMI...

Payroll jobs fall 20.5 million in April, Unemployment Rate at All-Time-High 

As was widely expected, the Employment Situation Summary for April indicated the largest number of payroll job cuts and the highest unemployment rate in the history of these surveys…seasonally adjusted estimates extrapolated from the establishment survey data projected that non-farm payroll employment fell by 20,500,000 in April, after the previously estimated payroll job decrease for March was revised down from -701,000 to -870,000, while the payroll jobs increase for February was revised down from 275,000 to 230,000…including those revisions, this report thus indicates a total of 20,714,000 fewer seasonally adjusted payroll jobs than were reported last month, wiping out more than nine years of job gains, and reducing payroll jobs to their smallest number since February 2011...the 20,500,000 jobs lost in April is an unparalleled record high, it tops the previous record of 800,000 jobs lost in March 2009 by twenty-five fold… it's also likely that millions more were not actually working during all or part of the month, because the establishment survey counts workers who are paid by their employer for all or any part of the pay period including the 12th of the month as employed, even if they were not actually at their jobs....meanwhile, the unadjusted data shows that there were actually 19,512,000 fewer payroll jobs extant in April than in March, as the expected seasonal job increases in sectors such as construction, services to buildings and dwellings, and leisure and hospitality were first wiped out by the seasonal adjustments before the adjusted losses were reported...

Seasonally adjusted job losses in April were spread through throughout both the goods producing and the private service sectors, with only the federal government showing a statistically insignificant 1,000 job increase on a seasonally adjusted basis...the leisure and hospitality sector accounted for more than a third of the April decline, as it was down by 7,653,000 jobs, with the loss of 5,491,300 employees working in bars and restaurants and another 1,062,000 job losses in amusements, gambling, and recreation employment...the broad professional and business services sector saw 2,128,000 jobs cut, as temporary help services employed 841,900 fewer than in March, and 259,400 less than normal for this time of year were employed by services to buildings and dwellings...the retail sector shed 2,106,900 jobs, led by losses of 739,000 spots in clothing stores and 344,700 jobs at motor vehicle and parts dealers, even as employment in the warehouse clubs and supercenters component of general merchandise retailing added 93,400 jobs....employment in health care and social assistance dropped by 2,086,900, with the loss of 503,300 jobs in dentist's offices, 336,200 jobs in child care services, and 241,300 more jobs in individual and family services...manufacturing employment fell by 1,330,000, led by job losses of 381,500 in motor vehicles and parts manufacturing and 109,000 in the manufacture of fabricated metal products...despite the increase at the federal level, government employment was down by 980,000 in April, with the loss of 468,800 jobs in local school districts and another 332,300 local government jobs outside of education...after seasonal adjustment, construction employment fell by 975,000 in April, with 393,100 of those construction jobs cut by nonresidential specialty trade contractors and another 297,400 cut by residential specialty trade contractors.…employment fell by 584,100 in the transportation and warehousing sector, led by the loss of 185,300 jobs in transit and ground passenger transportation....in addition, employment in "other services" fell by 1,267,000, employment in wholesale trade fell by 362,800, employment in the financial sector fell by by 262,000, employment in the information sector fell by 254,000, and employment in resource extraction fell by 50,000, with 6,000 of those in coal mining...

The establishment survey also showed that average hourly pay for all employees rose by $1.34 an hour to $30.01 an hour in April, after it had increased by a revised 15 cents an hour in March; at the same time, the average hourly earnings of production and non-supervisory employees increased by $1.04 to $25.12 an hour, averages which undoubtedly reflect the large loss of poorly-paid jobs in food services and retail....employers also reported that the average workweek for all private payroll employees rose by 0.1 hour to 34.2 hours in April, while hours for production and non-supervisory personnel rose by 0.1 hour to 33.5 hours...the manufacturing workweek, however, was down by 2.1 hours to 38.3 hours, while average factory overtime fell by 0.9 hour to 2.1 hours...

At the same time, the April household survey indicated that the seasonally adjusted extrapolation of those who reported being employed fell by an estimated 22,369,000 to 133,403,000, while the similarly estimated number of those who qualified as unemployed rose by 15,938,000 to 23,078,000; which thus meant a net decrease of 6,432,000 in the total labor force...since the working age population had also grown by 138,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by 646,000 to a record 103,415....with the number of those in the labor force decreasing while the civilian noninstitutional population was increasing, the labor force participation rate fell 2.5% to 60.2%....at the same time, since the decrease in the number employed was as large as it was, the employment to population ratio, which we could think of as an employment rate, fell from 60.0% in March to 51.3% in April...likewise, the increase in the number unemployed was large enough to raise the unemployment rate from 4.4% to 14.7%, the highest unemployment rate on record by a long shot....meanwhile, the number who reported they were involuntarily working part time rose by 5,122,000 to 10,887,000 in April, which was enough to increase the alternative measure of unemployment, U-6, which includes those "employed part time for economic reasons", from 8.7% the labor force in March to 22.8% of the labor force In April, also the largest jump and highest on record by a long shot....

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there...note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it along side the press release to avoid the need to scroll up and down the page..

March Trade Deficit Increases 11.6% on Falling Exports of Goods and Services

Our trade deficit was 11.6% higher in March, as both our imports and exports decreased, but our exports decreased by more....the Commerce Department report on our international trade in goods and services for March indicated that our seasonally adjusted goods and services trade deficit rose by $4.6 billion to $44.4 billion in March, from a February deficit that was revised from the originally reported $39.9 billion to $39.8 billion...in rounded totals, the value of our March exports fell by 20.0 billion to $187.7 billion on a $9.2 billion decrease to $128.1 billion in our exports of goods and a $10.8 billion decrease to $59.6 billion in our exports of services, while our imports fell by $15.4 billion to $232.2 billion on a $4.7 billion decrease to $193.7 billion in our imports of goods and a $10.7 billion decrease to $38.5 billion in our imports of services....export prices averaged 1.6% lower in March, so real exports were greater than their nominal value by that percentage, while import prices were 2.3% lower, meaning that our real imports were likewise greater than than their nominal value by that percentage...

Our March exports of goods fell mostly due to lower exports of industrial supplies and materials, automotive vehicles, parts, and engines, and capital goods...referencing the Full Release and Tables for March (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials fell by $2,888 million to $42,910 million on a $987 million decrease in our exports of crude oil, a $375 million decrease in our exports of fuel oil, a $880 million decrease in our exports of other petroleum products, and a $311 million decrease in our exports of nonmonetary gold, and that our exports of automotive vehicles, parts, and engines fell by $2,464 million to $11,303 million on a $876 million decrease in our exports of vehicle parts and accessories other than engines, chassis and tires, a $775 million decrease in our exports of passenger cars, a $389 million decrease in our exports of trucks, buses, and special purpose vehicles, and a $308 million decrease in our exports of automotive engines...in addition, our exports of capital goods fell by $2,015 million to $42,610 million, led by a $410 million decrease in our exports of industrial machines other than those itemized separately, a $399 million decrease in our exports parts for civilian aircraft and a $249 million decrease in our exports civilian aircraft, our exports of consumer goods fell by $821 million to $15,030 million on a $432 million decrease in our exports of gem diamonds and a $332 million decrease in our exports of jewelry even as our exports of pharmaceuticals rose by $813 million, and our exports of foods, feeds and beverages fell by a net of $7 million to $10,908 million even as our exports of soybeans rose by $249 million, while our exports of other goods not categorized by end use fell by $652 million to $5,253 million....

Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our goods imports and shows that falling imports of consumer goods and automotive vehicles, parts, and engines were mostly responsible for the decrease in March imports, even as an increase in imports of capital goods partly offset those decreases...our imports of consumer goods fell by $3,977 million to $47,351 million on a $2,457 million decrease in our imports of cellphones, a $437 million decrease in our imports of artwork, antiques and other collectibles, a $394 million decrease in our imports of toys, games and sporting goods, a $373 million decrease in our imports of TVs and video equipment, and a $327 million decrease in our imports of jewelry, even as our imports of pharmaceuticals rose by $1,998 million, while our imports of automotive vehicles, parts and engines fell by $2,729 million to $27,779 million on a $1,501 million decrease in our imports of vehicle parts and accessories other than engines, chassis and tires, a $547 million decrease in our imports of passenger cars, a $402 million decrease in our imports of automotive engines, and a $318 million decrease in our imports of trucks, buses, and special purpose vehicles....partially offsetting the decreases in those end-use categories, our imports of capital goods rose by $1,508 million to $53,215 million on a $803 million increase in our imports of computers, a $760 million increase in our imports of semiconductors, and a $319 million increase in our imports of civilian aircraft, even as our imports of electric apparatuses fell by $363 million…in addition, our imports of foods, feeds, and beverages rose by $441 million to $12,926 million led by a $209 million increase in our imports of 'other foods", our imports of industrial supplies and materials rose by $399 million to $41,152 million on a $2,309 million increase in our imports of nonmonetary gold and an $1,181 million increase in our imports of finished metal shapes, even as our imports of crude oil fell $2,709 and our imports of fuel oil fell $402, while our imports of other goods not categorized by end use rose by $155 million to $9,965 million.....

The Full Release and Tables pdf for this report also gives us surplus and deficit details on our goods trade with selected countries:

The March figures show surpluses, in billions of dollars, with South and Central America ($5.0), Hong Kong ($1.9), OPEC ($1.5), Brazil ($1.4), Saudi Arabia ($0.3), and United Kingdom ($0.1). Deficits were recorded, in billions of dollars, with European Union ($16.9), China ($15.5), Mexico ($9.0), Germany ($6.0), Japan ($4.6), Italy ($2.8), Canada ($2.6), Taiwan ($2.0), South Korea ($1.9), India ($1.7), France ($0.7), and Singapore (less than $0.1).
  • The deficit with the European Union increased $4.3 billion to $16.9 billion in March. Exports decreased $0.6 billion to $21.8 billion and imports increased $3.7 billion to $38.7 billion.
  • The surplus with the United Kingdom decreased $1.2 billion to $0.1 billion in March. Exports decreased $1.3 billion to $4.9 billion and imports decreased less than $0.1 billion to $4.8 billion.
  • The deficit with China decreased $4.2 billion to $15.5 billion in March. Exports increased $0.3 billion to $7.8 billion and imports decreased $3.9 billion to $23.3 billion.

In the advance estimate of 1st quarter GDP published last week, our March trade deficit was estimated based on the sketchy Advance Report on our International Trade in Goods which was released just before the GDP release...that report estimated that our seasonally adjusted March goods trade deficit was at $64,219 million on a Census basis, on goods exports of $127,647 million and goods imports of $191,866 million...this report revises that and shows that our actual Census basis goods trade deficit in March was at $64,376 million, on adjusted goods imports of $128,013 million and adjusted goods exports of $192,389 million...at the same time, the February goods trade deficit was revised from the $59,887 million indicated in that advance report to $59,730 million…amazingly, those revisions from the previously published figures exactly cancel each other out, which would suggest that the net 1st quarter trade deficit in goods as reported by last week's GDP report was accurate, and will not need to be be revised when the 2nd estimate is released at the end of this month....

Note, however, that we have not adjusted for changes in price, and that Exhibit 10 in the pdf for this March report indicates that the price adjusted trade in goods for each month going back to October has been revised....however, the 2nd estimate of GDP will not include any trade deficit revisions to October, November, and December, and will only use the revised inflation adjusted data for January, February & March, so it will not include and hence be less accurate than the data available here…that 4th quarter GDP data will not be corrected for price changes until the annual revisions to GDP are released at the end of July...

With the major drop in trade in services, more than 20% overall, we suspect that there also have been significant revisions in that data since the GDP report was published....however, the BEA's Key source data and assumptions (xls) for the advance estimate of first quarter GDP only provides aggregate exports and imports of services at annual rates on an international-transactions-accounts basis, and there is no comparable metric or adjustable data in this report that we could check to see what the differences are...but with both nominal exports and imports down in excess of $10 billion each, it's possible that even a modest revision to those figures could have an oversized impact on 1st quarter GDP...

March Factory Shipments Down 5.2%, Factory Inventories Down 0.8%

The Full Report on Manufacturers' Shipments, Inventories, & Orders (pdf) for March from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods decreased by $51.0 billion or 10.3 percent to $445.8 billion in March, following a decrease of $0.7 billion or 0.1% to $496.8 billion in February, which was revised from the decrease of $0.1 billion to $497.4 billion that was reported for February last month....however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched "factory orders report", both the "new orders" and "unfilled orders" sections of this report are really only reliable as revised updates to the March advance report on durable goods which was released last week...on those durable goods orders revisions, the Census Bureau's own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we'll just quote directly from that summary here:

  • Summary New orders for manufactured goods in March, down four of the last five months, decreased $51.0 billion or 10.3 percent to $445.8 billion, the U.S. Census Bureau reported today. This followed a 0.1 percent February decrease. Shipments, down three consecutive months, decreased $26.2 billion or 5.2 percent to $473.6 billion. This followed a 0.3 percent February decrease. Unfilled orders, down following three consecutive monthly increases, decreased $23.6 billion or 2.0 percent to $1,134.9 billion. This followed a 0.1 percent February increase. The unfilled orders-to-shipments ratio was 6.57, down from 6.62 in February. Inventories, down three consecutive months, decreased $5.8 billion or 0.8 percent to $693.5 billion. This followed a 0.4 percent February decrease. The inventories-to-shipments ratio was 1.46, up from 1.40 in February. 
  • New Orders for manufactured durable goods in March, down following three consecutive monthly increases, decreased $36.6 billion or 14.7 percent to $212.6 billion, down from the previously published 14.4 percent decrease. This followed a 1.1 percent February increase. Transportation equipment, down two of the last three months, led the decrease, $35.9 billion or 41.3 percent to $50.9 billion. New orders for manufactured nondurable goods decreased $14.4 billion or 5.8 percent to $233.2 billion.
  • Shipments of manufactured durable goods in March, down eight of the last nine months, decreased $11.8 billion or 4.7 percent to $240.4 billion, down from the previously published 4.5 percent decrease. This followed a 0.8 percent February increase. Transportation equipment, also down eight of the last nine months, led the decrease, $11.1 billion or 13.0 percent to $74.0 billion. Shipments of manufactured nondurable goods, down three consecutive months, decreased $14.4 billion or 5.8 percent to $233.2 billion. This followed a 1.3 percent February decrease. Petroleum and coal products, also down three consecutive months, drove the decrease, $15.5 billion or 30.3 percent to $35.6 billion.
  • Orders Unfilled orders for manufactured durable goods in March, down following three consecutive monthly increases, decreased $23.6 billion or 2.0 percent to $1,134.9 billion, unchanged from the previously published decrease. This followed a 0.1 percent February increase. Transportation equipment, also down following three consecutive monthly increases, led the decrease, $23.0 billion or 2.9 percent to $768.1 billion.
  • Inventories of manufactured durable goods in March, up eighteen of the last nineteen months, increased $2.8 billion or 0.6 percent to $437.4 billion, unchanged from the previously published increase. This followed a virtually unchanged February increase. Transportation equipment, up twenty of the last twenty-one months, led the increase, $0.9 billion or 0.6 percent to $152.7 billion. Inventories of manufactured nondurable goods, down three consecutive months, decreased $8.6 billion or 3.2 percent to $256.1 billion. This followed a 1.0 percent February decrease. Petroleum and coal products, also down three consecutive months, led the decrease, $7.5 billion or 19.7 percent to $30.8 billion. By stage of fabrication, March materials and supplies increased 0.7 percent in durable goods and decreased 1.8 percent in nondurable goods. Work in process increased 1.1 percent in durable goods and decreased 6.6 percent in nondurable goods. Finished goods were virtually unchanged in durable goods and decreased 2.9 percent in nondurable goods.

The BEA's Key source data and assumptions (xls) for the advance estimate of first quarter GDP indicates that they had estimated that the value of manufactured nondurable goods inventories would decrease by $1.5 billion on a Census basis (ie, before price adjustments) in March, while this report obviously shows total non-durable goods factory inventories decreased by $8.6 billion...the value of February's non durable goods factory inventories was concurrently revised from $264.9 billion to $ 264,652 billion...that would mean that March's inventory decrease was underestimated by $10.8 billion in the GDP report, while February's GDP inventory figure was $0.25 billion too high, which combined would suggest a downward revision of around 0.16 percentage points to first quarter GDP ... we should caution that since our estimate of the impact on GDP is based on the change in nominal spending, an imbalance of inflation adjustments among the revised components might also have a material impact on the final revision..

March Wholesale Sales Down 5.2%, Wholesale Inventories Down 0.8%

The March report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $475.0 billion, down 5.2 percent (±0.5 percent) from the revised February level, and also 5.2 percent (±0.5 percent) lower than wholesale sales of March 2018... the February preliminary estimate of wholesale sales was revised from the $500.7 billion reported last month to $500,955 billion, which the Census reports as "revised from the preliminary estimate of down 0.8 percent (±0.5 percent) to down 0.7 percent (±0.5 percent)." from January...as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods sold....

On the other hand, the monthly change in private inventories is a major factor in GDP, since additional goods sitting in a warehouse represent goods that were produced but not sold, and this March report estimated that wholesale inventories were valued at $650.7 billion at month end, a decrease of 0.8 percent (+/-0.2%) from the revised February level and 2.0 percent (±0.9  percent) lower than March a year ago, with the February preliminary inventory estimate concurrently revised upward from the originally reported $655.8 billion to $655.7 billion, which meant the change in inventories from January to February was revised from the decrease of 0.7 percent (+/-0.4%) reported last month to one of 0.8 percent (±0.2 percent), even as the revision from the advance estimate was from down 1.0 percent (±0.2 percent) to down 0.8 percent (±0.2 percent)…

The BEA's Key source data and assumptions (xls) for the advance estimate of first quarter GDP indicates that they had estimated that the value of March wholesale inventories would decrease by $6.4 billion from February before price adjustments, while this report shows that wholesale goods inventories decreased by $5.0 billion...however, the value of February's wholesale inventories that was used in the GDP report came from the sketchy Advance Report on Wholesale and Retail Inventories that was released just before the GDP report...that report had February wholesale inventories at $656,325 million, so hence February inventories have now been revised down $0.6 billion from the figure used in the GDP report...that revision in turn means that the March inventory change figure used in the GDP was $0.8 billion too low...combining the final revisions to February and March, the change in 1st quarter wholesale inventories will therefore be an increase of $0.2 billion from previously published figures, which would have a negligible impact on first quarter GDP ...

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)