Major reports that were released this past week included the December Consumer Price Index, the December Producer Price Index, the December Import-Export Price Index, and the Job Openings and Labor Turnover Survey (JOLTS) for November, all from the Bureau of Labor Statistics; the Advance Retail Sales Report for December and the Full Report on Manufacturers' Shipments, Inventories and Orders for November, both from the Census Bureau, and the December report on Industrial Production and Capacity Utilization from the Fed....the week also saw the release of the first regional Fed manufacturing survey for January: 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 fell from +6.3 in November and from +4.7 in December to +3.5 in January, suggesting somewhat sluggish growth of First District manufacturing....
CPI Rose 0.4% in December on Higher Prices for Fuel, Food, Clothing, and Car Insurance
The consumer price index rose 0.4% in December, as higher prices for fuel, food, clothing, and vehicle insurance were only slightly offset by lower prices for airline fares, major appliances and used vehicles...the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.4% higher in December, after rising 0.2% in November, being unchanged in October, rising by by 0.2% in September, 0.4% in August, by 0.6% in July and by 0.6% in June, after falling by 0.1% in May, falling by 0.8% in April and by 0.4% in March, but after rising by 0.1% in February, by 0.1% in January, and rising by 0.2% last December....the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 260.229 in November to 260.474 in December, which left it statistically 1.3620% higher than the 256.974 reading of October of last year, which is reported as a 1.4% year over year increase, up from the 1.2% year over year increase reported a month ago....with higher prices for gasoline a major factor in the overall index increase, seasonally adjusted core prices, which exclude food and energy, were just 0.1% higher for the month, as the unadjusted core price index actually fell from 269.473 to 269.226, which left the core index 1.6196% ahead of its year ago reading of 264.935, which is reported as a 1.6% year over year increase, the same as the year over year core price increase that was reported for November...
The volatile seasonally adjusted energy price index rose 4.0% in December, after rising 0.4% in November, 0.1% in October, 0.8% in September, 0.9% in August, 2.5% in July, 5.1% in June, but after falling by 1.8% in May, by 10.1% in April, 5.8% in March, 2.0% in February and by 0.7% in January, but after rising 1.6% in December, 0.8% in November and by 1.7% last October, but is still 9.4% lower than in November a year ago...the price index for energy commodities was 8.2% higher in December, while the index for energy services was 0.1% higher, after rising 1.1% in November....the energy commodity index was up 8.2% on a 8.3% increase in the price of gasoline and a 10.0% increase in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 1.2% higher...within energy services, the price index for utility gas service fell 0.8% after rising 3.1% in November and is now 4.1% higher than it was a year ago, while the electricity price index rose 0.4% after rising 0.5% in November....energy commodities are still averaging 15.2% lower than their year ago levels, with gasoline prices also averaging 15.2% lower than they were a year ago, while the energy services price index is now up 2.6% from last December, as electricity prices are now 2.2% higher than a year ago…
The seasonally adjusted food price index rose 0.4% in December, after falling 0.1% in November, rising 0.2% in October, being unchanged in September, rising 0.1% in August, falling 0.4% in July, rising 0.6% in June, 0.7% in May, 1.5% in April, 0.3% in March, 0.4% February, 0.2% January, 0.2% December, 0.1% in November, 0.2% October, 0.2% September, but after being unchanged last June, July & August, as the price index for food purchased for use at home was 0.4% higher in December, after falling 0.3% in November, while the index for food bought to eat away from home was also 0.4% higher, as average prices at fast food outlets rose 0.5% and prices at full service restaurants rose 0.3%, while food prices at employee sites and schools averaged 0.1% higher...
In the food at home categories, the price index for cereals and bakery products was 0.4% higher as average bread prices rose 0.2%, the price index for breakfast cereal rose 1.0%, and the price index for cakes, cupcakes, and cookies rose 1.2%....on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.2% lower as the price index for beef and veal fell 0.3%, the price index for poultry fell 0.9%, and egg prices fell 3.5%...at the same time, the seasonally adjusted index for dairy products was 0.8% higher, as whole milk prices rose 3.4% and the index for cheese and related products was 0.4% higher....meanwhile, the fruits and vegetables index was 0.4% lower as the price index for canned fruit fell 1.5% and the price index for canned vegetables fell 2.1%, while the price index for fresh vegetables fell 0.5% on a 2.6% decrease in tomato prices...on the other hand, the beverages price index was 1.1% higher as the price index for carbonated drinks rose 1.8% and the price index for coffee also rose 1.8%....lastly, the price index for the ‘other foods at home’ category was 0.7% higher, as the price index for butter and margarine rose 2.1%, peanut butter prices rose 3.2%, and the price index for soups rose 1.7%...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 November, just peanut butter prices, which have risen 11.2%, is the only food line item showing a change greater than 10% over the past year...
Among the seasonally adjusted core components of the CPI, which was 0.1% higher in December after being 0.2% higher in November, being unchanged in October, after rising by 0.2% in September, 0.4% in August, by 0.6% in July and by 0.2% in June, after falling by 0.1% in May, by 0.4% in April and by 0.1% in March, but after rising by 0.2% in February, 0.2% in January, 0.1% December, and by 0.2% last November, the composite price index of all goods less food and energy goods was 0.2% higher in December, while the more heavily weighted composite for all services less energy services was 0.1% higher....
Among the goods components, which will be used by the Bureau of Economic Analysis to adjust November's retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.1% lower, as the price index for major appliances fell 3.0% and the price index for window and floor coverings fell 2.3%....at the same time, the apparel price index was 1.4% higher on a 4.6% increase in the price index for men's suits, sport coats, and outerwear, a 4.8% increase in the price index for men's shirts and sweaters, a 3.2% increase in the price index for women's dresses, a 3.0% increase in the index for women's outerwear, a 2.3% increase in the price index for girls' apparel, and a 2.3% increase in the price index for boys' apparel....on the other hand, the price index for transportation commodities other than fuel was 0.2% lower even as prices for new cars rose 0.3%, as prices for used cars and trucks fell 1.2% and the price index for vehicle parts and equipment other than tires fell 0.1%....meanwhile, the price index for medical care commodities 0.4% lower, as both prescription and nonprescription drug prices fell 0.4% and the price index for medical equipment and supplies fell 0.2%...however, the recreational commodities index was 0.2% higher on a 0.7% increase in TV prices, a 2.5% increase in the price index for other video equipment, a 0.5% increase in the price index for pets, pet supplies, & accessories, a 2.4% increase in the price index for photographic equipment, and a 3.6% increase in the price index for sports equipment...at the same time, the education and communication commodities index was 0.8% higher on a 1.8% increase in the price index for computers, peripherals, and smart home assistants and a 1.7% increase in the price index for computer software and accessories….lastly, a separate price index for alcoholic beverages was 0.2% lower, while the price index for ‘other goods’ was up 0.3% on a 3.2% increase in the price index for infants equipment and a 1.1% increase in cigarette prices...
Within core services, the price index for shelter was 0.1% higher as rents and homeowner's equivalent rent were both 0.1% higher, while prices for lodging away from home at hotels and motels unchanged, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.4% and other household operation costs were on average 2.0% higher on a 3.2% increase in domestic services....meanwhile, the price index for medical care services was 0.1% lower, as the price index for eyeglasses and eye care fell 0.1% and the average price of health insurance fell 1.1%... the transportation services price index was also 0.1% lower even though vehicle insurance costs rose 1.4% as airline fares fell 2.3%, car and truck rentals fell 5.6%, and the price index for automobile service clubs fell 1.1%...at the same time, the recreation services price index fell 0.5% as the index for photo processing fell 5.6% and the index for admissions to movies, concerts and sporting events fell 3.5%....meanwhile, the index for education and communication services was 0.1% higher as the price index delivery services rose 1.5% and the price index for day care and preschool rose 0.3%...lastly, the index for other personal services was up 0.9% as the price index for checking accounts and other bank services rose 8.5% and the price index for laundry and dry cleaning services was 0.4% higher...
Among core line items, the price index for telephone hardware, calculators, and other consumer information items, which is down by 16.3% since last December, the price index for men's suits, sport coats, and outerwear, which is still down 13.4% from a year ago, the price index for women's dresses, which has fallen by 11.2% in the past year, the price index for medical equipment and supplies which is down by 10.0% from a year ago, the price index for lodging away from home including hotels and motels, which has fallen by 11.2% in the past year, and airline fares, which are now down by 18.4% since last December, have all seen prices drop by more than 10% over the past year, while the cost of intercity bus fare, which is up by 12.8% over the past year, the price index for used cars and trucks, which has risen 10.0% from a year ago, the price index for infant's equipment, which is up by 22.3% year over year, and the price index for major appliances, which is up 16.6% from last December, are the only line items to have increased by a double digit magnitude over that span....
Retail Sales Fell 0.7% in December after Prior Months Were Revised Lower
Seasonally adjusted retail sales decreased in December after retail sales for October and November were revised lower...the Advance Retail Sales Report for December (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $540.9 billion during the month, which was 0.7 percent (±0.5%) lower than November's revised sales of $544.6 billion, but was 2.9 percent (±0.7 percent) above the adjusted sales in December of last year...November's seasonally adjusted sales were revised almost 0.4% lower, from $546.5 billion to $544.6 billion, while October's sales were revised less than 0.1% lower, from $552.5 billion to $552.2 billion; as a result, the October to November change was revised up from a decrease of 1.1 percent (±0.5%) to a decrease of 1.4 percent (±0.2%), and the quarter over quarter increase for the 4th quarter was reduced to 0.3%....estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated actual sales rose 13.5%, from $546,082 million in November to $620,036 million in December, while they were up 4.8% from the $591,380 million of sales in December a year ago, so we can see how the large December seasonal adjustment knocked the big holiday sales increase we’d normally expect down to a negative print...
Since it's the end of the quarter and the end of the year for retail sales, we'll include the entire table from this report showing retail sales by business type, including the quarter over quarter data...again, to explain what this table shows, the first double column below shows us the seasonally adjusted percentage change in sales for each kind of business from the November revised figure to this month's December "advance" figure in the first sub-column, and then the year over year percentage sales change since last December in the 2nd column; the second double column pair below gives us the revision of the November advance estimates (now called "preliminary") as of this report, with the new October to November percentage change under "Oct 2020 r" (revised) and the November 2019 to November 2020 percentage change as revised in the 2nd column of that pair (for your reference, the table from the advance estimate of November sales, before this month's revisions, is here).... then, the third pair of columns shows the percentage change of the most recent 3 months of this year's sales (October, November and December) from the preceding three months of the 3rd quarter (July, August and September) and then from the same three months (October, November and December) of a year earlier....that first column of the last pair thus gives us a snapshot comparison of 3rd quarter sales to fourth quarter sales, which is useful in estimating the impact of retail sales on 4th quarter GDP, after those sales are adjusted for price changes….
To compute December's real personal consumption of goods data for national accounts from this December retail sales report, the BEA will use the corresponding price changes from the December consumer price index, which we reviewed above...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 December retail sales excluding the 6.6% price-related increase in sales at gas stations were down by 1.2%....then, subtracting the figures representing the 1.4% decrease in grocery & beverage sales and the 4.5% decrease in food services sales from that total, we find that core retail sales were down by almost 0.7% for the month...since the CPI report showed that the composite price index for all goods less food and energy goods was 0.1% higher in December, we can thus approximate that real retail sales excluding food and energy will show an decrease of roughly 0.8%... however, the actual adjustment 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 2.4% higher in December, the apparel price index was 1.4% higher, which would mean that real sales of clothing only rose by around 1.0%.…similarly, while nominal sales at sporting goods, hobby, music and book stores fell 0.8%, the price index for recreational commodities rose 0.2%, so we can figure real sales of recreational goods were down roughly 1.0%...on the other hand, while nominal sales at motor vehicles and parts dealers were down 1.9%, the price index for transportation commodities other than fuel decreased by 0.2%, which would suggest that real sales at motor vehicles and parts dealers were down around 1.7%…
In addition to figuring those core retail sales, to make a complete estimate of real December PCE, we'll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do.…the CPI report showed that the food price index was 0.4% higher in December, with both the index for food purchased for use at home and the index for food bought to eat away from home 0.4% higher... hence, with nominal sales at food and beverage stores 1.4% lower, real sales of food and beverages would be down around 1.8% in light of the 0.4% higher prices…likewise, the 4.5% decrease in nominal sales at bars and restaurants, once adjusted for 0.4% higher prices, suggests that real sales at bars and restaurants fell about 4.9%...meanwhile, while sales at gas stations were up 6.6%, there was an 8.3% increase in the retail price of gasoline, which would suggest real sales of gasoline were down around 1.7%, with the caveat that gasoline stations do sell more than gasoline, and we haven’t accounted for those other sales.....by averaging those estimated real sales figures with a sales appropriate weighting, and excluding food services, we can estimate that the income and outlays report for December will show that real personal consumption of goods fell by more than 0.9% for the month, after falling by a revised 1.4% in November, but after being close to unchanged in October...at the same time, the 4.9% decrease in real sales at bars and restaurants will have a significant negative impact on December’s real personal consumption of services...
Industrial Production Rose 1.6% in December, With a Big Boost from Cold Temperatures
The Fed's G17 release on Industrial production and Capacity Utilization indicated that industrial production jumped by a seasonally adjusted 1.6% in December after rising by a revised 0.5% in November and 1.0% in October, which together meant that industrial production rose at a 8.4% annual rate in the 4th quarter, after rising by a revised 42.5% rate in the 3rd quarter, even as industrial production is still down 3.6% year over year, albeit an improvement from the 5.5% year over year decrease reported a month ago.....the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, rose to 105.7 in December from 104.1 in November, which was revised from the 104.0 reported last month, while at the same time the index for October was revised but remained at 103.6 but is now a 1.0% increase from September, rather than the 0.9% increase previously reported, while the IP index for September remained at 102.6...
The manufacturing index, which accounts for more than 75% of the total IP index, rose 0.9% to 102.2 in December, after the November index was revised from 101.1 to 101.3 and the October idex was revised from 100.3 to 100.5, while the manufacturing index is still 2.8% lower than it was a year ago....meanwhile, the mining index, which includes oil and gas well drilling, rose from 115.5 in November to 117.4 in December, after the November mining index was revised down from 116.0, still leaving the mining index at a level 12.3% lower than it was a year earlier...finally, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, rose by 6.2% in our cold December, from 100.0 to 106.3, after the November utility index was revised up from 99.9, now 4.5% lower than October...since December 2019 was a warmer than normal month, the utility index is now 2.7% higher than it was a year ago...
This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose to 74.5% in December from 73.4% in November, which was revised from the 73.3% reported last month...capacity utilization of NAICS durable goods production facilities rose from a upwardly revised 72.3% in November to 73.0% in December, while capacity utilization for non-durables producers rose from a upwardly revised 74.3% to 75.0%...capacity utilization for the mining sector rose to 80.5% in December from 79.0% in November, which was originally reported as 79.4%, while utilities were operating at 74.5% of capacity during December, up from 70.3% of capacity during November, which was previously reported at 70.2%...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 rose 0.3% in December on Higher Wholesale Fuel Prices
The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.3% in December, as prices for finished wholesale goods averaged 1.1% higher while margins of final service providers were on average 0.1% lower....that followed a November report that the PPI rose 0.1%, as prices for finished wholesale goods averaged 0.4% higher while margins of final service providers were unchanged, an October report wherein the PPI rose 0.3%, as prices for finished wholesale goods averaged 0.5% higher while margins of final service providers averaged 0.2% higher, a newly revised September report that showed the PPI had risen 0.4%, as prices for finished wholesale goods rose 0.4% and margins of final service providers averaged 0.5% higher, and a re-revised August report that indicates the PPI was 0.2% higher, as prices for finished wholesale goods averaged 0.3% higher while margins of final service providers averaged 0.1% higher....on an unadjusted basis, producer prices are 0.8% higher than a year ago, same as year over year increase indicated by last month's report, while the core producer price index, which excludes food, energy and trade services, rose by 0.4% for the month, and is now 1.1% higher than in December a year ago, up from the 0.9% year over year increase shown in November...
As noted, the price index for final demand for goods, aka 'finished goods', was 1.1% higher in December, after being 0.4% higher in November, 0.5% higher in October, 0.4% higher in September, 0.3% higher in August, 0.7% higher in July, 0.4% higher in June, 1.5% higher in May, 3.0% lower in April, 1.0% lower in March, 0.9% lower in February, 0.3% higher in January, and 0.2% higher in December of last year....the finished goods price index rose 1.1% in December because the price index for wholesale energy goods was 5.5% higher, after it had risen by 1.2% in November, by 0.8% in October, fallen by a revised 0.4% in September, and risen by a revised 0.8% in August, by 4.6% in July, and by 9.6% in June, while the price index for wholesale foods fell 0.1%, after rising by 0.5% in November, 2.4% in October, and by a revised 1.4% in September, after falling 0.3% in August, while the index for final demand for core wholesale goods (excluding food and energy) was 0.5% higher, after rising 0.2% in November, being unchanged in October, 0.4% higher in September and 0.3% higher in July and August....wholesale energy prices averaged 5.5% higher due to a 16.1% increase in wholesale prices for gasoline, a 12.6% increase in wholesale prices for No.2 diesel fuel, and a 47.6% increase in wholesale prices for home heating oil, while the wholesale price for residential natural gas fell 1.5%...meanwhile, the wholesale food price index fell 0.1% on a 3.6% decrease in the wholesale price index for dairy products, an 5.0% decrease in the wholesale price index for fresh and dry vegetables, and a 24.9% decrease in wholesale price of eggs for fresh use....among core wholesale goods, the wholesale price index for industrial chemicals rose 3.4%, the wholesale price index for travel trailers and campers rose 0.8%, and the wholesale price index for iron and steel scrap rose 25.8% while the wholesale price index for computers and computer equipment fell 1.6% ..
At the same time, the index for final demand for services was 0.1% lower in December, after being unchanged in November, rising 0.2% in October, a revised 0.5% in September, a revised 0.1% in August, and 0.5% in July, as the index for final demand for trade services fell 0.8% and the index for final demand for transportation and warehousing services fell 0.1%, while the core index for final demand for services less trade, transportation, and warehousing services was 0.2% higher....among trade services, seasonally adjusted margins for hardware, building materials, and supplies retailers fell 8.2%, margins for RVs, trailers, and campers retailers fell 10.0%, and margins for fuels and lubricants retailers fell 6.6%... among transportation and warehousing services, average margins for airline passenger services fell 3.4% while average margins for air transportation of freight fell 1.4%...among the components of the core final demand for services index, the index for arrangement of cruises and tours rose 11.1%, the index for membership dues and admissions and recreation facility use fees rose 2.4%, margins for consumer loans rose 3.5%, while margins for deposit services (partial) fell 3.7%…
This report also showed the price index for intermediate processed goods rose 1.5% in December, after rising 1.4% in November, 0.3% in October, a revised 0.7% in September, a revised 0.9% in August, 1.4% in July, and 1.3% in June, but after being unchanged in May and falling the prior 5 months....the price index for intermediate energy goods rose 3.3%, as refinery prices for gasoline rose 16.1%, refinery prices for jet fuel rose 27.4%, and producer prices for lubricating oil base stocks rose 13.7%, while producer prices for natural gas to electric utilities fell 17.6%... meanwhile, the price index for intermediate processed foods and feeds rose 0.4%, as the producer price index for processed poultry rose 1.4%, the producer price index for meats rose 3.7% and the producer price index for prepared animal feeds rose 1.9%...at the same time, the core price index for intermediate processed goods less food and energy rose 1.2% as the producer price index for primary nonferrous metals rose 8.1%, the producer price index for copper and brass mill shapes rose 6.8%, and the producer price index for softwood lumber rose 12.5%, while the producer price index for plywood fell 3.5%...prices for intermediate processed goods are now 1.3% higher than in December a year ago, the first increase after 19 consecutive year over year decreases, which followed 29 months of year over year increases, which had been preceded by 16 months of negative year over year comparisons, as prices for intermediate goods fell every month from July 2015 through March 2016....
Meanwhile, the price index for intermediate unprocessed goods rose 2.2% in December, after rising 7.3% in November, 2.6% in October, a revised 4.0% in September, a revised 3.9% in August and .0% in July, and rising 5.1% in June and 8.6% in May, but after falling 12.6% in April and 8.5% in March....that was as the December price index for crude energy goods rose 2.5% as crude oil prices rose 17.5% while unprocessed natural gas prices fell 9.4%, and as the price index for unprocessed foodstuffs and feedstuffs rose 0.2% on an 11.6% jump in the price of raw milk, a 2.2% increase in the price of raw sugar cane, and a 0.8% increase in the price of unprocessed wheat...at the same time, the index for core raw materials other than food and energy materials rose 4.5%, as producer prices for recyclable paper rose 14.6%, the price index for iron and steel scrap rose 25.8%, the price for copper base scrap rose 10.0%, and raw cotton prices rose 8.6%... this raw materials index is now 1.5% higher than a year ago, the second annual increase in 2 years, as the year over year change on this index had been negative from the beginning of 2019 through October...
Lastly, the price index for services for intermediate demand rose 0.4% in December, after falling 0.1% in November, rising 0.8% in October, rising a revised 0.8% in September, a revised 0.9% in August, 0.4% in July, and 0.3% in June….the price index for intermediate trade services was 0.7% higher, as margins for metals, minerals, and ores wholesalers rose 7.0% and margins for intermediate building materials, paint, and hardware wholesalers rose 4.7%...meanwhile, the index for transportation and warehousing services for intermediate demand was 0.1% lower, as the intermediate price index for arrangement of freight and cargo fell 4.8% and the intermediate price index for transportation of passengers (partial) fell 3.3%...at the same time, the core price index for intermediate services less trade, transportation, and warehousing rose 0.4%, as the intermediate price index for business loans rose 6.2%, the intermediate price index for permanent job placement services rose 1.8% and the intermediate price index for portfolio management rose 1.7%...over the 12 months ended in December, the year over year price index for services for intermediate demand is 1.6% higher than it was a year ago, the fourth consecutive positive annual change since it turned negative year over year in April for the first time in the history of this index...
November Business Sales Down 0.1%: Business Inventories Up 0.5%
After the release of the December retail sales report, the Census Bureau released the composite Manufacturing and Trade, Inventories and Sales report for November (pdf), which incorporates the revised November retail data from that December report and the earlier published November wholesale and factory data to give us a complete picture of the business contribution to the economy for that month....according to the Census Bureau, total manufacturer's and trade sales were estimated to be valued at a seasonally adjusted $1,480.8 billion in November, down 0.1 percent (±0.2%)* from October's revised sales, but up 1.5 percent (±0.4%) from November sales of a year earlier...note that total October sales were concurrently revised from the previously reported $1,482.3 billion to $1,482.1 billion, still up 0.9% from September....manufacturer's sales rose 0.7% to $492,931 million in November; retail trade sales, which exclude restaurant & bar sales from the revised November retail sales reported earlier, fell 1.1% to $491,081 million, and wholesale sales rose 0.2% to $496,738 million..
Meanwhile, total manufacturer's and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,959.9 billion at the end of November, up 0.5 percent (±0.1 percent) from October, but 3.2 percent (±0.5 percent) lower than in November a year earlier...at the same time, the value of end of October inventories was revised from the $1,948.7 billion reported a month ago to $1,950.354 billion, now an 0.8% increase from September.... seasonally adjusted inventories of manufacturers were estimated to be valued at $692,933 million, up 0.7% from October, and inventories of retailers were valued at $617,142 million, also 0.7% higher than in October, while inventories of wholesalers were estimated to be valued at $649,823 million at the end of November, statistically unchanged from October...
For GDP purposes, all inventories, including retail, will be adjusted for inflation with appropriate component price indices of the producer price index for November, which was up 0.4% for finished goods, including an increase of 0.2% ex food & energy...last week, we looked at real factory inventories with price adjustments for goods at various stages of production, and judged the negative change in those inventories would have a modest negative impact on 4th quarter GDP growth…also last week, we found that real wholesale inventories were at least 0.4% lower for the month, following a 0.5% real increase in October, and that they add to the growth of 4th quarter GDP largely because of the sharp drop in the 3rd quarter they were poised to reverse….since nominal retail inventories for November have now been shown to 0.7% higher, real retail inventories for the month, considering a 0.4% finished goods price adjustment, would have thus increased by 0.3% from October, after a real 0.4% increase in that month...since the third quarter saw a small real decrease in real retail inventories, these real inventory increases we now have indicated for the 4th quarter would necessarily add back that decrease, plus the amount of the real 4th quarter increase, to the growth of 4th quarter GDP...
Job Openings Lower in November; Hiring & Layoffs Rose, Quitting was Little Changed
The Job Openings and Labor Turnover Survey (JOLTS) report for November from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 105,000, from 6,632,000 in October to 6,527,000 in November, after October’s job openings were revised 20,000 lower, from 6,652,000 to 6,632,000...November's jobs openings were also 3.9% lower than the 6,793,000 job openings reported in November a year ago, as the job openings ratio expressed as a percentage of the employed fell to 4.4% in November from 4.5% October, while it was up from 4.3% in November a year ago....the largest percentage decrease in November openings appears to be a 45,000 job opening decrease to 77,000 openings in the information sector, while the professional and business services sector saw job openings increase by 54,000 to 1,274,000 (see table 1 for more job openings details)...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...
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 November, seasonally adjusted new hires totaled 5,979,000, up by 67,000 from the revised 5,912,000 who were hired or rehired in October, as the hiring rate as a percentage of all employed remained at 4.2% in November, while it was still up from 3.9% in November a year ago (details on hiring by region and by sector since July are in table 2)....meanwhile, total separations rose by 271,000, from 5,142,000 in October to 5,413,000 in November, as the separations rate as a percentage of the employed rose from 3.6% to 3.8%, and it was also up from 3.7% in November a year ago (see table 3)...subtracting the 5,413,000 total separations from the total hires of 5,979,000 would imply an increase of 566,000 jobs in November, somewhat more than the revised payroll job increase of 336,000 for November reported in the December establishment survey last week, with at least some of that difference likely due to the difference in the date of the surveys, which is at month end for this report but is during the week of the 12th for the employment situation...
Breaking down the seasonally adjusted job separations, the BLS finds that 3,156,000 of us voluntarily quit our jobs in November, up by 6,000 from the revised 3,150,000 who quit their jobs in October, while the quits rate, widely watched as an indicator of worker confidence, remained unchanged at 2.2% of total employment, while it was down from 2.3% a year earlier (see job quitting details in table 4)....in addition to those who quit, another 1,971,000 were either laid off, fired or otherwise discharged in November, up by 295,000 from the revised 1,676,000 who were discharged in October, as the discharges rate rose from 1.2% to 1.4% of total employment, which was also up from the discharges rate of 1.2% in November a year ago....meanwhile, other separations, which includes retirements and deaths, were at 287,000 in November, down from 317,000 in October, for an 'other separations rate’ of 0.2%, which was the same rate as in October and as in November 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 easily 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 of which are picked from the aforementioned GGO posts, contact me…)
