Sunday, June 15, 2014

April inventories and job openings, May producer prices and retail sales

it was a relatively slow week, with the major release being the retail sales report, which showed a small 0.3% increase in May sales, while April sales were revised to a 0.5% increase...other reports we saw this week included two reports on April sales and inventories, which you'll recall are a major component of GDP...first, on Tuesday, the Census bureau released  the Wholesale Trade report on Sales and Inventories for April (pdf), which estimated that seasonally adjusted sales of merchant wholesalers increased by 1.3 percent (+/-0.5) from revised March sales to $450.2 billion, which was 7.8 percent (+/-1.8%) above the wholesale sales level of April last year...wholesale sales of durable goods were up 1.7 percent (+/-0.7%), on a 2.9% increase in wholesale sales of motor vehicles, parts and supplies, while wholesale sales of nondurable goods were up 1.0 percent (+/-0.5%) from March on a 3.0% increase in wholesale drugs and druggists' supplies...meanwhile, seasonally adjusted inventories of merchant wholesalers rose 1.1 percent (+/-0.2%) from the revised March total to $530.6 billion at the end of April, as inventories of durable goods were up 0.9 percent (+/-0.4%) on a 2.8% increase in wholesale inventories of electrical and electronic goods and a 2.5% increase in metals and minerals stocks, while inventories of nondurable goods increased 1.4 percent (+/-0.5%) on a 2.6% increase in wholesale inventories of drugs and druggists' supplies and a 2.3% increase in wholesale inventories of paper and paper products...

then on Thursday, the Census released the Manufacturing and Trade, Inventories and Sales Report for April, usually referred to in the media as just 'business inventories", which estimated that the combined value of seasonally adjusted distributive trade sales and manufacturers' shipments increased by 0.7 percent (±0.2%) from March to $1,337.4 billion in April, which was 5.4 percent (±0.6%) above the total monthly sales level of April a year ago; manufacturers sales were estimated at $497,642 million, retailer's sales were estimated at $389,594 million, and merchant wholesalers accounted for $450,186 million of the overall total...meanwhile, total manufacturer's and trade inventories were estimated to have increased 0.6 percent (±0.1%) from March to a seasonally adjusted $1,337.4 billion in April, which was up 5.0 percent (±0.5%) from April a year ago and the largest increase in 6 months...seasonally adjusted inventories of manufacturers were estimated to be valued at $645,753 million, inventories of retailers were estimated to be valued at $551,979 million, and inventories of wholesalers were estimated to be valued at $530,591 million at the end of April...note that none of these totals are adjusted for change in price, as they must be before inclusion in 2nd quarter GDP...at the end of April, the total business inventories to total sales ratio, a metric which is watched to determine if inventories are becoming excessive, was at 1.29, unchanged from March and down a bit from the 1.30 inventories to sales ratio of a year earlier..

May Producer Prices Unexpectedly Fall 0.2%

on Friday the Producer Price Index for May released by the BLS unexpectedly indicated lower wholesale prices for the first time since February, as the seasonally adjusted producer price index for final demand fell 0.2% after rising by 0.6% in April and 0.5% in March and is now 2.0% above year ago levels...the index for final demand for services fell by 0.2%, led by a 0.5% drop in final demand trade, while the index for final demand of transportation and warehousing services rose 0.9%; excluding trade, transportation, and warehousing, prices for final demand services were down 0.1%...the price index for final demand for goods was also down 0.2% after rising by 0.6 in April, as the price index for final demand food fell 0.2% after rising 2.7% in April, as wholesale pork prices, which had increased 20.6% in April, retreated 5.1%, while wholesale eggs rose another 1.8% on top of their 15.1% increase last month....with the price index for final demand energy also down 0.2% on a 4.4% drop in LP gas prices and 0.9% lower gasoline, the core producer price index was statistically unchanged....in addition, this report showed the price index for processed goods for intermediate demand fell 0.1% on a 2.9% decrease in prices for basic organic chemicals, while prices for intermediate processed foods and feeds fell 0.2% and intermediate processed energy goods rose 0.3%; meanwhile, the price index for unprocessed goods was unchanged as a 2.7% increase in the index for unprocessed energy materials offset a 2.3% decrease in prices for unprocessed foods and feeds and a 0.7% decline in the index for unprocessed nonfood materials less energy...finally, the price index for services for intermediate demand, which is computed separately from intermediate goods, fell 0.4% in May, the largest decrease since a 0.5% drop a year earlier, with a 2.8% drop in prices for securities brokerage, dealing, investment advice, and related services accounting for 40% of the overall index drop..

May Retail Sales Increase 0.3% as April Sales are Revised up by 0.4%

the Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales for the month were $437.6 billion, which was an increase of 0.3 percent (±0.5%)* from revised April sales of $436.2 billion, and 4.3 percent (±0.9%) above sales in May of last year....April seasonally adjusted sales were originally reported at $434.6 billion, and with the upward revision the March to April increase was revised from the previously reported 0.1% (±0.5%)* to an increase of 0.5% (±0.2%), while March sales were revised downward slightly, from $434.2 billion to $434.018 billion....estimated actual sales in May, extrapolated from surveys of a small sampling of retailers, indicated sales rose to $463,085 million in May from $437,114 million in April, and up from $443,010 million in May a year ago....on net, this report, including revisions, should swing the 2nd quarter goods component of real personal consumption expenditures, which had been running negative, into a slightly positive contribution to 2nd quarter GDP...

the main driver of the reported seasonally adjusted May increase in retail sales was an 11.1% increase to $81,832 million in sales at car & other vehicle dealers, which we should have seen coming with the 7 year high in car sales reported last week; that brought May sales for the aggregate motor vehicle and parts dealers group to $88,826 million, 10.4% above April's sales for the automotive sector...excluding that extraordinary jump in motor vehicle and parts sales, retail sales for May were at $348,822 million, only 0.1% above April's sales...other retail sectors that saw seasonally adjusted sales increase appreciably in May included building material and garden supply stores, where sales rose 1.1% to $27,496 million, non-store retailers, which include online and mail order sales, where sales rose 0.6% to $39,226 million, furniture stores, where sales rose 0.5% to $8,548 million, gasoline stations, where sales rose 0.4% to $45,657 million, and the category of miscellaneous store retailers, where sales rose 1.8% to $10,006 million...retail business sectors that saw seasonally adjusted sales decline in May included general merchandise stores, where sales fell 0.6% to $54,890 million, clothing stores, where sales also fell 0.6% to $21,008 million, electronic and appliance stores, where sales fell 0.3% to $8,824 million, restaurants and bars, where sales fell 0.2% to $46,488 million, grocery stores, where sales fell 0.2% to $48,819 million, drug stores, where sales fell 0.1% to $24,361 million, and specialty shops, such as sporting goods, book and music stores, where sales fell 0.1% to $7,187 million...

the table below, taken from the Census pdf, shows the percentage change in retail sales by business type from April to May in the first column. and the May to May annual percentage change in sales by business type in the second column...the third and fourth columns show the revised monthly and yearly sales percentage change by business type for April; the 3rd column show the percentage change in retail sales by business type from March to April, while the 4th column shows the April to April percentage change in sales by business type...those columns revise last month's advance report for April, which we have saved here..

May 2014 retail sales table

as previously noted, April's sales were revised from a increase of 0.1% to an increase of 0.5%, so once again we're confronted by the phenomena where the revisions to the previous month were greater than the sales gain reported for the current month....for the automotive group, the increase in April retail sales was revised from an originally reported 0.6% to the current increase of 0.9% over March; since that's consistent with the overall upward revision, the revision to retail excluding automotive sales was a similar increase, from the 0.0% reported to an increase ex-auto of 0.4%...the largest upward revisions to April's monthly changes were seen in furniture store sales, which were originally reported to have fallen 0.6% and have now been revised to an increase of 1.6%, electronic and appliance store sales, which were originally reported down 2.3%, have now been revised to a drop of just 0.7%; building materials and garden supply sales, which were originally reported up 0.4%, are now reported to have jumped 1.9%; specialty shops, including sporting goods, book and music stores, which were originally reported to have increased sales 0.7% in April, have now been revised to an increase of 1.4%; general merchandise stores, where sales were first reported as up 0.2%, have now been revised to an April increase of 0.9%; restaurant and bar sales, which were reported last month as down 0.9%, have now been revised to show a decrease of 0.3%, and miscellaneous store sales, where sales were originally reported down by 2.3%, are now shown to have decreased by just 1.4%...

April Job Openings Rise to 7 Year High

according to the April Job Openings and Labor Turnover Survey, seasonally adjusted job openings rose by 289,000 to 4,455,000, the highest count of job openings from this survey in seven years, as job openings in retail rose from 488,000 to 553,000 and job openings in restaurants and bars rose from 563,000 to 625,000, while job openings in construction fell from 116,000 in March to 94,000 in April... jobs open at the end of March were revised up by 111,000 from the originally reported 4,014,000 opening to 4,166,000 jobs left unfilled at the end of March...job openings as a percentage of the employed labor force rose to 3.1% from 2.9%, with a jump from 2.9% to 3.3% in the Midwest...based on 9,753,000 officially unemployed in April, there would be 2.2 who were counted as unemployed for every job opening; that, of course, does not count those who might have wanted a job but didnt look for work during the month...

this same 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 include retirements and death.... in April, seasonally adjusted new hires totaled 4,708,000, statistically unchanged from the 4,706,000 hired or rehired in March, as the hiring rate as a percentage of all employed was also unchanged at 3.4%, but up from 3.3% a year earlier...retail sales hiring increased by 50,000 to 767,000 in April, while hiring in professional and business services fell by 36,000 to 981,000....total separations were also virtually unchanged, rising from 4,491,000 in March to 4,496,000 in April, as the separations rate as a percentage of the employed remained at 3.3%, also the same as a year ago...the 4,496,000 total separations minus the total hires of 4,708,000 would imply an increase of 212,000 jobs in April, which is 70,000 less than the revised payroll job increase of 282,000 for April reported by the BLS establishment survey last week, so one or both of these reports is off by that much, still well within the margin of error for both surveys...

breaking down the seasonally adjusted job separations, we find 2,473,000 quit their jobs in April, up 12,000 from the 2,461,000 who quit their jobs in March, while the quits rate, an indication of worker confidence, remained unchanged at 1.8% of total employment, although that rate varies considerably between industries, ranging from a high of 3.7% of restaurant and bar workers who quit to a low quit rate of 0.6% for government employees....in addition to those who quit, another 1,651,000 were either laid off, fired or otherwise discharged in April, up from 1,638,000 in March, while the discharges rate also remained unchanged at 1.2% of all those employed during the month.meanwhile, other separations, which includes retirement and death, were at 373,000 in April, down from 392,000 in March, for an 'other separations' rate of 0.3%, also unchanged.... 

our FRED graph for this report below shows job openings in blue in thousands monthly since January 2005, and monthly hires in orange and monthly separations in violet over the same span.note that when separations in purple were above  hires in orange we were losing jobs...the two major components of separations are also included, the count of layoffs and firings is tracked in red, while the number of those quitting their jobs monthly is shown in green....

April 2014 JOLTS

(the above are the comments that accompanied my regular sunday morning links emailing, synopses which in turn were 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 that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

1 comment:

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