Sunday, November 22, 2015

October consumer prices, industrial production, new home starts, state employment summary, et al

the major releases of this past week were the October Consumer Price Index from the Bureau of Labor Statistics, the October report on Industrial Production and Capacity Utilization from the Fed, and the October report on New Residential Construction from the Census Bureau...other reports released this week included the 3rd Quarter Household Debt and Credit Report from the New York Fed, which reported that US household debt increased by a $212 billion in the third quarter to a five year high of $12.07 trillion; the 3rd quarter National Delinquency Survey from the Mortgage Bankers Association, which reported that 3.57% of US home loans were at least 90 days overdue and 1.88% were in some stage of the foreclosure process, the Regional and State Employment and Unemployment Summary for September, and with the release of the Consumer Price Index, the October report on Real Average Hourly Earnings, which indicated that inflation adjusted and seasonally adjusted earnings for all employees increased by 0.2% from September to October, which resulted from a 0.4% increase in average hourly earnings offset by a 0.2% increase in the CPI…real average weekly earnings also increased by just 0.2%, on the 0.2% increase in real average hourly earnings combined with no change in the average workweek...

in addition, this week also saw the release of the first three regional Fed manufacturing indexes for November: the Empire State Manufacturing Survey from the New York Fed, which covers New York and northern New Jersey, saw their headline general business conditions index rise from -11.4 to -10.7, the fourth month in a row that index was below minus ten, indicating an ongoing recession in First District manufacturing, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose from -4.5 in October to +1.9 in November, it's first positive reading in 3 months; and the Kansas City Fed manufacturing survey for November, which covers western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, and which reported its broadest composite index rose to +1 in November from -1 in October, it's first positive reading after seven months negative, suggesting that the regional contraction, mostly in the energy industry, has abated somewhat... 

October Prices 0.2% on Higher Rent and Medical Services

the consumer price index rose in October as modestly higher prices for food, energy, and services were only partially offset by lower prices for core goods....the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose 0.2% in October after falling 0.2% in September and 0.1% in August...the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, actually fell in October to 237.838 from 237.945 in September due to seasonal factors, which left it statistically 0.2% higher than the 238.031 reading of October of last year...regionally, prices for urban consumers have risen 1.1% in the West, while they have fallen 0.1% in the South, 0.3% in the Midwest and 0.1% in the Northeast over the past year, with greater increases or smaller decreases within regions in cities of more than 1,500,000 people...since both food and energy prices rose modestly, core prices, which exclude food and energy, also rose by 0.2% in October, as the unadjusted core index rose from 243.359 to 243.985, a level 1.91% ahead of its year ago reading of 239.413...

the seasonally adjusted energy price index rose by 0.3% in October after falling by 4.7% in September, as the energy index remains 17.1% lower than it was in October a year ago...prices for energy commodities were 0.4% higher in October while the index for energy services saw a 0.2% increase after falling 0.4% in September....the increase in the energy commodity index was largely due to a 0.4% increase in the price of gasoline, the largest component, while fuel oil prices fell 1.1% and prices for other fuels, including propane, kerosene and firewood, averaged a 2.1% increase…within energy services, the index for utility gas service fell by 0.7%, leaving utility gas priced 11.0% lower than a year ago, while the electricity price index rose by 0.4%, after it fell by 0.5% in September...energy commodities are still priced 27.8% below their year ago levels, with gasoline 27.9% lower than it was a year ago, while the energy services price index is 2.9% lower than last October, as electricity prices have also fallen 0.5% over that period...

the seasonally adjusted food index rose by 0.1% in October, after rising 0.4% in September and rising 0.2% in both July and in August, as prices for food at home rose 0.1% while prices for food away from home rose 0.2% on a 2.3% increase in school lunches, while average prices at fast food outlets and at full service restaurants rose 0.2%...price increases for food at home were led by an 0.8% increase in the index for cereals and bakery products, which was driven by a 2.4% increase in prices for breakfast cereal, a 2.2% increase in prices for rice, and an average 1.7% increase in prices for frozen and refrigerated bakery products...the index for fruits and vegetables rose 0.5% as fresh fruit prices were 1.6% higher on 3.5% higher priced apples and 2.8% higher priced oranges, fresh vegetables rose 0.5% on 2.6% higher prices potatoes and a 2.3% increase in prices for tomatoes, while processed fruit and vegetables fell 1.5% on a 3.1% drop in prices for canned vegetables...in addition, the index for beverages and beverage materials was up by 0.2% as prices for non-carbonated juices were 0.8% higher while instant coffee prices fell 1.1%, and prices in the 'other food at home' category rose 0.1% as butter prices were 5.3% higher, salt and other seasonings averaged a 1.9% increase, while sauces and gravies fell 1.5% and sugars and sweets were 0.7% lower...on the other hand, the index for meats, poultry, fish, and eggs was 0.5% lower in October as egg prices fell 4.8%, prices for beef and veal fell 1.0%, and fish and seafood prices averaged 0.8% lower, while bacon prices rose 3.4% and turkeys were priced 1.8% higher, while the index for dairy products fell 0.2% on 0.7% lower milk prices and 0.8% lower priced cheese...only two food line items have seen price changes greater than 10% over the past year; egg prices are still 30.0% higher than a year ago, while ham prices, which were up 1.5% in October, are still 10.4% lower than they were in October a year ago...the itemized list for price changes in over 100 separate food items is included at the beginning of Table 2, which gives us a line item breakdown for prices of more than 200 CPI items overall...

among the seasonally adjusted core components of the CPI, which rose by 0.2% in October, the composite of all commodities less food and energy commodities fell by 0.1%, while the composite for all services less energy services rose by 0.3%....among the commodity components, which will be used by the BEA to adjust October retail sales for inflation in national accounts data, the index for household furnishings and supplies fell 0.2% on a 1.5% cut in prices for major appliances and a 1.0% decrease in infant's furniture, apparel prices were down 0.8% on 2.1% lower prices for men's apparel and 0.7% lower prices for women's apparel including 3.6% lower prices for dresses; transportation commodities were down 0.3% on 0.2% lower prices for new and used cars while car parts other than tires were 1.2% lower; medical care commodities rose 0.2% on higher prices for both drugs and medical supplies; recreational commodities were 0.1% lower on a 1.6% decrease in prices bicycles and 1.3% lower priced TVs; education and communication commodities fell 0.1% on a 0.9% decrease in prices for computers and peripheral equipment while prices for college textbooks rose 0.7%; the index for alcoholic beverages rose 0.6%, and the index for other goods rose 0.5%...

within services, the price index for shelter rose 0.3% on a 0.3% increase in rent, a 0.2% increase in owner's equivalent rent and an 0.8% increase in lodging away from home; medical care services rose 0.8% on 2.3% jump in inpatient hospital services; transportation services rose 0.2% on 1.5% higher airline fares and a 0.9% increase in charges for vehicle body work; recreation services rose 0.4% despite a 3.2% decrease in video rentals as photographer's fees rose 2.4% and admission to sporting events was 1.5% higher; education and communication services were 0.4% higher on 0.8% higher internet services and 0.6% higher college tuition and fees, and other personal services rose 0.3% on a 0.7% increase in laundry and dry cleaning services...other than the aforementioned ham and eggs and energy prices, only telephones, which were priced 14.7% lower, and televisions, which are 13.3% cheaper, saw their prices change by more than 10% over the past year...

Industrial Production Falls 0.2% in October from Upwardly Revised Prior Months

industrial production fell again in October, but manufacturing strengthened as the composite was pulled down by lower output from mines and by utilities...the Fed's G17 release on Industrial production and Capacity Utilization indicated that industrial production fell by 0.2% in October after falling by 0.2% in September and after the 0.1% drop in August was revised to a 0.1% increase, ultimately resulting in a total net increase from last month's report...the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, thus rose to 107.2 in October from the 107.1 reading reported in September, as the June index was revised from 106.6 to 106.7, the July index was revised from 107.4 to 107.5, the August index was revised from 107.3 to 107.6, and the September index was revised from 107.1 to 107.4...to the extent that this report plays into GDP, the increases in July, August and September industrial production imply an upward revision to 3rd quarter growth in those market group where production changed leading to those revisions...

most of the aforementioned revisions originated in the manufacturing index, which rose by 0.4% in October after falling 0.1% in September, as its 0.4% drop in August was revised to a 0.2% decrease, and its 0.2% decrease in June was revised to a 0.1% decrease...thus the October manufacturing index is now at 106.3, up from last month's reported 105.5, which has now been revised to 105.9...with the revisions, the manufacturing index is now 1.9% higher than a year ago, in contrast to month's 1.4% year over year increase...meanwhile, the mining index, which includes output of oil and gas wells, fell by 1.5% in October after falling a slightly revised 2.4% in September, and at 112.5 it's now 6.9% below its level of October a year ago...finally, the utility index, which often fluctuates wildly due to above or below normal temperatures, fell by 2.5% in October after rising 1.2% in September, as changes in both months were due to warmer than normal temperatures...September temperatures, 3.7°F above the 20th century average, resulted in greater than normal use of air conditioning, while October temperatures, 3.3°F above the 20th century average, resulted in a reduced use of utilities for heating...at 101.9, the utility index was thus 1.5% lower than it was in October a year ago...

production within the major market groups was mixed in October, with production of consumer goods slipping 0.1%, as output of consumer durable goods rose 0.5% on 0.8% increases in production of both automotive products and household durables such as furniture and appliances, while production of non-durables fell by 0.3% on a 1.7% drop in the output of consumer energy products...production of business equipment rose 0.2%, while production of defense and space equipment was unchanged....production of construction supplies rose 1.7% while production of business supplies fell 0.1%, and output of intermediate materials to be used in later industrial production fell 0.4%... further details for industrial production by market group, including the changes for each of the last 6 months, 3 quarters and 3 years, can be found on Table 1 and Table 4 of the report, with table 1 showing the percentage change from the prior month, quarter or year, and table 4 giving the new index and subindex values for the same...

this report also gives us capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which fell after revisions from 77.7% in September to 77.5% in October, which happens to be the same figure published for capacity utilization last month....seasonally adjusted capacity utilization for all manufacturing industries was up 0.2% to 76.4% in October as manufacturing capacity utilization for September was revised up 0.3% to 76.2%...after a similar upward revision, utilization of NAICS durable goods production facilities rose from 76.0% in September to 76.2% in October, while capacity utilization for non-durables rose from 77.7% to 77.9%....capacity utilization for mining fell from 81.9% in September to 80.5% in October, while utilities were operating at 77.8% of capacity during October, down from the revised 79.9% usage rate in September...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....

Census Estimates New Housing Starts Fell in October, New Permits Rose

the October report on New Residential Construction (pdf) from the Census Bureau estimated that the widely watched count of new housing unit starts was at a seasonally adjusted annual rate of 1,060,000 in October, which was 11.0 percent (±13.5%)* below the revised September estimated rate of 1,191,000 housing units started annually and 1.8 percent (±11.2%) below last October's rate of 1,079,000 housing starts a year...the asterisks indicate that the Census does not have sufficient data to determine whether housing starts rose or fell over the past month or even over the past year, with the figure in parenthesis the most likely range of the change indicated; in other words, October housing starts could have been up 2.5% or down 24.5% for all they know, with subsequent large revisions likely...in this report, the annual rate for September housing starts was revised from the 1,206,000 reported last month to 1,191,000, while August starts, which were first reported at 1,126,000 annually, were revised from last month's revised figure of 1,132,000 annually to 1,116,000 annually with this report.....those annual rates of starts indicated by the annualized headline change were extrapolated from a survey of a small percentage of permit offices visited by Census field agents, which estimated that 92,200 housing units were started in October, down from 110,000 units started in September, which was initially estimated at 111,000 housing starts...of those housing units started in October, an estimated 60,100 were single family homes and 29,100 were units in structures with more than 5 units, down from 65,000 single family and 43,800 units in structures with more than 5 units in September....the unadjusted estimates also show that housing starts were up in the Northeast and in the Midwest, while they were down in the South and the West, with a 15,000 drop to 41,700 starts in the South greater than the statistical margin of error for that region, and hence the only directionally certain metric in this month's starts data...

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 starts data...in October, Census estimated new building permits were being issued at a seasonally adjusted annual rate of 1,150,000 housing units, which was 4.1 percent (±1.5%) above the revised September rate of 1,105,000 permits annually and 2.7 percent (±2.2%) above the rate of permit issuance in October a year earlier...again,.the estimates for new permits reported here were extrapolated from the unadjusted estimate, which showed permits for 97,100 housing units were issued in October, which was actually down from the estimated 97,100 new permits issued in September, with the South showing the only monthly increase...the October permits included 59,100 permits for single family homes, down from 59,400 single family permits in September, and 35,000 permits for housing units in apartment buildings with 5 or more units, up from 34,300 such multifamily permits a month earlier...

State and Regional Employment Report for October

the Regional and State Employment and Unemployment Summary for October expands on the national employment situation summary of two weeks ago by breaking down the state and regional details...as with most BLS reports, the press release is very readable & self explanatory, with BLS referring to appropriate tables linked to at the bottom of the press release wherever relevant, and with tables and coverage of all 50 states, it's more detailed than we can meaningfully cover in a short synopsis....the BLS table corresponding to household survey data, including the seasonally adjusted count of the unemployed and the unemployment rate for each state, is here....North Dakota at 2.8% continues as the state with the lowest unemployment rate despite the troubles in the oil patch, largely through a reduction of their labor force, while West Virginia had the highest unemployment rate at 6.9%, marking the first month since the recession started with no state seeing higher than a 7% rate..

for a breakdown of payroll employment by job type for each state over the past 3 months, and the change in employment since last October, see the following two BLS tables accompanying this release: Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted and Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted ...the latter two tables are very detailed, giving you both actual and seasonally adjusted totals for jobs in each state and the District of Columbia in several categories, including construction, manufacturing, trade, transportation and utilities, financial, professional and business services, education and health services, leisure and hospitality and government....the 20 page pdf version of this report has even more detail also includes map graphics for both the employment rate and the year over year payroll jobs increase by state and region...


(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 from the aforementioned GGO posts, contact me…)

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