Sunday, March 18, 2018

February’s consumer and producer prices, retail sales, industrial production, & new home construction: January’s business inventories and JOLTS

major monthly reports released over the past week included the Retail Sales report for February and Business Sales and Inventories for January from the Census Bureau, the February Consumer Price Index, the February Producer Price Index and the February Import-Export Price Index from the Bureau of Labor Statistics, the February report on Industrial Production and Capacity Utilization from the Fed, and the February report on New Residential Construction from the Census Bureau...in addition, the BLS released both the Job Openings and Labor Turnover Survey (JOLTS) for January and the Regional and State Employment and Unemployment Report for January during this same week... this week also saw the release of the first two regional Fed manufacturing surveys for March: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one NYC suburban county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose to +22.5, up from +13.1 in February, suggesting an acceleration of the ongoing expansion of First District manufacturing... meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell to +22.3 in March from +25.8 in February, still indicating a large plurality of the region's manufacturing firms reported increases in their activity this month...

February Consumer Prices Rise 0.2% on Higher Utilities, Clothing, and Transportation Services

the consumer price index increased by 0.2% in February, as higher prices for utilities, clothing and transportation services were partially offset by lower prices for fuel and groceries….the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the seasonally adjusted price index for urban consumers rose 0.2% in February after it had risen by 0.5% in January, 0.1% in December, 0.4% in November, 0.1% in October, 0.5% in September, 0.4% in August, and 0.1% in July....the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, rose from 247.867 in January to 248.991 in February, which left it statistically 2.212% higher than the 243.603 index reading of last January, which is reported as a 2.2% year over year increase...with higher food and energy services offsetting lower priced groceries and fuel, seasonally adjusted core prices, which exclude food and energy, also rose by 0.2% for the month, with the unadjusted core index rising from 254.638 to 255.783, which put it 1.848% ahead of its year ago reading of 251.143, which is reported as a 1.8% increase...

the volatile seasonally adjusted energy price index rose by 0.1% in February, after it had risen by 3.0% in January, fallen by 0.2% in December, risen by 3.2% in November and by 2.0% in October, and is now 7.7% higher than in February a year ago....prices for energy commodities were 0.9% lower for the month, while the index for energy services increased by 1.4%, after falling by 0.8% in January....the decrease in the energy commodity index was due to a 0.9% decrease in the retail price of gasoline, the largest component, while the price of fuel oil fell 3.6% and prices for other fuels, including propane, kerosene and firewood, fell by an average of 0.6%…however, energy commodities are still priced 12.8% above their year ago levels, with gasoline prices averaging 12.6% higher than they were a year ago…within energy services, the index for utility gas service rose 4.7% after falling by 2.6% in January, leaving utility gas priced 3.8% higher than it was a year ago, while the electricity price index rose by 0.4%, after falling by 0.2% in January...the energy services price index is now 2.6% higher than last February, as electricity prices have also increased by 2.2% over that period...

the seasonally adjusted food price index was unchanged in February, after rising 0.2% in January, 0.2% in December, being unchanged in October and November, rising 0.1% in September, 0.1% in August, 0.2% in July, being unchanged in June, rising 0.2% in May, 0.2% in April, 0.3% in March, and 0.2% last February, as the index for food purchased for use at home was 0.2% lower in February, while prices for food bought to eat away from home were 0.2% higher, as prices at fast food outlets rose 0.3% and prices at full service restaurants rose 0.2%, while food prices at work and schools rose 0.7%...

in the food at home categories, the price index for cereals and bakery products decreased by 0.1%, as prices for bread fell 0.6% and prices for breakfast cereal fell 1.5%...the price index for the meats, poultry, fish, and eggs group was down 0.2% as pork prices fell 0.8% and beef and veal prices fell 0.7%, while at the same time the index for dairy products was 0.3% lower on a 0.2% decrease in the price of fresh whole milk and a 2.3% drop in prices for ice cream...the fruits and vegetables index was 0.5% lower on a 0.7% decrease in prices for fresh fruits and 8.7% drop in tomato prices....meanwhile, the beverages index was down 0.1% as beverage materials including coffee and tea fell 0.4% and noncarbonated juices and drink prices fell 1.0%....lastly, prices in the ‘other foods at home’ category was also 0.1% lower, as sugar and sweeteners prices fell 1.2% while peanut butter prices were 3.4% higher....among food at home line items, only eggs, which have risen 10.5% since last February, have seen a price change greater than 10% over the past year...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 February after rising by 0.3% in January, 0.3% in December, 0.1% in November, 0.2% in October, 0.1% in September, 0.2% in August and by 0.1% in each of the prior 4 months, the composite of all goods less food and energy goods rose by 0.1%, while the more heavily weighted composite for all services less energy services was 0.2% higher....among the goods components, which will be used by the Bureau of Economic Analysis to adjust February retail sales for inflation in national accounts data, the index for household furnishings and supplies was unchanged as a 2.4% increase in prices for window coverings and and a 2.2% increase in prices for floor coverings was offset by a 5.9% decrease in prices for laundry equipment...the apparel price index was 1.5% higher after rising 1.7% in January on a 4.8% increase in the index for women's outerwear, a 4.3% increase in the index for men's shirts and sweaters, and a 3.6% increase in the price index for boys' apparel....on the other hand, prices for transportation commodities other than fuel were 0.4% lower, as prices for new cars were down 0.6% and prices for oil, coolant, and fluids fell 0.9%...at the same time, prices for medical care commodities were 0.3% lower on a 0.4% decrease in prescription drug prices, while the recreational commodities index was 0.3% lower on another 3.3% drop in TV prices and a 1.5% decrease in the index for sports equipment....meanwhile, the education and communication commodities index was 0.5% lower, on a 1.2% decrease in the index for personal computers and peripheral equipment and a 3.2% decrease in prices for computer software and accessories...lastly, a separate price index for alcoholic beverages was up 0.2%, while the price index for ‘other goods’ was down 0.1% on a 1.1% decrease in the index for miscellaneous personal goods..

within core services, which rose by 0.2%, the price index for shelter rose 0.2% on a 0.2% increase in rents and a 0.2% increase in homeowner's equivalent rent, while costs for lodging away from home at hotels and motels fell 0.1%, the sub-index for water, sewers and trash collection rose 0.3%, and other household operation costs were on average 1.5% higher....meanwhile, the index for medical care services was unchanged, as dentists services rose 1.3% while hospital services were priced 0.5% lower...at the same time, the transportation services index was 1.0% higher on a 1.3% increase in car and truck leasing, 1.7% higher prices for motor vehicle insurance, and 1.0% higher parking and other auto fees....the recreation services index rose 0.1% as admission to sporting events rose 2.8%, while the index for education and communication services was fell 0.2% as wireless telephone services fell 0.5% internet and electronic information services fell 1.0%...lastly, the index for other personal services was up 0.4% as the index for legal services rose 2.6% and checking and other bank services rose 1.1%...among core line items, the index for clocks, lamps, and decorator items, which has fallen 10.2% over the past year, prices for televisions, which are now 13.6% cheaper than a year ago, and the index for audio equipment, which is now 18.2% lower than last February, have seen prices drop by more than 10% over the past year, while nothing has seen prices rise by a double digit magnitude over that span...

Retail Sales Down 0.1% in February after Revisions to December and January

seasonally adjusted retail sales decreased 0.1% in February after retail sales for January were revised higher...the Advance Retail Sales Report for February (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $492.0 billion during the month, which was 0.1 percent (±0.5%) lower than January's revised sales of $492.3 billion but still 4.0 percent (±0.7 percent) above the adjusted sales in February of last year...January's seasonally adjusted sales were revised up from $492.0 billion to $492.3 billion, while December's sales were revised from $493.3 billion down to $492,915 million; as a result, the December to January change was revised up from down 0.3 percent (±0.5%) to down 0.1 percent (±0.2%)...the downward revisions to December sales would indicate that 4th quarter personal consumption expenditures will be revised lower at about a $1.5 billion annual rate, which would thereby reduce 4th quarter GDP by about 0.03 percentage points...estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated sales were down 1.9%, from $445,661 million in January to $437,407 million in February, while they were up 4.1% from the $420,352 million of sales in February of a year ago..  

included below is the table of the monthly and yearly percentage changes in retail sales by business type taken from the February Census Marts pdf....the first pair of columns below gives us the seasonally adjusted percentage change in sales for each kind of business from the January revised figure to this month's February "advance" report in the first sub-column, and then the year over year percentage sales change since last February is in the 2nd column...the second double column pair below gives us the revision of the January advance estimates (now called "preliminary") as of this report, with the new December to January percentage change under "Dec 2017 (r)" (revised) and the January 2017 to January 2018 percentage change as revised in the last column shown...for your reference, our copy of the table of last month’s advance estimate of January sales, before this month's revisions, is here.….

February 2018 retail sales table

despite the negative headline print, this February report is better than it appears, because much of the weakness was due to lower prices...for instance, while there was a 0.9% drop to $92,274 million in sales at motor vehicle dealers, prices for both new cars and new trucks were down 0.6%, which means real unit sales of vehicles were only down on the order of 0.3%...without that decrease in vehicle sales, other retail sales rose 0.2%...likewise, we see that sales at gasoline stations were down 1.2%, while the CPI report we reviewed earlier indicated gasoline prices had fallen 0.9% over the same period, which would suggest that real consumption of gasoline was down by just 0.3%...a similar dynamic plays out for sales at groceries, which were down 0.2% for the month, which can entirely be accounted for by a 0.2% drop in grocery store prices...ex cars, gasoline, and groceries, other sales were up by 0.3%, which would be deflated to a 0.2% increase by the 0.1% increase in the composite price index for all goods less food and energy goods...

Industrial Production Up 1.1 in February on 1.2% Jump in Manufacturing

the Fed's February G17 release on Industrial production and Capacity Utilization reported that industrial production increased by 1.1% in February after falling by a revised 0.3% in January, which still left industrial output 4.4% higher than a year ago...the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, was at 108.2 in February, after the January index was revised down from 107.2 to 107.1, the December index was revised up from 107.3 to 107.4, and the September index was revised from the 104.8 reported last month to 104.9, while the October and November indexes remained unchanged at 106.6 and 106.9 respectively..

the manufacturing index, which accounts for more than 77% of the total IP index, rose to 105.9 in February, after the January index was revised down from 104.8 to 104.6, and December index was revised up from 104.7 to 104.8...with other prior months unrevised, the manufacturing index now stands 2.5% above its year ago level....meanwhile, the mining index, which includes oil and gas well drilling, rose 4.5%, from 112.5 in January to 117.4 in February, after the January index was revised up from 112.4, which left the mining index 9.7% higher than it was a year earlier...finally, the utility index, which often fluctuates due to above or below normal temperatures, fell by 4.7% in our warm February, from 108.8 to 103.7, after the January utility index was revised from 109.2 to 108.8, still up 1.3% from December...however, with this winter's temperatures well below the record levels seen across much of the US last winter, the utility index is now 10.5% 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 78.1% in February from 77.4% in January, which was revised down from the 77.5% reported last month ...capacity utilization of NAICS durable goods production facilities rose from a revised 76.5% in January to 77.4% in February, while capacity utilization for non-durables producers rose from an upwardly revised 77.5% to 78.0%...capacity utilization for the mining sector rose to 87.6% in February from 84.3% in January, which was originally reported as 84.2%, while utilities were operating at 76.9% of capacity during February, down from their 80.8% of capacity during January, which was previously reported at 81.1%...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 Up 0.2% in February on Wider Margins of Service Providers

the seasonally adjusted Producer Price Index (PPI) for final demand rose 0.2% in February, as prices for finished wholesale goods decreased 0.1%, while margins of final services providers increased by 0.3%...this followed a revised January report that indicated the PPI was 0.4% higher, with prices for finished goods up 0.7% while final demand for services rose 0.3%, and a December report that indicated the overall PPI was on average unchanged, as prices for finished goods rose by 0.1%, while margins of final services providers decreased by 0.1%....on an unadjusted basis, producer prices are now 2.8% higher than a year earlier, with the core producer price index 2.7% higher for the year, up from the year over year figures of 2.7% for the PPI and 2.5% for core that were indicated last month....

as noted, the price index for final demand for goods, aka 'finished goods', was down 0.1% in February, after being up 0.4% in January, unchanged in December, and rising a revised 0.8% in November and 0.3% in October...the price index for wholesale energy was down 0.5% in January after rising 3.4% in January and 0.5% in December, while the price index for wholesale foods fell 0.4% and the index for final demand for core wholesale goods (ex food and energy) was 0.2% higher...driving the wholesale energy price index decrease was a 1.6% decrease in the wholesale price of gasoline and 4.1% lower wholesale prices for diesel fuel, while wholesale residential natural gas prices rose 3.7%...for wholesale foods, 27.1% lower prices for fresh and dry vegetables were only partially offset by a 33.6% jump in wholesale prices for fresh eggs....among wholesale core goods, prices for primary basic organic chemicals jumped 7.2% while the wholesale price index for light trucks was down 1.2%…

at the same time, the index for final demand for services rose 0.3% in February, after rising 0.3% in January, falling 0.1% in December, rising 0.2% in November, 0.5% in October, and by 0.2% in both August and September, as the February index for final demand for trade services fell 0.2%, the index for final demand for transportation and warehousing services rose 0.9%, while the index for final demand for services less trade, transportation, and warehousing services was 0.3% higher....among trade services, seasonally adjusted margins for apparel, jewelry, footwear, and accessories retailers fell 2.1% and margins for machinery, equipment, parts, and supplies wholesalers fell 1.4%... among transportation and warehousing services, margins for traveler accommodation services were 3.7% higher and margins for air transportation of freight rose 1.5%...in the core final demand for services index, the index for bundled wired telecommunications access services rose 3.5% while the index for arrangement of vehicle rentals and lodging fell 3.5%..

this report also showed the price index for intermediate processed goods was 0.7% higher, after rising 0.7% in January, 0.5% in December, and a revised 0.6% in November, October, and in September....the price index for intermediate energy goods rose 0.8% as refinery prices for jet fuel rose 2.4% and prices for natural gas sold to electric utilities rose 23.2%, while prices for intermediate processed foods and feeds rose 1.2% as the prepared animal feeds index rose 5.8%...meanwhile, the core price index for processed goods for intermediate demand less food and energy was 0.7% higher on a 7.2% increase in the index for primary basic organic chemicals and a 5.6% increase in prices for softwood lumber....prices for intermediate processed goods are now 4.8% higher than in February a year ago, now the fifteenth consecutive year over year increase, after 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 rose 2.8% in February, after rising 0.9% in January, 1.9% in December, and a revised 2.5% in November and 0.5% October....the price index for crude energy goods rose 5.4% as raw natural gas prices rose 23.5% while crude oil prices fell 7.3%, while the index for unprocessed foodstuffs and feedstuffs rose 2.1%, as prices for slaughter cattle rose 7.7% and prices for wheat rose 5.4%...on the other hand, the index for core raw materials other than food and energy materials fell 0.3%, as prices for corrugated wastepaper fell 12.5% and prices for aluminum base scrap fell 3.4%...this raw materials index is now up by 5.6% from a year ago, in contrast to the year over year increase of 19.2% that we saw last February...

lastly, the price index for services for intermediate demand rose 0.5% in February after rising 0.1% in January, being unchanged in December, rising a revised 0.6% in November, 0.3% in October, and 0.2% in September...the index for trade services for intermediate demand was up 0.1%, as margins for chemicals and allied products wholesalers rose 1.9% while margins for intermediate wholesalers of machinery and equipment parts and supplies fell 1.0%…the index for transportation and warehousing services for intermediate demand rose 0.5%, as the intermediate index for air transportation of freight rose 1.5%...meanwhile, the core price index for services less trade, transportation, and warehousing for intermediate demand was also 0.5% higher, as the index for legal services rose 1.4% while the index for advertising sales in print fell 3.0%....over the 12 months ended in February, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is still 2.9% higher than it was a year ago...

January Business Sales Down 0.2%, Business Inventories Up 0.6%

after the release of the February retail sales report, the Census Bureau released the composite Manufacturing and Trade, Inventories and Sales report for January (pdf), which incorporates the revised January retail data from that February report and the earlier published January 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 $1,426.0 billion in January, down 0.2 percent (±0.2%)* from December's revised sales, but up 5.7 percent (±0.4 percent) from January sales of a year earlier...note that total December sales were concurrently revised up from the originally reported $1,431.3 billion to 1,429.453 billion, now just a 0.5% increase from November....manufacturer's sales rose 0.6% to $498,766 million in January; retail trade sales, which exclude restaurant & bar sales from the revised January retail sales reported earlier, fell 0.1% to $434,711 million, while wholesale sales fell 1.1% to $492,558 million...

meanwhile, total manufacturer's and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,917.0 billion at the end of January, up 0.6 percent (±0.1%) from the end of December, and 3.7 percent (±0.3 percent) higher than in January a year earlier...at the same time, the value of end of December inventories was revised from the $1,902.2 billion reported last month to $1,905.7 billion, which would imply an upward revision of about 0.08 percentage points to 4th quarter GDP....seasonally adjusted inventories of manufacturers were estimated to be valued at $672,434 million, up 0.3% from December, and inventories of retailers were valued at $625,557 million, 0.7% more than in December, while inventories of wholesalers were estimated to be valued at $627,417 million at the end of January, 0.8% higher than in December...considering the 0.7% increase in the producer price index in January, it appears that most of the month's inventory growth is price related...

Housing Starts, Permits Reported Lower in February

the February report on New Residential Construction (pdf) from the Census Bureau estimated that their widely watched count of new housing units started in February was at a seasonally adjusted annual rate of 1,236,000, which was 7.0 percent (±16.7 percent)* below the revised estimated January annual rate of 1,329,000, and was 4.0 percent (±12.2 percent)* below last February's rate of 1,288,000 housing starts a year...the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell during the month or even over the past year, with the figures in parenthesis the most likely range of the change indicated; in other words, February housing starts could have been up by 9.7% or down by as much as 23.7% from those of January, with revisions of a greater magnitude in either direction still possible...in this report, the annual rate for January housing starts was revised from the 1,326,000 reported last month to 1,329,000, while December starts, which were first reported at a 1,192,000 annual rate, were revised from last month's initial revised figure of 1,209,000 annually to a 1,207,000 annual rate with this report....these annual rates of 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 89,500 housing units were started in February, down from the 90,200 units that were started in January but up from the 81,400 units that were started in December...

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 February, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,298,000, which was 5.7 percent (±0.7 percent) below the revised January rate of 1,377,000 permits, but was 6.5 percent (±2.4 percent) above the rate of building permit issuance in February a year earlier...the annual rate for housing permits issued in January was revised down from the originally reported 1,396,000....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 90,500 housing units were issued in February, down from the revised estimate of 96,700 new permits issued in January.... for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 1.236 Million Annual Rate in February and Comments on February Housing Starts... 

Job Openings at a Record High In January, Hiring, Retirements, and Layoffs Up, Quits Down

the Job Openings and Labor Turnover Survey (JOLTS) report for January from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 645,000, from 5,667,000 in December to a record high of 6,312,000 in January, after December job openings were revised 144,000 lower, from 5,811,000 to 5,667,000, as part of an annual revision of all 2017 job openings and labor turnover data...January's jobs openings were also 15.9% higher than the revised 5,444,000 job openings reported for January a year ago, as the job opening ratio expressed as a percentage of the employed increased to 4.1 from the 3.7% logged in December, also up from the 3.6% rate of January 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...

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 January, seasonally adjusted new hires totaled 5,583,000, up by 59,000 from the revised 5,524,000 who were hired or rehired in December, as the hiring rate as a percentage of all employed rose from 3.7% in December to 3.8% in January, and was also up from the 3.7% hiring rate in January a year earlier (details of hiring by sector since September are in table 2)....meanwhile, total separations rose by 95,000, from 5,314,000 in December to 5,409,000 in January, as the separations rate as a percentage of the employed rose from 3.6% to 3.7%, which was also up from 3.6% in January a year ago (see table 3)...subtracting the 5,409,000 total separations from the total hires of 5,583,000 would imply an increase of 174,000 jobs in January, somewhat less than the revised payroll job increase of 239,000 for January reported in the February establishment survey last week but still within the expected +/-115,000 margin of error in these incomplete samplings...

breaking down the seasonally adjusted job separations, the BLS finds that 3,271,000 of us voluntarily quit our jobs in January, down from the revised 3,340,000 who quit their jobs in December, while the quits rate, widely watched as an indicator of worker confidence, fell by 0.1% to 2.2% of total employment, while it remained the same as the 2.2% quits rate of a year earlier (see details in table 4)....in addition to those who quit, another 1,762,000 were either laid off, fired or otherwise discharged in January, up by 107,000 from the revised 1,655,000 who were discharged in December, as the discharges rate rose from 1.1% to 1.2% of all those who were employed during the month, which was also up from the discharges rate of 1.1% a year earlier....meanwhile, other separations, which includes retirements and deaths, were at 375,000 in January, up from 318,000 in December, for an 'other separations rate’ of 0.3%, up from 0.2% in December but the same as as in January 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 from the aforementioned GGO posts, contact me…)   

No comments:

Post a Comment