Sunday, May 16, 2021

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

Regular monthly reports that were released this week included the the April Consumer Price Index, the April Producer Price Index and the April Import-Export Price Index from the Bureau of Labor Statistics, the Retail Sales report for April and the Manufacturing and Trade, Inventories and Sales report for March (pdf), both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, and the Job Openings and Labor Turnover Survey (JOLTS) for March, also from the BLS.…

CPI Rose 0.8% in April on Higher Prices for Utilities, Used Cars and Trucks, and most Consumer Goods

The consumer price index rose 0.8% in April, the largest one month increase since June 2009, as higher prices for utilities, used vehicles, transportation services, hotels and motels, and a host of consumer goods were only slightly offset by lower prices for fuel and for health insurance...the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.8% higher in April, after rising by 0.6% in March, 0.4% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, but after falling by 0.1% last May, by 0.7% in April of last year....the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 264.877 in March to 267.054 in April, which left it statistically 4.1597% higher than the 256.389 index reading of April of last year, which is reported as a 4.2% year over year increase, up from the 2.6% year over year increase reported a month ago, and the largest annual increase since 2008...with lower prices for energy holding back the overall index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.9% for the month, the largest core monthly increase since April 1982, as the unadjusted core price index rose from 271.713 to 273.968, which left the core index 2.9610% ahead of its year ago reading of 267.268, which is reported as a 3.0% year over year increase, up from the 1.6% year over year core price increase that was reported for March, and the largest year over year core price index increase since October 1995...

The volatile seasonally adjusted energy price index fell 0.1% in April, after rising by 5.0% in March, by 3.9% in February, 3.5% in January, 2.6% in December, 0.7% in November, 0.6% in October, 1.4% in September, 0.9% in August, 2.1% in July, and by 4.4% in June, but after falling by 2.3% in May, and by 9.5% last April, and hence is still 25.1% higher than in April a year ago....the price index for energy commodities was 1.4% lower in April, while the index for energy services was 1.5% higher, after rising 0.6% in March....the energy commodity index was down 1.4% on a 1.3% decrease in the price of gasoline and a 3.2% decrease in the price index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 1.5% lower...within energy services, the price index for utility gas service rose 2.4% after rising 2.5% in March and is now 12.1% higher than it was a year ago, while the electricity price index rose 1.2% in April after being unchanged in March....energy commodities are still averaging 47.9% higher than their year ago levels, with gasoline price averaging 49.6% higher than they were a year ago, while the energy services price index is now up 5.4% from last April, as electricity prices are also 3.6% higher than a year ago…

The seasonally adjusted food price index rose 0.4% in April, after rising by 0.1% in March, 0.2% in February, 0.1% in January and 0.3% in December, after being unchanged in November, rising 0.2% in October, rising 0.1% in August and in September, after falling 0.3% last July, rising 0.5% last June, rising 0.7% last May and by 1.4% last April, as the price index for food purchased for use at home was 0.4% higher in April, after rising 0.1% in March, while the index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets rose 0.5% and prices at full service restaurants rose 0.2%, while food prices at elementary and secondary schools averaged 1.0% lower...

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 fresh biscuits, rolls, muffins rose 0.6%, the price index for crackers and bread and cracker products rose 2.6% and the price index for fresh sweetrolls, coffeecakes, doughnuts rose 2.2%....at the same time, the price index for the meats, poultry, fish, and eggs food group was 0.5% higher, as the price index for beef and veal rose 1.0%, the price index for pork rose 2.6%, and the price index for poultry rose 1.1%...meanwhile, the seasonally adjusted price index for dairy products was 0.6% higher, as milk prices rose 2.1% and the price index for dairy products other than cheese and ice cream was 1.0% higher....moreover, the fruits and vegetables price index was 0.8% higher as the price index for fresh fruits rose 1.5%, the price index for canned vegetables rose 1.2%, and the price index for dried beans, peas, and lentils rose 1.3%....meanwhile, the beverages price index was 0.3% higher as the price index for noncarbonated juices and drinks rose 1.0% and the price index for coffee rose 0.4%....lastly, the price index for the ‘other foods at home’ category was 0.1% higher, as the price index for spices, seasonings, condiments and sauces rose 1.3%, the price index for fats and oils rose 1.2% and the price index for prepared salads rose 1.3%...the itemized list for price changes of over 100 separate food items is included at the beginning of Table 2 for this release, which also gives us a line item breakdown for prices of more than 200 CPI items overall...since last April, the only food line item showing a price change greater than 10% over the past year is bacon, which was 10.7% higher, while the price index for food at employee sites and schools is 35.2% lower on what was reported as a 43.5% year over year drop in the price index for food at elementary and secondary schools in March...

Among the seasonally adjusted core components of the CPI, which rose 0.9% in April after rising 0.3% in March, 0.1% in February, being unchanged in January and December, after rising by 0.2% in November, by 0.1% in October, by 0.2% in September, by 0.3% in August, by 0.5% in July and by 0.2% in June, after falling by 0.1% in May, and by 0.4% in April of last year, the composite price index of all goods less food and energy goods was 2.0% higher in April, while the more heavily weighted composite for all services less energy services was 0.5% higher....

Among the goods components, which will be used by the Bureau of Economic Analysis to adjust March retail sales for inflation in national accounts data, the price index for household furnishings and supplies was was 0.9% higher, as the price index for living room, kitchen, and dining room furniture rose 2.8%, the price index for housekeeping supplies rose 0.8%, and the price index for window and floor coverings rose 0.7%....,at the same time, the apparel price index was 0.3% higher on a 2.3% increase in the price index for men's pants and shorts, a 1.5% increase in the price index for women's dresses, a 1.5% increase in the price index for men's footwear, and a 4.2% increase in the price index for boys' and girls' footwear....meanwhile. the price index for transportation commodities other than fuel saw a 4.3% jump, as prices for new cars and trucks were 0.5% higher, prices for used cars and trucks rose by a record 10.0%, and the price index for tires was 1.5% higher... in addition, the price index for medical care commodities 0.6% higher, as prescription drug prices rose 0.5% and nonprescription drug prices rose 1.1%...at the same time, the recreational commodities index was 1.2% higher on a 3.1% increase in TV prices, a 1.2% increase in the price index for sporting goods, a 2.7% increase in the price index for toys, and a 1.7% increase in the price index for recreational books...moreover1, the education and communication commodities index was 3.1% higher on a 1.4% increase in the price index for educational books and supplies, and a 5.1% increase in the price index for computers, peripherals, and smart home assistants….lastly, a separate price index for alcoholic beverages was 0.2% higher, while the price index for ‘other goods’ was up 0.4% on a 2.1% increase in the price index for miscellaneous personal goods and a 0.3% increase in the price index for hair, dental, shaving, and miscellaneous personal care products...

Within core services, the price index for shelter was 0.3% higher as rents rose 0.4% and homeowner's equivalent rent was 0.2% higher, and as prices for lodging away from home at hotels and motels rose 8.8%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.1%, and other household operation costs were on average 0.6% higher on a 2.4% increase in the price index for repair of household items...meanwhile, the price index for medical care services was unchanged, as the price index for inpatient hospital services rose 0.3% and the price index for care of invalids and elderly at hom rose 3.0% while the price of health insurance fell 1.0%....but the transportation services price index was 2.9% higher as car and truck rentals rose 16.2%, the price index for airline fares rose 10.2%, and the price index for vehicle insurance rose 2.5%...in addition, the recreation services price index rose 0.8% as the index for cable and satellite television services rose 0.5% and the price index for admissions to sporting events rose 10.1%.... at the same time, the index for education and communication services was 0.1% higher as the price index for delivery services rose 0.4%, the price index for day care and preschool services rose 0.4% and the price index for internet services and electronic information providers also rose 0.4%...lastly, the index for other personal services was unchanged as the price index for laundry and dry cleaning services was 0.4% higher while the price index for checking accounts and other bank services fell 3.4%...

Among core line items, the price index for car and truck rental, which has now risen 82.2% from a year ago, the price index for used car and trucks, which is now up 21.0% from a year ago, the price index for men's pants and shorts, which is now up 10.4% from a year ago, the price index for laundry equipment, which is up 23.5% from last April, and the price index for "other furniture", which is up 11.0% year over year, have all seen prices rise by more than 10% over the past year, while the price index for telephone hardware, calculators, and other consumer information items, which is now down by 17.4% since last April, is the only core line item to have decreased by a double digit magnitude over that one year span....

Retail Sales Unchanged in April after Big Revisions to Prior Months’ Sales

Seasonally adjusted retail sales were statistically unchanged in April, after retail sales March were revised higher, while sales for February were revised much lower ...the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $619.9 billion for the month, which was virtually unchanged (±0.5 percent)* from revised March sales of $619.8 billion, but 51.2 percent (± 0.7 percent) above the adjusted sales of April of last year...March sales were originally reported at $619.1 billion, up 9.8% from February; they are now indicated to have risen 10.7% to $619.8 billion because February adjusted sales were concurrently revised from $563.7 billion to $559.97 billion...the net of those revisions to February and March sales would reduce first quarter sales by about a $12 billion annual rate and subtract about 0.24 percentage points, give or take, from 1st quarter GDP when the 2nd estimate is released at the end of the month...estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated nominal dollar sales fell 2.1%, from $629,941 million in March to $616,697 million in April, while they were up 51.4% from the $407,227 million of sales in April a year ago....

We are again including below the table of monthly and yearly percentage changes in sales by business type, taken from the Census marts pdf....the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from March to April in the first column, and then the year over year percentage change for those businesses since last April in the 2nd column; the second pair of columns gives us the revision of last month’s March advance monthly estimates (now called "preliminary") as revised in this report, likewise for each business type, with the February to March change under "Feb 2021 r (revised)" and the revised March 2020 to March 2021 percentage change in the last column shown...for your reference, our copy of the table of last month’s advance March estimates, before this report's revision, is here....

April 2021 retail sales table

To compute April's real personal consumption of goods data for national accounts from this April retail sales report, the BEA will use the corresponding price changes from the April consumer price index, which we reviewed 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 March retail sales excluding the 1.1% price-related decrease in sales at gas stations were up by 0.1%....then, by subtracting the amounts representing the 0.4% increase in grocery & beverage sales and the 3.0% increase in food services sales out from that total, we find that core retail sales were down by more than 0.3% for the month....since the April CPI report showed that the the composite price index of all goods less food and energy goods was 2.0% higher in April, we can thus figure that real retail sales excluding food and energy will show an decrease of more than 2.3%...however, the actual adjustment in national accounts for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at motor vehicle & parts dealers were up 2.9%, the April price index for transportation commodities other than fuel was 4.3% higher, which would suggest that real unit sales at auto & parts dealers were probably on the order of 1.3% or 1.4% lower once price increases are taken into account... similarly, while nominal sales at clothing stores were 5.1% lower in April, the apparel price index was 0.3% higher, which means that real sales of clothing likely fell around 5.4%...

In addition to figuring those core real retail sales, to make an estimate of the change in real sales, we'll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do…the April CPI report showed that the food price index was 0.4% higher, as the price index for food purchased for use at home rose 0.4% while the index for food bought away from home was 0.3% higher...thus, while nominal sales at food and beverage stores were 0.2% higher, real sales of food and beverages would have 0.2% lower in light of the 0.4% higher prices…similarly, the 3.0% increase in nominal sales at bars and restaurants, once adjusted for 0.3% higher prices, suggests that real sales at bars and restaurants rose by around 2.7% during the month...and while sales at gas stations were down 1.1%, there was a 1.3% decrease in price of gasoline during the month, which would suggest that real sales of gasoline were up on the order of 0.2%, with a caveat that gasoline stations do sell more than gasoline, products which should not be adjusted with gasoline prices, so the actual increase in real sales at gas stations was likely a bit smaller…reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can then estimate that the income and outlays report  for April will show that real personal consumption of goods fell by around 1.9% in April, after rising by a revised 7.5% in March, but after falling by a revised 1.9% in February and rising by 3.1% in January...at the same time, the 2.7% increase in real sales at bars and restaurants should add about 0.3% to April's real personal consumption of services...

Job Openings Jump to Record High in March; Hiring and Job Quitting Up; Layoffs Down

The Job Openings and Labor Turnover Survey (JOLTS) report for March from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 597,000 to a record high of 8,123,000 in March, after February's job openings were revised up to 7,526,000 from the originally reported 7,367,000 ...March's jobs openings were also up 40.8% from the 5,769,000 job openings reported in March a year ago, as the job opening ratio expressed as a percentage of the employed rose to 5.3% in March, up from a revised 5.0% rate in February, and up from the 3.7% rate of March a year ago...the leisure and hospitality sector, with a 267,000 job opening increase to 1,209,000 openings, saw the largest increase, while job openings in healthcare and social assistance decreased by 218,000 to 1,268,000..(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 March, seasonally adjusted new hires totaled 6,009,000, up by 215,000 from the revised 5,794,000 who were hired or rehired in February, as the hiring rate as a percentage of all employed rose from 4.0% in February to 4.2% in March, which was also up from the 3.4% the hiring rate in March a year earlier (details of hiring by sector since November are in table 2)....meanwhile, total separations fell by 107,000 to 5,322,000 in March, as the separations rate as a percentage of the employed fell from 3.8% to 3.7%, which was also down from the initial pandemic separations rate of 10.8% a year ago (see table 3)...subtracting the 5,322,000 total separations from the total hires of 6,009,000 would imply an increase of 687,000 jobs in March, less than the revised payroll job increase of 770,000 for March reported in the April 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 found that 3,508,000 of us voluntarily quit our jobs in March, up from the revised 3,383,000 who quit their jobs in February, while the quits rate, widely watched as an indicator of worker confidence, remained unchanged at 2.4% of total employment, which was still up from the quits rate of 1.9% a year earlier (see details in table 4)....in addition to those who quit, another 1,480,000 were either laid off, fired or otherwise discharged in March, down by 243,000 from the revised 1,723,000 who were discharged in February, as the discharges rate fell from 1.2% to 1.0% of all those who were employed during the month, which was also way down from the discharges rate of 8.6% a year ago...meanwhile, other separations, which includes retirements and deaths, were at 334,000 in March, up from 323,000 in February, for an 'other separations rate’ of 0.2%, same as in February and as in March of last year....both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges, can be accessed using the links to tables at the bottom of the press release... 

Industrial Production Rose 0.7% in April after Prior Months Revised Lower

Industrial production increased in April after production for January and February was revised lower...the Fed's G17 release on Industrial production and Capacity Utilization for April reported that industrial production rose 0.7% in April after rising by a revised 2.4% in March, which left our total output 16.5% higher than the depressed levels of April a year ago...the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, came in at 106.3 in April, while the March index value remained unrevised from the 105.6 reported last month, after the February index was revised from 104.1 to 103.1, and the January index was revised down from 106.9 to 106.8...the effect of those revisions was to revise the March change from +1.4% to +2.4%, while the February decrease was revised from -2.6% to -3.5%..

The manufacturing index, which accounts for more than 77% of the total IP index, rose 0.4% to 103.2 in April, while the March manufacturing index remained at 102.8 after the February manufacturing index was revised from 100.0 down to 99.7 and the January index was revised from 103.9 to 103.8....with the recovery of manufacturing plants that were damaged by February's big freeze, the manufacturing index is now 2.3% above its Covid impacted level of a year ago....meanwhile, the mining index, which includes oil and gas well drilling, rose 0.7%, from 118.1 in March to 118.9 in April, after the March index was revised down from from the originally reported 119.2, which left the mining index 2.4% lower than it was a year earlier...finally, the seasonally adjusted utility index, which typically fluctuates due to deviations from normal temperatures, rose by 2.6% in our cooler than normal April, from 100.2 to 102.8, after the March utility index was revised from 98.8 to 100.2, now down 9.0% from our cold February, after the February index was revised from 111.5 to 110.1, now up 7.8% from January...after this month's revisions, the utility index is now 1.9% above that of a year ago, partly due to a milder April last year than this year..

This report also includes April capacity utilization stats, which is expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry rose to 74.9% in April from 74.4% in March, with capacity utilization for March unrevised after capacity utilization for February was revised lower...capacity utilization of NAICS durable goods production facilities rose from 74.4% in March to 74.7% in April, while capacity utilization for non-durables producers rose from 74.8% to 75.7%...capacity utilization for the mining sector rose to 82.1% in April from 81.4% in March, which was previously reported as 82.2%, while utilities were operating at 71.4% of capacity during April, up from their 69.7% of capacity during March, which was previously reported at 68.8%...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 0.6% in April on Higher Wholesale Food Prices, Wider Margins for Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.6% in March, as prices for both finished wholesale goods and margins of final services providers rose 0.6%...that increase followed a March report that had the PPI 1.0% higher, as prices for finished wholesale goods rose 1.7% while margins of final services providers rose 0.7%, a February report that the PPI was 0.5% higher, with prices for finished wholesale goods on average 1.4% higher, while margins of final services providers increased by 0.1%, a revised January report that still has the PPI 1.3% higher, with average prices for finished wholesale goods now rising 1.6%, while margins of final services providers increased by 1.1%, and a re-revised December report that indicates the PPI was up 0.3%, with prices for finished wholesale goods up 0.9% while margins of final services providers were unchanged....on an unadjusted basis, producer prices are now 6.2% higher than a year ago, up from the 4.2% 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 0.7% for the month, and is now 4.6% higher than in April a year ago, up from the 3.1% year over year increase as was shown in February...

As noted, the price index for final demand for goods, aka 'finished goods', was 0.6% higher in April, after being 1.7% higher in March, 1.4% higher in February, 1.6% higher in January, 0.9% higher in December, 0.4% higher in November, 0.5% higher in October, 0.4% higher in September, 0.4% higher in August, 0.5% higher in July, 0.4% higher in June, and 1.4% higher in May, but 2.8% lower in April of last year....the finished goods price index rose 0.6% in February because the price index for wholesale foods rose 2.1%, after rising by 0.5% in March, 1.3% in February, rising a revised 1.7% in January, but falling by a revised 1.4% in December, while the price index for wholesale energy goods was 2.4% lower, after it had risen by 5.9% in March, 6.0% in February, and by 4.9% in both January and December...meanwhile, the index for final demand for core wholesale goods (excluding food and energy) was 1.0% higher, after it had risen by 0.9% in March, 0.3% in February and 0.8% in January....wholesale energy prices averaged 2.4% lower due to a 3.4% decrease in wholesale prices for gasoline, a 7.6% decrease in wholesale prices for No.2 diesel fuel, and a 10.1% drop in wholesale prices for LP gas, while the wholesale food price index rose 2.1% on a 13.4% increase in the wholesale price index for beef and veal, a 10.2% increase in the wholesale price index for pork, and a 3.6% increase in wholesale price index for dairy products...among core wholesale goods, the wholesale price index for steel mill products jumped 18.4%, the wholesale price index for industrial chemicals rose 3.0%, the wholesale price index for truck trailers rose 3.7%, and the wholesale price index for mobile homes rose 5.8% ..

At the same time, the index for final demand for services rose 0.6% in April, after rising 0.7% in March, 0.1% in February and a revised 1.1% in January, as the index for final demand for trade services rose 0.5%, the index for final demand for transportation and warehousing services rose 2.1%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.5% higher...among trade services, seasonally adjusted margins for fuels and lubricants retailers rose 8.4%, margins for cleaning supplies and paper products retailers rose 7.4%, margins for computer hardware, software, and supplies retailers rose 4.4%, margins for TV, video, and photographic equipment and supplies retailers rose 5.1%, and margins for food and alcohol retailers rose 3.0%, while margins for apparel wholesalers fell 11.5%.. among transportation and warehousing services, margins for airline passenger services rose 7.3%, average margins for air transportation of freight rose 1.2%, and average margins for rail transportation of freight and mail rose 0.6%...among the components of the core final demand for services index, the index for portfolio management rose 1.5%, margins for passenger car rental rose 17.0%, and margins for arrangement of vehicle rentals and lodging rose 3.9%, while margins for tax preparation and planning fell 5.1% …

This report also showed the price index for intermediate processed goods rose 1.6% in April, after rising 4.0% in March, 2.7% in February, a revised 1.5% in January, a revised 1.4% in December, 0.9% in November, 0.9% in October, 0.6% in September, 0.9% in August, 1.4% in July, and 1.2% in June, but after being unchanged in May and falling the prior 5 months....however, the price index for intermediate energy goods fell 4.1% in April, as refinery prices for gasoline fell 3.4%, refinery prices for No. 2 diesel fuel fell 7.6%, producer prices for LP gas fell 10.1%, producer prices for industrial electric power fell 6.2%, and producer prices for natural gas to electric utilities fell 4.9%... meanwhile, the price index for intermediate processed foods and feeds rose 3.3%, as the producer price index for meats rose 9.8%, the producer price index for processed poultry rose 4.1%, and the producer price index for fats and oils rose 8.0%...at the same time, the core price index for intermediate processed goods less food and energy rose 2.9% as the producer price index for plastic resins and materials rose 7.5%, the producer price index for aluminum mill shapes rose 7.5%, the producer price index for steel mill products rose 18.4%, the producer price index for plywood rose 10.0%, and the producer price index for building paper and board rose 9.2%...prices for intermediate processed goods are now 18.4% higher than in March a year ago, the fifth 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 fell 3.8% in April, after rising 9.3% in March, 4.3% in February, a revised 4.0% in January, a revised 2.1% in December, and after rising by 6.3% in November, 1.3% in October, 5.2% in September, 4.0% in August, 0.6% in July, 5.4% in June and 8.4% in May, but after falling 13.7% last April ....that was as the April price index for crude energy goods fell 17.2% as crude oil prices fell 7.2% and unprocessed natural gas prices fell 32.1%, while coal prices rose 2.0%, while the price index for unprocessed foodstuffs and feedstuffs rose 7.9% on a 37.4% increase in the price of slaughter hogs, a 19.0% increase in the price of slaughter chickens, and a 12.2% increase in producer prices for slaughter cattle....at the same time, the index for core raw materials other than food and energy materials rose 1.2%, as the price index for copper base scrap rose 3.3% and the price index for recyclable paper rose 8.3%... this raw materials index is now 57.6% higher than a year ago, just the sixth year over year increase in more than 2 years, as the annual change on this index had been negative from the beginning of 2019 through October of last year...

Lastly, the price index for services for intermediate demand rose 0.4% in March, after rising 0.4% in March, 0.7% in February, a revised 0.9% in January, and a revised 0.7% in December, after being unchanged in November, rising 0.7% in October, rising 1.1% in September, 0.8% in August, 0.5% in July, and 0.3% last June….the price index for intermediate trade services was 1.5% higher, as margins for intermediate hardware, building material, and supplies retailers rose 7.0%, margins for intermediate building materials, paint, and hardware wholesalers rose 2.3%, margins for intermediate paper and plastics products wholesalers rose 2.2%, and margins for intermediate metals, minerals, and ores wholesalers rose 2.3%...meanwhile, the index for transportation and warehousing services for intermediate demand was 2.0% higher, as the intermediate price index for arrangement of freight and cargo rose 12.3%, the intermediate price index for transportation of passengers (partial) rose 7.1%, the intermediate price index for water transportation of freight rose 1.6%, the intermediate price index for services related to water transportation rose 1.7%, and the intermediate price index for air transportation of freight rose 1.2%....at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.4%, as the intermediate price index for passenger car rental rose17.0%, the intermediate price index for executive search services rose 4.0%, the intermediate price index for radio advertising time sales rose 5.4%, and the intermediate price index for traveler accommodation services rose 2.3%, while the intermediate price index for securities brokerage, dealing, investment advice, and related services fell 2.4%...over the 12 months ended in April, the year over year price index for services for intermediate demand is now 6.7% higher than it was a year ago, the eightth consecutive positive annual change since it briefly turned negative year  over year from April to August, and the largest 12-month advance in the ten year history of this index..

March Business Sales Rose 5.7%, Business Inventories Were Up 0.3%

After the release of the April retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for March  (pdf), which incorporates the revised March retail data from that April retail report and the earlier published March wholesale and factory data to give us a complete picture of the business impact on the economy for that month....note that retail sales and inventories were revised on April 26th, which thus revised the figures that were reported a month ago, even before the usual revisions to the prior month’s data that accompany this report...

According to the Census Bureau, total manufacturer's and trade sales were estimated to be valued at a seasonally adjusted $1,638.2 billion in March, up 5.7 percent (±0.2 percent) from February's revised sales, and up 18.5 percent (±0.4 percent) from March sales of last year...at the same time, total February sales were revised up from the originally reported $1,549.6 billion to $1,549,939 million, now a 1.6% decrease from January....manufacturer's sales rose 2.1% to $513,555 million in March; retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, rose 10.4% to $556,804 million, while wholesale sales rose 4.6% to $567,868 million...

Meanwhile, total manufacturer's and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,014.3 billion at the end of March, up 0.3% (±0.1%) from the end of February, but virtually unchanged (±0.5 percent)* from inventories of March a year earlier...the value of end of February inventories was revised from the $2,010.8 billion reported last month to $2,009.3 billion, which is now 0.6% more than January's inventory valuation....seasonally adjusted inventories of manufacturers were estimated to be valued at $707,713 million, up 0.7% from February, while inventories of retailers were valued at $612,982 million, 1.4% less than those of February, and while inventories of wholesalers were estimated to be valued at $693,639 million at the end of March, 1.3% more than in February...

Last week we figured that there would be little impact on 1st quarter GDP based on the inventory change the factory report showed, and that 1st quarter GDP was underestimated by around 0.03 percentage points based on what the wholesale inventories report showed...the BEA's Key source data and assumptions (xls) that accompanied the release of the advance estimate of 1st quarter GDP indicates that they had estimated that the value of retail inventories March would decrease by $9.0 billion before adjustment with the PPI, almost exactly what this reports indicates....so after netting out the 3 inventory changes, this report indicates there should be a net upward adjustment of around 0.03 percentage points to 1st quarter GDP when the 2nd estimate is released at the end of May...

 

(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…)  

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