Sunday, May 15, 2022

April's consumer and producer prices; March wholesale sales

Regular monthly reports that were released this week included the April Consumer Price Index, the April Producer Price Index and the April Import-Export Price Index from the Bureau of Labor Statistics, and the Wholesale Trade, Sales and Inventories report for March from the Census Bureau....

CPI Rose 0.3% in April as Higher Prices for Food, Housing, Utilities, & Airfare were offset by lower Prices for Fuel, Clothing, & Hi-Tech Goods

The consumer price index rose 0.3% in April, as higher prices for groceries, utilities, rent, airfares, health insurance, new cars, and furniture were partly offset by lower prices for fuel, clothing, TVs, appliances, and information technology commodities....the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.3% higher in April, after rising by 1.2% in March, by 0.8% in February, by 0.6% in January. by 0.6% in December, by 0.7% in November, by 0.9% in October, by 0.4% in September, by 0.3% in August, by 0.5% in July, by 0.9% in June, by 0.7% in May, and by 0.6% last April....the unadjusted CPI-U index, which was originally set with prices of the 1982 to 1984 period equal to 100, rose from 287.504 in March to 289.109 in April, which left it statistically 8.2586% higher than the index reading of 267.054 in April of last year, which is reported as a 8.3% year over year increase, down from the 8.5% year over year increase reported for March, which had been the greatest one year price increase since December 1981....with lower energy prices reducing the overall index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.6% for the month, as the unadjusted core price index rose from 289.305 to 290.846, which left the core index 6.1606% ahead of its year ago reading of 273.968, which is reported as a 6.2% year over year increase, down from the 6.5% year over year core price increase that was reported in March, which had been the greatest year over year core price increase since August 1982...

The volatile seasonally adjusted energy price index fell 2.7% in April, after rising by 11.0% in March, by 3.5% in February, by 0.9% in January, by 0.9% in December, by 2.4% in November, by 3.7% in October, by 1.2% in September, and by 1.9% in August, and hence is still 30.3% higher than in April of a year ago....the price index for energy commodities was 5.4% lower in April, while the price index for energy services was 1.3% higher, after it had risen by 1.8% in March....the energy commodity index was down 5.4% on a 6.1% decrease in the price of gasoline. even as the price of fuel oil rose 2.7%, while the price index for other energy commodities, including propane, kerosene, and firewood, was 1.4% higher...within energy services, the price index for utility gas service rose 3.1% after rising 0.6% in March and is now 22.7% higher than it was a year ago, while the electricity price index rose 0.7% in April after rising 2.2% in March.... energy commodities are still averaging 44.7% higher than their year ago levels, with gasoline prices averaging 43.6% higher than they were a year ago, while the energy services price index is up 13.7% from last April, as electricity prices are also 11.0% higher than a year ago…

Meanwhile, the seasonally adjusted food price index rose 0.9% in April, after rising by 1.0% in March, by 1.0% in February, by 0.9% in January, by 0.5% in December, by 0.8% in November, by 0.9% in October, by 0.9% in September, by 0.4% in August, and by 0.7% last July, as the price index for food purchased for use at home was 1.0% higher in April, after rising by 1.5% in March, by 1.4% in February, by 0.4% in January, by 0.4% in December, by 0.9% in November, and by 0.9% in October, while the index for food bought to eat away from home was 0.6% higher, as average prices at fast food outlets rose 0.3%, prices at full service restaurants rose 0.9%, and food prices at employee sites and schools averaged 0.1% higher...

In the food at home categories, the price index for cereals and bakery products was 1.1% higher, as average bread prices rose 2.0%, the price index for breakfast cereal rose 2.4%, the price index for rice, pasta, & cornmeal rose 1.3%, the price index for frozen and refrigerated bakery products, pies, tarts, and turnovers rose 1.9%, and the price index for fresh cakes and cupcakes rose 1.0%....in addition, the price index for the meats, poultry, fish, and eggs food group was 1.4% higher even though the price index for beef and veal fell 0.9%, as the price index for pork rose 0.6%, the price index for poultry rose 3.0%, the price index for fresh fish and seafood rose 0.9%, and the price index for eggs rose 10.3%....at the same time, the seasonally adjusted price index for dairy products was 2.5% higher, as milk prices rose 3.1%, the price index for cheese and related products rose 2.1%, and the price index for dairy products other than cheese and ice cream rose 2.3%...on the other hand, the fruits and vegetables price index was 0.3% lower, as the price index for fresh fruits fell 0.5%, the price index for canned fruits vegetables fell 0.3%, the price index for frozen vegetables fell 0.1%, and the price index for dried beans, peas, and lentils fell 0.2%...however, the beverages price index was 2.0% higher, as the price index for carbonated drinks rose 1.8%, the price index for noncarbonated juices and drinks rose 2.4%, the price index for coffee rose 2.4%, and price index for beverage materials other than coffee but including tea was 1.9% higher....lastly, the price index for the ‘other foods at home’ category rose 0.7%, as the price index for fats and oils rose 1.2%, the price index for soups rose 2.3%, the price index for prepared salads rose 1.7%, and the price index for baby foods was 3.0% higher....

Among the seasonally adjusted core components of the CPI, which rose by 0.6% in April, after rising by 0.3% in March, by 0.5% in February, by 0.6% in January, by 0.6% in December, by 0.5% in November, by 0.6% in October, by 0.3% in September, by 0.2% in August, and by 0.3% last July, the composite price index of all goods less food and energy goods was 0.2% higher in March, while the more heavily weighted composite for all services less energy services rose 0.7%....

Among the goods components, which will be used by the Bureau of Economic Analysis to adjust January’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.5% higher, as the price index for bedroom furniture rose 1.7%, the price index for furniture other than bedroom, living room, kitchen, and dining room furniture rose 2.0%, the price index for window coverings rose 4.7%, the price index for tools, hardware and supplies rose 1.2%, and the price index for household cleaning products rose 1.7%....on the other hand, the apparel price index was 0.8% lower on a 1.3% decrease in the price index for men's underwear, nightwear, swimwear, and accessories, a 2.3% decrease in the price index for women's suits and separates, a 1.3% decrease in the price index for footware, and a 1.3% decrease in the price index for jewelry... meanwhile, the price index for transportation commodities other than fuel was 0.4% higher, as prices for new cars were 1.7% higher, tire prices were 0.9% higher, the price index for parts and equipment other than tires rose 0.9% and the price index for motor oil, coolant, and fluids rose 3.7%....at the same time, meanwhile, the price index for medical care commodities was 0.1% higher, as both nonprescription drug prices and prescription drug prices were unchanged, while the price index for medical equipment and supplies was 0.3% higher....in addition, the recreational commodities index was 0.5% higher despite a 2.2% decrease in TV prices, on a 1.0% increase in the price index for audio equipment, a 1.2% increase in the price index for sports equipment, a 1.2% increase in the price index for pet food, a 2.0% increase in the price index for recreational reading materials and a 4.6% increase in the price index for sewing machines, fabric and supplies...however, the education and communication commodities index was 2.6% lower on a 4.3% decrease in the price index for smartphones, a 2.1% decrease in the price index for computers, peripherals, and smart home assistants, and a 1.4% decrease in the price index for computer software and accessories….lastly, a separate price index for alcoholic beverages was 0.4% higher, while the price index for ‘other goods’ was 0.3% higher on a 0.5% increase in the price index for cigarettes, a 1.2% increase in the price index for hair, dental, shaving, and miscellaneous personal care products, and a 0.3% increase in the price index for stationery, stationery supplies, and gift wrap....

Within core services, the price index for shelter was 0.5% higher as rents rose 0.5% and homeowner's equivalent rent was also 0.5% higher, and prices for lodging away from home at hotels and motels rose 1.7%, while at the same time the shelter sub-index for water, sewers and trash collection was 0.3% higher, and the price index for moving, storage, freight expense was 2.1% higher....meanwhile, the price index for medical care services was 0.5% higher, as the price index for hospital and related services was 0.5% higher, the price index for care of invalids and elderly at home rose 0.5%, and price index for health insurance rose 2.0%....at the same time, the transportation services price index was 3.1% higher, as the price index for airline fares rose 18.6%, the price index for motor vehicle body work rose 1.3%, and the price index for motor vehicle insurance rose 0.8%....in addition, the recreation services price index rose 0.4%, as the price index for admission to movies, theaters, and concerts rose 1.1%, the price index for photographers and photo processing rose 1.8%, the price index for video discs and other media rose 1.7%, and the price index for pet services rose 1.7%....meanwhile, the index for education and communication services was 0.2% higher as the price index for day care and preschool rose 0.6%, the price index for residential telephone services rose 0.7%, and the price index for delivery services rose 2.8%...lastly, the index for other personal services was 0.5% higher, as the price index for legal services rose 1.1%, the price index for checking accounts and other bank services rose 2.1%, the price index for laundry and dry cleaning services rose 0.7%, and the price index for apparel services other than laundry and dry cleaning services was 0.6% higher..

Producer Prices Rose 0.5% in April; Record Annual Increase of 16.3% for Final Demand for Goods

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.5% in April, as average prices for finished wholesale goods rose by 1.3% while final demand for services was unchanged....that increase followed a revised 1.6% increase in March, when average prices for finished wholesale goods rose by 2.4% and final demand for services rose 1.2%, a revised 1.1% increase in February, when average prices for finished wholesale goods rose by 2.2% while margins of final services providers rose 0.5%, a revised 1.2% increase in January, when wholesale goods prices rose 1.6% and the price index for final demand for services rose 0.9%, and a revised 0.6% increase in December, when average prices for finished wholesale goods fell 0.1%, but margins of final services providers were 0.9% higher....on an unadjusted basis, producer prices are now 11.0% higher than a year ago, down from the upwardly revised 11.5% year over year increase now shown for March's producer prices, while the core producer price index, which excludes food, energy and trade services, rose by 0.6% for the month, and is now 6.9% higher than in a year ago, down from the revised 7.1% year over year core PPI increase that is now indicated for March...

As we noted, the producer price index for final demand for goods, which was previously aggregated as 'finished goods', was 1.3% higher in March, after being revised to 2.4% higher in March, to 2.2% higher in February, to 1.6% higher in January, and after being 0.1% lower in December, 0.9% higher in November, 1.3% higher in October. 1.2% higher in September, 1.0% higher in August, 0.8% higher in July, 1.3% higher in June, 1.4% higher in May, and 1.0% higher in April of last year, and hence is now up by a record 16.32% from a year ago, topping March's revised 15.79% record annual increase....the finished goods price index rose 1.3% in April as the price index for wholesale energy goods was 1.7% higher in April, after it had risen by a revised 6.4% in March, and a revised 7.2% in February, and as the price index for wholesale foods rose 1.5%, after rising by a revised 2.5% in March, and a revised 2.0% in February, and while the index for final demand for core wholesale goods (excluding food and energy) rose 1.0% in April, after rising a revised 1.1% in March and by a revised 0.8% in February....wholesale energy prices averaged 1.7% higher on a 8.1% increase in wholesale prices for diesel fuel, an 11.7% increase in wholesale prices for home heating oil, and a 3.7% increase in wholesale prices for residential natural gas, while the wholesale food price index rose 1.5% on an 82.0% increase in the wholesale price index for eggs for fresh use, a 8.5% increase in the wholesale price index for fresh fruits and melons, a 5.1% increase in the wholesale price index for finfish and shellfish, and a 4.0% increase in the wholesale price index for pork, even as the wholesale price index for fresh and dry vegetables fell 26.6%....among core wholesale goods, the wholesale price index for mining machinery and equipment rose 4.9%, the wholesale price index for tires rose 4.4%, the wholesale price index for transformers and power regulators rose 3.9%. the wholesale price index for agricultural machinery and equipment rose 3.1%, the wholesale price index for household appliances rose 3.0%, and the wholesale price index for truck trailers rose 2.6%....

With the annual increase in the price index for final demand for goods at a record high, we are including a graph showing its year over year change monthly over the period that metric has been computed...

Meanwhile, the price index for final demand for services was unchanged in April, after rising by a revised 1.2% in March, by a revised 0.5% in February, by a revised 0.9% in January, and by a revised 0.9% in December, and is now up by 8.2% from a year ago, down from the record 9.2% year over year increase that is now indicated for March....the price index for final demand for trade services fell 0.5%, the price index for final demand for transportation and warehousing services rose 3.6%, while the core index for final demand for services less trade, transportation, and warehousing services was 0.1% lower...among trade services, seasonally adjusted margins for flooring and floor coverings retailers fell 13.7%, margins for health, beauty, and optical goods retailers fell 1.3%, margins for furniture retailers fell 5.0%, margins for sporting goods and boat retailers fell 2.8%, and margins for cleaning supplies and paper products retailers fell 2.1%, while margins for fuel and lubricants retailers rose 3.5%....among transportation and warehousing services, average margins for airline passenger services rose 2.9%, margins for truck transportation of freight rose 4.4%, and margins for air transportation of freight rose 3.5%...among the components of the core final demand for services index, the price index for portfolio management fell 1.8%, the price index for traveler accommodation services fell 3.1%, and the price index for arrangement of cruises and tours fell 2.0%, while the price index for passenger car rental rose 9.4%, and the price index for arrangement of vehicle rentals and lodging rose 3.0% …

This report also showed the price index for intermediate processed goods rose 2.2% in April after rising a revised 2.2% in March, by a revised 1.5% in February, and by a revised 2.2% in January...the price index for intermediate energy goods rose 4.5% in April, as producer prices for natural gas to electric utilities rose 10.2%, producer prices for industrial natural gas rose 7.0%, refinery prices for jet fuel rose 14.8%, and refinery prices for diesel fuel rose 8.1%... at the same time, the price index for intermediate processed foods and feeds rose 2.9%, as the producer price index for dairy products rose 2.8% and the producer price index for prepared animal feeds rose 1.6%...meanwhile, the core price index for intermediate processed goods less food and energy goods rose 1.4% even though the producer price index for softwood lumber fell 15.6%, as the producer price index for prepared paint rose 5.2%, the producer price index for basic organic chemicals rose 2.6%, the producer price index for aluminum mill shapes rose 6.2%, the producer price index for nonferrous foundry shop products rose 3.9%, the producer price index for metal containers rose 5.0%, the producer price index for secondary nonferrous metals rose 4.5%, the producer price index for plastic resins and materials rose 5.3%, and the producer price index for synthetic rubber rose 4.8%, while the producer price index for building paper and board fell 5.6%...average prices for intermediate processed goods are still 21.9% higher than in April a year ago, the same year over year increase as in March, but down from.their 26.6% year over year increase in November, which had been a 46 year high.....

At the same time, the price index for intermediate unprocessed goods rose 5.8% in April, after rising a revised 1.8% in March, rising a revised 10.0% in February and a revised 2.9% in January, after falling by a revised 4.8% in December and rising by 2.3% in November. by 6.0% in October, by 2.8% in September, by 1.4% in August, by 3.2% in July, by 2.1% in June, and by 7.9% last May...that was as the April price index for crude energy goods rose 10.3%, as unprocessed natural gas prices rose 16.9%, crude oil prices rose 4.5% and coal prices rose 17.4%..at the same time, the price index for unprocessed foodstuffs and feedstuffs was 2.5% higher on a 5.4% increase in producer prices for slaughter chickens, a 4.3% increase in producer prices for wheat, a 3.5% increase in producer prices for corn, a 4.3% increase in producer prices for alfalfa hay, and a 2.9% increase in producer prices for slaughter hogs....meanwhile, the index for core raw materials other than food and energy materials was 0.5% higher, on a 2.5% increase in the price index for copper base scrap and a 3.1% increase in the price index for recyclable paper.....this raw materials index is now 48.1% higher than a year ago, up from the 41.8% year over year increase in March, but still down from the record 59.2% annual increase last April, and now the eighteenth consecutive year over year increase for this index, after the annual change on this index had been negative from the beginning of 2019 through October of 2020...

Lastly, the price index for services for intermediate demand was 0.7% higher in April, after being a revised 1.1% higher in March, a revised 0.2% higher in February, after rising a revised 0.7% in January, by 0.8% in December, and by 0.6% in November….the price index for intermediate trade services fell 0.1%, as margins for machinery and equipment parts and supplies wholesalers fell 0.4%, margins for intermediate building materials, paint, and hardware wholesalers fell 1.6%, and margins for intermediate food wholesalers fell 0.9% ...on the other hand, the index for transportation and warehousing services for intermediate demand was 2.5% higher, as the intermediate price index for water transportation of freight rose 5.7%, the intermediate price index for truck transportation of freight rose 4.4%, the intermediate price index for air mail and package delivery services (not by USPS) rose 4.2%, the intermediate price index for transportation of passengers rose 2.8%, and the intermediate price index for warehousing, storage, and related services was 4.5% higher .... at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.6%, as the intermediate price index for television advertising time sales rose 2.4%, the intermediate price index for data processing and related services rose 3.2%, the intermediate price index for nonresidential real estate rents rose 4.3%%, the intermediate price index for truck, utility trailer, and RV rental and leasing rose 3.6%, and the intermediate price index for passenger car rental rose 9.4%....over the 12 months ended in April, the year over year price index for services for intermediate demand is now 7.5% higher than it was a year ago, the nineteenth consecutive positive annual increase in this index change since it briefly turned negative year over year from April to August of 2020, while it is still down from the record 9.5% year over year increase indicated for July...

March Wholesale Sales Up 1.7%, Wholesale Inventories Up 2.3%, Mostly Due to Higher Prices

The March report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at "$686.2 billion, up 1.7 percent (±0.5 percent) from the revised February level and .. up 22.1 percent (±1.1 percent) from the revised March 2021 level."... the February preliminary estimate of wholesale sales was revised from the $675.8 billion reported last month to $674,9 billion, which the Census reports as "revised from the preliminary estimate of up 1.7 percent (±0.4 percent) to up 1.5 percent (±0.4 percent)" from January...as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods sold....

On the other hand, the monthly change in private inventories is a major factor in GDP, since additional goods sitting in a warehouse represent goods that were produced but not sold, and this March report estimated that wholesale inventories were valued at "$840.3 billion at the end of March, up 2.3 percent (±0.2 percent) from the revised February level. Total inventories were up 22.0 percent (±1.4 percent) from the revised March 2021 level", with the February preliminary inventory estimate concurrently revised upward from the originally reported $818.2 billion to $821.1 billion, which meant the change in inventories from January to February was revised from the increase of 2.5 percent (+/-0.4%) reported last month to an increase of 2.8 percent (±0.2 percent)…

The BEA's key source data and assumptions (xls) for the advance estimate of first quarter GDP indicates that they had estimated that the Census value of March wholesale inventories would increase by $18.6 billion from February before price adjustments, while this report shows that wholesale goods inventories increased by $19.2 billion...however, the value of February's wholesale inventories that was used in the GDP report came from the sketchy Advance Report on Wholesale and Retail Inventories that was released just before the GDP report, and that report had February wholesale inventories valued at $819,079 million, so hence February inventories have now been revised up by $2.0 billion from the figure used in the GDP report...that revision in turn means that the March inventory change figure used in the GDP report was $2.6 billion too low...combining the final revisions to February and March, the nominal change in 1st quarter wholesale inventories would therefore be an increase of $4.6 billion from previously published figures, which should result in a 0.11 percentage point upward revision to first quarter GDP, assuming the inflation adjustments on the revisions are reasonably close to those used in the advance report.…

 

(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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