Monday, August 15, 2022

July's consumer and producer prices, June’s wholesale sales

Major economic reports released this past week were the July Consumer Price Index, the July Producer Price Index, and the July Import-Export Price Index, all of which came from the Bureau of Labor Statistics, and the June report on Wholesale Trade, Sales and Inventories from the Census Bureau...

CPI Was Unchanged in July as Higher Prices for Food and Housing were Offset by Lower Energy Prices

The consumer price index was unchanged in July, as higher prices for food, rent, health & vehicle insurance, new vehicles, vehicle maintenance and repair, and furniture were offset by a big drop in energy prices and lower prices for used cars, computers and software, airfares, and hotels....the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the average of seasonally adjusted prices were virtually unchanged in July, after rising by 1.3% in June, by 1.0% in May, by 0.3% in April, 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, and by 0.5% last July....the unadjusted CPI-U index, which was originally set with prices of the 1982 to 1984 period equal to 100, fell from 296.311 in June to 296.276 in July, which left it statistically 8.5248% higher than the index reading of 273.003 in June of last year, which is reported as a 8.5% year over year increase, down from the 9.1% year over year increase reported for June, which had been the greatest one year price increase since November 1981....with lower energy prices responsible for lowering the overall price index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.3% for the month, as the unadjusted core price index rose from 294.680 to 295.646, which left the core index 5.9109% ahead of its year ago reading of 279.146, which is reported as a 5.9% year over year increase, same as the year over year core price increase that was reported in June, and well down from the 6.5% 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 4.6% in July, after rising by 7.5% in June, 3.9% in May, falling by 2.7% in April, 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 32.9% higher than in July of a year ago....the price index for energy commodities was 7.6% lower in July, while the price index for energy services was 0.1% higher, after it had risen by 3.5% in June....the energy commodity index was down 7.6% on a 7.7% decrease in the price of gasoline and an 11.0% drop in the price of fuel oil, while the price index for other energy commodities, including propane, kerosene, and firewood, was 1.0% lower...within energy services, the price index for utility gas service fell 3.6% after rising 8.2% in June, and is still 30.5% higher than it was a year ago, while the electricity price index rose 1.6% in July after rising 1.7% in June.... energy commodities are still averaging 44.9% higher than their year ago levels, with gasoline prices averaging 44.0% higher than they were a year ago, while the energy services price index is up 18.8% from last July, as electricity prices are now 15.2% higher than a year ago…

Meanwhile, the seasonally adjusted food price index rose 1.1% in July, after rising by 1.0% in June, by 1.2% in May, by 0.9% in April, 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 1.3% higher in July, after rising by 1.0% in June, 1.4% in May, 1.0% in April, 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% last October, while the index for food bought to eat away from home was 0.7% higher, as average prices at fast food outlets rose 0.8%, prices at full service restaurants rose 0.6%, and food prices at employee sites and schools averaged 0.9% higher...

In the food at home categories, the price index for cereals and bakery products was 1.8% higher, as average bread prices rose 2.8%, the price index for flour and prepared flour mixes rose 3.2%, the price index for breakfast cereal rose 2.0%, the price index for crackers and bread and cracker products rose 3.3%, and the price index for cakes, cupcakes, and cookies rose 1.7%....at the same time, the price index for the meats, poultry, fish, and eggs food group was 0.5% higher even as the price index for beef and veal was unchanged, as the price index for poultry rose 1.2% and eggs prices rose 4.3%....meanwhile, the seasonally adjusted price index for dairy products was 1.7% higher, as milk prices rose 0.1%, the price index for cheese and related products rose 2.0%, and the price index for dairy products other than cheese and ice cream rose 3.7%....in addition, the fruits and vegetables price index was 0.5% higher, as the price index for canned fruits and vegetables rose 1.6%, the price index for frozen fruits and vegetables rose 0.9% and the price index other processed fruits and vegetables including those dried rose 2.7%...at the same time, the beverages price index was 2.3% higher, as the price index for carbonated drinks rose 2.7%, the price index for coffee rose 3.5%, and the price index for beverage materials including tea but not coffee was 2.4% higher....lastly, the price index for the ‘other foods at home’ category rose 1.8%, as the price index for sugar and sugar substitutes rose 2.1%, the price index for fats and oils rose 2.2%, the price index for soups rose 3.0%. the price index for snacks rose 1.8%, the price index for sauces and gravies rose 3.4%, the price index for olives, pickles, & relishes rose 3.0%, and the price index for baby foods was 2.1% higher....

Among the seasonally adjusted core components of the CPI, which rose by 0.3% in July, after rising by 0.7% in June, by 0.6% in May, by 0.6% in April, 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 rose 0.2% in July, while the more heavily weighted composite for all services less energy services was 0.4% higher....

Among the goods components, which will be used by the Bureau of Economic Analysis to adjust June’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.6% higher, as the price index for living room, kitchen, and dining room furniture rose 2.7%, the price index for bedroom furniture rose 1.2%, the price index for laundry appliances rose 1.7%, the price index for window coverings rose 4.0%, and the price index for housekeeping supplies rose 1.3%....on the other hand, the apparel price index was 0.1% lower on a 2.4% decrease in the price index for men's underwear, nightwear, swimwear, and accessories, a 1.2% decrease in the price index for men's suits, sport coats, and outerwear, a 1.4% decrease in the price index for men's footwear, a 0.8% decrease in the price index for girls apparel, and a 1.3% decrease in the price index for infants' and toddlers' apparel, even as the price index for women's dresses rose 3.0%....meanwhile, the price index for transportation commodities other than fuel was 0.1% higher, as prices for new cars were 0.8% higher and the price index for motor oil, coolant, and fluids rose 0.8%, but prices for used cars and trucks were 0.4% lower....in addition, the price index for medical care commodities was 0.6% higher, as nonprescription drug prices rose 1.3% and the price index for medical equipment and supplies was 0.8% higher....at the same time, the recreational commodities index was 0.2% higher despite a 1.4% decrease in the price index for audio equipment, on a 4.1% increase in the price index for photographic equipment and supplies, a 1.2% increase in the price index for pet foods, and a 2.1% increase in the price index for toys, games, hobbies and playground equipment...on the other hand, the education and communication commodities index was 0.8% lower on a 1.8% increase in the price index for computers, peripherals, and smart home assistants, and a 1.9% decrease in the price index for computer software and accessories….lastly, a separate price index for alcoholic beverages was 0.5% higher, while the price index for ‘other goods’ was 0.3% higher on an 0.8% increase in the price index for cosmetics, perfume, bath, nail preparations and implements, and a 1.3% increase in the price index for hair, dental, shaving, and miscellaneous personal care products....

Within core services, the price index for shelter was 0.5% higher as rents rose 0.7% and homeowner's equivalent rent was 0.6% higher, while prices for lodging away from home at hotels and motels fell 3.2%, while at the same time the shelter sub-index for water, sewers and trash collection was 0.4% higher, and the price index for moving, storage, freight expense was 1.5% higher....meanwhile, the price index for medical care services was 0.4% higher, as the price index for hospital services was 0.5% higher, the price index for care of invalids and elderly at home rose 1.5%, and price index for health insurance rose 2.2%...on the other hand, the transportation services price index was 0.5% lower, even as the price index for motor vehicle insurance rose 1.3%, as the price index for airline fares fell 7.8% and the price index for car and truck rental fell 9.5%....meanwhile, the recreation services price index rose 0.4%, as the price index for video discs and other media rose 2.9%, the price index for admission to sporting events rose 4.9%, and the price index for pet services including veterinary services rose 1.2%.....however, the price index for education and communication services was 0.1% lower as the price index for internet services and electronic information providers fell 0.8% and the price index for day care and preschool fell 0.2%...lastly, the index for other personal services was also 0.4% higher, as the price index for laundry and dry cleaning services rose 0.8%, the price index for other apparel services rose 1.5%. and the price index for tax return preparation and other accounting fees was 0.6% higher..

Producer Prices Fell 0.5% in July on Lower Energy Prices, Still Up 9.8% YoY

The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.5% in July, the first decrease since April 2020, as average prices for finished wholesale goods fell 1.8% while the more heavily weighted final demand for services was 0.1% higher.....that decrease followed a revised 1.0% increase in June, when average prices for finished wholesale goods rose by 2.3% while final demand for services was 0.3% higher, a revised 0.8% increase in May, when average prices for finished wholesale goods rose by 1.5% while final demand for services was 0.5% higher, a revised 0.5% increase in April, when average prices for finished wholesale goods rose by 1.3% while final demand for services price index was unchanged, and a revised 1.7% increase in March, when average prices for finished wholesale goods rose by 2.4% and final demand for services rose 1.3%....on an unadjusted basis, producer prices are still 9.8% higher than a year ago, albeit down from the revised 11.3% year over year increase for June's producer prices, while the core producer price index, which excludes food, energy and trade services, rose by 0.2% for the month, and is now 5.8% higher than in a year ago, down from the revised 6.4% year over year core PPI increase that is now indicated for June...note that the BLS is now revising the PPI going back five months, so the figures we'll cite for those months were revised, whether we note it or not..

As we noted, the producer price index for final demand for goods, which was previously aggregated as 'finished goods', was 1.8% lower in July, after being 2.3% higher in June, 1.5% higher in May, 1.3% higher in April, 2.4% higher in March, to 2.2% higher in February, and 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 still up by 14.8% from a year ago....the final demand goods price index fell 1.8% in July as the price index for wholesale energy goods was 9.0% lower, after it had risen by a revised 9.4% in June, 4.8% in May, by a revised 1.5% in April, by 6.6% in March, and by 7.2% in February, while the price index for wholesale foods was 1.0% higher, after falling 0.2% in June but after rising by 0.5% in May, by 1.5%% in April and by 2.4% in March, and while the index for final demand for core wholesale goods (excluding food and energy) rose 0.5% June, after rising by a revised 0.4% June, by 0.6% in May and by 1.1% in both March and April...wholesale energy prices averaged 9.0% lower on a 16.7% decrease in wholesale prices for gasoline, a 16.6% decrease in wholesale prices for diesel fuel, an 11.6% decrease in wholesale prices for home heating oil, and 11.8% decrease in wholesale prices for liquefied petroleum gas, while the final demand food price index was 1.0% higher on a 44.2% increase in the wholesale price index for eggs for fresh use, a 12.7% increase in the wholesale price index for fresh and dry vegetables, a 5.9% increase in the wholesale price index for pasta products, and a 9.5% increase in the wholesale price index for beef and veal....among core wholesale goods, the final demand price index for industrial chemicals rose 1.9%, the wholesale price index for household furniture rose 2.2%, the final demand price index for transformers and power regulators rose 1.3%, the final demand price index for X-ray and electromedical equipment rose 1.7%, and the wholesale price index for tires rose 1.4%....

Meanwhile, the price index for final demand for services was 0.1% higher in July, after rising by a revised 0.3% in June, by 0.5% in May, after being unchanged in April, and rising by 1.3% in March, and is now up by 6.9% from a year ago, albeit down quite a bit from the record 9.2% year over year increase that was reported for March....the price index for final demand for trade services rose 0.3%, the price index for final demand for transportation and warehousing services rose 0.4%, but 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 lawn, garden, and farm equipment and supplies retailers rose 2.1%, margins for TV, video, and photographic equipment and supplies retailers rose 3.8%, margins for automotive parts, including tire retailers rose 2.5%, and margins for fuel and lubricants retailers rose 12.3%, while margins for RVs, trailers, and campers retailers fell 11.3%....among transportation and warehousing services, average margins for airline passenger services rose 1.1%, margins for courier, messenger, and U.S. postal services rose 2.2%, and margins for rail transportation of freight and mail rose 1.2%...among the components of the core final demand for services index, the price index for portfolio management fell 7.9%, the price index for arrangement of vehicle rentals and lodging fell 1.8%, and the price index for passenger car rental fell 3.0%, while the price index for arrangement of cruises and tours rose 2.8%, the price index for bundled wired telecommunications access services rose 3.2%, and the price index for consumer loans rose 1.5% …

This report also showed the price index for intermediate processed goods fell 2.3% in July, also the largest decline since April 2020, after rising a revised 2.1% in June, by 2.3% May, 2.1% in April, 2.3% in March, and by 1.5% in February....the price index for intermediate energy goods fell 9.0% in June, as producer prices for natural gas to electric utilities fell 19.0%, refinery prices for gasoline fell 16.7%, refinery prices for diesel fuel fell 16.6%, producer prices for liquefied petroleum gas fell 11.8%, and producer prices for industrial natural gas fell 9.4%... at the same time, the price index for intermediate processed foods and feeds fell 0.1%, as the producer price index for shortening, cooking oil, and margarine fell 9.0% and the producer price index for processed poultry fell 1.8%, while the producer price index for meats rose 3.8% and the producer price index for processed fruits and vegetables rose 1.1%...meanwhile, the core price index for intermediate processed goods less food and energy goods fell 0.2% as the producer price index for copper and brass mill shapes fell 9.7%, the producer price index for primary nonferrous metals fell 10.5%, the producer price index for secondary nonferrous metals fell 9.4%, and the producer price index for nonferrous wire and cable fell 3.2% while the producer price index for synthetic rubber rose 4.0%, the producer price index for agricultural chemicals other than nitrogenates and phosphates rose 4.8%, the producer price index for ball and roller bearings rose 2.3%, and the producer price index for softwood lumber rose 2.3%...average prices for intermediate processed goods are still 17.4% higher than in July a year ago, but well off 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 fell 12.4% in July, after rising a revised 4.5% in June, a revised 5.4% in May, by 5.5% in April, by 2.9% in March, and by 9.8% in February....that was as the July price index for crude energy goods fell 21.2%, as unprocessed natural gas prices fell 27.6% and crude oil prices fell 19.1% while coal prices were 4.4% higher...at the same time, the price index for unprocessed foodstuffs and feedstuffs was 0.8% lower on a 22.7% decrease in producer prices for wheat, an 8.5% decrease in producer prices for corn, and a 13.7% decrease in producer prices for oilseeds.....meanwhile, the index for core raw materials other than food and energy materials was 6.9% lower, on a 23.2% decrease in the price index for raw cotton, a 24.6% decrease in the price index for aluminum base scrap, an 11.2% decrease in the price index for iron and steel scrap, an 8.5% decrease in the price index for copper base scrap, and a 9.6% decrease in the price index for nonferrous metal ores.....this raw materials price index is still 27.5% higher than a year ago, but down from the 49.8% year over year increase in June, and down from the record 59.2% annual increase in April 2021, and now the twenty-first 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 0.1% higher in July, after being a revised 0.3% lower in June, but a revised 0.5% higher in May, 0.9% higher in April, 1.3% higher in March, and 0.2% higher in February, after rising 0.8% in January, by 0.8% in December, and by 0.6% in November….the price index for intermediate trade services fell 0.4%, as margins for machinery and equipment parts and supplies wholesalers fell 1.6%, margins for paper and plastics products wholesalers fell 0.7%, and margins for intermediate hardware, building material, and supplies retailers fell 3.8%, while margins for intermediate automotive parts and tire retailers rose 2.5%.....on the other hand, the index for transportation and warehousing services for intermediate demand was 0.9% higher, as the intermediate price index for water transportation of freight rose 1.7%, the intermediate price index for rail transportation of freight and mail rose 1.2%, and the intermediate price index for mail and package delivery services by U.S. Postal Service rose 5.0%, and the intermediate price index for pipeline transportation was 2.9% higher, while the intermediate price index for warehousing, storage, and related services was 0.9% lower.... at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services rose 0.1%, as the intermediate price index for business loans rose 8.3%, the intermediate price index for bundled wired telecommunication access services rose 3.2%, and the intermediate price index for waste collection rose 2.6%, while the intermediate price index for radio advertising time sales fell 7.1%, the intermediate price index for portfolio management fell 7.9%, and the intermediate price index for passenger car rental fell 3.0%...over the 12 months ended in July, the year over year price index for services for intermediate demand is 5.7% higher than it was a year ago, the twenty-second consecutive annual increase in this index change since it briefly turned negative year over year from April to August of 2020, while it is still lower than the record 9.5% year over year increase indicated for July 2021....

Wholesale Sales & Wholesale Inventories Both Rose 1.8% in June

The June report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $709.6 billion, up 1.8 percent (±0.4 percent) from the revised May level, and up 20.4 percent (±0.9 percent) from wholesale sales of June 2021...the May preliminary estimate was revised to $697.250 million from the $696.035 million in sales reported last month, and as a result the month over month percent change was revised from the estimate of up 0.5 percent (±0.4 percent) reported a month ago to up 0.7 percent (±0.4 percent) from April...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 produced or finally sold...

On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods on the shelf or in intermediate storage represent goods that were produced but not sold, and this June report estimated that wholesale inventories were valued at a seasonally adjusted $895.4 billion at month end, up 1.8 percent (+/-0.4%) from the revised May level and 25.5 percent (±1.2) higher than in June a year ago, with the May preliminary estimate revised from the $878,552 million reported last month to $879,642 million, now a 1.9% increase from April...

In the advance report on 2nd quarter GDP of two weeks ago, wholesale inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories which was released the same day as the GDP release...that report estimated that our seasonally adjusted wholesale inventories were valued at $895,976 billion at the end of June, up from $879,474 billion in May....those figures total $470 million less than the $895,401 billion for June and $879,642 for May that this report shows, which means that the quarterly increase in 2nd quarter wholesale inventories used in the GDP report was overestimated at about a $1.6 billion annual rate...assuming there's no revision or imbalance in the inflation adjustment to those inventories, that would suggest that the growth rate of 2nd quarter GDP was overestimated by around 0.03 percentage points, just based on what this wholesale report shows...

 

 

(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…)  

No comments:

Post a Comment