February’s consumer and producer prices, retail sales, & industrial production; January’s business inventories

Major monthly reports released over the past week included the February Consumer Price Index, the February Producer Price Index and the February Import-Export Price Index, all from the Bureau of Labor Statistics (BLS), the Retail Sales report for February and the conjoined Business Sales and Inventories for January from the Census Bureau, and the February report on Industrial Production and Capacity Utilization from the Fed….in addition, the week also saw the release of the Regional and State Employment and Unemployment Report for January from the BLS, a report which breaks down the two employment surveys from the monthly national jobs report by state and region, later than usual due to the annual revisions….while the text of that report provides a useful summary of this data, the serious statistical aggregation can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands…

This week also saw the release of the first 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 fell from –2.4 in February to -20.9 in March, the fifth consecutive negative reading, suggesting that the ongoing contraction of First District manufacturing was much more widespread than a month earlier…

CPI Rose 0.4% in February on Higher Rent, Energy, and Transportation Services

The consumer price index was 0.4% higher in February, as higher prices for rent, fuel, utilities, car insurance, used vehicles, transportation services, clothing, and internet services were just partly offset by lower prices for new cars, furniture and appliances, and medical care services…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the weighted average of seasonally adjusted prices of consumer goods and services was 0.4% higher in February, after being 0.3% higher in January, 0.2% higher in December, 0.2% higher in November, 0.1% higher in October, 0.4% higher in September, after rising by 0.5% in August, by 0.2% in July, by 0.2% in June, by 0.1% in May, by 0.4% in April, by 0.1% in March, and by 0.4% in February of last year….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, rose from 308.417 in January to 310.326 in February which left it statistically 3.15317% higher than the index reading of 300.840 for February of last year, which is reported as a 3.2% year over year increase, up from the 3.1% year over year increase reported for January, with such widely cited year over year figures often telling us more about last year’s CPI changes than this years…with higher fuel prices offset by flat prices for food, seasonally adjusted core prices, which exclude food and energy, were also up by 0.4% for the month, as the unadjusted core price index rose from 313.623 to 315.419, which left the core index 3.7525% ahead of its year ago reading of 304.011, which is reported as a 3.8% year over year increase, down from the 3.9% year over year core price increase that was reported in January, and well below the 6.6% annual increase reported for September 2022, which had been the largest annual increase in core prices in forty years..

The volatile seasonally adjusted energy price index rose 2.3% in February, after falling by 0.9% in January, by 0.2% in December, by 1.6% in November and by 2.1% in October, but after rising by 1.2% in September, rising by 4.4% in August, and being unchanged in July, and is still 4.6% lower than in January of a year ago….the price index for energy commodities was 3.6% higher in February, while the price index for energy services was 0.8% higher, after it had risen by 1.4% in January….the energy commodity index was up 3.6% on a 3.8% increase in the price of gasoline and and a 1.1% increase in the price of fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.5% higher…within energy services, the price index for utility gas service rose 2.3% in February after rising 2.0% in January, but is still 8.8% lower than it was a year ago, while the electricity price index rose 0.8% in February after rising 1.2% in January… energy commodities are still averaging 4.2% lower than their year ago levels, with gasoline prices averaging 1.9% lower than they were a year ago, but the energy services price index is now up 0.5% from last February, as electricity prices are averaging 3.6% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was unchanged in February, after being 0.4% higher in January, 0.2% higher in December, 0.2% higher in November, 0.3% higher in October, 0.2% higher in September, 0.2% higher in August, and 0.2% higher in July, as the price index for food purchased for use at home was unchanged, after being 0.4% higher in January, 0.1% higher in December, unchanged in November, and 0.3% higher in October, while the price index for food bought to eat away from home was 0.1% higher, as average prices at fast food outlets rose 0.1%, average prices at full service restaurants also rose 0.1%, and food prices at employee sites and schools averaged 0.2% higher….

In the food at home categories, the price index for cereals and bakery products was 0.5% higher, even as bread prices fell 0.5%, as the price index for breakfast cereal rose 2.0%, the price index for cookies rose 2.1%, the price index for frozen and refrigerated bakery products, pies, tarts, turnovers rose 1.8% and the price index for fresh cakes and cupcakes was 1.0% higher…at the same time, the price index for the meats, poultry, fish, and eggs food group was 0.1% higher, as the price index for beef and veal rose 0.5%, the price index for ham rose 1.2%, and egg prices were 5.8% higher….on the other hand, the seasonally adjusted price index for dairy products was 0.6% lower, as average milk prices fell 0.2%, the price index for cheese and related products fell 1.1% and the price index for ice cream and related products was 0.9% lower….at the same time, the fruits and vegetables price index was 0.2% lower, as the price index for fresh fruits fell 1.5% and canned fruit prices averaged 0.8% lower….in addition, the beverages price index also 0.2% lower, as the price index for carbonated drinks fell 0.2%, the price index for noncarbonated juices and drinks was 0.5% lower, and the price index for coffee was 1.2% lower….lastly, the price index for the ‘other foods at home’ category was unchanged, as the price index for sugar and and sweets rose 0.9%, the price index for salad dressing rose 1.1%, and the price index for olives, pickles, and relishes rose 1.0%, but the price index for margarine fell 2.2%, the price index for snacks fell 0.7%, and the price index for frozen and freeze dried prepared foods was 1.0% lower…

Among the seasonally adjusted core components of the CPI, which rose by 0.4% in February, after rising by 0.4% in January, by 0.3% in December, by 0.3% in November, by 0.2% in October, by 0.3% in September, by 0.2% in August, and by 0.2% in July, the composite price index of all goods less food and energy goods was 0.1% higher in February, while the more heavily weighted composite for all services less energy services was 0.5% higher….

Among the goods components of the core price index, which will be used by the Bureau of Economic Analysis to adjust October’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.3% lower, as the price index for tools, hardware and supplies fell 0.6%, the price index for furniture and bedding fell 0.7%, and the major appliance index was 1.3% lower….on the other hand, the apparel price index was 0.6% higher on a 2.6% increase in the price index for women’s dresses, a 6.8% increase in the price index for girls’ apparel, a 2.9% increase in the price index for boys’ and girls’ footwear, and a 5.1% increase in the price index for infants' and toddlers' apparel…. meanwhile, the price index for transportation commodities other than fuel was 0.1% higher even as average prices for new vehicles was 0.1% lower, as the price index for used cars and trucks was 0.5% higher, and the price index for vehicle parts and equipment other than tires was also 0.5% higher… in addition, the price index for medical care commodities was also 0.1% higher even as prescription drug prices fell 0.1%, as nonprescription drug prices rose 0.6%, and the price index for medical equipment and supplies was 0.2% higher…on the other hand, the recreational commodities index was 0.2% lower, as the price index for video equipment other than televisions fell 1.1%, the price index for toys fell 0.9%, the price index for pet food fell 0.9%, the price index for sporting goods including bicycles fell 1.0%, and the price index for recreational books was 3.7% lower…however, the education and communication commodities index was 0.2% higher on a 0.7% increase in the price index for computers, peripherals, and smart home assistants, and a 3.6% increase in the price index for computer software and accessories …lastly, a separate price index just for alcoholic beverages was unchanged, while the price index for ‘other goods’ was 0.7% higher on a 1.8% increase in the price index for cosmetics, perfume, bath, nail preparations and implements and a 0.9% increase in the price index for cigarettes…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.5%, homeowner’s equivalent rent was 0.4% higher, prices for lodging away from home at hotels and motels was 0.1% higher and the price index for water, sewers and trash collection was 0.5% higher….however, the price index for medical care services was 0.1% lower, as the price index for physicians' services fell 0.2%, the price index for outpatient hospital services fell 0.4%, and the price index for inpatient hospital services was also 0.4% lower….on the other hand, the transportation services price index was 1.4% higher, as the price index for car and truck rental rose 3.8%, the price index for airline fares rose 3.6%, the price index for vehicle maintenance and servicing rose 0.6%, and the price index for motor vehicle insurance rose was 0.9% higher…moreover, the recreation services price index was 0.5% higher, as the price index for pet services rose 1.0%, the price index for fees the price index for admission to sporting events rose 1.9%, and the price index for admission to movies, theaters, and concerts was 0.8% higher…at the same time, the price index for education and communication services was also 0.5% higher, as the price index for postage rose 2.3%, the price index for residential telephone services rose 1.2%, and the price index for internet services and electronic information providers was 1.3% higher…lastly, the index for other personal services fell 0.6%, even as the price index for financial services rose 1.7%, as the price index for miscellaneous personal services was 1.3% lower..

Retail Sales rose 0.6% in February After January’s Sales were Revised 0.5% Lower

Seasonally adjusted retail sales increased 0.6% in February after retail sales for January were revised 0.5% lower…the Advance Retail Sales Report for February (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $700.7 billion during the month, which was 0.6 percent (±0.5%) higher than January’s revised sales of $696.7 billion, and 1.5 percent (±0.7 percent) above the adjusted sales in February of last year…January’s seasonally adjusted sales were revised down more than 0.5%, from $700.3 billion to $696.7 billion, while December’s sales were revised 0.3% lower, from $706.2 billion to $704.1 billion; as a result, the December 2023 to January 2024 percent change was revised from down 0.8 percent (±0.5 percent) to down 1.1 percent (±0.4 percent)…..the downward revision to December sales would indicate that nominal 4th quarter personal consumption expenditures will be revised lower at about a $8.4 billion annual rate, which would lower 4th quarter GDP by roughly 0.16 percentage points…estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated sales were up 0.9%, from $637,809 million in January to $643,391 million in February, and that they were up 2.3% from the $629,035 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 2023 (r)” (revised) and the January 2023 to January 2024 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…

To estimate February’s real personal consumption of goods data for national accounts from this February retail sales report, the BEA will initially use the corresponding price changes from the February 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 February retail sales excluding the 0.9% increase in sales at gas stations were also up by 0.6%….then, subtracting the figures representing the 0.1% increase in grocery & beverage store sales and the 0.4% increase in food services sales from that total, we find that nominal core retail sales were up by more than 0.6% for the month…since the CPI report showed that the composite price index for all goods less food and energy goods was 0.1% higher in February, we can thus figure that real retail sales excluding food and energy will on average be up by more than 0.5%…..however, the actual adjustment in national accounts data 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 auto and parts dealers were up 1.6%, the price index for transportation commodities other than fuel was was 0.1% higher, which would suggest that real sales at auto and parts dealers were up by 1.5%…similarly, while nominal sales at clothing stores were 0.5% lower in February, the apparel price index was 0.6% higher, which means that real sales of clothing actually fell around 1.1%, because the 0.5% fewer dollars spent bought 0.6% fewer clothes per dollar..

In addition to figuring the real change in those core retail sales, we should also adjust food and energy retail sales for their price changes separately, as the BEA will do…the February CPI report showed that the food price index was unchanged, with the index for food purchased for use at home unchanged, while prices for food bought to eat away from home (other than at employee sites and schools) were 0.1% higher… thus, as nominal sales at food and beverage stores were up 0.1%, real sales of food and beverages would be also be 0.1% higher in light of flat prices…meanwhile, the 0.4% increase in nominal sales at bars and restaurants, once adjusted for 0.1% higher prices, suggests that real sales at bars and restaurants rose about 0.3% during the month….on the other hand, while sales at gas stations were up 0.9%, there was a 3.8% increase in the retail price of gasoline during the month, which would suggest that real sales of gasoline were down on the order of 2.8%, with a caveat that gasoline stations do sell more than gasoline, and we haven’t accounted for those other sales, or their prices….averaging real sales that we have thus estimated back together, but leaving out real restaurant and bar sales, we can then estimate that the income and outlays report for February would show that real personal consumption of goods rose by nearly 0.3% in February*, after falling by a revised 1.4% in January, after rising by a revised 0.6% in December, and rising 0.4% in November, unrevised…at the same time, the 0.3% increase in real sales at bars and restaurants would slightly boost the growth rate of February’s real personal consumption of services..…*NB: leaving our sales gasoline decrease out of that computation, since it’s most certainly incorrect, would leave real PCE goods up by more than 0.5% for the month, which is probably closer to what it will be…

Industrial Production Rose 0.1% in February After January Revised 0.4% Lower

The Fed’s February report on Industrial production and Capacity Utilization indicated that industrial production was 0.1% higher in February, after falling by a revised 0.5% in January, and after falling by a revised 0.3% in December, which left our industrial output 0.2% lower than in February a year ago….the industrial production index, with the benchmark set for average 2017 production to equal to 100.0, came in at 102.3 in February, after the January index was revised from the 102.6 reported last month to 102.2, the December index was revised but unchanged at 102.7, the November index was revised from the 102.7 reported last month to 103.0, the October index was revised from 102.4 to 102.6, and the September index was revised from 103.2 to 103.3…

The manufacturing index, which accounts for more than 77% of the total IP index, rose by 0.8%, from 98.4 in January to 99.2 in February, after the manufacturing index for January was revised down from 98.6 to 98.4, the manufacturing index for December index was revised up from 99.1 to 99.5, the manufacturing index for November index was revised up from 99.1 to 99.4, and the manufacturing index for October index was revised up from 98.7 to 98.8, leaving the manufacturing index 0.7% below its year ago level….meanwhile, the mining index, which includes oil and gas well drilling, rose 2.2% in a partial recovery from January's well freeze-offs, from 116.6 in January to 119.2 in February, after the January index was revised down from 117.3, which still left the mining index 1.4% above where it was a year earlier… finally, the utility index, which often fluctuates due to above or below normal temperatures, fell by 7.5% during our record warm February weather, from 98.8 to 93.3, after our colder than normal January’s utility index was revised from 98.7 to 98.8, now up 7.4% from December….with last February’s temperatures also well above normal, the utility index is 0.7% 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 was unchanged at 78.3% in February, after capacity utilization for January was revised down from the 78.5% reported last month …capacity utilization of NAICS durable goods production facilities rose from a downwardly revised 74.4% in January rate to 75.1 in February, while capacity utilization for non-durables producers rose to 78.9 from a downwardly revised 79.0% in January.…capacity utilization for the mining sector rose to 93.8% in February from 91.7% in January, which was originally reported as 92.2%, while utilities were operating at 67.8% of capacity during February, down from their revised 73.5% of capacity during January, which was previously reported at 74.2%…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 February on Higher Food, Energy, & Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.6% in February, as the price index for finished wholesale goods rose 1.2% and the price index for final demand for services was 0.3% higher…that followed a 0.3% PPI increase in January, when the price index for finished wholesale goods fell 0.1%, while the price index for final demand for services was 0.5% higher; a 0.1% PPI decrease in December, when the index for prices of wholesale goods was 0.2% lower, while the price index for final demand for services was unchanged; an unchanged PPI reading in November, when the average of prices for wholesale goods was 0.2% lower, while the price index for final demand for services was 0.2% higher; a 0.3% PPI decrease in October, when the weighted average of prices for wholesale goods was 1.2% lower while the price index for final demand for services was 0.1% higher, and an unrevised 0.2% increase in September, when the weighted average of prices for wholesale goods was 0.9% higher and the price index for final demand for services was 0.1% lower….on an unadjusted basis, producer prices are 1.6% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was up 0.4% for the month, and is still 2.8% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 1.2% higher in February, after being 0.1% lower in January, 0.1% lower in December, 0.2% lower in November, 1.3% lower in October. 0.9% higher in September, 1.7% higher in August, and 0.2% higher in July, and is now up 0.3% from a year ago….the final demand goods price index was up 1.2% in January as the price index for wholesale energy goods was 4.4% higher, after it had fallen 1.1% in January, after falling 0.8% in December, 2.0% in November, and falling 6.4% in October, while the price index for wholesale foods was 1.0% higher, after falling 0.3% in January, being unchanged in December but after rising 0.7% in November, while the index for final demand for core wholesale goods (excluding food and energy) was 0.3% higher, after being 0.3% higher in January…

Wholesale energy prices were up 4.4% in February on a 6.8% increase in wholesale prices for gasoline, a 15.9% increase in wholesale prices for diesel fuel, and a 3.9% increase in wholesale prices for liquefied petroleum gas, while the final demand food price index was 1.0% higher on a 4.9% increase in the wholesale price index for beef and veal, an 8.9% increase in the wholesale price index for fresh and dry vegetables, a 1.1% increase in the wholesale price index for dairy products, and a 55.0% increase in the wholesale price index for eggs for fresh use….among core wholesale goods, the wholesale price index for industrial chemicals rose 1.9%, the wholesale price index for pumps, compressors, and equipment increased 1.0%, the wholesale price index for cosmetics and other toiletries rose 0.9%, and wholesale price index for cigarettes was 2.6% higher…

Meanwhile, the price index for final demand for services was 0.3% higher in February, after being 0.5% higher in January, being unchanged in December, 0.2% higher in November, 0.1% higher in October, but 0.1% lower in September, 0.2% higher in August, and 0.8% higher in July, and is now 2.3% higher than a year ago…the price index for final demand for trade services fell 0.3%, but the price index for final demand for transportation and warehousing services rose 0.9%, 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 computer hardware, software, and supplies retailers fell 8.5%, margins for automobile retailers fell 3.5%, margins for sporting goods and boat retailers fell 3.1%, and margins for chemicals and allied products wholesalers fell 6.4%, but margins for major household appliances retailers rose 6.6%….among transportation and warehousing services, average margins for airline passenger services rose 2.4% and margins for courier, messenger, and U.S. postal services rose 1.3%….among the components of the core final demand for services index, the price index for consumer loans (partial) rose 3.4%, the price index for traveler accommodation services rose 3.8%, the price index for dental care rose 1.9%, and the price index for health and medical insurance increased 1.4%…

This report also showed the price index for intermediate processed goods was 0.2% lower in February, after being 0.1% lower in January, 0.4% lower in December, 0.7% lower in November and 1.0% lower in October, but after rising 0.5% in September and by 2.0% in August….the price index for intermediate energy goods rose 6.2% in February as refinery prices for gasoline rose 6.8%, refinery prices for diesel fuel rose 15.9%, refinery prices for jet fuel rose 11.5%, the price index for commercial electric power rose 2.4%, and the price index for natural gas to electric utilities rose 7.2%… at the same time, the price index for intermediate processed foods and feeds rose 0.3%, as the producer price index for meats rose 2.2%, the producer price index for refined sugar and byproducts rose 9.1%, and the producer price index for dairy products rose 1.1%….in addition, the core price index for intermediate processed goods less food and energy goods was 0.5% higher, as the producer price index for plastic resins and materials rose 1.7%, the producer price index for steel mill products rose 2.9%, the producer price index for ball and roller bearings rose 3.6%, and the producer price index for primary nonferrous metals rose 3.6%, while the producer price index for softwood lumber fell 3.0%….average prices for intermediate processed goods are still 1.8% lower than in February 2023, the twelfth consecutive year over year decrease, and are thus way down from their 26.6% year over year increase of November 2021, which had been a 46 year high…

Meanwhile, the price index for intermediate unprocessed goods rose 1.2% in February, after rising 1.4% in January, falling 4.2% in December, 2.1% in November and by 1.6% in October, after rising 2.9% in September, 2.1% in August and 2.5% in July….that was as the February price index for crude energy goods rose 3.6%, as crude oil prices rose 7.5%, while unprocessed natural gas prices fell 7.2%, and coal prices were 0.6% lower…in addition, the price index for unprocessed foodstuffs and feedstuffs was 0.8% higher, on a 35.6% increase in producer prices for slaughter hogs, a 2.0% increase in producer prices for slaughter chickens, a 1.6% increase in producer prices for slaughter cattle, and an 8.9% increase in producer prices for oilseeds…on the other hand, the index for core raw materials other than food and energy materials was 1.7% lower on a 4.4% decrease in the price index for iron and steel scrap, a 0.9% decrease in the price index for iron ores, and a 1.0% decrease in the price index for nonferrous metal ores….this raw materials price index is still 8.3% lower than a year ago, the thirteenth negative print after twenty-seven consecutive year over year increases, which came 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 February, after being 0.7% higher in January, 0.4% higher in December, and 0.5% higher in November, but after being unchanged in October, 0.3% higher in September, 0.1% lower in August, and 0.7% higher in July….the price index for intermediate trade services fell 0.5%, as margins for intermediate chemicals and allied products wholesalers fell 6.4%, margins for intermediate paper and plastics products wholesalers fell 3.5%, and margins for metals, minerals, and ores wholesalers fell 2.9%….on the other hand, the index for transportation and warehousing services for intermediate demand was 1.1% higher, as the intermediate price index for the U.S. Postal Service rose 3.2%, the intermediate price index for arrangement of freight and cargo rose 7.1%, the intermediate price index for transportation of passengers rose 2.4%, and the intermediate price index for water transportation of freight was 1.7% higher…at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.1% higher, as the intermediate price index for radio advertising time sales rose 7.7%, the intermediate price index for investment banking rose 3.3%, the intermediate price index for business loans rose 2.9%, and the intermediate price index for traveler accommodation services rose 3.8%…over the 12 months ended in February, the year over year price index for services for intermediate demand is still 3.2% higher than it was a year ago, the forty-first consecutive annual increase in this index change after it briefly turned negative year over year at the onset of the pandemic, from April to August of 2020, even as it is still much lower than the record 9.5% year over year increase indicated for July 2021…

January’s Business Sales Down 1.3%, Business Inventories Unchanged

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 “$1,833.3 billion, down 1.3 percent (±0.2 percent) from December 2023 and was down 1.2 percent (±0.4 percent) from January 2023“…note that total December sales were concurrently revised up from the originally reported $1,863.6 billion to $1,856.7 billion, now unchanged from November, revised from a 0.4% increase…. manufacturer’s sales fell 1.0% in January, and retail trade sales, which exclude restaurant & bar sales from the revised January retail sales reported earlier, fell 1.1%, while wholesale sales fell 1.7%…

meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted “$2,555.0 billion, virtually unchanged (±0.1 percent)* from December 2023, but were up 0.4 percent (±0.5 percent)* from January 2023″....at the same time, the value of end of December inventories was revised from the $2,556.0 billion reported last month to $2,554.8 billion, now up 0.3% from November… seasonally adjusted inventories of manufacturers were estimated to be 0.1% lower than in December, while inventories of retailers were 0.4% higher, while inventories of wholesalers were estimated to be valued 0.4% lower than in December…

For GDP purposes, all these inventories, including retail, will be adjusted for inflation with appropriate component price indices of the producer price index for January, which indicated finished goods prices were 0.1% lower…last week, we looked at real factory inventories with producer price adjustments for goods at various stages of production, and judged the decrease in those inventories would first subtract the 4th quarter increase, and then also subtract the first quarter decrease, from the growth rate of first quarter GDP…also last week, we found that the reverse of January’s real wholesale inventories from the 4th would also reverse that 4th quarter increase and also subtract January’s small decrease from 1st quarter GDP….since the nominal value of retail inventories for January has now been shown to be 0.4% higher, real retail inventories for the month, after the 0.1% finished goods price adjustment, thus would have thus increased by 0.5% from December, after a fourth quarter that saw real retail inventories up sharply…therefore, what is so far a modest real retail inventory increase in the 1st quarter would thus have a modest negative impact on 1st quarter GDP, amounting to the difference between the first quarter increase and the 4th quarter increase…

  

(the above is the synopsis that accompanied my regular sunday morning news 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…)