March jobs report; February’s trade deficit, construction spending, factory inventories, and JOLTS, et al

Major monthly economic reports released ​during the past week included the Employment Situation Summary for March and the Job Openings and Labor Turnover Survey (JOLTS) for February, both from the Bureau of Labor Statistics, the Commerce Department report on our International Trade for February, and the February report on Construction Spending and the Full Report on Manufacturers’ Shipments, Inventories and Orders for February, both from the Census Bureau..

Privately issued reports released this week included the ADP Employment Report for March, wherein the payroll processor estimated that private payrolls increased by 184,000, the light vehicle sales report for March from Wards Automotive, which estimated that vehicles sold at a 15.49 million annual rate in March, down from the 15.81 million annual sales rate in February, but up from the 14.89 million annual sales rate reported for March a year earlier, and both of the widely followed purchasing manager’s survey from the Institute for Supply Management (ISM): the March Manufacturing Report On Business indicated that the manufacturing PMI (Purchasing Managers Index) rose to 50.3% in March, up from 47.8% in February, which suggests that a small plurality of manufacturing purchasing managers saw better conditions during March for the first time in 17 months, while the March 2023 Services Report On Business reported their Services Index fell to 51.4%, down from 52.6% in February, also indicating that a small plurality of service industry purchasing managers reported expansion in various facets of their business in March…

Employers Added 303,000 Jobs in March, Unemployment Rate Fell to 3.8%

The Employment Situation Summary for March reported a payroll job increase that was well above expectations, and that both the labor force participation rate and the employment rate rose 0.2%, while the unemployment rate fell 0.1%….seasonally adjusted estimates extrapolated from the establishment survey data projected that employers added 303,000 jobs in March, after the previously estimated payroll job increase for January was revised was revised up by 27,000, from 229,000 to 256,000, while the payroll jobs increase for February was revised down by 5,000, from 275,000 to 270,000…so including those revisions, this report thus represents a total of 325,000 more seasonally adjusted payroll jobs than were reported last month…..the unadjusted data shows that there were actually 659,000 more payroll jobs extant in March than in February, as the usual seasonal job increases in sectors such as construction, administrative and waste services, and in leisure and hospitality were washed out by the seasonal adjustments…

Seasonally adjusted job increases in March were spread through both the goods producing and the service sectors and government, with only non-durable goods manufacturing showing a modest 4,000 job loss…since the BLS summary of the job gains by sector is clear and more detailed than our usual synopsis, we’ll just quote that summary here:

• Total nonfarm payroll employment rose by 303,000 in March, higher than the average monthly gain of 231,000 over the prior 12 months. In March, job gains occurred in health care, government, and construction. (See table B-1.)
• Health care added 72,000 jobs in March, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
• In March, employment in government increased by 71,000, higher than the average monthly gain of 54,000 over the prior 12 months. Over the month, employment increased in local government (+49,000) and federal government (+9,000).
• Construction added 39,000 jobs in March, about double the average monthly gain of 19,000 over the prior 12 months. Over the month, employment increased in nonresidential specialty trade contractors (+16,000).
• Employment in leisure and hospitality trended up in March (+49,000) and has returned to its pre-pandemic February 2020 level. Over the prior 12 months, job growth in the industry had averaged 37,000 per month.
• Employment in the other services industry continued its upward trend in March (+16,000). The industry had added an average of 8,000 jobs per month over the prior 12 months. Employment in other services remains below its February 2020 level by 40,000, or 0.7 percent.
• Employment in social assistance continued to trend up in March (+9,000), below the average monthly gain of 22,000 over the prior 12 months.
• In March, employment was little changed in retail trade (+18,000). A job gain in general merchandise retailers (+20,000) was partially offset by job losses in building material and garden equipment and supplies dealers (-10,000) and in automotive parts, accessories, and tire retailers (-3,000).
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services.

The establishment survey also showed that average hourly pay for all employees rose by 12 cents an hour to $34.69 an hour in March, after it had increased by 5 cents an hour in February; at the same time, the average hourly earnings of production and non-supervisory employees increased by 7 cents to $29.79 an hour…employers also reported that the average workweek for all private payroll employees increased by 0.1 hour to 34.4 hours in March, after a 0.1 hour decrease in February, while hours for production and non-supervisory personnel was up by 0.1 hour to 33.9 hours….meanwhile, the manufacturing workweek was unchanged at 40.0 hours, while average factory overtime was down a tenth of an hour to 2.9 hours…

At the same time, the March household survey indicated that the seasonally adjusted extrapolation of those who reported being employed rose by an estimated 498,000 to 161,466,000, while the similarly estimated number of those counted as unemployed fell by 29,000 to 6,429,000; which together meant there was a 469,000 increase in the total labor force…since the working age population had grown by 173,000 over the same period, that meant the number of employment aged individuals who were not in the labor force fell by a rounded 296,000 to 99,989,000…meanwhile, the increase of those in the labor force was large enough, when compared to the civilian noninstitutional population, to increase the labor force participation rate from 62.5% in February to 62.7% in March….likewise, the increase in number employed as a percentage of the increase in the population was enough to raise the employment to population ratio, which we could think of as an employment rate, by 0.2%, from 60.1% in February to 60.3% in March….at the same time, the modest decrease in the number unemployed​, combined with the increase in the labor force, was apparently just large enough to lower the unemployment rate by 0.1%, from 3.9% in February to 3.8% in March….meanwhile, the number who reported they were involuntarily working part time fell by 68,000 to 4,308,000 in March, even though the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, remained unchanged at 7.3% in March..

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it alongside the press release to avoid the need to scroll up and down the page..

Hiring, Layoffs, and Job Quitting were Higher in February; Job Openings were Little Changed

The Job Openings and Labor Turnover Survey (JOLTS) report for February from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 8,000, from 8,748,000 in January to 8,756,000 in February, after January’s job openings were revised down by 115,000 from the originally reported 8,863,000…February’s jobs openings were still 11.1% lower than the 9,849,000 job openings reported for February a year ago, as the job opening ratio expressed as a percentage of the employed was unchanged at 5.3% in February, but was down from the 6.0% rate of February a year ago… the information sector, with a 85,000 job opening decrease to 117,000 openings, saw the largest percentage decrease, while job openings in finance and insurance increased by 126,000 to 491,000 (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 February, seasonally adjusted new hires totaled 5,818,000, up by 120,000 from the revised 5,698,000 who were hired or rehired in January, as the hiring rate as a percentage of all employed rose from 3.6% in January to 3.7% in February, but was still down from the 3.9% hiring rate in February a year earlier (details of hiring by sector since November and for a year ago are in table 2)….meanwhile, total separations rose by 110,000, from 5,449,000 in January to 5,559,000 in February, as the separations rate as a percentage of the employed was unchanged at 3.5% in February, but was down from the 3.8% separations rate in February a year ago (see details in table 3)…subtracting the 5,559,000 total separations from the total hires of 5,818,000 would imply an increase of 259,000 jobs in February, a bit less than the revised payroll job increase of 270,000 for February reported in the March establishment survey later in the week, but still well within the expected +/-130,000 margin of error for these extrapolated reports…

Breaking down the seasonally adjusted job separations, the BLS found that 3,484,000 of us voluntarily quit our jobs in February, up by 38,000 from the revised 3,446,000 who quit their jobs in January, while the quits rate, widely watched as an indicator of worker confidence, remained unchanged at 2.2% of total employment, while it was down from the quits rate of 2.6% year earlier (see details in table 4)….in addition to those who quit, another 1,724,000 were either laid off, fired or otherwise discharged in February, up by 128,000 from the revised 1,596,000 who were discharged in January, as the discharges rate rose from 1.0% to 1.1% of all those who were employed during the month, and it was also up from the 1.0% discharges rate of a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 351,000 in February, down from 407,000 in January, for an ‘other separations rate’ of 0.2%, down from the 0.3% rate in January, but the same as in February 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…

US Trade Deficit Rose 1.9% in February on Higher Imports of Cellphones

Our trade deficit rose 1.9% in February, as both the value of our exports and the value of our imports increased, but the value of our imports increased by more than the value of our exports did….the Commerce Department report on our international trade in goods and services for February indicated that our seasonally adjusted goods and services trade deficit rose by a rounded $1.3 billion to a rounded $68.9 billion in February, from a January deficit that was revised up to $67.6 billion from the $67.4 billion reported a month ago…in rounded figures, the value of our February exports rose by a rounded $5.9 billion to $251.2 billion on a $5.0 billion increase to $176.7 billion in our exports of goods, and an $0.8 billion increase to $86.4 billion in our exports of services, while the value of our imports rose $7.1 billion to $331.9 billion on a $4.7 billion increase to $268.1 billion in our imports of goods, and a $2.4 billion increase to $63.8 billion in our imports of services….export prices averaged 0.3% higher in February, which means part of the increase in the nominal value of our exports for the month was price related, and that our real exports likely rose on the order of 2.0%, while import prices also averaged 0.8% higher, meaning that part of increase in imports was also price related, and that real imports probably only rose about 1.4%

The $5.0 billion increase in the value of our February exports of goods resulted from higher exports of industrial supplies and materials, of foods, feeds, and beverages, and of capital goods, which were partly offset by lower exports of automotive products…referencing the Full Release and Tables for February (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials rose by $2,923 million to $64,073 million on a $1,097 million increase in our exports of crude oil, a $600 million increase in our exports of non-monetary gold, and a $432 million increase in our exports of natural gas liquids, which were partly offset by a $552 million decrease in our exports of natural gas, and that our exports of foods, feeds and beverages rose by $1,706 million to $15,471 million, led by a $989 million increase in our exports of soybeans… in addition, our exports of capital goods rose by $1,480 million to $52,969 million on a $1,420 million increase in our exports of civilian aircraft and a $337 million increase in our exports of computers, which were partly offset by a $529 million decrease in our exports of industrial machinery not otherwise itemized, and our exports of consumer goods rose by $148 million to $21,750 million as a $663 million decrease in our exports of pharmaceutical preparations was offset by a $553 million increase in our exports of gem diamonds, while our exports in other goods not categorized by end use rose by $40 million to $7,188 million…partly offsetting the increases in those end use categories, our exports of automotive vehicles, parts, and engines fell by $1,287 million to $13,853 million, led by a $866 million decrease in our exports of new and used passenger cars..

Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our imports of goods and shows that higher imports of consumer goods, of foods, feeds, and beverages, and of automotive products were largely responsible for the $4.7 billion increase in our February goods imports, even as imports in all categories rose….our imports of consumer goods increased by $1,605 million to $63,751 million as a $1,350 million increase in our imports of a cell phones, a $430 million increase in our imports of furniture and related household goods, and a $381 million increase in our imports of textile apparel and household goods other than those of wool or cotton were partly offset by a $1,256 million decrease in our imports of pharmaceutical preparations, and a $364 million decrease in our imports of artwork and other collectibles. while our imports of foods, feeds, and beverages rose by $1300 million to $18,283 million, on increases in imports of every food category, led by a $539 million increase in imports of foods other than those itemized separately….in addition, our imports of automotive vehicles, parts and engines rose by $1,066 million to $41,946 million on a $467 million increase in our imports of automotive parts and accessories other than engines, chassis, and tires, and our imports of capital goods rose by $679 million to $75,685 million as a $1,611 million increase in our imports of computers and a $394 million increase in our imports of telecommunications equipment were partly offset by a $534 million decrease in our imports of computer accessories and a $532 million decrease in our imports of semiconductors…lastly, our imports of industrial supplies and materials rose by $128 million to $55,077 million as a $572 million increase in our imports of petroleum products other than fuel oil and a $308 million increase in our imports of bauxite and aluminum were partly offset by a $512 million decrease in our imports of organic chemicals and a $420 million decrease in our imports of copper, while our imports of other goods not categorized by end use fell by $18 million to $10,867 million…

The press release for this month’s report summarizes Exhibit 19 in the full release pdf for February, which gives us surplus and deficit details on our goods trade with selected countries:

The February figures show surpluses, in billions of dollars, with South and Central America ($5.5), Netherlands ($4.3), Hong Kong ($2.8), Australia ($1.6), United Kingdom ($0.8), Belgium ($0.6), Brazil ($0.6), Switzerland ($0.4), and Saudi Arabia (less than $0.1). Deficits were recorded, in billions of dollars, with China ($21.9), European Union ($17.6), Mexico ($15.3), Vietnam ($9.6), Germany ($7.6), Japan ($6.2), Ireland ($5.3), South Korea ($5.2), Canada ($5.1), India ($4.4), Taiwan ($4.2), Italy ($3.4), Malaysia ($2.4), France ($0.8), Singapore ($0.3), and Israel ($0.3).

• The balance with Switzerland shifted from a deficit of $1.5 billion in January to a surplus of $0.4 billion in February. Exports increased $0.7 billion to $3.6 billion and imports decreased $1.2 billion to $3.2 billion.
• The deficit with Japan decreased $1.1 billion to $6.2 billion in February. Exports increased $0.1 billion to $6.4 billion and imports decreased $1.0 billion to $12.6 billion.
• The deficit with Mexico increased $2.7 billion to $15.3 billion in February. Exports increased $0.4 billion to $27.6 billion and imports increased $3.1 billion to $43.0 billion.

To gauge the impact of January and February trade data on the eventual 1st quarter GDP growth figures, we use exhibit 10 in the full pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted for inflation in chained 2017 dollars, the same inflation adjustment that’s used by the BEA to compute trade figures for GDP, with the only difference being that the amounts in this report are not annualized….from that table, we can figure that the 4th quarter’s real exports of goods averaged 143,572.7 million monthly in chained 2017 dollars, while inflation adjusted 1st quarter goods exports were at 144,853 million and 147,842 million for January and February respectively in that same 2017 dollar quantity index representation…averaging January’s and February’s goods exports and then computing the annualized change between that average and the average of the fourth quarter, we find that the 1st quarter’s real exports of goods are running at a 7.96% annual rate above those of the 4th quarter, or at a pace that would add about 0.58 percentage points to 1st quarter GDP….. in a similar manner, we find that our 4th quarter real imports of goods averaged 227,978.3 million monthly in chained 2017 dollars, while inflation adjusted January and February imports were at 230,845 million and 234,855 million respectively, after that same 2017 chained dollars inflation adjustment…that would indicate that so far in the 1st quarter, our real imports of goods have increased at a 8.83% annual rate from those of the 4th quarter…since increases in imports subtract from GDP because they represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, their increase at a 8.83% rate would subtract about 0.96 percentage points from 1st quarter GDP….hence, if the average trade deficit in goods of the two months reported here is continued in March, the net effect of our international trade in goods will be to subtract around 0.38 percentage points from 1st quarter GDP…

Note that we have not computed the impact of the usually less volatile change in services here because the Census does not provide inflation adjusted data on those, but that the $0.6 billion increase in exports of services vs the $2.4 billion increase in imports of services suggests that February’s trade in services would also be a subtraction from 1st quarter GDP, after a near balance in the change in January’s exports and imports in services suggested that the impact of that month’s services trade on GDP would be negligible…

Construction Spending Fell 0.3% in February after January & December Figures Were Revised Lower

The Census Bureau’s report on February construction spending (pdf) reported that “Construction spending during February 2024 was estimated at a seasonally adjusted annual rate of $2,091.5 billion, 0.3 percent (±0.8 percent)* below the revised January estimate of $2,096.9 billion. The February figure is 10.7 percent (±1.3 percent) above the February 2023 estimate of $1,889.6 billion. During the first two months of this year, construction spending amounted to $298.1 billion, 11.9 percent (±1.3 percent) above the $266.5 billion for the same period in 2023. “…the January annualized spending estimate was revised less than 0.3% lower, from the $2,102.4 billion reported a month ago to $2,096.9 billion, while December’s construction spending was revised down by more than 0.2%, from $2,105.8 billion to $2,101.042 billion annually, which together meant that the December to January construction spending change remained as a decrease of 0.2%….meanwhile, December’s annualized spending decrease would mean we’ll see a downward revision of about 1 basis point to 4th quarter GDP when the annual revisions are released later this summer…

A further breakdown of the different subsets of construction spending are provided by a Census summary, which precedes the detailed spreadsheets, is included below:

• Private Construction - Spending on private construction was at a seasonally adjusted annual rate of $1,617.1 billion, virtually unchanged from (±0.7 percent)* the revised January estimate of $1,616.8 billion. Residential construction was at a seasonally adjusted annual rate of $901.1 billion in February, 0.7 percent (±1.3 percent)* above the revised January estimate of $894.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $716.0 billion in February, 0.9 percent (±0.7 percent) below the revised January estimate of $722.3 billion.
• Public Construction - In February, the estimated seasonally adjusted annual rate of public construction spending was $474.4 billion, 1.2 percent (±1.5 percent)* below the revised January estimate of $480.1 billion. Educational construction was at a seasonally adjusted annual rate of $100.5 billion, 1.8 percent (±2.0 percent)* below the revised January estimate of $102.3 billion. Highway construction was at a seasonally adjusted annual rate of $147.3 billion, 1.6 percent (±4.8 percent)* below the revised January estimate of $149.7 billion.

As you can gather from that summary, construction spending data is used as the source for 3 subcomponents of GDP; investment in private non-residential structures, investment in residential structures, and into government investment outlays, for both state and local and Federal governments…however, getting an accurate read on the impact of February’s construction spending reported in this release on 1st quarter GDP is difficult because all figures given here are in nominal dollars and as you know, data used to compute the change in GDP must be adjusted for changes in price to determine the actual change in construction put in place….there are multiple prices indexes for different types of construction listed in the National Income and Product Accounts Handbook, Chapter 6 (pdf), so in lieu of trying to adjust the figures for all of those types of construction separately, we’ve opted to just use the producer price index for final demand construction as an inexact shortcut to make the needed price adjustment and come up with an approximate estimate…

That price index showed that aggregate construction costs were unchanged in February, after they had increased by 0.2% in January, and were unchanged in December and fell by 0.1% in November…on that basis, we can estimate that February construction costs were about 0.2% more than those of December, also 0.2% more than those of November, and roughly 0.1% more than those of October, and of course roughly the same as those of January….we’ll then use those relative price change percentages to inflate the lower cost spending figures for each of the 4th quarter months vis a vis February, which is arithmetically the same as adjusting higher priced January and February construction spending downward, for purposes of comparison…

This report gives annualized construction spending in millions of dollars for the 4th quarter months as $2,101,042 in December, $2,082,923 in November, and $2,058,903 in October, while annualized construction spending was at $2,091,511 in February and $2,096,922 in January….thus to compare January’s nominal construction spending of $2,096,922 and February’s figure of $2,091,511 to “inflation adjusted” figures of the fourth quarter, our computation looks like this: ((2,091,511 + 2,096,922 * 1.000 ) / 2 ) / ((2,101,042 * 1.002 + 2,082,923 * 1.002 + 2,058,903 * 1.001) / 3) = 1.00469427, which tells us that real construction spending over January and February has risen by 0.47% from that of the 4th quarter period, or​ that it was up at a 1.89% annual rate…then, to figure the potential effect of that change on GDP, we take the difference between the 4th quarter inflation adjusted average and that of January’s & February’s adjusted spending as a fraction of 4th quarter GDP, and find that 1st quarter construction spending is rising at a rate that would add about 0.09 percentage points to 1st quarter GDP, an estimate which assumes there would be little change in real construction in March over the January & February average…

February Factory Shipments Rose 1.4%, Factory Inventories were 0.3% Higher

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for February from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods increased by $8.2 billion or 1.4 percent to $576.8 billion, the first increase in three months, following a revised 3.8% decrease to $568.6 billion in January, which was originally reported as a 3.6 percent decrease to $569.7 billion a month ago….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only accurate as revised updates to the February advance report on durable goods, which was released last week…on those durable goods revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we’ll just quote directly from that summary here:

• Summary: New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, the U.S. Census Bureau reported today. This followed a 3.8 percent January decrease. Shipments, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion. This followed a 0.8 percent January decrease. Unfilled orders, up eleven of the last twelve months, increased $0.1 billion or virtually unchanged to $1,392.8 billion. This followed a virtually unchanged January decrease. The unfilled orders to-shipments ratio was 7.10, down from 7.17 in January. Inventories, up following two consecutive monthly decreases, increased $2.3 billion or 0.3 percent to $857.7 billion. This followed a 0.1 percent January decrease. The inventories-to-shipments ratio was 1.47, down from 1.49 in January.
• New orders for manufactured durable goods in February, up following two consecutive monthly decreases, increased $3.5 billion or 1.3 percent to $277.7 billion, down from the previously published 1.4 percent increase. This followed a 6.9 percent January decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $2.9 billion or 3.3 percent to $90.4 billion. New orders for manufactured nondurable goods increased $4.7 billion or 1.6 percent to $299.0 billion.
• Shipments of manufactured durable goods in February, up following two consecutive monthly decreases, increased $3.3 billion or 1.2 percent to $282.6 billion, unchanged from the previously published increase. This followed a 0.7 percent January decrease. Transportation equipment, also up following two consecutive monthly decreases, drove the increase, $3.5 billion or 4.0 percent to $89.8 billion. Shipments of manufactured nondurable goods, up following four consecutive monthly decreases, increased $4.7 billion or 1.6 percent to $299.0 billion. This followed a 0.8 percent January decrease. Petroleum and coal products, also up following four consecutive monthly decreases, led the increase, $4.0 billion or 6.3 percent to $67.8 billion.
• Unfilled orders for manufactured durable goods in February, up eleven of the last twelve months, increased $0.1 billion or virtually unchanged to $1,392.8 billion, unchanged from the previously published increase. This followed a virtually unchanged January decrease. Transportation equipment, up fourteen of the last fifteen months, drove the increase, $0.6 billion or 0.1 percent to $898.0 billion.
• Inventories of manufactured durable goods in February, up seven consecutive months, increased $1.7 billion or 0.3 percent to $528.7 billion, unchanged from the previously published increase. This followed a 0.1 percent January increase. Transportation equipment, also up seven consecutive months, led the increase, $1.2 billion or 0.7 percent to $170.1 billion. Inventories of manufactured nondurable goods, up following four consecutive monthly decreases, increased $0.6 billion or 0.2 percent to $329.1 billion. This followed a 0.6 percent January decrease. Petroleum and coal products, also up following four consecutive monthly decreases, led the increase, $0.4 billion or 0.9 percent to $47.7 billion. By stage of fabrication, February materials and supplies increased 0.2 percent in durable goods and decreased 0.8 percent in nondurable goods.

To gauge the effect of February’s dollar valued factory inventories on 1st quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index….by stage of fabrication, the value of finished goods inventories increased 0.3% to $297,937 million; the value of work in process inventories increased 0.7% to $247,477 million, and the value of materials and supplies inventories decreased by 0.2% to $312,320 million…at the same time, the producer price index for February indicated that prices for finished goods increased 1.2%, that prices for intermediate processed goods were 1.6% higher, and that prices for unprocessed goods were on average 1.2% higher, even as core raw materials averaged a 1.9% price decrease….assuming similar valuations for like inventories, that would suggest that February’s real finished goods inventories were around 0.9% smaller than January’s, that real inventories of intermediate processed goods were also about 0.9% smaller, and that real raw material inventory inventories were likely about 1.4% lower, with a caveat that crude oil prices are overweighed in the PPI when compared to their 5% of factory inventories …since this report thus indicates a decrease of about 1.1% in real factory inventories, following a 0.2% decrease in January, and since there was a modest increase in real factory inventories in the 4th quarter, any 1st quarter decrease in real factory inventories would first subtract that 4th quarter increase and then also the first quarter decrease from the growth rate of first quarter GDP…

 

 

(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…)