April’s consumer and producer prices, retail sales, industrial production, and new housing reports; March business inventories

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, the Retail Sales report for April and the Manufacturing and Trade, Inventories and Sales report for March (pdf), both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, and the April report on New Residential Construction, also from the Census Bureau…in addition, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for April this week, which breaks down the two employment surveys from the monthly national jobs report by state and region….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 first two regional Fed manufacturing surveys for May:the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, a NYC suburban county in Connecticut, northern New Jersey, and Puerto Rico, reported their headline general business conditions index fell to –15.6 from -14.3 in April, which would indicate that the ongoing contraction of Second District manufacturing was a bit more widespread than a month earlier… Meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell to +4.5 in May, down from +15.5 in April, but still its fourth consecutive positive reading, which they explain was because “more than 29 percent of the firms reported increases in general activity (down from 38 percent last month), while 25 percent reported decreases (up from 22 percent); and 46 percent reported no change (up from 40 percent)”…

CPI Rose 0.3% in April on Higher Rent, Fuel, and Clothing

The consumer price index was 0.3% higher in April, as higher prices for rent, gasoline, clothing, car insurance, medical care services, drugs, transportation services, and video services were partly offset by lower prices for utilities, new & used vehicles, furniture and appliances, and telephone hardware including smartphones….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 0.3% higher in April, after being 0.4% higher in March, 0.4% higher in February, 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, and by 0.4% in April 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 312.332 in March to 313.548 in April, which left it statistically 3,35736% higher than the index reading of 303.363 in April of last year, which is reported as a 3.4% year over year increase, down from the 3.5% year over year increase reported for March, with such widely cited year over year figures usually telling us more about last year’s CPI changes than this years…with higher energy prices partly offset by flat prices for food, seasonally adjusted core prices, which exclude food and energy, were also up by 0.3% for the month, as the unadjusted core price index rose from 317.088 to 317.978, which left the core index 3.60998% ahead of its year ago reading of 306.899, which is reported as a 3.6% year over year increase, which they're calling down from the 3.8% year over year core price increase that was reported in March, 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 1.1% in April, after rising by 1.1% in March and by 2.3% in February, but 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 last July, and is now 2.1% higher than in April of a year ago….the price index for energy commodities was 2.7% higher in April, while the price index for energy services was 0.7% lower, after it had risen by 0.7% in March….the energy commodity index was up 2.7% on a 2.8% increase in the price of gasoline and a 0.9% increase in the price of fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 2.2% higher…within energy services, the price index for utility gas service was 2.9% lower in April after being unchanged in March, and is still 1.9% lower than it was a year ago, while the electricity price index slipped 0.1% in April after rising 0.9% in March… energy commodities are now averaging 1.1% higher than their year ago levels, with gasoline prices averaging 1.2% higher than they were a year ago, while the energy services price index is also up 3.6% from last April, as electricity prices are averaging 5.7% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was unchanged in April, after being 0.1% higher in March, unchanged in February, 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 0.2% lower, after being unchanged in February and March, but after being 0.4% higher in January, while the price index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets rose 0.4%, average prices at full service restaurants rose 0.3%, and prices of other food away from home averaged 0.2% higher…

In the food at home categories, the price index for cereals and bakery products was 0.6% higher, even as bread prices fell 0.2%, as the price index for breakfast cereal rose 3.1%, the price index for flour and prepared flour mixes rose 3.2%, the price index for frozen and refrigerated bakery products, pies, tarts, turnovers rose 1.1% and the price index for rice, pasta, and cornmeal was 1.2% higher…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.7% lower, the price index for poultry fell 0.5% and egg prices were 7.3% lower….however, the seasonally adjusted price index for dairy products was 0.1% higher, even as average milk prices fell 0.8%, as the price index for ice cream and related products was 3.3% higher…. meanwhile, the fruits and vegetables price index was 0.8% lower, as the price index for fresh fruits fell 1.7%, the price index for fresh vegetables fell 0.6%, and canned fruit prices averaged 0.6% lower….in addition, the beverages price index was 0.2% lower, as the price index for noncarbonated juices and drinks was 1.1% lower, and the price index for coffee was 0.6% lower….lastly, the price index for the ‘other foods at home’ category was 0.1% higher, as the price index for sugar and sugar substitutes rose 1.5%, the price index for sauces and gravies rose 0.8%, the price index for butter and margarine rose 2.8%, the price index for soups rose 0.5%, and the price index for salt and other seasonings and spices was 1.9% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.3% in April, after rising by 0.4% in March, by 0.4% in February, 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% lower in April, 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 April’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.4% lower, as the price index for floor coverings fell 0.6%, the price index for furniture and bedding fell 0.5%, and the major appliance index was 1.8% lower….on the other hand, the apparel price index was 1.2% higher on a 2.9% increase in the price index for men’s shirts and sweaters, a 2.5% increase in the price index for men’s pants and shorts, a 2.8% increase in the price index for women’s suits and separates, a 2.7% increase in the price index for women’s dresses, a 2.7% increase in the price index for boys’ apparel, and a 2.1% increase in the price index for jewelry…. however, the price index for transportation commodities other than fuel was was 0.7% lower, as average prices for new vehicles was 0.4% lower, the price index for used cars and trucks was 1.4% lower, and the price index for motor oil, coolant, and fluids was 0.8% lower….on the other hand, the price index for medical care commodities was 0.4% higher as prescription drug prices rose 0.2%, nonprescription drug prices rose 1.1%, while the price index for medical equipment and supplies was 0.4% lower…meanwhile, the recreational commodities index was unchanged, as the price index for televisions fell 1.5%, and the price index for other video equipment fell 1.8%, while the price index for sporting goods including bicycles rose 1.4%, and the price index for toys was 0.4% higher… in addition, the education and communication commodities index was 0.1% higher on a 1.7% increase in the price index for educational books and supplies, and a 0.9% increase in the price index for computers, peripherals, and smart home assistants.…lastly, a separate price index just for alcoholic beverages was 0.1% higher, while the price index for ‘other goods’ was 0.1% lower on a 0.7% decrease in the price index for cosmetics, perfume, bath, nail preparations and implements and a 0.2% decrease in the price index for cigarettes…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.4%, homeowner’s equivalent rent was 0.4% higher, prices for lodging away from home at hotels and motels were 0.3% lower, and the price index for water, sewers and trash collection was 0.4% higher, while household operation costs were 1.2% lower on a 2.1% decrease in prices for domestic services….at the same time, the price index for medical care services was also 0.4% higher, as the price index for inpatient hospital services rose 0.8%, the price index for eyeglasses and eye care rose 0.9%, and the price index for health insurance was 0.3% higher….moreover, the transportation services price index was 0.9% higher, as the price index for parking fees and tolls rose 2.5%, the price index for ship fares rose 1.1%, and the price index for motor vehicle insurance was 1.8% higher…in addition, the recreation services price index was 0.3% higher, as the price index for admissions to sporting events rose 1.0%, the price index for veterinarian services rose 0.8%, and the price index for purchase, subscription, and rental of video was 1.4% higher….at the same time, the price index for education and communication services was 0.2% higher, as the price index for delivery services rose 1.0%, the price index for elementary and high school tuition and fees rose 0.4%, and the price index for residential telephone services was 0.8% higher…lastly, the index for other personal services rose 1.1%, as the price index for laundry and dry cleaning services rose 1.7%, and the price index for tax return preparation and other accounting fees was 3.3% higher..

NB: a note on the reporting of consumer prices: most of the media, and even some economists, have been reporting the change in consumer inflation as a change from annual figures of one month to the next...that's a misleading and sometimes nonsensical way of reporting it, because it often tells you more about what the inflation figures were during the same month of a year ago than in the current month...by way of illustrating the problem, let's imagine that CPI figures in 2023 started with a 0.6% increase in January, then were unchanged in February, increased 0.6% again in March, then were unchanged again in April 2023, then rose 0.6% again in May of 2023, then continued alternating between rising 0.6% and being unchanged each month over the rest of the year...in 2024, however, we will postulate that inflation leveled off at a 0.3% increase every month in our hypothetical example...both years would show a 3.6% annual gain, maybe closer to 3.7% with compounding...but those who report inflation as a change between the annual figures would have reported inflation at 3.3% in January 2024 (because the January 2023 0.6% increase had dropped out of the comparison), then would have reported a 3.6% increase in February, then a 3.3% increase in March, and would report a 3.6% increase again in April, even if month over month inflation for 2024 stays unchanged at 0.3%...hence, when March 2024 inflation at 0.4% replaced March 2023 inflation at 0.1% in the actual data, it was widely reported that our inflation rose from 3.2% to 3.5%…now in April, our 0.3% CPI increase replaced the 0.4% increase in April 2023 in the annual change, and they are reporting that inflation fell from 3.5% to 3.4%…unfortunately, it appears our policy makers are similarly arithmetically challenged that way..

Retail Sales Unchanged in April after Prior Months’ Sales Revised Lower

Seasonally adjusted retail sales were virtually unchanged in April, after retail sales for February and March were revised lower in an intervening annual revision …the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $705.2 billion during the month, which was virtually unchanged (±0.4 percent)* from revised March sales of $705.1 billion, and 3.0 percent (±0.5 percent) above the adjusted sales of April of last year…estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated nominal dollar sales fell 1.0%, from $708,557 million in March to $701,649 million in April, while they were up 4.0% from the $674,516 million of sales in April a year ago….

Retail sales estimates from the prior months were revised on April 23rd, benchmarked based on the results of the 2022 Annual Retail Trade Survey and the Service Annual Survey, and hence the changes in sales indicated in this report reflect the ​​revisions from that revision….March sales were originally reported at $709.6 billion, up 0.7% from February; they ​were revised to $707.9 billion with the annual revision and are now indicated to have risen 0.6% to $705.1 billion….February adjusted sales were concurrently revised from $704.5 billion to $70​2​.7 billion​ and then to $700.5 billion, and January’s sales were revised from $697.954 billion to $695.631 million with the rebenchmarking​, and were not revised in this report…

We are again including below the table of monthly and yearly percentage changes in sales by business type, taken from the Census marts pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from March to April in the first column, and then the year over year percentage change for those businesses since last April in the 2nd column; the second pair of columns gives us the revision of last month’s March advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the February to March change under “Feb 2024 r (revised)” and the revised March 2023 to March 2024 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance March estimates, before the annual revision, is here….

To compute April’s real personal consumption of goods data for national accounts from this April retail sales report, the BEA will initially use the corresponding price changes from the April consumer price index, which we reviewed above…to estimate what they will find, we’ll first separate out the volatile sales of gasoline from the other totals…from the third line on the above table, we can see that April retail sales excluding the 3.1% increase in sales at gas stations were down by 0.2%….then, by subtracting the dollar values representing the 0.8% increase in grocery & beverage sales and the 0.2% increase in food services sales out from that total, we find that core retail sales were down by roughly 0.5% for the month…..since the April CPI report showed that the the composite price index of all goods less food and energy goods was 0.1% lower in April, we can thus figure that real retail sales excluding food and energy would have been down about 0.4% from March….however, the actual adjustment in national accounts for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at motor vehicle & parts dealers were down 0.8%, the April price index for transportation commodities other than fuel was was 0.7% lower, which would suggest that real unit sales at auto & parts dealers were only on the order of 0.1% lower, because most of the sales decline was due to lower prices… on the other hand, while nominal sales at clothing stores were 1.6% higher in April, the apparel price index was ​1.2% higher, which means that ​most of the clothing store sales increase was due to higher prices, and that real sales of clothing likely rose about 0.4%

In addition to figuring those core real retail sales, to make an estimate of the change in real sales, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do…the April CPI report indicated that the food price index was unchanged in April, as the price index for food purchased for use at home fell 0.2%, while the index for food bought away from home was 0.3% higher…thus, while nominal sales at food and beverage stores were 0.8% higher, real sales of food and beverages would have been 1.0% higher in light of 0.2% lower prices…on the other hand, the 0.2% nominal increase in sales at bars and restaurants, once adjusted for 0.3% higher prices, suggests that real sales at bars and restaurants actually fell by around 0.1% during the month…and while sales at gas stations were up 3.1%, there was also a 2.8% increase in price of gasoline during the month, which would suggest that real sales of gasoline were up on the order of 0.3%, with a caveat that gasoline stations sell more than just gasoline, products which should not be adjusted with gasoline prices, so the actual increase in real sales at gas stations was likely greater than 0.3%…reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can then estimate that the income and outlays report for April will show that real personal consumption of goods fell by almost 0.2% in April, after rising by 0.7% in March, but after being unchanged in February after falling by 1.3% in January…at the same time, the 0.1% decrease in real sales at bars and restaurants would induce an insignificant downward bias to April’s real personal consumption of services..

Industrial Production Unchanged in April after February and March Production was Revised Higher

Industrial production was statistically unchanged in April after production for February and March were revised higher…the Fed’s G17 release on Industrial production and Capacity Utilization for April reported that industrial production was unchanged in April after being a revised 0.1% higher in March and a revised 0.8% higher in February, which still left our total output at a level 0.4% lower than the level of April a year ago….the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, came in at 102.8 in April, after the March index value was revised up to 102.8 from the 102.7 reported last month, ​and after the February index value was revised from 102.3 to 102.6, while the January index was revised but revised unchanged at 101.8….the effect of those revisions was to revise the March change from +0.4% to +0.1%…

The manufacturing index, which accounts for more than 77% of the total IP index, fell 0.3% to 99.4 in April, led by a 2.0% decrease in the production of automotive products, after the March manufacturing index was revised from 99.9 to 99.7, the February manufacturing index was revised from 99.4 up to 99.5, the January manufacturing index was unrevised at 98.2, the December manufacturing index was revised from 99.4 to 99.3, and the November manufacturing index was revised from 99.4 to 99.3, which left the manufacturing index 0.5% below its level of a year ago….meanwhile, the mining index, which includes oil and gas well drilling, fell 0.6%, from 117.9 in March to 117.1 in April, after the March mining index was revised up from the originally reported 115.7, which still left the mining index 1.3% lower than it was a year earlier…finally, the seasonally adjusted utility index, which typically fluctuates due to deviations from normal temperatures, rose by 2.8%, from 103.7 in our close to normal March to 106.7 in our cooler than normal April, after the March utility index was revised from 103.5 to 103.7, now up 1.6% from our warm February….with the April increase, the utility index is now 2.3% above that of a year ago, partly due to a milder April last year than this year…

This report also includes April’s capacity utilization stats, which are expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry fell to 78.4% in April from 78.5% in March, with capacity utilization for March unrevised…capacity utilization of NAICS durable goods production facilities ​f​ell from a downwardly revised 75.0% in March to 74.6% in April, while capacity utilization for non-durables producers fell from 79.3% to 79.2%…capacity utilization for the mining sector fell to 92.1% in April from 93.7% in March, which was previously reported as 91.0%, while utilities were operating at 71.0% of capacity during April, up from their 69.2% of capacity during March, which was reported at 69.1% of capacity a month ago…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 0.5% in April on Higher Energy, Trade and Core Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.5% in April, as the price index for finished wholesale goods rose 0.4% while the price index for final demand for services was 0.6% higher…that April increase followed a downwardly revised 0.1% PPI decrease in March, when the price index for wholesale goods fell 0.2% and the price index for final demand for services was 0.1% lower, a revised 0.6% PPI increase in February, when the price index for wholesale goods rose 1.1% and the price index for final demand for services was 0.4% higher, a revised 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 revised 0.1% PPI decrease in December, when the index for prices of wholesale goods was 0.1% lower and the price index for final demand for services was 0.1% lower; an unrevised 0.1% PPI increase 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; and an unrevised 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 2.2% 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 now 3.1% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.4​% higher in April, after being 0.2% lower in March, 1.1% higher in February, 0.1% lower in January, 0.1% lower in December, 0.2% lower in November, 1.2% lower in October. 0.9% higher in September, 1.7% higher in August, and 0.2% higher in July, and is now up 1.3% from a year ago….the final demand goods price index was up 0.4% in April as the price index for wholesale energy goods was 2.0% higher, after it had fallen 1.3% in March, risen 3.8% in February, after falling 1.2% in January, by 0.8% in December, by 2.0% in November, and by 6.4% in October, while the price index for wholesale foods was 0.7% lower, after rising 0.4% in March and 1.0% in February, but after falling 0.3% in January, being unchanged in December and 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 unchanged in March and 0.4% higher in February…

Wholesale energy prices were up 2.0% in April​ on a 5.4% increase in wholesale prices for gasoline, a 3.0% decrease in wholesale prices for diesel fuel, and a 5.7% increase in wholesale prices for liquefied petroleum gas, while the final demand for food price index was 0.7% lower on an 18.7% decrease in the wholesale price index for fresh and dry vegetables, a 5.9% decrease in the wholesale price index for beef and veal, and a 4.5% decrease in the wholesale price index for grains….among core wholesale goods, the wholesale price index for iron and steel scrap rose 4.6%, the wholesale price index for Industrial chemicals increased 2.6%, the wholesale price index for industrial material handling equipment rose 2.4%, and wholesale price index for jewelry, platinum and karat gold was also 2.4% higher…

Meanwhile, the price index for final demand for services was 0.6% higher in April, after being 0.1% lower in March, 0.4% higher in February, 0.5% higher in January, after being 0.1% lower 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 2.7% higher than a year ago…the price index for final demand for trade services r​ose 0.8%, the price index for final demand for transportation and warehousing services fell 0.6%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.6% higher….

Among trade services, seasonally adjusted margins for computer hardware, software, and supplies retailers rose 12.4%, margins for automobile retailers rose 3.4%, margins for sporting goods and boat retailers rose 1.9%, and margins for machinery and vehicle wholesalers rose 5.9%, but margins for fuels and lubricants retailers fell 11.0% and margins for apparel wholesalers were 4.9% lower….among transportation and warehousing services, average margins for airline passenger services fell 3.8% while margins for most other transportation and warehousing services were little changed….among the components of the core final demand for services index, the price index for portfolio management rose 3.9%, the price index for consumer loans (partial) rose 3.4%, the price index for management, scientific, and technical consulting services rose 3.2%, and the price index for passenger car rental rose 2.4%, but the price index for gaming receipts (partial) decreased 2.9%…

This report also showed the price index for intermediate processed goods was 0.6% higher in April, after being 0.5% lower in March, 1.4% higher in February, 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 1.6% in April as refinery prices for gasoline rose 5.4%, refinery prices for diesel fuel rose 3.0%, the price index for industrial electric power rose 1.1%, the price index for commercial electric power rose 1.2%, and the price index for liquefied petroleum gas rose 5.7%… on the other hand, the price index for intermediate processed foods and feeds fell 0.2%, as the producer price index for meats fell 2.2%, the producer price index for fats and oils fell 0.7%, and the producer price index for refined sugar and byproducts fell 0.5%….however, the core price index for intermediate processed goods less food and energy goods was 0.4% higher, as the producer price index for industrial gases rose 4.5%, the producer price index for synthetic rubber rose 4.3%, the producer price index for softwood lumber rose 6.2%, and the producer price index for building paper and board rose 5.6%….average prices for intermediate processed goods are still 0.5% lower than in April 2023, the fourteenth 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 3.2% in April, after falling 1.9% in March and 0.4% in February, after rising 1.4% in January, falling 4.1% in December, falling 2.1% in November and by 1.6% in October, after rising 2.9% in September, 2.1% in August and 2.5% last July….that was as the April price index for crude energy goods rose 8.2%, as crude oil prices rose 10.6%, while unprocessed natural gas prices fell 0.9% and coal prices were 0.2% lower…however, the price index for unprocessed foodstuffs and feedstuffs was 0.2% lower, on a 12.9% decrease in producer prices for slaughter turkeys, a 5.3% decrease in producer prices for slaughter chickens, a 5.3% decrease in producer prices for slaughter steers and heifers, and a 4.9% decrease in producer prices for corn….meanwhile, the index for core raw materials other than food and energy materials was 1.0% higher on a 5.9% increase in the price index for copper base scrap, a 2.8% increase in the price index for nonferrous metal ores, and a 4.6% increase in the price index for iron and steel scrap….this raw materials price index is still 4.6% lower than a year ago, the fifteenth negative annual 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 April, after being 0.2% higher in March, unchanged in February, 0.8% higher in January, 0.5% higher in December, and 0.5% higher in November….the price index for intermediate trade services was 0.5% lower, as margins for intermediate metals, minerals, and ores wholesalers fell 3.2% margins for intermediate building materials, paint, and hardware wholesalers fell 2.3%, and margins for intermediate chemicals and allied products wholesalers fell 0.5%, but margins for machinery and equipment parts and supplies wholesalers rose 1.3%….on the other hand, the index for transportation and warehousing services for intermediate demand was 0.4% higher, as the intermediate price index for arrangement of freight and cargo rose 2.3%, the intermediate price index for pipeline transportation rose 1.5%, and the intermediate price index for rail transportation of freight and mail was 0.9% higher…meanwhile, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.3% higher, as the intermediate price index for portfolio management rose 3.9%,, the intermediate price index for permanent placement services rose 5.4%, the intermediate price index for management, scientific, and technical consulting services rose 3.2%, and the intermediate price index for passenger car rental rose 2.4%…over the 12 months ended in April, the year over year price index for services for intermediate demand is now 3.0% higher than it was a year ago, the forty-third consecutive annual increase in this index, 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…

Business Sales Fell 0.1% in March, Business Inventories Were Also 0.1% Lower

After the release of the April retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for March (pdf), which incorporates the revised March retail data from that April retail report and the earlier published March wholesale and factory data to give us a complete picture of the business impact on the economy for that month….note that retail sales and inventories were revised on April 23rd, which thus revised the figures that were reported a month ago, even before the usual revisions to the prior month’s data that accompany this report, and that changes noted are from those revised figures…

According to the Census Bureau, total manufacturers’ and trade sales were estimated to be valued at a seasonally adjusted $1,858.0 billion in March, down 0.1 percent (±0.2 percent)* from February’s revised sales, but up 2.1 percent (±0.4 percent) from March sales of last year…at the same time, total February sales were revised down from the originally reported $1,866.5 billion to $1,860,134 million, and are now a 1.4% increase from January….manufacturer’s sales rose 0.3% to $583,878 million in March, and retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, rose 0.8% to $611,381 million, but wholesale sales fell 1.3% to $662,771 million..

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,539.0 billion at the end of March, down 0.1 percent (±0.1 percent)* from the end of February, but up 0.7 percent (±0.4 percent) from inventories of March a year earlier…the value of end of February inventories was revised from the $2,567.5 billion reported last month to $2,540.7 billion, which is now up 0.3% from January’s inventory valuation….seasonally adjusted inventories of manufacturers were estimated to be valued at $857,841 million, up 0.1% from February, and inventories of retailers were valued at $786,408 million, 0.2% more than those of February, while inventories of wholesalers were estimated to be valued at $894,729 million at the end of March, down 0.4% from February…

Two weeks ago, we figured that there wouldn’t be a need for a revision to 1st quarter GDP based on the inventory change the full factory report showed, while last week we figured that 1st quarter GDP was overestimated by around 0.20 percentage points based on what the wholesale inventories report showed……in the advance report on 4th quarter GDP of three weeks ago, retail inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories which was released the day before the GDP release…that report estimated that our seasonally adjusted retail inventories were valued at $788,078 million at the end of March, up 0.3% from a revised $786,098 million in February….that’s $3.104 billion more than the $786,408 and $784,754 million for those two months that this report shows, which would mean that the quarterly change in 1st quarter retail inventories was overestimated at roughly a $12.4 billion annual rate, or by an amount that would subtract about 0.21 percentage points from GDP, depending on how the inflation adjustments shake out…combined with our previous estimates on factory and wholesale inventories, then, this report would suggest that the growth rate of 1sr quarter GDP should be revised downwards by around 0.41 percentage points when the 2nd estimate is released next week….

April Housing Starts Reported Higher, Building Permits Lower

The April report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,360,000 in April, which was 5.7 percent (±11.0 percent)* above the revised March estimated rate of 1,287,000 annually, but was 0.6 percent (±12.3 percent)* below last April’s rate of 1,368,000 housing starts a year….the figures shown in parenthesis indicate the most likely range of the change indicated; in other words, April housing starts could have been down by 5.3% or up by as much as 16.7% from those of March, with revisions of a greater magnitude in either direction from that range possible…with this report, the annual rate for March housing starts was revised from the 1,321,000 reported last month down to 1,287,000, and February starts, which were first reported at a 1,521,000 annual rate, were revised from last month’s initial revised figure of 1,549,000 annually to a 1,546,000 annual rate, while January starts, which were first reported at a 1,331,000 annual rate, and were revised from an annual rate of 1,374,000 to a 1,375,000 annual rate a month ago, were revised up to a 1,376,000 annual rate with this report….

The annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 124,000 housing units were started in April, up from the 108,500 housing units that were started in March, and up from the 133,700 housing units that were started in February…of those housing units started in April, an estimated 95,200 were single family homes and 28,100 were housing units in structures with more than 5 units, up from the revised 87,900 single family starts in March, and up from the 20,000 units started in structures with more than 5 units in March…

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data…in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,440,000, which was 3.0 percent below the revised March rate of 1,485,000, and was 2.0 percent below the rate of building permit issuance in April a year earlier….the annual rate for housing permits issued in March was revised from 1,458,000 to 1,485,000…

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 132,600 housing units were issued in April, up from the revised estimate of 124,300 new permits issued in March….of April’s permits, 93,500 were for single family homes, up from 85,200 in March, while 33,800 were in buildings with 5 or more units, down from 34,800 in March…

For graphs and commentary on this report, see the following posts by Bill McBride at Calculated Risk: AM Housing Starts Increased to 1.360 million Annual Rate in April and Single Family Starts Up 18% Year-over-year in March; Multi-Family Starts Down Sharply YoY which in turn links tohis detailed Real Estate Newsletter post covering the same subject.

 

 

(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…) 

Comments

Popular posts from this blog

temporary post for advance graphics

September’s consumer and producer prices; August’s trade deficit and wholesale inventories

July’s consumer and producer prices, retail sales, industrial production, and new home construction; June’s business inventories