March consumer credit and wholesale inventories

It was a light week for economic data; the only report we usually cover tht was released this week was the Wholesale Trade, Sales and Inventories report for March from the Census Bureau….meanwhile, the Fed released the Consumer Credit Report for March on Monday of this week, and it showed that overall consumer credit​, a measure of non-real estate debt, had grown by a seasonally adjusted $6.3 billion in March, or at a 1.5% annual rate, as non-revolving credit expanded at a 2.0% annual rate to $3,721.1 billion, while revolving credit outstanding grew at a 0.1% rate to $1,337.8 billion…for the first quarter of 2024, consumer credit increased at a 3.2% seasonally adjusted annual rate, as non revolving credit increased at a 2.2% rate while revolving credit increased at a 5.7% rate…

The week’s major privately issued report was the Mortgage Monitor for May (covering March data) from ICE Black Knight Financial Services, which indicated that 3.20% of all mortgages were delinquent in March, down from the 3.38% delinquency rate in February, but up from the 2.92% of mortgages that were delinquent in March of 2023, and that 0.38% of all mortgages were in the foreclosure process, down from the 0.40% that were in foreclosure in February, and down from the 0.46% of mortgages that were in foreclosure in March a year earlier…

March Wholesale Sales Fell 1.3%, Wholesale Inventories were 0.4% Lower

The March report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at “$662.8 billion, down 1.3 percent (±0.5 percent) from the revised February level, but were up 1.4 percent (±0.9 percent) from the revised March 2023 level.”… the February preliminary estimate of wholesale sales was revised from the $673.7 billion reported last month to $671.5 billion, which meant that the “January 2024 to February 2024 percent change was revised from the preliminary estimate of up 2.3 percent (±0.4 percent) to up 2.0 percent (±0.4 percent).“…as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods sold..

On the other hand, the monthly change in private inventories is a major factor in GDP, since additional goods sitting in a warehouse represent goods that were produced but not sold, and this March report estimated that wholesale inventories were valued at “$894.7 billion at the end of March, down 0.4 percent (±0.2 percent) from the revised February level. Total inventories were down 2.3 percent (±0.9 percent) from the revised March 2023 level.“, with the February preliminary inventory estimate concurrently revised from the originally reported $901.1 billion to $898.7 billion, which meant the change in inventories from January to February was revised from the increase of 0.5 percent (+/-0.2%)* reported last month to ​an increase of 0.2 percent (±0.2 percent)* from January.…

In the advance report on 1st quarter GDP of two weeks ago, wholesale inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories, which was released the day before the GDP release…that report estimated that our seasonally adjusted wholesale inventories were valued at $896.2 at the end of March, down from $900.0 billion in February…that’s a net $2.8 billion more than the $894.7 billion and $898.7 billion that this report shows, which would imply that the quarterly change in 4th quarter wholesale inventories was overestimated at roughly a $11.2 billion annual rate in the GDP report….assuming there’s no distortion caused by reweighting the inflation adjustments to those inventories, that would mean that the growth rate of 1st quarter GDP was overestimated by around 0.20 percentage points based on what this report shows…

 

 

(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…)