June’s consumer and producer price indices, May’s wholesale sales

Major reports that were released this week included the June Consumer Price Index and the June Producer Price Index from the Bureau of Labor Statistics, and the May report on Wholesale Trade, Sales and Inventories from the Census Bureau…this week also saw the Consumer Credit Report for May from the Fed, which indicated that non-real estate consumer borrowing outstanding grew by a seasonally adjusted $11.3 billion, or at a 2.7% annual rate, as non-revolving credit grew at a 1.4% rate to $3,719.6 billion, while revolving credit outstanding grew at a 6.3% rate to $1,345.1 billion…

A major private report released last week that i neglected to mention was the Mortgage Monitor for May, which now comes from the Mortgage Technology unit of ICE, after originating with Lender Processing Services and being published by Black Knight Financial Services for several years…what they call the “July Mortgage Monitor” indicated that 3.04% of mortgages were delinquent in May, down from the 3.31% that were delinquent in April, and down from the 3.10% delinquency rate of May 2023, and that 0.37% of all mortgages were in the foreclosure process in May, matching the 0.37% of mortgages in foreclosure in April, but down from the 0.43% foreclosure rate of May a year ago….the full Mortgage Monitor for May (pdf) is a comprehensive 21 pages of tables and graphics, with explanatory text..

Consumer Prices Fell 0.1% in June on Lower Gasoline, Vehicle, Airline, and Lodging Prices

The consumer price index was 0.1% lower in June, as higher prices for rent, gas utility service, car insurance, recreational goods, and eating out were more than offset by lower prices for gasoline, new and used vehicles, electricity, airline fares, hotels and motels, furniture, and information technology commodities, 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 0.1% lower in June,​ after being unchanged in May, 0.3% higher in April, 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, and by 0.2% in June of last year….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, actually rose from 314.069 in May to 314.175 in June, which left it statistically 2.9714% higher than the index reading of 305.109 from June of last year, which is reported as a 3.0% year over year increase, less than the 3.3% year over year increase reported for May, with such widely cited year over year figures usually telling us more about last year’s CPI changes than this years…with lower energy prices a major reason for the lower CPI print, seasonally adjusted core prices, which exclude food and energy, were up by 0.1% for the month, as the unadjusted core price index rose from 318.629 to 319.003, which left the core index 3.2673% ahead of its year ago reading of 308.910, which is reported as a 3.3% year over year increase, which was less than the 3.4% year over year core price increase that was reported in May, 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 fell 2.0% in June, after falling 2.0% in May, but after rising by 1.1% in April, 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 after being unchanged last July, and is still 1.0% higher than in June of a year ago….the price index for energy commodities was 3.5% lower in June, while the price index for energy services was 0.1% lower, after the energy services index had fallen by 0.2% in May….the energy commodities index was down 3.7% on a 3.8% decrease in the price of gasoline and a 2.4% decrease in the price of fuel oil, while prices for ​"other energy commodities​", including propane, kerosene, and firewood, averaged 1.2% lower…within energy services, the price index for utility gas service was 2.4% higher in June after being 0.8% lower in May, and is now 3.7% higher than it was a year ago, while the electricity price index was 0.7% lower in June after being unchanged in May… energy commodities are now averaging 2.2% lower than their year ago levels, with gasoline prices averaging 2.5% lower than they were a year ago, while the energy services price index is up 4.3% from last June, as electricity prices are still averaging 4.4% higher than a year ago…​

Meanwhile, the seasonally adjusted food price index was 0.2% higher in June, after being 0.1% higher in May, unchanged in April, 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 of last year, as the price index for food purchased for use at home was 0.1% higher in June, after being unchanged in May, 0.2% lower in April, 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 0.4% higher, as average prices at fast food outlets rose 0.2%, average prices at full service restaurants rose 0.6%, 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 0.1% higher, as bread prices rose 0.7%, the price index for breakfast cereal rose 0.4%, the price index for crackers and bread and cracker products rose 0.8% and the price index for fresh sweetrolls, coffeecakes, and doughnuts was 1.7% higher…at the same time, the price index for the meats, poultry, fish, and eggs food group was 0.2% higher, as the price index for fresh fish and seafood rose 2.1% and egg prices were 3.5% higher….in addition, the seasonally adjusted price index for dairy products was 0.6% higher, as average milk prices rose 0.7% and the price index for ice cream and related products was 1.4% higher….on the other hand, the fruits and vegetables price index was 0.5% lower, as the price index for fresh fruits fell 0.6%, and frozen vegetable prices averaged 1.1% lower….meanwhile, the beverages price index was 0.1% higher, as the price index for carbonated drinks was 1.0% higher and the price index for coffee was 0.5% higher….lastly, the price index for the ‘other foods at home’ category was 0.5% higher, as the price index for margarine rose 2.9%, the price index for baby food and formula rose 1.7%, the price index for olives, pickles, and relishes rose 1.6%, and the price index for prepared salads was 2.0% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.1% in June, after rising by 0.2% in May, 0.3% in April, 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% last July, the composite price index of all goods less food and energy goods was 0.1% lower in June, while the more heavily weighted composite​ index for all services less energy services was 0.1% higher….

Among the goods components of the core price index, which will ​initially be used by the Bureau of Economic Analysis to adjust May’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.2% lower, as the price index for furniture and bedding fell 0.9%, the price index for window and floor coverings fell 0.5%, and the tools, hardware and supplies index was 1.4% lower….on the other hand, the apparel price index was 0.1% higher on a 5.9% increase in the price index for women’s outerwear, a 2.7% increase in the price index for women's underwear, nightwear, swimwear, and accessories, and a 4.0% increase in the price index for jewelry and watches…. however, the price index for transportation commodities other than fuel was was 0.6% lower, as the price index for used cars and trucks fell 1.5%, average prices for new vehicles was 0.2% lower and the price index for vehicle parts and equipment other than tires was 0.4% lower….on the other hand, the price index for medical care commodities was 0.2% higher as nonprescription drug prices rose 0.2% and the price index for medical equipment and supplies was 1.0% higher…at the same time, the recreational commodities index was 0.4% higher, as the price index for TVs rose 0.6%, the price index for photographic equipment and supplies rose 2.1%, the price index for recreational reading materials rose 2.2%, and the price index for toys, games, hobbies and playground equipment was 2.5% higher… however, the education and communication commodities index was 0.5% lower, on a 1.0% decrease in the price index for college textbooks, a 1.9% decrease in the price index for computers, peripherals, and smart home assistants, and a 0.2% decrease in the price index for smartphones.…lastly, a separate price index just for alcoholic beverages was 0.2% higher, while the price index for ‘other goods’ was 0.2% higher on a 0.5% increase in the price index for cigarettes and a 0.5% increase in the price index for miscellaneous personal goods…

Within core services, the price index for shelter was 0.2% higher, as rents rose 0.3%​ and homeowner’s equivalent rent was 0.3% higher, ​but prices for lodging away from home at hotels and motels were 2.0% lower, the price index for household insurance was 0.7% lower, ​and the price index for water, sewers and trash collection was 0.2% higher….at the same time, the price index for medical care services was 0.2% higher, as the price index for eyeglasses and eye care rose 0.7%, and the price index for services by medical professionals other than doctors and dentists rose 0.4%….on the other hand, the transportation services price index was 0.5% lower, as the price index for car and truck rental fell 1.2%, the price index for airline fares fell 5.0%, ​and the price index for ​parking and other fees was 0.​8% lower…in addition, the recreation services price index was 0.​1% lower, as the price index for ​veterinarian services fell 0.6%, the price index for cable, satellite, and live streaming television service fell ​0.5%, and the price index for purchase, subscription, and rental of video was ​also 0.5% lower….however, the price index for education and communication services was ​unchanged, as the price index for elementary and high school tuition and fees also rose 0.​9%, ​but the price index for residential telephone services was ​0.5% ​lower…lastly, the index for other personal services ​rose 9.9%, as the price index for ​haircuts and other personal care services rose 0.6%, and the price index for ​mi​scellaneous personal services​ was ​1.2%​ higher..

Producer Prices Rose 0.2% in June on Higher Margins for Trade Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.2% in June, as the price index for finished wholesale goods fell 0.5% while the price index for final demand for services was 0.6% higher.…that June increase followed a May index which was revised from a 0.2% decrease to unchanged, as an 0.8% decrease in the price index for finished wholesale goods was offset by a 0.3% increase in the price index for final demand for services,​ and followed​ a 0.5% increase in April, when the price index for finished wholesale goods rose 0.4% while the price index for final demand for services was 0.6% higher, a 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 unchanged, 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 0.3% higher, an unrevised 0.4% 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 0.6% higher; a 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 of last year, 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 now 2.6% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was unchanged for the month, but is still 3.1% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.5% lower in June, after being 0.8% lower in May, 0.3% higher in April, 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 last July, and is still up 1.0% from a year ago….the final demand goods price index was down 0.5% in June because the price index for wholesale energy goods was 2.6% lower, after it had fallen 4.6% in May, risen 1.8% in April, fallen 1.3% in March, risen 3.9% in February, after falling 1.1% in January, by 0.8% in December, by 2.0% in November, and by 6.4% in October, and because the price index for wholesale foods was 0.3% lower, after being unchanged in May, after falling 0.8% in April, rising 0.5% in March and 1.0% in February, while the index for final demand for core wholesale goods (excluding food and energy) was unchanged, after rising 0.2% in both April and May, being unchanged in March and 0.3% higher in both January and February…

Wholesale energy prices were down 2.6% in ​June on a 5.8% decrease in wholesale prices for gasoline, a 5.1% decrease in wholesale prices for liquefied petroleum gas, a 3.3% decrease in wholesale prices for diesel fuel, and a 3.5% decrease in wholesale prices for home heating oil and distillates, while the final demand for food price index was 0.3% lower on a 5.9% decrease in the wholesale price index for processed young chickens, a 5.2% decrease in the wholesale price index for finfish and shellfish, a 6.3% decrease in the wholesale price index for fresh fruits and melons, and a 4.4% decrease in the wholesale price index for fresh and dry vegetables….among core wholesale goods, the wholesale price index for transformers and power regulators rose 0.7% and the wholesale price index for passenger cars increased 0.6%, while the wholesale price index for ousehold appliances fell 1.1%, and the wholesale price index for jewelry, platinum and karat gold was 1.4% lower…

Meanwhile, the price index for final demand for services was 0.6% higher in June, after being 0.3% higher in May, 0.6% higher in April, unchanged in March, 0.3% higher in February, and 0.6% 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 last July, and is now 3.5% higher than a year ago…the price index for final demand for trade services rose 1.9% while the price index for final demand for transportation and warehousing services fell 0.4%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.1% higher….

Among trade services, seasonally adjusted margins for fuels and lubricants retailers rose 6.7%, margins for automobiles retailers rose 7.0%, margins for computer hardware, software, and supplies retailers rose 16.8%, margins for furniture retailers rose 4.2%, margins for machinery and vehicle wholesalers rose 3.7%, and margins for major household appliances retailers rose 2.1%, but margins for TV, video, and photographic equipment and supplies retailers were 9.6% lower….among transportation and warehousing services, average margins for rail transportation of freight and mail were unchanged but margins for truck transportation of freight were 1.2% lower….among the components of the core final demand for services index, the price index for recreational activity instruction fees rose 6.6%, the price index for deposit services rose 4.4%, the price index for sales and subscriptions of periodicals and newspapers rose 1.8%, and the price index for portfolio management increased 1.0%…

This report also showed the price index for intermediate processed goods was 0.2% lower in June, after being 1.4% lower in May, 0.5% higher in April, 0.7% 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% last August….the price index for intermediate energy goods fell 1.1% in June as refinery prices for gasoline fell 5.8%, refinery prices for jet fuel fell 4.6%, refinery prices for No. 2 diesel fuel fell 3.3%, the price index for commercial electric power fell 0.9%, and the ​producer price index for liquefied petroleum gas fell 5.4%… on the other hand, the price index for intermediate processed foods and feeds rose 0.2%, as the producer price index for dairy products rose 1.3%, and the producer price index for prepared animal feeds rose 0.5%….however, the core price index for intermediate processed goods less food and energy goods was 0.1% lower, as the producer price index for plastic resins and materials fell 1.3%, the producer price index for steel mill products fell 1.8%, the producer price index for basic organic chemicals fell 0.9%, and the producer price index for fabricated structural metal products fell 0.8%….average prices for intermediate processed goods are still 0.5% lower than in June 2023, the sixteenth 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 1.4% in June, after rising 0.2% in May, rising 2.1% in April. falling 1.4% in March and 0.3% 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 June price index for crude energy goods rose 4.7% even though crude oil prices fell 0.2%, as unprocessed natural gas prices rose 36.3% and coal prices were 0.7% higher…however, the price index for unprocessed foodstuffs and feedstuffs was 0.3% lower, on a 17.3% decrease in producer prices for hay and hayseeds, a 9.1% decrease in producer prices for slaughter turkeys, a 14.9% decrease in producer prices for slaughter hogs, a 9.8% decrease in producer prices for wheat, and a 3.1% decrease in producer prices for oilseeds….at the same time, the index for core raw materials other than food and energy materials was 0.4% lower on a 5.3% decrease in the price index for copper base scrap and a 3.0% decrease in the price index for nonferrous metal ores….this raw materials price index is now 2.7% higher than a year ago, the first year over year increase following sixteen consecutive negative annual prints, which followed 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 0.2% higher in June, after being 0.3% higher in May, 0.3% higher in April, 0.2% higher in March, unchanged in February, 0.9% higher in January, 0.5% higher in December, and 0.5% higher in November….the price index for intermediate trade services was 0.5% higher, as margins for building materials, paint, and hardware wholesalers rose 2.6% and margins for intermediate hardware, building material, and supplies retailers rose 1.0%, but margins for margins for intermediate machinery and equipment parts and supplies wholesalers fell 1.1%….on the other hand, the index for transportation and warehousing services for intermediate demand was 0.4% lower, as the intermediate price index for arrangement of freight and cargo fell 0.9%​ and the intermediate price index for warehousing, storage, and related services was 2.9% lower…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 investment banking rose 1.4%, the intermediate price index for gross rents of retail properties rose 3.8%, the intermediate price index for passenger car rental rose 4.2% and the intermediate price index for deposit services (partial) was 4.8% higher…over the 12 months ended in April, the year over year price index for services for intermediate demand is now 3.8% higher than it was a year ago, the forty-fifth 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…

May Wholesale Sales Rose 0.4%, Wholesale Inventories Rose 0.6%

The May report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $666.7 billion in May, up 0.4 percent (±0.4 percent)* from the revised April level, and up 1.9 percent (±0.9 percent) from the value of wholesale sales in May 2023.. the April preliminary estimate of wholesale sales was revised from the $663.8 billion reported a month ago to $663.9 billion, which was apparently enough to revise the March to April percent change from the preliminary estimate of up 0.1 percent (±0.4 percent)* to up 0.2% (±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 produced or finally sold….

On the other hand, the monthly change in private inventories is a major factor in GDP, as any goods left on the shelf or in intermediate storage represent goods that were produced but not sold, and this May report estimated that wholesale inventories were valued at a seasonally adjusted $901.7 billion at month end, up 0.6 percent (±0.2 percent)from the revised April level but 0.5 percent (±0.7 percent) lower than in May a year ago, with the April preliminary inventory estimate revised from $895.8 billion to $896.3 billion at the same time, now a 0.2% decrease from March…

For national accounts purposes, May’s wholesale inventories will be adjusted for price changes by category with the appropriate components of the May producer price index, which indicated a 0.8% decrease in prices for finished goods, a 1.5% decrease in prices for intermediate goods, and a 1.8% decrease in prices for unprocessed goods….with most of wholesale inventories finished goods, with the notable exceptions of commodities, there will thus be a real increase of at least 1.4% in May wholesale inventories, following the real wholesale inventory decrease of less than 0.5% we had figured for April…since the key source data and assumptions (xls) for the third estimate of 1st quarter GDP indicated that the 1st quarter’s real wholesale inventory change was modestly negative, the increase in 2nd quarter real wholesale inventories would ​firstt  reverse that, and then add the 2nd quarter’s increase to the growth rate of 2nd 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…)