August’s consumer and producer prices, July’s wholesale sales

Major reports released ​last week included the August Consumer Price Index, the August Producer Price Index, and the August Import-Export Price Index, all from the Bureau of Labor Statistics, and the Wholesale Trade, Sales and Inventories report for July, from the Census Bureau…this week also saw the Consumer Credit Report for July from the Fed, which indicated that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $25.5 billion in July, or at a 6.0% annual rate, as non-revolving credit expanded at a 4.8% rate to $3,734.4 billion, while revolving credit outstanding grew at a 9.4% rate to $1,359.3 billion…

The major privately issued report released this week was the Mortgage Monitor for September, which now comes from the Mortgage Technology unit of ICE, and which indicated that 3.37% of all mortgages were delinquent in July, down from the 3.49% that were delinquent in June, but up from the 3.21% delinquency rate of July 2023, and that 0.35% of all mortgages were in the foreclosure process in July, unchanged from the 0.35% of mortgages in foreclosure in June, but down from the 0.42% foreclosure rate of July a year ago….the full Mortgage Monitor for September (pdf), which covers July data, is a comprehensive 22 pages of tables and graphics, with explanatory text..

Consumer Prices Rose 0.2% in August on Higher Costs for Shelter

The consumer price index was 0.2% higher in August, as higher prices for rent, lodging, home & car insurance, clothing, airline fares, and hospital services were partly offset by lower prices for gasoline, electric and gas utility service, used vehicles, furniture, drugs, 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 for consumer goods and services was 0.2% higher in August, after being 0.2% higher in July, 0.1% lower in June, 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, and 0.4% higher last September, after rising by 0.5% in August 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 314.540 in July to 314.796 in August, which left it statistically 2.5307% higher than the index reading of 307.026 from July of last year, which is reported as a 2.5% year over year increase, less than the 2.9% year over year increase that was reported for July, with that widely cited year over year change reflecting the effect of last August’s 0.5% increase dropping out of the comparison…with energy prices down and just a small change in food prices, seasonally adjusted core prices, which exclude food and energy, were up by 0.3% for the month, as the unadjusted core price index rose from 319.214 to 320.017, which left the core index 3.1970% ahead of its year ago reading of 310.103, which is reported as a 3.2% year over year increase, same as the 3.2% year over year core price increase that was reported in July, but 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 was 0.8% lower in August, after being unchanged in July, after falling 2.0% in both May and June, 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% last October, but after rising by 1.2% last September, and rising by 4.4% last August, and is now 4.0% lower than in August of a year ago….the price index for energy commodities was 0.6% lower in August, while the price index for energy services was 0.9% lower, after the energy services index had fallen by 0.1% in June….the energy commodities index was down 0.6% on a 0.6% decrease in the price index for gasoline and a 1.9% decrease in the price of fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 0.5% lower …within energy services, the price index for utility gas service was 1.9% lower in August after being 0.7% higher in June, and is now 0.1% higher than it was a year ago, while the electricity price index was 0.7% lower in August, after being 0.1% lower in June….energy commodities are now averaging 10.1% lower than their year ago levels, with gasoline prices averaging 10.3% lower than they were a year ago, while the energy services price index is still up 3.1% from last August, as electricity prices are still averaging 3.9% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.1% higher in August, after being 0.2% higher in July, 0.2% higher in June, 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 last September, and 0.2% higher in August of last year, as the price index for food purchased for use at home was 0.1% higher in August, after being 0.1% higher in June and July, unchanged in May, 0.2% lower in April, and unchanged in February and March, while the price index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets rose 0.3%, average prices at full service restaurants rose 0.2%, and prices of other food away from home averaged 0.7% higher…

In the food at home categories, the price index for cereals and bakery products was 0.1% lower, as bread prices fell 0.1%, the price index for fresh biscuits, rolls, muffins fell 1.6%, the price index for cookies fell 0.4%, and the price index for frozen and refrigerated bakery products, pies, tarts, and turnovers was 0.5% lower.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.8% higher, as the price index for poultry rose 1.0% and egg prices were 4.8% higher….at the same time, the seasonally adjusted price index for dairy products was 0.5% higher, as average milk prices rose 0.6%, and the price index for ice cream and related products was 2.1% higher….on the other hand, the fruits and vegetables price index was 0.2% lower, as the price index for fresh vegetables fell 1.1%, and the price index for processed fruits and vegetables, not including those canned, averaged 0.4% lower….at the same time, the beverages price index was 0.7% lower, as the price index for carbonated drinks fell 1.4% and the price index for coffee was 2.2% lower….lastly, the price index for the ‘other foods at home’ category was 0.3% lower, as the price index for margarine fell 2.4%, the price index for salad dressing fell 1.3%, the price index for frozen and freeze dried prepared foods fell 0.8%, and the price index for soups was 1.2% lower…

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

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust August’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.3% lower, as the price index for bedroom furniture fell 1.6%, the price index for living room, kitchen, and dining room furniture fell 1.1%, the price index for “other” household equipment and furnishings fell 0.8%, and the index for outdoor equipment and supplies was 0.5% lower….on the other hand, the apparel price index was 0.3% higher on a 1.5% increase in the price index for women’s apparel, a 4.3% increase in the price index for boys' apparel, a 1.8% increase in the price index for girls' apparel, a 0.7% increase in the price index for men’s footwear, and a 2.1% increase in the price index for infants' and toddlers' apparel…. however, the price index for transportation commodities other than fuel was was 0.3% lower, even as average prices for new cars were 0.1% higher, as the price index for used cars and trucks fell 1.0% and the price index for tires was 0.3% lower….at the same time, the price index for medical care commodities was 0.2% lower as nonprescription drug prices fell 0.6%, prescription drug prices fell 0.2%, and the price index for medical equipment and supplies was 0.5% lower…in addition, the recreational commodities index was also 0.2% lower, as the price index for TVs fell 2.8%, the price index for photographic equipment fell 0.9%, the price index for newspapers and magazines fell 1.9%, and the price index for music instruments and accessories was 0.4% lower… meanwhile, the education and communication commodities index was 0.4% lower, on a 0.4% decrease in the price index for computers, peripherals, and smart home assistants, and a 0.7% decrease in the price index for telephone hardware, calculators, and other consumer information items including smartphones.…lastly, a separate price index just for alcoholic beverages was unchanged, while the price index for ‘other goods’ was 0.2% higher on a 1.4% increase in the price index for cigarettes and a 0.4% increase in the price index for cosmetics, perfume, bath, nail preparations and implements…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.5%, homeowner’s equivalent rent rose 0.5%, and prices for lodging away from home at hotels and motels were 1.8% higher, while the price index for household insurance rose 0.8% and the price index for water, sewers and trash collection was 0.2% higher…. on the other hand,  the price index for medical care services was 0.1% lower, as the price index for dental services fell 0.6%, the price index for eyeglasses and eye care fell 0.5%, and the price index for care of invalids and elderly at home was 0.2% lower….however, the transportation services price index was 0.9% higher, as the price index for motor vehicle repairs rose 1.4%, the price index for motor vehicle insurance rose 0.6%, and the price index for airline fares was 3.9% higher…meanwhile, the recreation services price index was unchanged, as the price index for subscription, and rental of videos and video games fell 0.7% and the price index for admission to sporting events fell 1.3%, while the price index for pet services rose 0.6%, and the price index for fees for lessons or instructions was 0.7% higher…. at the same time, the price index for education and communication services was 0.2% higher, as the price index for postage and delivery services rose 0.5%, the price index for technical and business school tuition and fees rose 0.5%, and the price index for day care and preschool was 1.3% higher…lastly, the index for other personal services rose 0.2%, as the price index for haircuts and other personal care services rose 0.6%, the price index for laundry and dry cleaning services rose 0.6%, and the price index for checking account and other bank services was 2.9% higher..

Producer Prices Rose 0.2% in August on Higher Margins for Trade and Core Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.2% in August, as the price index for finished wholesale goods was unchanged, while the price index for final demand for services was 0.4% higher.…that August PPI increase followed a revised unchanged index in July, when the price index for finished wholesale goods rose 0.6%, while the price index for final demand for services was 0.3% lower, a revised 0.2% increase in June, when the price index for finished wholesale goods fell 0.3% while the price index for final demand for services was 0.4% higher, an unchanged May index, when an 0.8% decrease in the price index for finished wholesale goods was offset by a 0.4% increase in the price index for final demand for services, and followed a 0.5% PPI 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, an unrevised and unchanged PPI index in March, when the price index for wholesale goods fell 0.2% and the price index for final demand for services was 0.1% higher, an unrevised 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 also 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; 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 1.7% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.3% higher for the month, and is now 3.3% higher than it was a year ago…

As noted, the producer price index for final demand for goods was unchanged in August, after being 0.6% higher in July, 0.3% lower in June, 0.8% lower in May, 0.4% 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 last September, and 1.7% higher last August, and is now virtually unchanged from a year ago….the final demand goods price index was unchanged in August because the price index for wholesale energy goods was 0.9% lower, after it had risen by 1.8% in July, fallen by 2.0% in June and by 4.6% in May, after rising 1.8% in April, falling 1.2% in March, rising 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, while the price index for wholesale foods was 0.6% higher, after being up 0.7% in July, up 0.1% in June, down 0.1% in May, down 0.8% in April, up 0.3% in March and up 1.0% in February, while the index for final demand for core wholesale goods (excluding food and energy) was 0.2% higher, after being 0.2% higher in July, unchanged in June, and rising by 0.2% in May and by 0.3% April, after being unchanged in March and 0.3% higher in both January and February…

Wholesale energy prices were down 0.9% in July despite a 0.6% increase in wholesale prices for gasoline, on a 10.5% decrease in wholesale prices for jet fuel, a 2.9% decrease in wholesale prices for home heating oil and distillates, a 6.6% decrease in wholesale prices for liquefied petroleum gas, and a 1.1% decrease in wholesale prices for residential natural gas, while the final demand for food price index was 0.1% higher on a 55.3% increase in the wholesale price index for eggs for fresh use, a 2.5% increase in the wholesale price index for fresh and dry vegetables, a 1.6% increase in the wholesale price index for processed young chickens, and a 2.5% increase in the wholesale price index for roast coffee…. among core wholesale goods, the wholesale price index for household appliances rose 1.6%, the wholesale price index for iron and steel scrap rose 2.1%, and the wholesale price index for cigarettes was 2.3% higher…

Meanwhile, the price index for final demand for services was 0.4% higher in August, after being 0.3% lower in July, 0.4% higher in June, 0.3% higher in May, 0.6% higher in April, 0.1% higher 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 last September, and 0.2% higher last August, and is still 2.6% higher than a year ago…the price index for final demand for trade services rose 0.6% while the price index for final demand for transportation and warehousing services slipped 0.1%, while the core index for final demand for services less trade, transportation, and warehousing services was 0.3% higher….

Among trade services, seasonally adjusted margins for fuels and lubricants retailers rose 14.1%, margins for furniture retailers rose 5.3%, margins for machinery and vehicle wholesalers rose 4.9%, and margins for computer hardware, software, and supplies retailers rose 9.7%, but margins for TV, video, and photographic equipment and supplies retailers were 7.7% lower….among transportation and warehousing services, average margins for air transportation of freight were 0.3% lower, and margins for airline passenger services were 0.8% lower….among the components of the core final demand for services index, the price index for guestroom rentals rose 4.8%, the price index for consumer loans rose 5.9%, the price index for traveler accommodation services rose 4.4%, and the price index for application software publishing increased 1.7%…

This report also showed the price index for intermediate processed goods was 0.1% lower in August, after being 0.6% higher in July, 0.1% lower in June, 1.3% lower in May, 0.5% higher in April, 0.6% 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% last September and by 2.0% last August….the price index for intermediate energy goods fell 0.6% in August as refinery prices for jet fuel fell 10.5%, the price index for industrial natural gas fell 6.7%, the price index for commercial natural gas fell 4.3%, and the producer price index for natural gas to electric utilities fell 3.6%… at the same time, the price index for intermediate processed foods and feeds fell 0.3%, as the producer price index for meats fell 4.2%, as the producer price index for fats and oils fell 2.8%, and the producer price index for prepared animal feeds was 0.8% lower….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.1% higher, as the producer price index for adhesives and sealants rose 1.5%, the producer price index for nitrogenates rose 1.8%, the producer price index for softwood lumber rose 2.9%, and the producer price index for fluid power equipment also rose 2.9%….average prices for intermediate processed goods are now 1.1% lower than in August 2023, the 17th year over year decrease in 18 months, 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 fell 3.7% in August, after rising 2.1% in July, 0.8% in June, rising 0.1% 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 by 2.9% last September, and by 2.1% last August ….that was as the August price index for crude energy goods fell 7.5%, as crude oil prices fell 4.2% and unprocessed natural gas prices fell 29.8%, while coal prices were 1.3% higher…the price index for unprocessed foodstuffs and feedstuffs was 1.7% lower, on an 27% decrease in producer prices for hay and hayseeds, a 16.9% decrease in producer prices for slaughter turkeys, a 6.6% decrease in producer prices for slaughter hogs, and a 5.0% decrease in producer prices for wheat….at the same time, the index for core raw materials other than food and energy materials was 1.1% lower, on an 8.6% decrease in the price index for aluminum base scrap, an 8.3% decrease in the price index for copper base scrap, a 3.4% decrease in the price index for recyclable paper, and a 1.9% decrease in the price index for nonferrous metal ores….this raw materials price index is now 4.3% lower than a year ago, the first year over year decrease in three months, which had followed sixteen consecutive negative annual prints, which in turn had 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 0.1% lower in August, the first decrease in a year, after being 0.3% higher in July, 0.2% higher in June, 0.3% higher in May, 0.2% 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 last November….the price index for intermediate trade services was 0.3% lower, as margins for intermediate machinery and equipment parts and supplies wholesalers fell 0.8%, margins for metals, minerals, and ores wholesalers fell 0.6%, margins for food wholesalers fell 0.5%, and margins for intermediate automotive parts and tires retailers fell 1.6%….at the same time, the index for transportation and warehousing services for intermediate demand was unchanged, as the intermediate price index for the U.S. Postal Service rose 6.1% and the index for services related to water transportation rose 0.8%, while the index for air mail and package delivery services excluding those by USPS fell 0.9%, and the intermediate price index for warehousing, storage, and related service was 1.3% lower…. meanwhile, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.1% lower, as the intermediate price index for television advertising time sales fell 4.5%, the intermediate price index for passenger car rental fell 3.7%, the intermediate price index for advertising space sales in periodicals and newspapers fell 2.0% and the intermediate price index for cable and satellite subscriber services was 1.1% lower…over the 12 months ended in July, the year over year price index for services for intermediate demand is still 3.4% higher than it was a year ago, the forty-seventh consecutive annual increase in this index, after it had briefly turned negative year over year at the onset of the pandemic, from April to August of 2020, even as ​t​he current annual increase is still much lower than the record 9.5% year over year increase indicated for July 2021…

Wholesale Sales Rose 1.1% in July; Wholesale Inventories Were Up 0.2%

The July report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $671.0 billion in July, up 1.1 percent (±0.4 percent) from the revised June level, and was up 2.9 percent (±0.7 percent) from wholesale sales of July 2023… the June preliminary sales estimate was revised to $663.7 billion from the $661.5 billion in sales reported last month, and hence the May to June change was revised to a 0.3% decrease from the 0.6% decrease reported last month.…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 additional goods on the shelf or in intermediate storage represent goods that were produced but not sold, and this July report estimated that wholesale inventories were valued at a seasonally adjusted $903.5 billion at month end, up 0.2 percent (+/-0.2%)* from the revised June level. and 0.4 percent (±0.7%)* higher than in June a year ago, with the June preliminary estimate revised from the $903.0 billion reported a month ago to $901.5 billion, which revised the June change from up 0.2% to statistically unchanged from May….

The producer price index for July indicated that prices for finished goods were on average 0.6% higher, that prices for intermediate processed goods were on average 0.7% higher, while prices for unprocessed goods were 3.6% higher….hence, once adjusting for higher prices, July’s real wholesale inventories were at least 0.4% less than those at the end of the 2nd quarter, and likely even less than that…since the key source data and assumptions (xls) for the second estimate of 2nd quarter GDP indicated a real increase of $27.9 billion in wholesale inventories on a NIPA basis, July’s decrease in real inventories w​ould first subtract that, then subtract the July decrease, from the growth of 3rd quarter GDP, because a reversal of inventory growth would mean some 3rd quarter sales were from inventories, instead of indicating an increase of domestic production…

 

 

(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…)