October’s consumer and producer price indexes, retail sales, and industrial production, September’s business inventories

Major reports released ​last week included the September Consumer Price Index,the September Producer Price Index, and the September Import-Export Price Index, all from the Bureau of Labor Statistics, the Retail Sales Report for October and the associated Business Sales and Inventories Report for September, both from the Census Bureau, and the October report on Industrial Production and Capacity Utilization from the Fed​....T​h​e week also saw the release of the first regional Fed manufacturing survey for November: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, a suburban NYC county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose from -11.9 in October to +31.2 in November, its highest reading in nearly three years, meaning that a significant majority of Second District manufacturers are now reporting improving conditions, after the had reported deteriorating business conditions last month..

Consumer Prices Rose 0.2% in October on Higher Shelter, Used Cars, & Utilities

The consumer price index was 0.2% higher in October, as higher prices for rent, electric and gas utility service, used vehicles, vehicle repairs, airline fares, lodging, furniture, recreation services​, and medical care services were partly offset by lower prices for gasoline, clothing, car insurance, nonprescription drugs, telephone and internet services, 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 October, after being 0.2% higher in September. 0.2% higher in August, 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 last November, and 0.1% higher in October 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 315.301 in September to 315.664 in October, which left it statistically 2.5979% higher than the index reading of 307.671 from October of last year, which is reported as a 2.6% year over year increase, more than the 2.4% year over year increase that was reported for August, with that widely cited year over year ​increase reflecting the effect of last October’s sub 0.1% increase dropping out of the comparison…with energy prices mixed and a modest increase in food prices, seasonally adjusted core prices, which exclude both food and energy, were up by 0.3% for the month, as the unadjusted core price index rose from 321.109 to 321.758, which left the core index 3.3329% ahead of its year ago reading of 311.380, which is reported as a 3.3% year over year increase, statistically unchanged from the 3.3% year over year core price increase that was reported for September, 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 unchanged in October, after being 1.9% lower in September, 0.8% lower in August, and 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% last November and by 2.1% last October, and is now 4.9% lower than in October of a year ago….the price index for energy commodities was 1.0% lower in October, while the price index for energy services was 1.0% higher, after the energy services price index had risen by 0.7% in September….the energy commodities index was down 1.0% on a 0.9% decrease in the price index for gasoline and a 4.6% decrease in the price index for fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 0.4% lower …within energy services, the price index for utility gas service was ​0​.3% higher in October, after being 0.7% higher in September, and is now 2.0% higher than it was a year ago, while the electricity price index was ​1​.2% higher in October, after being 0.7% higher in September….energy commodities are now averaging 15.3% lower than their year ago levels, with gasoline prices averaging 12.2% lower than they were a year ago, while the energy services price index is now up 4.0% from last October, as electricity prices are now averaging 4.5% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.2% higher in October, after being 0.4% higher in September, 0.1% higher in August, 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, and 0.3% higher in October of last year, as the price index for food purchased for use at home was 0.1% higher in October, after being 0.4% higher in September, and 0.1% higher in June, July and August, after being 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 0.2% higher, as average prices at fast food outlets rose 0.2%, average prices at full service restaurants rose 0.2%, the price index for food at elementary and secondary schools rose 1.2%, 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 1.0% higher, as bread prices rose 1.9%, the price index for rice, pasta, and cornmeal rose 1.7%, price index for fresh biscuits, rolls, muffins rose 3.2%, and the price index for fresh sweetrolls, coffeecakes, doughnuts was 1.4% higher.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 1.2% lower, as the price index for beef and veal fell 1.1%, the price index for pork fell 0.5%, the price index for processed fish and seafood fell 0.6%, and egg prices were 6.4% lower….meanwhile, the seasonally adjusted price index for dairy products was 1.0% higher, as average milk prices rose 1.4% and the price index for cheese and related products was 1.6% higher….at the same time, the fruits and vegetables price index was 0.4% higher, as the price index for fresh fruits rose 1.4%, and the price index for frozen fruits and vegetables averaged 1.0% higher….likewise, the beverages price index was also 0.4% higher, as the price index for noncarbonated juices and drinks rose 0.7% and the price index for coffee was 0.4% higher….lastly, the price index for the ‘other foods at home’ category was 0.1% higher, as the price index for sugar and sweets rose 0.8%, the price index for soups rose 0.8%, the price index for frozen and freeze dried prepared foods rose 0.9%, and the price index for prepared salads was 0.7% higher…

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

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust October’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was unchanged, as the price index for living room, kitchen, and dining room furniture rose 1.5% and the price index for for outdoor equipment and supplies rose 0.6%, but the price index for appliances fell 0.6%, and the index for window coverings was 3.5% lower…at the same time, the apparel price index was 1.5% lower on a 2.8% decrease in the price index for women’s apparel, a 2.3% decrease in the price index for boys’ apparel, a 3.8% decrease in the price index for girls’ apparel, and a 2.4% decrease in the price index for jewelry and watches….on the other hand, the price index for transportation commodities other than fuel was was 0.8% higher, as average prices for new vehicles were unchanged, the price index for used cars and trucks rose 2.7% and the price index for vehicle parts and equipment other than tires was 1.2% higher…on the other hand, the price index for medical care commodities was 0.2% lower as the price index for nonprescription drug prices fell 1.2%, the price index for prescription drugs rose 0.2, and the price index for medical equipment and supplies was unchanged…meanwhile, the recreational commodities index unchanged, as the price index for TVs rose 1.4%, the price index for audio equipment rose 2.6%, and the price index for newspapers and magazines rose 9.0%, ​while the price index for video equipment other than TVs fell 2.0%, the price index for recreational books fell 2.8%, and the price index for toys, games, hobbies and playground equipment was 1.1% lower…at the same time, the education and communication commodities index was 1.1% lower, on a 1.6% decrease in the price index for computers, peripherals, and smart home assistants, and a 1.0% decrease in the price index for telephone hardware, calculators, and other consumer information items, led by a 2.7% decrease in the price index for smartphones.…lastly, a separate price index just for alcoholic beverages was 0.4% higher, while the price index for ‘other goods’ was 0.4% higher on a 0.6% increase in the price index for tobacco and smoking products 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 0.3%, homeowner’s equivalent rent rose 0.4%, prices for lodging away from home at hotels and motels were 0.4% higher​, while the price index for household insurance rose 0.7% and the price index for water, sewers and trash collection was 0.5% higher… at the same time, the price index for medical care services was 0.4% higher, as the price index for physicians’ services rose 0.5%, the price index for eyeglasses and eye care rose 1.3%, and the price index for outpatient hospital services was 0.7% higher….in addition, the transportation services price index was 0.4% higher, as the price index for motor vehicle maintenance and servicing rose 1.0%, the price index for motor vehicle repairs rose 1.3%, the price index for intracity transportation rose 0.8%, and the price index for airline fares was 3.2% higher…meanwhile, the recreation services price index was 0.7% higher, as the price index for admission to movies, theaters, and concerts rose 0.9%, the price index for pet services including veterinary rose 0.9%, and the price index for fees for club membership for shopping clubs, fraternal, or other organizations, or participant sports fees was 2.1% higher…. on the other hand the price index for education and communication services was 0.1% lower, as the price index for residential telephone services fell 2.2%, and the price index for internet services and electronic information providers was 1.0% lower…lastly, the index for other personal services rose 0.3%, as the price index for laundry and dry cleaning services rose 0.3%, the price index for financial services rose 0.4%, and the price index for funeral expenses was 0.7% higher..

Retail Sales Rose 0.4% in October after September Sales Were Revised 0.2% Higher

Seasonally adjusted retail sales increased 0.4% in October after retail sales for August and September were revised higher…the Advance Retail Sales Report for October (pdf) from the Census Bureau estimated that seasonally adjusted retail and food services sales totaled $718.9 billion during the month, which was 0.4 percent (±0.5%)* higher than September’s revised sales of $716.0 billion, and 2.8 percent (±0.5 percent) above the seasonally adjusted sales in October of last year… September’s adjusted sales were revised from the $714.4 billion reported last month to $716.0 billion, while August’s sales were revised from $711.3 billion to $710.04 billion, and hence the combination of those two revisions left the August to September percentage change at +0.8% (±0.2 percent), revised from the +0.4%​ increase previously reported….estimated unadjusted sales,extrapolated from surveys of a small sampling of retailers, indicated sales actually rose 6.8%, from $683,242 million in September to $730,037 million in October, while they were up 4.6% from the $697,816 million of sales in October a year ago….the net $0.34 billion upward revision to August and September’s retail sales would indicate an upward revision of around $1.4 billion at an annual rate in 3rd quarter sales, and should increase the previous estimate of the personal consumption expenditures contribution to 3rd quarter GDP by about 0.2 percentage points, assuming the distribution of price adjustments in the revised figures is similar to that of those originally published…

Included below is the table of the monthly and yearly percentage changes in retail sales by business type taken from the October Census Marts pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each kind of business from the September revised figure to this month’s October “advance” report in the first sub-column, and then the year over year percentage sales change since last October in the 2nd column…the second double column pair below gives us the revision of the September advance estimates (now called “preliminary”) as of this report, with the new August to September percentage change under “Aug 2024 r” (revised) and the September 2023 to September 2024 percentage change as revised in the last column shown…for your reference, the table of last month’s advance estimate of September sales, before this month’s revisions, is here…

To compute October’s initial estimate of real personal consumption of goods data for national accounts from this October retail sales report, the BEA will use the corresponding price changes for each type of sales from the October consumer price index, which we just reviewed…to estimate what they will find, we​'ll start by pulling out the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that October retail sales excluding the 0.1% increase in sales at gas stations were also up 0.4%%….then, subtracting the figures representing the 0.1% increase in grocery & beverage sales and the 0.7% increase in food services sales from the figures behind that change, we find that core retail sales were also up by 0.4% for the month….since the CPI report showed that the composite price index for all goods less food and energy goods was unchanged in October, we can thus approximate that real retail sales, excluding food and energy sales, were on average about 0.4% higher for the month…however, the actual adjustment 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 up by 1.6%, the price index for transportation commodities other than fuel was 0.8% higher, which would imply that real unit sales at auto & parts dealers would only be around 0.8% higher…​similarly, while nominal sales at furniture stores were down 1.3%, the price index for furniture and bedding increased by 1.0%, which would suggest that real sales at furniture stores fell by almost 2.3%..​.on the other hand, while sales at clothing stores were down 0.2%, the apparel price index decreased by 1.5%, which would suggest that real sales at clothing stores were up by around 1.3%…

In addition to figuring those core retail sales, to make a complete estimate of real October PCE for goods, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do….the CPI report showed that the food price index was 0.2% higher in October, with the price index for food purchased for use at home 0.1% higher, while prices for food bought to eat away from home were 0.1% higher… hence, with nominal sales at food and beverage stores 0.1% higher, that was due to higher prices, and real sales of food and beverages would thus be unchanged…likewise, the 0.7% increase in nominal sales at bars and restaurants, once adjusted for 0.2% higher prices, suggests that real sales at bars and restaurants rose 0.5%…meanwhile, while nominal sales at gas stations were up 0.1%, there was a 0.9% decrease in the retail price of gasoline, which would suggest real sales of gasoline were up on the order of 1.0%, with the caveat that gasoline stations do sell more than gasoline, products which should not be adjusted with gasoline prices, so the increase in real sales at gas stations was likely somewhat less than our imputed estimate…by reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can estimate that the income and outlays report for October will show that real personal consumption of goods rose by almost 0.5% for the month, after rising by a revised 0.​9% in September, and falling by a revised 0.3% in August, but after rising by 1.0% in July, being uncharged in June, and rising by 0.9% in May and June, but after falling by 0.4% in April….at the same time, the 0.5% increase in real sales at bars and restaurants will have a small positive impact on October’s real personal consumption of services…

Industrial Production Fell 0.3% in October after September’s Output was Revised Lower

The Fed’s G17 release on Industrial production and Capacity Utilization reported that industrial production fell by 0.3% in October after falling by 0.5% in September, which was revised down from the 0.3% decrease previously reported….the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, fell to 102.3 in October from 102.5 in September, after September’s index was revised down from 102.6 to 102.5, August’s index was revised from 102.9 to 103.0, index was revised from 102.6 to 102.5, June index was was revised from 103.2 to 103.3, and May’s index was revised from 103.1 to 103.0…with the October decrease and the September downwards revision, the industrial production was 0.3% lower than a year ago, down from the 0.6% year over year increase reported a month ago..

The manufacturing index, which was adversely impacted by the strike at Boeing, by Hurricane Milton and the lingering effects of Hurricane Helene, decreased by 0.5%, from 99.0 in September to 98.5 in October, and was also 0.3% below its level of a year ago, after September’s manufacturing index was revised down from 99.1 to 99.0, August’s manufacturing index was revised down from 99.5 to 99.4, July’s manufacturing index was revised down from 99.0 to 98.8, June’s manufacturing index was revised down from 99.5 to 99.4, and May’s manufacturing index was unrevised at 99.5….meanwhile, the mining index, which includes oil and gas well drilling, rose by 0.3%, from 117.8 in September to 118.2 in October, after the September index was revised down from 118.2 to 117.8, which leaves the mining index 1.5% lower than it was a year ago….at the same time, the utility index, which often fluctuates due to above or below normal temperatures, rose by 0.7% on warm weather in October, from 106.7 to 107.4, after the September utility index was revised up from 106.0 to 106.7, thus still leaving the utility index 1.5% higher than it was a year earlier..

Producer Prices Rose 0.2% in October on Higher Core Goods and Services

The seasonally adjusted Producer Price Index (PPI) for final demand was 0.2% higher in October, as the final demand price index for wholesale goods rose 0.1% while the price index for final demand for services was 0.3% higher…that October PPI reading followed a​n upwardly revised 0.1% increase in September, when the price index for finished wholesale goods was 0.2% lower, while the price index for final demand for services was 0.2% higher, a revised 0.2% increase in August, when prices for finished wholesale goods averaged 0.1% lower, while the price index for final demand for services was 0.4% higher, a revised unchanged PPI index in July, when the price index for finished wholesale goods rose 0.6%, while the price index for final demand for services was 0.2% lower, a revised 0.3% increase in June, when the price index for finished wholesale goods fell 0.3% while the price index for final demand for services was 0.7% higher, and followed an unrevised and 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, 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 last 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 2.4% 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 3.5% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.1% higher in October, after being 0.2% lower in September, 0.1% lower in August, 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, and 1.2% lower last October, and is now 0.2% higher than a year ago….the final demand goods price index was 0.1% higher in October even though the price index for wholesale energy goods was 0.3% lower, after it had fallen by 2.8% in September and by 1.1% in August, after rising by 1.7% in July, after falling 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% last October, and even though the price index for wholesale foods was 0.2% lower, after ​i​t had been up 1.0% in September, up 0.2% in August, up 0.6% 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, because the index for final demand for core wholesale goods (excluding food and energy) was 0.2% higher, after being 0.1% higher in September, 0.2% higher in August, 0.2% higher in July, and 0.1% higher in June, after 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 0.3% in October on a 0.9% decrease in wholesale prices for gasoline, an 18.1% decrease in wholesale prices for liquefied petroleum gas, and a 5.5% decrease in wholesale prices for home heating oil and distillates, while the final demand for food price index was 0.2% lower on a 3.3% decrease in the wholesale price index for fresh fruits and melons, a 22.0% decrease in the wholesale price index for eggs for fresh use, an 8.5% decrease in the wholesale price index for processed young chickens, and a 1.8% decrease in the wholesale price index for grains…. among core wholesale goods, the wholesale price index for men's and boys' apparel rose 1.2%, the wholesale price index for tools, dies, jigs, fixtures, and industrial molds rose 1.6%, and the wholesale price index for carbon steel scrap was 8.4% higher…

Meanwhile, the price index for final demand for services was 0.3% higher in October, after being 0.2% higher in September, 0.4% higher in August, 0.2% lower in July, 0.7% higher in June, 0.4% 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, and 0.1% higher last October, and is now 3.5% higher than a year ago…the price index for final demand for trade services rose 0.1%, the price index for final demand for transportation and warehousing services rose 0.5%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.3% higher….

Among trade services, seasonally adjusted margins for computer hardware, software, and supplies retailers rose 14.9%, margins for major household appliances retailers rose 3.9%, margins for TV, video, and photographic equipment and supplies retailers rose 6.1%, and margins for cleaning supplies and paper product retailers rose 3.8%, but margins for fuels and lubricants retailers were 6.0% lower….among transportation and warehousing services, average margins for air transportation of freight were 1.3% higher, and margins for airline passenger services were 3.2% higher….among the components of the core final demand for services index, the price index for cable and satellite subscriber services rose 6.5%, the price index for portfolio management rose 3.6%, the price index for arrangement of vehicle rentals and lodging rose 3.8%, and the price index for legal services increased 1.4%…

This report also showed the price index for intermediate processed goods was 0.5% higher in October, after being 0.8% lower in September, 0.2% lower in August, 0.6% higher in July, 0.1% lower in June, 1.4% 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 last October….the price index for intermediate energy goods rose 1.2% in September even as refinery prices for gasoline fell 0.9%, as refinery prices for diesel fuel rose 7.5%, producer prices for industrial electric power rose 1.9%, and the producer price index for commercial electric power rose 1.5%… on the other hand, the price index for intermediate processed foods and feeds fell 0.1%, as the producer price index for processed poultry fell 6.6%, and the producer price index for dairy products was 0.8% lower….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.4% higher, as the producer price index for asphalt rose 7.4%, the producer price index for primary basic organic chemicals rose 5.3% the producer price index for plastic resins and materials rose 3.5%, the producer price index for copper and brass mill shapes rose 3.1%, and the producer price index for softwood lumber rose 2.6%….average prices for intermediate processed goods were still 1.2% lower than in October 2023, the 19th year over year decrease in 20 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 rose 4.1% in October, after falling 1.8% in September, falling 3.4% in August, rising 2.1% in July, rising 0.6% in June, after being unchanged 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% last October….that was as the September price index for crude energy goods rose 9.9%, as crude oil prices rose 7.3% unprocessed natural gas prices rose 29.3%, and coal prices were 0.2% higher…​meanwhile. the price index for unprocessed foodstuffs and feedstuffs was 0.4% higher, on a 5.0% increase in producer prices for oilseeds, a 3.4% increase in producer prices for slaughter chickens, a 2.9% increase in producer prices for slaughter cattle, and a 2.7% increase in producer prices for wheat….at the same time, the index for core raw materials other than food and energy materials was 2.1% higher, on an 8.0% increase in the price index for iron and steel scrap, a 5.7% increase in the price index for aluminum base scrap, a 4.4% increase in the price index for copper base scrap, and a 3.8% increase in the price index for nonferrous metal ores….this raw materials price index is still 2.9% lower than a year ago, the 19th year over year decrease in the past 21 months, 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% higher in October, after being 0.1% higher in September, unchanged in August, 0.3% higher in July, 0.4% 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 0.4% lower, as margins for chemicals and allied products wholesalers fell 3,2%, margins for metals, minerals, and ores wholesalers fell 0.5%, and margins for intermediate hardware, building material, and supplies retailers fell 2.6%….on the other hand,​  the index for transportation and warehousing services for intermediate demand was 0.3% higher, as the intermediate price index for transportation of passengers (partial) rose 3.2%, the intermediate price index for water transportation of freight rose 1.2%, and the intermediate index for air transportation of freight rose 1.3%….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.1% higher, as the intermediate price index for television advertising time sales rose 6.9%, the intermediate price index for cable and satellite subscriber services rose 6.5%, the intermediate price index for portfolio management rose 3.6% and the intermediate price index for internet advertising sales was 1.4% higher…over the 12 months ended in October, price index for services for intermediate demand was 3.5% higher than it was a year ago, the forty-ninth 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 the current annual increase is still much lower than the record 9.5% year over year increase that’s indicated for July 2021…

Business Sales Up 0.3% in September, Business Inventories Up 0.1%

After the release of the October retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for September (pdf), which incorporates the revised September retail data from that October report and the earlier published September wholesale and factory data to yield a complete picture of businesses’ impact on the economy for that month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $1,881.2 billion in September, up 0.3 percent (±0.2 percent) from August’s revised sales, and up 0.5 percent (±0.3 percent) from September’s sales of a year earlier…note that total August sales were concurrently revised from the originally reported $1,876.8 billion to $1,876.3 billion, but are still down 0.2% from July, as originally reported….

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,587.1 billion at the end of September, up 0.1 percent (±0.1 percent)* from August, and 2.2 percent (±0.3 percent) higher than in September a year earlier…the value of end of August inventories w​a​s revised from the $2,581.8 billion reported last month to $2,583.7 billion, but are still up 0.3% from July….seasonally adjusted inventories of manufacturers were estimated to be valued at $858,065 million, 0.2% lower than in August, inventories of retailers were valued at $825,377 million, 0.9% more than in August, while inventories of wholesalers were estimated to be valued at $903,703 million at the end of September, 0.2% lower than in August…

Last week we estimated that 3rd quarter GDP was overestimated by around 0.06 percentage points based on what the wholesale inventory report showed, but that the factory inventories report indicated that 3rd quarter GDP was underestimated by around 0.02 percentage points….in the advance report on 3rd quarter GDP of two 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 $824,316 million at the end of September, up 0.8% from a revised $817,905 million valuation in August….that’s $1.539 billion less than the $825,377 million and $818,383 million for those two months that this report shows, which would mean that the quarterly change in 3rd quarter retail inventories was underestimated at roughly a $6.2 billion annual rate, meaning 3rd quarter GDP would be revised about 0.07 percentage points higher based on the revisions to retail inventories…combined with our previous estimates on factory and wholesale inventories, then, this report would suggest that the growth rate of 3rd quarter GDP should be revised upwards by around 0.03 or 0.04 percentage points when the 2nd estimate is released on the 27th of November…

 

 

(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…)