November’s consumer and producer prices; October’s wholesale sales and inventories

Major reports released this week included the November Consumer Price Index, the November Producer Price Index, and the November Import-Export Price Index, all from the Bureau of Labor Statistics, and the October report on Wholesale Trade, Sales and Inventories from the Census Bureau….in a report from late last week we missed, the Fed released the Consumer Credit Report for October, which indicated that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $19.2 billion, or at a 4.5% annual rate, as non-revolving credit outstanding expanded at a 1.1% rate to $3,739.1 billion, while revolving credit outstanding grew at a 13.9% rate to $1,373.5 billion….

The major private report released this week was the Mortgage Monitor for December, which now comes from the Mortgage Technology unit of ICE, and which indicated that 3.45% of all mortgages were delinquent in October, down from 3.48% in September, but up from the 3.26% delinquency rate of October of 2023, and that 0.35% of all mortgages were in the foreclosure process, up slightly but statistically unchanged from the 0.35% that were in foreclosure in September, but down from the 0.41% of mortgages that were in foreclosure a year ago….the full Mortgage Monitor for December (pdf), which covers October mortgage and housing data, is a comprehensive 23 pages of tables and graphics, with explanatory text…

Consumer Prices Rose 0.3% in November on Higher Prices for Food, Shelter, Vehicles and Fuel

The consumer price index was 0.3% higher in November, as higher prices for food, rent, gas utility service, gasoline, new and used vehicles, vehicle repairs, lodging, recreation services, and medical care services were partly offset by lower prices for electricity, internet services and electronic information providers, prescription drugs, recreational goods, 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 0.3% higher in November, after being 0.2% higher in October, 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, and 0.2% higher in November 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 fell from 315.664 in October to 315.493 in November, which still left it statistically 2.74938% higher than the index reading of 307.051 from November of last year, which is reported as a 2.7% year over year increase, more than the 2.6% year over year increase that was reported for October, with that widely cited year over year increase reflecting the effect of last November’s 0.2% increase dropping out of the comparison and being replaced by the current month's +0.3%…with energy prices and food prices both moderately higher, seasonally adjusted core prices, which exclude both food and energy, were also up by 0.3% for the month, as the unadjusted core price index rose from 321.758 to 321.947, which left the core index 3.3186% ahead of its year ago reading of 311.606, 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 October, 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 0.2% higher in November, after being unchanged in October, 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% last December, and by 1.6% last November, and is still 3.2% lower than in November of a year ago…the price index for energy commodities was 0.5% higher in November, while the price index for energy services was 0.1% lower, after the energy services price index had risen by 1.0% in October….the energy commodities index was up 0.5% on a 0.6% increase in the price index for gasoline and a 0.6% increase in the price index for fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 0.6% lower …within energy services, the price index for utility gas service was 1.0% higher in November, after being 0.3% higher in October, and is now 1.8% higher than it was a year ago, while the electricity price index was 0.4% lower in November, after being 1.2% higher in October….energy commodities are still averaging 8.4% lower than their year ago levels, with gasoline prices averaging 8.1% lower than they were a year ago, while the energy services price index is still up 2.8% from last November, as electricity prices are now averaging 3.1% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.4% higher in November, after being 0.2% higher in October, 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, and 0.2% higher in November of last year, as the price index for food purchased for use at home was 0.5% higher in November, after being 0.1% higher in October, 0.4% higher in September, and 0.1% higher in June, July and August, 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% and average prices at full service restaurants rose 0.3%, while the price index for food at elementary and secondary schools fell 0.9%, and prices of other food away from home averaged 0.1% lower…

In the food at home categories, the price index for cereals and bakery products was 1.1% lower, as bread prices fell 1.3%, the price index for rice, pasta, and cornmeal fell 1.2%, price index for fresh biscuits, rolls, muffins fell 2.8%, and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers was 2.6% lower.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 1.7% higher, as the price index for beef and veal rose 3.1%, the price index for pork rose 1.2%, the price index for shelf stable fish and seafood rose 1.4%, and egg prices were 8.2% higher….meanwhile, the seasonally adjusted price index for dairy products was 0.1% lower, even as average milk prices rose 0.7%, as the price index for cheese and related products was 1.2% lower….at the same time, the fruits and vegetables price index was 0.6% higher, as the price index for fresh vegetables rose 1.0%, and the price index for canned fruits averaged 1.4% higher…in addition, the beverages price index was 1.5% higher, as the price index for carbonated drinks rose 1.7%, the price index for noncarbonated juices and drinks rose 1.5% and the price index for coffee was 2.1% higher….lastly, the price index for the ‘other foods at home’ category was 0.1% higher, as the price index for butter and margarine rose 1.3%, the price index for snacks rose 1.2%, the price index for frozen and freeze dried prepared foods rose 0.8%, and the price index for sauces and gravies was 1.9% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.3% in November, after rising by 0.3% in August, September and October, 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, and by 0.3% last November, the composite price index of all goods less food and energy goods was 0.3% higher in November, while the more heavily weighted composite index for all services less energy services was also 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 November’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies 0.7% higher, as the price index for living room, kitchen, and dining room furniture rose 0.7%, the price index for other furniture rose 1.1%, the price index for tools, hardware and supplies rose 1.9%, and the index for window coverings was 2.9% higher…at the same time, the apparel price index was 0.2% higher on a 1.0% increase in the price index for men’s apparel, a 3.0% increase in the price index for women’s outerwear, a 1.4% increase in the price index for women’s underwear, nightwear, swimwear, and accessories, and a 0.8% increase in the price index for jewelry and watches….in addition, the price index for transportation commodities other than fuel was was 0.9% higher, as average prices for new vehicles rose 0.6%, the price index for used cars and trucks rose 2.0% and the price index for motor oil, coolant, and fluids was 0.2% higher…on the other hand, the price index for medical care commodities was 0.1% lower as the price index for prescription drugs fell 0.4%, the price index for nonprescription drugs rose 0.%, and the price index for medical equipment and supplies was 0.4% lower…at the same time, the recreational commodities index 0.5% lower, as the price index for TVs fell 0.8%, the price index for audio equipment fell 1.2%, the price index for sports equipment fell 0.7%, the price index for photographic equipment fell 1.3%, the price index for recreational books fell 4.0%, the price index for newspapers and magazines fell 5.6%, and the price index for toys was 1.1% lower…in addition, the education and communication commodities index was 1.1% lower, on a 1.7% decrease in the price index for computers, peripherals, and smart home assistants, and a 2.3% decrease in the price index for telephone hardware, calculators, and other consumer information items, led by a 3.7% decrease in the price index for smartphones.…lastly, a separate price index just for alcoholic beverages was 0.1% higher, while the price index for ‘other goods’ was 0.2% higher on a 1.2% increase in the price index for cigarettes and a 0.4% increase in the price index for hair, dental, shaving, and miscellaneous personal care products…

Within core services, the price index for shelter was 0.3% higher, as rents rose 0.3%, homeowner’s equivalent rent rose 0.2%, and prices for lodging away from home at hotels and motels were 3.7% higher, while the price index for household insurance was unchanged while the price index for water, sewers and trash collection was 0.6% higher… at the same time, the price index for medical care services was 0.4% higher, as the price index for dental services rose 0.5%, the price index for eyeglasses and eye care rose 0.3%, and the price index for outpatient hospital services was 0.3% higher….meanwhile, the transportation services price index was unchanged, as the price index for motor vehicle body work rose 0.8%, the price index for motor vehicle repairs rose 0.5%, and the price index for intercity transportation other than air rose 1.5%, while the price index for car and truck rental fell 3.0%, the price index parking and other fees fell 2.0%, the price index parking and other fees fell 2.0%, and the price index for intracity transportation was 1.3% lower….meanwhile, the recreation services price index was 0.7% higher, as the price index for pet services rose 1.3%, the price index for fees for lessons or instructions rose 0.6%, and the price index for club membership for shopping clubs, fraternal, or other organizations, or participant sports fees was 2.7% higher…. in addition, the price index for education and communication services was 0.2% higher, as the price index for day care and preschool rose 0.6%, and the price index for elementary and high school tuition and fees was 0.4% higher…lastly, the index for other personal services rose 0.4%, as the price index for haircuts and other personal care services rose 0.6%, the price index for financial services rose 0.5%, and the price index for apparel services other than laundry and dry cleaning was 0.7% higher..

Producer Prices Rose 0.4% in November After Prices for August, September, & October were Revised Higher

The seasonally adjusted Producer Price Index (PPI) for final demand was 0.4% higher in November, as the final demand price index for wholesale goods rose 0.7% and the price index for final demand for services was 0.2% higher…that November PPI increase followed an upwardly revised 0.3% PPI increase in October, when the final demand price index for wholesale goods rose 0.1% and the price index for final demand for services was 0.3% higher, an upwardly revised revised 0.2% increase in September, when the price index for finished wholesale goods was 0.3% lower, but the price index for final demand for services was 0.4% higher, an upwardly revised 0.3% 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, an unrevised and 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 0.4% increase in June, when the price index for finished wholesale goods fell 0.3% but 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; and an 0.1% PPI increase last 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….on an unadjusted basis, producer prices are now 3.0% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was just 0.1% higher for the month, but is still 3.5% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.7% higher in November, after being 0.1% higher in October, 0.3% lower in September, unchanged 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, and 0.2% lower last November, and 1.2% lower last October, and is now 1.1% higher than a year ago….the final demand goods price index was 0.7% higher in November as the price index for wholesale energy goods was 0.2% higher, after it had risen by 0.1% in October, after falling by 3.0% in September and by 1.0% in August, after rising by 1.7% in July, and after falling by 2.0% in June and by 4.6% in May, and as the price index for wholesale foods was 0.2% lower, after it had been unchanged in October, up 0.8% in September, up 0.3% in August, up 0.6% in July, up 0.1% in June, down 0.1% in May, and down 0.8% in April, while the index for final demand for core wholesale goods (excluding food and energy) was 0.2% higher for the fifth month in a row…

Wholesale energy prices were up 0.2% in November on a 0.4% increase in wholesale prices for gasoline, an 0.9% increase in wholesale prices for residential natural gas, and a 6.1% increase in wholesale prices for home heating oil and distillates, while the final demand for food price index was 3.1% higher on a 55.6% increase in the wholesale price index for eggs for fresh use, a 21.8% increase in the wholesale price index for fresh fruits and melons, a 33.2% increase in the wholesale price index for fresh and dry vegetables, a 5.0% increase in the wholesale price index for grains, and a 7.4% increase in the wholesale price index for finfish and shellfish…. among core wholesale goods, the wholesale price index for men’s and boys’ apparel rose 0.9%, the wholesale price index for printing trades machinery and equipment rose 0.8%, and the wholesale price index for cigarettes was 2.2% higher…

Meanwhile, the price index for final demand for services was 0.2% higher in November, after being 0.3% higher in October, 0.4% higher in September, 0.5% 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 last December, and 0.2% higher last November, and is now 3.9% higher than a year ago…the price index for final demand for trade services rose 0.8%, but the price index for final demand for transportation and warehousing services fell 0.5%, while the core index for final demand for services other than trade, transportation, and warehousing services was 0.1% higher….

Among trade services, seasonally adjusted margins for TV, video, and photographic equipment and supplies retailers rose 16.3%, margins for fuels and lubricants retailers rose 4.2%, margins for RVs, trailers, and campers retailers rose 4.1%, and margins for machinery and vehicle wholesalers rose 1.8%, but margins for computer hardware, software, and supplies retailers were 4.7% lower….among transportation and warehousing services, average margins for truck transportation of freight were 0.2% lower, and margins for airline passenger services were 2.1% lower….among the components of the core final demand for services index, the price index for cable and satellite subscriber services rose 0.9%, the price index for bundled wired telecommunications access services rose 1.2%, the price index for credit intermediation, including trust services (partial) rose 3.8%, and the price index for securities brokerage, dealing, investment advice, and related services was 1.3% higher…

This report also showed the price index for intermediate processed goods was unchanged in November, after being 0.6% higher in October, 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 last December, and 0.7% lower last November….the price index for intermediate energy goods fell 1.2% in November even as refinery prices for gasoline rose 0.4%, as refinery prices for diesel fuel fell 2.1%, producer prices for industrial electric power fell 1.8%, the producer price index for natural gas to electric utilities fell 2.1%, and the producer price index for liquefied petroleum gas was 3.4% lower….on the other hand, the price index for intermediate processed foods and feeds rose 0.9%, as the producer price index for processed poultry rose 5.9%, the producer price index for meats rose 1.8%, and the producer price index for fats and oils was 3.7% higher….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.1% higher, as the producer price index for asphalt rose 7.4%, the producer price index for copper and brass mill shapes rose 2.2%, the producer price index for motors, generators, and motor generator sets rose 1.9%, the producer price index for building paper and board rose 10.9%, and the producer price index for softwood lumber rose 4.3%….average prices for intermediate processed goods were still 0.3% lower than in November 2023, the 20th year over year decrease in 21 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 0.6% in November, after rising 2.4% in October, falling 1.6% in September, falling 3.3% in August, rising 2.0% 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, after falling by 4.1% last December, by 2.1% last November and by 1.6% last October….that was even as the November price index for crude energy goods fell 2.0%, as crude oil prices fell 3.3% unprocessed natural gas prices rose 2.6%, and coal prices were 0.1% lower…meanwhile. the price index for unprocessed foodstuffs and feedstuffs was 2.9% higher, on a 7.4% increase in producer prices for corn, a 21.9% increase in producer prices for slaughter hogs, and a 1.3% increase in producer prices for hay and hayseeds….at the same time, the index for core raw materials other than food and energy materials was 0.4% higher, on a 2.6% increase in the price index for aluminum base scrap, a 0.6% increase in the price index for construction sand, gravel, and crushed stone, and a 3.1% increase in the price index for hides and skins….this raw materials price index is still 1.9% lower than a year ago, the 20th year over year decrease in the past 22 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 0.3% lower in November, the largest decrease since June 2022, coming after being 0.2% higher in October, 0.2% higher in September, 0.1% higher 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 0.3% higher, as margins for food wholesalers rose 1.6%, margins for building materials, paint, and hardware wholesalers rose 0.6%, and margins for intermediate hardware, building material, and supplies retailers rose 1.9%….at the same time, the price index for transportation and warehousing services for intermediate demand was 0.1% higher, as the intermediate price index for courier and messenger services, except air mail, rose 1.2%, the intermediate price index for water transportation of freight rose 0.9%, and the intermediate index for air mail and package delivery services, excluding by USPS rose 1.2%….on the other hand, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.6% lower, as the intermediate price index for television advertising time sales fell 6.9%, the intermediate price index for cable and satellite subscriber services fell 6.5%, the intermediate price index for portfolio management fell 3.6% and the intermediate price index for internet advertising sales was 1.4% higher…over the 12 months ended in November, 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…

Wholesale Sales Fell 0.1% in October, Wholesale Inventories Rose 0.2%

The October report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at “$675.1 billion, down 0.1 percent (±0.5 percent)* from the revised September level, but was up 0.9 percent (±0.5 percent) from the revised October 2023 level“.. September’s sales were revised from the $674.8 billion reported last month to $675.9 billion and hence “The August 2024 to September 2024 percent change was revised from the preliminary estimate of up 0.3 percent (±0.4 percent)* to up 0.5 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 produced or finally sold..

On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods left in a warehouse represent goods that were produced but not sold, and this October report estimated that wholesale inventories were valued at a seasonally adjusted ”$905.0 billion at the end of October, up 0.2 percent (±0.4 percent)* from the revised September level. Total inventories were up 0.9 percent (±0.5 percent) from the revised October 2023 level. The September 2024 to October 2024 percent change was unrevised from the advance estimate of up 0.2 percent (±0.4 percent)*” ….that last revision is in reference to the sketchy Advance Report on Wholesale and Retail Inventories, which was released before the release of 3rd quarter GDP revisions…September inventories are now shown to be at $903.3 billion, revised down from the wholesale inventory figure of $903.7 billion reported a month ago…

To estimate the effect of October wholesale inventories on 4th quarter GDP, we must first adjust them for changes in price with appropriate components of the producer price index…although details are not broken out, we’ve previously estimated that more than 2/3rds of wholesale inventories are finished goods, with notable exceptions such as crude oil, chemicals, and farm product inventories…meanwhile, the producer price index for October indicated that prices for finished goods were on average 0.1% higher, that prices for intermediate processed goods were 0.5% higher, and that prices for unprocessed goods were 4.1% higher…those price increase suggest that the increase in the nominal value of wholesale inventories was largely price related, and real wholesale inventories probably fell a bit….since real wholesale inventories in the 3rd quarter were up by $6.3 billion in 2017 dollars, accounting for about a tenth of the quarter's increase, any 4th quarter real wholesale inventory decrease would reverse that 3rd quarter increase and also subtract the 4th quarter decrease from the growth rate of 4th 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…)