January’s consumer and producer prices, retail sales, and industrial production; December’s business inventories

Major reports released this week included the January Consumer Price Index, the January Producer Price Index and the January Import-Export Price Index, all from the Bureau of Labor Statistics, the Retail Sales Report for January and the Business Sales and Inventories Report for December from the Census Bureau, and the January report on Industrial Production and Capacity Utilization from the Fed…

Consumer Prices Rose 0.5% in January on Higher Prices for Fuel, Food, and Rent

The consumer price index was 0.5% higher in January, as higher prices for groceries, rent, home, health and vehicle insurance, used vehicles, fuel, gas utility service, airline fares, lodging, hospital services, prescription drugs, internet and phone service, and recreational services were slightly offset by lower prices for clothing, appliances, TVs, and 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 0.5% higher in January, after being 0.4% higher in December, 0.3% higher in November, 0.2% higher in October, 0.2% higher in September. 0.2% higher in August, 0.2% higher in July, unchanged in June, unchanged in May, 0.3% higher in April, 0.3% higher in March, 0.4% higher last February, and 0.3% higher in January of last year, with all those monthly percentage figures now revised from a month ago based on a new seasonal adjustment computation, which did not affect the unadjusted price index data or the overall annual change….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, rose from 315.605 in December to 317.671 in January, which left it statistically 3.0005% higher than the index reading of 308.417 from January of last year, which is reported as a 3.0% year over year increase, more than the 2.9% year over year increase that was reported for December, with that widely cited year over year increase reflecting the effect of last January’s +0.3% increase dropping out of the comparison and being replaced by the current month’s +0.5%….with food prices and energy prices both higher, seasonally adjusted core prices, which exclude both food and energy, were up by 0.4% for the month, as the unadjusted core price index rose from 322.007 to 323.842, which left the core index 3.2584% ahead of its year ago reading of 313.623, which is reported as a 3.3% year over year increase, more than the 3.2% year over year core price increase that was reported for December, 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 1.1% higher in January, after being 2.4% higher in December, 0.1% higher in November, 0.2% lower in October, 1.0% lower in September, 1.0% lower in August, and 0.4% lower in July, and is now 1.0% higher than in January of a year ago…the price index for energy commodities was 1.9% higher in January, while the price index for energy services was 0.3% higher, after the energy services price index had risen by 0.8% in December….the energy commodities index was up 1.9% on a 1.8% increase in the price index for gasoline and a 6.2% increase in the price index for fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 1.0% higher …within energy services, the price index for utility gas service was 1.8% higher in January, after being 2.8% higher in December, and is now 4.9% higher than it was a year ago, while the electricity price index was unchanged in January, after being 0.2% higher in December…. energy commodities are still averaging 0.5% below their year ago levels, with gasoline prices averaging 0.2% lower than they were a year ago, while the energy services price index is still up 2.5% from last January, as electricity prices are still averaging 1.9% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.4% higher in January, after being 0.3% higher in December, 0.3% higher in November, 0.2% higher in October, 0.3% higher in September, 0.2% higher in August, and 0.1% higher in July, as the price index for food purchased for use at home was 0.5% higher in January, after being 0.3% higher in December and 0.4% higher in November, while the price index for food bought to eat away from home was 0.2% higher, as average prices at fast food outlets rose 0.3% and average prices at full service restaurants rose 0.1%, while the price index for food at employee sites and schools fell 0.1%, while prices of other food away from home averaged 0.1% higher…

In the food at home categories, the price index for cereals and bakery products was 0.4% lower, as bread prices fell 0.7%, the price index for breakfast cereal fell 3.3%, the price index for rice, pasta, and cornmeal fell 2.2%, the price index for fresh cakes and cupcakes fell 2.6%, and the price index for fresh sweetrolls, coffeecakes, doughnuts was 0.5% lower.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 1.9% higher, as the price index for beef and veal rose 0.7%, the price index for pork rose 0.7%, the price index for fresh fish and seafood rose 1.6%, and egg prices were 15.2% higher….at the same time, the seasonally adjusted price index for dairy products was 0.3% higher, even as average milk prices fell 0.9%, as the price index for ice cream and related products rose 2.2% and the price index for cheese and related products was 0.2% higher….however, the fruits and vegetables price index was 0.5% lower, as the price index for fresh vegetables fell 1.7% and the price index for frozen vegetables fell 1.3%.…but the beverages price index was 0.9% higher, as the price index for carbonated drinks rose 1.4% and the price index for noncarbonated juices and drinks rose 0.8%, while the price index for coffee was 0.1% lower….lastly, the price index for the ‘other foods at home’ category was 0.3% higher, as the price index for sugar and sweets rose 1.3%, the price index for margarine rose 3.6%, the price index for snacks rose 1.4%, and the price index for olives, pickles, and relishes was 2.7% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.4% in January, after rising by 0.2% in December, by 0.3% in August, September, October and November, and by 0.2% in July, the composite price index of all goods less food and energy goods was 0.3% higher in December, while the more heavily weighted composite index for all services less energy services was 0.5% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust December’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 dishes and flatware fell 2.3%, the price index for bedroom furniture fell 0.7%, the price index for major appliances fell 1.1%, and the index for other appliances was 0.5% lower….at the same time, the apparel price index was 1.4% lower on a 2.3% decrease in the price index for men’s shirts and sweaters, a 2.5% decrease in the price index for men’s pants and shorts, a 4.2% decrease in the price index for women’s dresses, a 2.3% decrease in the price index for women’s underwear, nightwear, swimwear, and accessories, a 2.2% decrease in the price index for boys' and girls' footwear, and a 3.9% 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 cars rose 0.2%, the price index for used cars and trucks rose 2.2%, the price index for tires rose 0.7%, and the price index for vehicle parts and equipment other than tires was 1.3% higher…in addition, the price index for medical care commodities was 1.2% higher in December as the price index for prescription drugs rose 2.5%, the price index for nonprescription drugs fell 0.2%, and the price index for medical equipment and supplies was 0.6% lower…at the same time, the recreational commodities index 0.3% higher, even as the price index for TVs fell 2.1%, as the price index for audio equipment rose 1.5%, the price index for sports vehicles including bicycles rose 0.5%, the price index for photographic equipment rose 2.4%, the price index for recreational books rose 3.0%, and the price index for toys, games, hobbies and playground equipment was 1.7% higher…in addition, the education and communication commodities index was 0.1% higher, on a 0.6% increase in the price index for college textbooks. a 0.9% increase in the price index for computers, peripherals, and smart home assistants, and a 1.0% increase in the price index for computer software and accessories.…lastly, a separate price index just for alcoholic beverages was 0.3% higher, while the price index for ‘other goods’ was 0.2% higher. on a 0.6% increase in the price index for cosmetics, perfume, bath, nail preparations and implements and 0.6% increase in the price index for cigarettes…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.4%, and homeowner’s equivalent rent rose 0.3%, and prices for lodging away from home at hotels and motels were 1.7% higher, while the price index for household insurance was 1.1% higher, and the price index for water, sewers and trash collection services was 0.7% higher, while the price index for moving, storage, and freight expense was 0.9% lower… meanwhile, the price index for medical care services was unchanged, as the price index for health insurance rose 0.7% and price index for hospital services was 0.9% higher, while the price index for dentists fell 0.6%, and the price index for nursing homes and adult day services was 0.8% lower….however, the transportation services price index was 1.8% higher, as the price index for parking and other fees rose 6.4%, the price index for motor vehicle insurance rose 2.0%, the price index for car and truck rental rose 1.7%, the price index for airline fares rose 1.2%, and the price index for intracity transportation was 0.9% higher….at the same time, the recreation services price index was 1.4% higher, as the price index for purchase, subscription, and rental of videos rose 2.8%, the price index for admission toto sporting events rose 4.3%, the price index for admission to movies, theaters, and concerts rose 0.7%. the price index for fees for lessons or instructions rose 1.1%, and the price index for photographers and photo processing service was 1.0% higher….in addition, the price index for education and communication services was 0.3% higher, as the price index for day care and preschool rose 0.8%, the price index for internet services and electronic information providers rose 1.1%, and the price index for residential telephone services was 1.9% higher…lastly, the index for other personal services was 0.5% lower, largely because the price index for financial services was 4.7% lower..

Retail Sales Fell 0.9% in January, Led by Lower Vehicle and Online Sales

The value of seasonally adjusted retail sales decreased 0.9% in January after offsetting revisions to retail sales for November and December…the Advance Retail Sales Report for January (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $723.9 billion during the month, which was down 0.9 percent (±0.5%) from December’s revised sales of $730.1 billion, but 4.2 percent (±0.7 percent)* above the adjusted sales in January of last year….December’s seasonally adjusted sales were revised about 0.15% higher, from $729.2 billion to $730.3 billion, while November’s sales were revised more than 0.1% lower, from $725.9 billion to $725.1 billion; as a result, the November to December change was was revised from up 0.4 percent (±0.5 percent)* to up 0.7 percent (±0.3 percent)….

the revisions to November and December sales indicate that the 4th quarter’s nominal personal consumption expenditures would be revised higher by about $0.3 billion, or at an annual rate of around $1.2 billion, which would increase 4th quarter GDP by around 0.02 percentage points….estimated unadjusted retail sales, extrapolated from surveys of a small sampling of retailers, indicated sales actually fell 16.5%, from $799,769 million in December to $668,016 million in January, while they were still 4.8% higher than the $637,342 million of sales in January a year ago, so we can see how the seasonal adjustment to post holiday sales boosted the headline sales result to a modest decline, in contrast to the big sales drop that we would normally expect to see in January….

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

To compute January’s real personal consumption of goods data for national accounts from this January retail sales report, the BEA will use the corresponding price changes from the January consumer price index, which we reviewed above…to estimate what they will find, we’ll first separate out the volatile sales of gasoline from the other totals…from the third line on the above table, we can see that January retail sales excluding the 0.9% increase in sales at gas station were down by 1.0%…then, subtracting the figures representing the 0.1% decrease in grocery & beverage store sales and the 0.8% increase in food services sales from that total, we find that core retail sales were down by nearly 1.6% for the month…since the CPI report showed that the composite price index for all goods less food and energy goods was 0.3% higher in January, we can thus approximate that real retail sales excluding food and energy will show a decrease of roughly 1.9%….however, the actual adjustment in national accounts data 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 furniture stores were down 1.7%, the price index for the price index for furniture and bedding was 0.2% higher, which would suggest that real sales at furniture stores fell by 1.9%…on the other hand, while nominal sales at clothing stores were 1.2% lower in January, the apparel price index was 1.4% lower, which means that real sales at clothing stores were probably about 0.2% higher…

In addition to figuring those core retail sales, we should also adjust food and energy retail sales for their price changes separately…the January CPI report showed that the food price index was 0.4% higher, with the index for food purchased for use at home 0.5% higher, while prices for food bought to eat away from home averaged 0.2% higher… thus, while nominal sales at food and beverage stores were 0.1% lower, real sales of food and beverages would actually be 0.6% lower in light of the 0.5% higher prices…meanwhile, the 0.9% increase in nominal sales at bars and restaurants, once adjusted for 0.2% higher prices, suggests that real sales at bars and restaurants rose about 0.7% during the month….in addition, while sales at gas stations were up 0.9% in dollars, there was also a 1.8% increase in the consumer price of gasoline during the month, which would suggest that real sales of gasoline were down nearly 0.9%, with the caveat that gasoline stations do sell more than gasoline, and we haven’t accounted for those other sales…by averaging real sales that we have thus estimated together with an appropriate weighting for each type, we can then estimate that the income and outlays report for January will show that real personal consumption of goods fell by almost 1.4% in January, after rising by a revised 0.9% in December, and by a revised 1.0% in November, after being unchanged in October, rising by 1.2% in September, and falling by 0.5% in August…at the same time, the 0.7% increase in real sales at bars and restaurants would add less than 5 basis points to January’s real personal consumption of services….

Industrial Production Rose 0.5% in January on Colder Weather

The Fed’s G17 release on Industrial production and Capacity Utilization reported that seasonally adjusted industrial production was 0.5% higher in January after being 1.0% higher in December, but after falling by 0.1% percent in November, and is now 2.0% higher than a year ago…the industrial production index, with the benchmark now set for average 2017 production to be equal to 100.0, rose to 103.6 in January from 103.0 in December, after the December index was revised from the 103.2 reported last month to 103.0, the November index was revised from 102.3 to 102.9, and the October index remained unrevised at 102.1…

The manufacturing index, which accounts for around 77% of the total IP index, fell 0.1% in January, from 99.1 in December to 99.0 in January, due a 5.2 percent decrease in the production index for motor vehicles and parts.…that decrease came after the December manufacturing index was revised from 99.3 to 99.1, the November manufacturing index was revised from 98,7 to 98.6, and the October manufacturing index was revised from 98.3 to 98.4, leaving the manufacturing index 1.0% higher than a year ago…meanwhile, the mining index, which includes oil and gas well drilling, fell 1.2%, from 120.6 in December to 119.2 in January, after the December index was revised down from 120.9, which still left the mining index 3.4% above where it was a year earlier…lastly, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, jumped 7.2% in January, from 107.2 in our cold December to 114.9 in our even colder January, after the December utility index was revised from 107.5 to 107.2 and the November utility index was revised from 105.3 to 104.1….even though last year’s heating requirements for January were also above normal and left the utility index higher at that time, this year’s utility index is now 6.9% higher than it was a year ago…

This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose to 77.8% in January from 77.5% in December, which was revised down from the 77.6% that was reported for December last month …capacity utilization of NAICS durable goods production facilities fell from a revised 74.1% in December to 74.0% in January, while capacity utilization for non-durables producers fell from a revised 78.8% to 78.5%…capacity utilization for the mining sector fell to 89.5% in January from 90.6% in December, which was originally reported as 90.8%, while utilities were operating at 75.7% of capacity during January, up from their 70.8% of capacity during December, which was previously reported at 71.1%…for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories….

Producer Prices Rose 0.4% in January on Higher Food, Energy and Transportation Indices

The seasonally adjusted Producer Price Index (PPI) for final demand was 0.4% higher in January, as the final demand price index for wholesale goods rose 0.6% while the price index for final demand for services was 0.3% higher… that January PPI increase followed an upwardly revised 0.5% increase in December, when the final demand price index for wholesale goods rose 0.5% and the price index for final demand for services was also 0.5% higher, a downwardly revised 0.2% increase in November, when final demand prices for wholesale goods rose 0.6% and the price index for final demand for services was 0.1% higher, a revised 0.2% 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 0.2% higher, a revised 0.3% increase in September, when the price index for finished wholesale goods was 0.2% lower, but the price index for final demand for services was 0.5% higher, and an unrevised 0.3% increase in August, when prices for finished wholesale goods averaged unchanged, while the price index for final demand for services was 0.5% higher….on an unadjusted basis, producer prices are now 3.5% 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 3.4% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.6% higher in January, after being 0.5% higher in December, 0.6% higher in November, 0.1% higher in October, 0.2% lower in September, unchanged in August, 0.4% higher in July, 0.2% lower in June, and 0.6% lower in May, and is now 2.3% higher than a year ago….the final demand goods price index was 0.6% higher in January as the price index for wholesale energy goods was 1.7% higher, after it had been up 2.2% in December, up 0.3% in November, and up 0.3% in October, while the price index for wholesale foods was 1.1% higher, after it had been up 0.4% in December, up 2.1% in November, and down 0.6% in October, while the index for final demand for core wholesale goods (excluding food and energy) was 0.1% higher January after being 0.1% higher in December and 0.2% higher in November….

Wholesale energy prices were up 1.7% in January on a 14.2% increase in wholesale prices for liquefied petroleum gas, a 10.4% increase in wholesale prices for No. 2 diesel fuel, and a 10.2% increase in wholesale prices for home heating oil and distillates, while the final demand for food price index was 1.1% higher on a 44.0% increase in the wholesale price index for eggs for fresh use, a 5.7% increase in the wholesale price index for beef and veal, a 3.5% increase in the wholesale price index for grains, a 3.8% increase in the wholesale price index for oilseeds, and a 1.8% increase in the wholesale price index for finfish and shellfish…. among core wholesale goods, the wholesale price index for metal cutting machine tools rose 2.0%, the wholesale price index for industrial chemicals rose 1.8%, the wholesale price index for communication and related equipment rose 1.2% and the wholesale price index for internal combustion engines was 1.2% higher…

Meanwhile, the price index for final demand for services was 0.3% higher in January, after being 0.5% higher in December, 0.1% higher in November, 0.2% higher in October, 0.5% higher in September, 0.5% higher in August, but 0.2% lower in July, and is now 4.1% higher than a year ago…the price index for final demand for trade services ruse 0.1%, the price index for final demand for transportation and warehousing services rose 0.6%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.4% higher….

Among trade services, seasonally adjusted margins for automobile retailers rose 8.2%, margins for sporting goods, including boat retailers rose 3.4%, and margins for apparel, jewelry, footwear, and accessories retailers were 2.7% higher, while margins for TV, video, and photographic equipment and supplies retailers fell 7.2% and margins for fuels and lubricants retailers 9.8% lower….among transportation and warehousing services, average margins for rail transportation of freight and mail were 1.4% higher, margins for truck transportation of freight were 1.3% higher, and margins for air transportation of freight were 0.6% higher….among the components of the core final demand for services index, the price index for traveler accommodation services rose 5.7%, the price index for consumer loans (partial) rose 3.0%, the price index bundled wired telecommunications access services rose 2.6%, and the price index for application software publishing was 2.2% higher…

This report also showed the price index for intermediate processed goods was 1.0% higher in January, after being 0.2% higher in December, 0.1% higher in November, 0.3% higher in October, but 0.8% lower in September, 0.1% lower in August, and 0.5% higher in July….the price index for intermediate energy goods rose 3.5% in December as refinery prices for No. 2 diesel fuel rose 10.4%, refinery prices for jet fuel rose 10.4%, the producer price index for industrial natural gas rose 5.8%, producer prices commercial natural gas rose 2.8%, producer prices for natural gas to electric utilities rose 5.3%, and the producer price index for liquefied petroleum gas was 14.2% higher….at the same time, the price index for intermediate processed foods and feeds rose 0.8%, as the producer price index for meats rose 2.8%, the producer price index for processed fruits and vegetables rose 0.3%, and the producer price index for dairy products was 0.4% higher….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 6.8%, the producer price index for industrial gases rose 7.0%, and the producer price index for paving mixtures and blocks rose 6.5%, the producer price index for nitrogenates rose 2.5%, and the producer price index for basic organic chemicals was 2.0% higher….average prices for intermediate processed goods were 1.0% higher than in January 2024, just the 3rd year over year increase in 23 months, and are thus still 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 5.5% in January, after rising 3.6% in December, after being unchanged in November, after rising 2.3% in October, after falling 1.9% in September, falling 3.2% in August, and after rising 2.0% in July and 0.5% in June….that was as the January price index for crude energy goods rose 13.0%, as crude oil prices rose 14.8% and unprocessed natural gas prices rose 13.7%, while coal prices were 0.2% lower…at the same time, the price index for unprocessed foodstuffs and feedstuffs was 0.9% higher, on a 13.6% increase in producer prices for slaughter turkeys, a 4.9% increase in producer prices for slaughter cattle, a 4.4% increase in producer prices for corn, and a 3.8% increase in producer prices for oilseeds….in addition, the index for core raw materials other than food and energy materials was 1.4% higher, on a 2.3% increase in the price index for recyclable paper, a 0.5% increase index for copper base scrap, and a 5.7% increase in the price index for nonferrous metal ores….this raw materials price index is now 8.7% higher than a year ago, the 4th year over year increase in the past 24 months, 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% lower in January, after being 0.5% higher in December, 0.2% lower in November, 0.1% higher in October, 0.2% higher in September, 0.1% higher in August, 0.3% higher in July, and 0.5% higher in June.…the price index for intermediate trade services was 0.2% lower, as margins for chemicals and allied products wholesalers fell 0.4%, margins for paper and plastics products wholesalers fell 0.6%, and margins for intermediate hardware, building material, and supplies retailers fell 2.0%….on the other hand, the price index for transportation and warehousing services for intermediate demand was 0.4% higher, as the intermediate price index for courier and messenger services, except air mail, rose 1.5%, the intermediate price index for services related to water transportation rose 2.3%, the intermediate index for warehousing, storage, and related services rose 2.6%, and the intermediate price index for truck transportation of freight was 1.3% higher….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.3% lower , as the intermediate price index for business loans (partial) fell 7.7%, the intermediate price index for securities brokerage, dealing, investment advice, and related service fell 2.2%, and the intermediate price index for radio advertising time sales was 17.1% lower…over the 12 months ended in January, price index for services for intermediate demand was 2.1% higher than it was a year ago, the fifty-first 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, while 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 Rose 0.8% in December; Business Inventories Fell 0.2%

After the release of the January retail sales report, the Census Bureau released the composite Manufacturing and Trade, Inventories and Sales report for December (pdf), which incorporates the revised December retail data from that January report and the earlier published December wholesale and factory data to give us a relatively complete picture of the business contribution to 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 $1,908.8 billion in December, up 0.8 percent (±0.2 percent) from November’s revised sales, and up 3.1 percent (±0.4 percent) from December’s sales of a year earlier…note that total November sales were concurrently revised up from the originally reported 1,893.1 billion to $1,893.24 billion, now up 0.6% from October, rather than up 0.5%.. manufacturer’s sales were 0.6% higher in December; retail trade sales, which exclude restaurant & bar sales from the revised December retail sales reported earlier, rose 0.8%, while wholesale sales were 1.0% higher…

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,556.0 billion at the end of December, down 0.2 percent (±0.1 percent) from November, but 0.4 percent (±0.5 percent)* higher than in December a year earlier…at the same time, the value of end of November inventories was revised from the $2,588.2 billion reported last month to $2,588.76 billion, but is still up 0.1% from October….seasonally adjusted inventories of manufacturers were estimated to be valued at $863,187 million at the end of December, 0.4% more than at the end of November, while inventories of retailers were valued at $822,655 million, down 0.4% from November, and inventories of wholesalers were estimated to be valued at $898,472 million at the end of December 0.5% lower than in November…

Last week we estimated that the growth rate of 4th quarter GDP was underestimated by around 0.04 or 0.05 percentage points based on what the wholesale inventory report showed, but that GDP was overestimated by around by about 0.01 percentage point based on what the factory inventories report showed….in the advance report on 4th quarter GDP of three 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 $823,283 billion at the end of December, down 0.3% from a revised $825,463 billion in November….that’s $164 million less than the $822,655 and $826,255 billion for those two months that this report shows, which would mean that the quarterly change in 4th quarter retail inventories were underestimated at almost a $0.7 billion annual rate, or by an amount that might add about 0.01 percentage points to GDP, give or take, depending on how the inflation adjustments shake out…combined with our previous estimates on the GDP impact of factory and wholesale inventory revisions, then, this report would suggest that the growth rate of 4th quarter GDP should be revised upwards by around 0.04 or 0.05 percentage points when the 2nd estimate is released two weeks from now….

 

 

(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…)