March consumer and producer prices, February’s wholesale inventories

Major monthly reports released this past week included the March Consumer Price Index and the March Producer Price Index, both from the Bureau of Labor Statistics, and the February report on Wholesale Trade, Sales and Inventories from the Census Bureau….in addition, the Fed released the Consumer Credit Report for February, which indicated that overall consumer credit, a measure of non-real estate debt, fell by a seasonally adjusted $0.8 billion, or at a 0.2% annual rate, as revolving credit grew at a 0.1% annual rate to $1,323.6 billion, while non-revolving credit outstanding shrunk at a 0.3% rate to $3,673.4 billion…

Consumer Prices Fell 0.1% in March on Lower Prices for Gasoline, Airfare, Drugs, and Used Vehicles

The consumer price index ended 0.1% lower in March, as lower prices for gasoline, airline fares, lodging away from home, prescription drugs, used vehicles, recreational goods, and smartphones were only partly offset by higher prices for groceries, utilities, clothing, hospital services, invalid and elderly care, tax prep & accounting fees, vehicle repairs, eating out, and admissions to sporting events….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 0.1% lower in March, after being 0.2% higher in February, 0.5% higher in January, 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 last​ May, 0.3% higher last​ April, and 0.3% higher in March of last year….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, actually rose to 319.799 in March from 319.082 in February, which left it statistically 2.3907% higher than the index reading of 312.332 from February of last year, which is reported as a 2.4% year over year increase, less than the 2.8% year over year increase that was reported for February, with that widely cited year over year change reflecting the effect of last March’s +0.3% increase dropping out of the comparison and being replaced by the current month’s -0.1%….with lower energy prices responsible the overall CPI decrease, seasonally adjusted core prices, which exclude both food and energy, were up by 0.1% for the month, as the unadjusted core price index rose from 325.252 to 325.933, which left the core index 2.78945% ahead of its year ago reading of 317.088, which is reported as a 2.8% year over year increase, less than the 3.1% year over year core price increase that was reported for February, and well below the 6.6% annual increase reported for September 2022, which had been the largest annual increase in core prices in forty years..

The volatile seasonally adjusted energy price index was 2.4% lower in March, after being 0.2% higher in February, 1.1% higher in January, 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 March of a year ago…the price index for energy commodities was 6.1% lower in March, while the price index for energy services was 1.6% higher, after the energy services price index had risen by 1.4% in February….the energy commodities index was down 6.1% on a 6.3% decrease in the price index for gasoline and a 4.2% decrease in the price index for fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 1.5% lower…within energy services, the price index for utility gas service was 3.6% higher in March, after being 2.5% higher in February, and is now 9.4% higher than it was a year ago, while the electricity price index was 0.9% higher in March, after being 1.0% higher in February…. energy commodities are now averaging 9.5% below their year ago levels, with gasoline prices averaging 9.8% lower than they were a year ago, while the energy services price index is now up 4.2% from last March, as electricity prices are averaging 2.8% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.4% higher in March, after being 0.2% higher in February, 0.4% higher in January, 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 March, after being unchanged in February, 0.5% higher in January, 0.3% higher in December and 0.4% higher in November, while the price index for food bought to eat away from home was 0.4% higher, as average prices at fast food outlets rose 0.2% and average prices at full service restaurants rose 0.6%, while the price index for food at employee sites and schools rose 0.1%, and prices of other food away from home averaged 0.2% higher…

In the food at home categories, the price index for cereals and bakery products was 0.1% lower, as bread prices fell 1.0%, the price index for rice, pasta, and cornmeal fell 0.​8%, and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers was​ also 0.8% lower.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 1.3% higher, as the price index for beef and veal rose 1.2%, the price index for pork food rose 1.7%, and egg prices were 5.9% higher….at the same time, the seasonally adjusted price index for dairy products was 1.0% higher, as average milk prices rose 1.0% and the price index for cheese and related products was 1.9% higher….however, the fruits and vegetables price index was 0.5% lower, as the price index for fresh vegetables fell 1.0% and the price index for fresh fruits was 0.4% lower.…but the beverages price index was 0.6% higher, as the price index for carbonated drinks rose 1.3% and the price index for coffee was 0.9% higher….lastly, the price index for the ‘other foods at home’ category was 0.5% higher, as the price index for margarine rose 0.9%, the price index for soups rose 1.1%, the price index for snacks rose 0.9%, and the price index for prepared salads was 2.0% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.1% in March, after rising by 0.2% in February, by 0.4% in January. 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 0.1% lower in March, while the more heavily weighted composite index for all services less energy services was 0.2% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust March’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was unchanged, as the price index for furniture and bedding rose 0.6% and the price index for clocks, lamps, and decorator items rose 1.6%​, while the price index for dishes and flatware fell 1.7% and the price index for window and floor coverings and other linens was 1.5% lower….at the same time, the apparel price index was 0.4% higher on a 4.3% increase in the price index for men’s shirts and sweaters, a 4.4% increase in the price index for women’s outerwear, a 2.1% increase in the price index for men’s underwear, nightwear, swimwear, and accessories, and a 1.1% increase in the price index for jewelry and watches….on the other hand, the price index for transportation commodities other than fuel was was 0.2% lower, as average prices for new cars rose 0.3%, but the price index for used cars and trucks fell 0.7%, the price index for vehicle parts and equipment other than tires fell 2.6%, and the price index for motor oil, coolant, and fluids was 1.0% lower…at the same time, the price index for medical care commodities was 1.1% lower as the price index for prescription drugs fell 2.0% and the price index for nonprescription drugs fell 0.3% while the price index for medical equipment and supplies was 0.2% higher…in addition, the recreational commodities index was 0.3% lower, as the price index for TVs fell 1.5%, as the price index for audio equipment fell 1.2%, the price index for sports vehicles including bicycles fell 1.1%, the price index for sewing machines, fabric and supplies fell 1.9%, and the price index for toys, games, hobbies and playground equipment was 0.6% lower… however, the education and communication commodities index was 0.5% higher, on a 1.8% increase in the price index for educational books and supplies. a 0.5% increase in the price index for telephone hardware, calculators, and other consumer information items, and a 0.4% increase in the price index for computer software and accessories.…lastly, a separate price index just for alcoholic beverages was 0.2% higher, while the price index for ‘other goods’ was 0.3% higher. on a 1.6% increase in the price index for miscellaneous personal care goods and a 0.6% increase in the price index for cigarettes…

Within core services, the price index for shelter was 0.2% higher, as rents rose 0.2%​ and homeowner’s equivalent rent rose 0.4%, but prices for lodging away from home at hotels and motels were 4.3% lower, while the price index for household insurance was 0.3% lower, and the price index for water, sewers and trash collection services was 0.2% higher, and the price index for moving, storage, and freight expense was 0.3% higher… at the same time, the price index for medical care services was 0.5% higher, as the price index for inpatient hospital services rose 2.0%, price index for outpatient hospital services was 0.7% higher, and the price index for are of invalids and elderly at home was 4.9% higher….however, the transportation services price index was 1.4% lower, as the price index for car and truck rental fell 2.7%, the price index for vehicle insurance fell 0.8%, and the price index for airline fares fell 5.3%….on the other hand, the recreation services price index was 0.1% higher, as the price index for subscription and rental of video and video games rose 3.2%, the price index for admission to sporting events rose 2.3%, and the price index for veterinarian services was 0.5% higher….in addition, the price index for education and communication services was 0.2% higher, as the price index for elementary and high school tuition and fees rose 0.5%, the price index for internet services and electronic information providers rose 0.3, and the price index for postage and delivery services was 0.4% higher…lastly, the index for other personal services was 1.6% higher, the price index for funeral expenses rose 0.7% and the price index for ax return preparation and other accounting fees was 9.5% higher..

Producer Price​s Fell 0.4% in March on Lower Food, Energy and Trade Services

The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.4% in March, as the final demand price index for wholesale goods fell 0.9% while the price index for final demand for services was 0.2% lower… that minus 0.4% March PPI reading followed an upwardly revised 0.1% increase in February, when the price index for wholesale goods rose 0.3% while the price index for final demand for services was unchanged, a 0.6% increase in January, when the final demand price index for wholesale goods rose 0.7% and the price index for final demand for services was 0.5% higher, a 0.5% PPI 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 0.1% 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% lower, 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 0.5% higher, an unrevised 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 2.7% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.​1% 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 0.9% lower in March, after being 0.3% higher in February, 0.7% higher in January, 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​ last May, and is still 0.9% higher than a year ago….the final demand goods price index was 0.9% lower in March because the price index for wholesale energy goods was 4.0% lower, after it had been 1.3% lower in February, 2.0% higher in January, 2.2% higher in December, up 0.4% in November, and up 0.3% in October, and ​b​eca the price index for wholesale foods was 2.1% lower, after it had been up 1.8% in February, up 1.0% in January, up 0.3% in December, and up 2.1% in November, while the index for final demand for core wholesale goods (excluding food and energy) was 0.3% higher March, after being 0.3% higher February, 0.2% higher in January and 0.1% higher in December….

Wholesale energy prices were down 4.0% in March on an 11.1% decrease in wholesale prices for gasoline, a 6.1% decrease in wholesale prices for No. 2 diesel fuel, and a 5.5% decrease in wholesale prices for home heating oil and distillates, while the final demand for food price index was 2.1% lower on a 21.3% decrease in the wholesale price index for eggs for fresh use, 12.2% decrease in the wholesale price index for fresh fruits and melons, a 7.7% decrease in the wholesale price index for fresh and dry vegetables, and a 6.3% decrease in the wholesale price index for beef and veal…. among core wholesale goods, the wholesale price index for steel mill products rose 7.1%, the wholesale price index for oil field and gas field machinery rose 1.1%, and the wholesale price index for costume jewelry and novelties was 1.7% higher…

Meanwhile, the price index for final demand for services was 0.2% lower in March, after being unchanged in February, 0.5% higher in January, 0.5% higher in December, 0.1% lower in November, 0.4% higher in October, 0.5% higher in September, 0.5% higher in August, but 0.2% lower in July, and is still 3.6% higher than a year ago…the price index for final demand for trade services fell 0.7%, the price index for final demand for transportation and warehousing services fell 0.6%, and 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 automobile retailers fell 3.4%, margins for TV, video, and photographic equipment and supplies retailers fell 7.7%, margins for sporting goods, including boat retailers were 6.9% lower, and margins for apparel, jewelry, footwear, and accessories retailer​s were 2.​0% lower, and margins for machinery and vehicle wholesalers were 1.3% lower, but margins for major household appliances retailers were 14.0% higher,….among transportation and warehousing services, average margins for airline passenger services were 4.0% lower but margins for truck transportation of freight were 0.7% higher….among the components of the core final demand for services index, the price index for legal services rose 1.5%, the price index for cable and satellite subscriber services rose 1.1%, the price index for fast food and beverages services rose 1.2%, and the price index for gaming receipts was 3.1% higher…

This report also showed the price index for intermediate processed goods was unchanged in March, after being 0.4% higher in February, 1.1% higher in January, 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 last July….the price index for intermediate energy goods fell 3.2% in March as refinery prices for jet fuel fell 9.1%, refinery prices for gasoline fell 11.1%, refinery prices for diesel fuel fell 6.1%, and the producer price index for commercial electric power fell 1.3%….at the same time,the price index for intermediate processed foods and feeds fell 0.5%, as the producer price index for meats fell 2.8%, the producer price index for dairy products fell 1.2%, and the producer price index for ​fats and oils was 2.5% lower….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.9% higher, as the producer price index for primary nonferrous metals rose 8.1%, the producer price index for secondary nonferrous metals rose 2.2%, the producer price index for steel mill products rose 7.1%, the producer price index for aluminum mill shapes rose 5.1%, and the producer price index for softwood lumber was 3.2% higher….average prices for intermediate processed goods were 0.9% higher than in March 2024, the 5th year over year increase in 25 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 fell 4.1% in March, after rising 0.9% in February, 5.8% in January and 2.9% in December, after being unchanged in November, after rising 2.3% in October, after falling 1.9% in September and falling 3.2% in August….that was as the March price index for crude energy goods fell 3.3%, as crude oil prices fell 8.2% ​b​ut unprocessed natural gas prices rose 10.4%, ​w​hile coal prices were 2.0% lower…at the same time, the price index for unprocessed foodstuffs and feedstuffs was 7.5% lower, on a 36.2% decrease in producer prices for ungraded chicken eggs, a 16.6% decrease in producer prices for raw milk, an 8.4% decrease in producer prices for hay and hayseeds, and a 4.3% decrease in producer prices for wheat….meanwhile, the index for core raw materials other than food and energy materials was 0.4% higher, on a 7.6% increase in the price index for aluminum base scrap, a 2.5% increase index for copper base scrap, and a 0.6% increase in the price index for nonferrous metal ores….this raw materials price index is still 7.1% higher than a year ago, the 6th year over year increase in the past 26 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 0.1% lower in March, after being 0.2% higher in February, 0.1% lower in January, 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 last June.…the price index for intermediate trade services was 0.1% higher, as margins for metals, minerals, and ores wholesalers rose 5.2%, margins for chemicals and allied products wholesalers rose 3.2%, and margins for paper and plastics products wholesalers rose 1.3%, while margins for building materials, paint, and hardware wholesalers were 2.5% lower….at the same time, the price index for transportation and warehousing services for intermediate demand was 0.1% lower, as the intermediate price index for transportation of passengers fell 3.9% while the intermediate index for water transportation of freight was 1.5% higher….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.2% lower, as the intermediate price index for business loans fell 2.8%, the intermediate price index for television advertising time sales service fell 4.0%, and the intermediate price index for passenger car rental was 2.7% lower….over the 12 months ended in March, price index for services for intermediate demand was 2.0% higher than it was a year ago, the fifty-third 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 was indicated for July 2021…

Wholesale Sales Rose 2.4% in February; Wholesale Inventories Rose 0.3%

The February report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was “$696.4 billion, up 2.4 percent (±0.4 percent) from the revised January level and … up 4.3 percent (±0.7 percent) from the revised February 2024 level”… the December 2024 to January 2025 percent change in sales was initially revised from the preliminary estimate of down 1.3 percent (±0.5 percent) to a decrease of 1.5 percent (±0.5 percent) in conjunction with an annual revision of previously published data based on historical corrections and the results of the 2022 Annual Wholesale Trade Survey, and then was further revised to a decrease of 0.9% to $680.2 billion with this report….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 sold….

On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods in a warehouse or on a store shelf represent goods that were produced but not sold, and this February report estimated that wholesale inventories were valued at $902.3 billion at month end, an increase of 0.3 percent (+/-0.2%) from the revised January level and 1.1 percent (±0.7 percent) higher than February a year ago, with the January preliminary inventory estimate revised from the advance estimate of up 0.8 percent (±0.2 percent) to $906.2 billion to a increase of 0.8 percent (±0.2 percent) to $899.5 billion, also reflecting both the annual revision and revisions included in this report….

For national accounts, the wholesale inventories reported here will be adjusted the February producer price indices…with notable exceptions such as inventories of farm products, chemicals and petroleum, we’ve previously estimated that wholesale inventories appear to be roughly 70% finished goods….with the February producer price index for finished goods up by 0.3% while the producer price indexes for intermediate goods & raw goods were 1.0% higher and 1.3% higher respectively, we can figure that February’s real wholesale inventories would have probably decreased by about 0.3%…however, since real wholesale inventories were down sharply the 4th quarter, almost offsetting the quarter’s increases in retail and factory increases, any first quarter real wholesale inventory decease that’s smaller than that of the fourth quarter decrease will add to 1st quarter GDP by an amount equal to the difference between the two quarterly decreases.…

 

 

(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…)