April’s consumer and producer prices, retail sales, industrial production, and new housing; March business inventories

Regular monthly reports that were released ​l​ast week included the April Consumer Price Index, the April Producer Price Index and the April Import-Export Price Index from the Bureau of Labor Statistics, the Retail Sales report for April and the Manufacturing and Trade, Inventories and Sales report for March (pdf), both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, and the April report on New Residential Construction, also from the Census Bureau…

This week also saw first two regional Fed manufacturing surveys for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, a NYC suburban county in Connecticut, northern New Jersey, and Puerto Rico, reported their headline general business conditions index fell to -9.2 from –8.1 in April, which would indicate that the ongoing contraction of Second District manufacturing was a bit more widespread than a month earlier… Meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions rose to +4.0 in May, up from -26.4 in April, but still its third consecutive negative reading, which they explain was because “Twenty-three percent of the firms reported decreases in general activity this month (down from 39 percent last month), while 19 percent reported increases (up from 13 percent); 58 percent reported no change (up from 41 percent last month)”…

Consumer Prices Rose 0.2% in April on Higher Prices for Shelter, Utilities, Medical Care, and Dining Out

The consumer price index was 0.2% higher in April, as higher prices for rent, utilities, eating out, medical services, drugs, furniture, appliances, recreational goods, and vehicle repairs were only partly offset by lower prices for groceries, fuel, used vehicles, airline fares, internet service, smartphones, 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 0.2% higher in April, after being 0.1% lower in March, 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, and 0.3% higher in April 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 319.799 in March to 320.795 in April, which left it statistically 2.31129% higher than the index reading of 313.548 from April of last year, which is reported as a 2.3% year over year increase, less than the 2.4% year over year increase that was reported for March, with that widely cited year over year change reflecting the effect of last April’s +0.3% increase dropping out of the comparison and being replaced by the current month’s +0.2%​, and not telling us anything beyond that….with mostly higher energy prices offset by lower food prices, seasonally adjusted core prices, which exclude both food and energy, were also up by 0.2% for the month, as the unadjusted core price index rose from 325.933 to 326.815, which left the core index 2.77912% ahead of its year ago reading of 317.978, which is reported as a 2.8% year over year increase, same as the 2.8% year over year core price increase that was reported for March, 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 0.7% higher in April, after being 2.4% lower in March, 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 last July, and is now 3.7% lower than in April of a year ago…the price index for energy commodities was 0.2% lower in April, while the price index for energy services was 1.5% higher, after the energy services price index had risen by 1.6% in March….the energy commodities index was down 0.2% on a 0.1% decrease in the price index for gasoline and a 1.3% decrease in the price index for fuel oil, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 4.7% lower…within energy services, the price index for utility gas service was 3.7% higher in April, after being 3.6% higher in March, and is now 15.7% higher than it was a year ago, while the electricity price index was 0.8% higher in April, after being 0.9% higher in March…. energy commodities are now averaging 11.5% below their year ago levels, with gasoline prices averaging 11.8% lower than they were a year ago, while the energy services price index is now up 6.2% from last April, as electricity prices are now averaging 3.6% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.1% lower in April, after being 0.4% higher in March, 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 last July, as the price index for food purchased for use at home was 0.4% lower in April, after being 0.5% higher in March, 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 0.3% and average prices at full service restaurants rose 0.6%, while the price index for food at employee sites and schools was unchanged, and prices for other food away from home averaged 0.3% higher…

In the food at home categories, the price index for cereals and bakery products was 0.5% lower, even though bread prices rose 1.6%, as the price index for breakfast cereal fell 2.5%, the price index for rice, pasta, and cornmeal fell 0.8%, the price index for fresh sweetrolls, coffeecakes, doughnuts fell 1.1%, and the price index for frozen and refrigerated bakery products, pies, tarts, ​and turnovers was 2.9% lower.…at the same time, the price index for the meats, poultry, fish, and eggs food group was 1.6% lower, as the price index for pork fell 1.4%, and egg prices were 12.7% lower….in addition, the seasonally adjusted price index for dairy products was 0.2% lower, even though average milk prices rose 0.7%, as the price index for ice cream and related products fell 1.4%, the price index for cheese and related products fell 0.2%, and the price index for other dairy and related products was 1.3% lower….meanwhile, the fruits and vegetables price index was 0.4% lower, as the price index for fresh fruits fell 0.3%, the price index for canned fruits and vegetables fell 1.3%, and the price index for frozen fruits and vegetables was 3.0% lower.…on the other hand, the beverages price index was 0.7% higher, as the price index for noncarbonated juices and drinks rose 0.6% and the price index for coffee was 2.4% higher….lastly, the price index for the ‘other foods at home’ category was 0.1% lower, as the price index for salad dressing fell 1.5%, the price index for peanut butter fell 1.4%, the price index for snacks fell 0.7%, and the price index for salt and other seasonings and spices was 1.8% lower…

Among the seasonally adjusted core components of the CPI, which rose by 0.2% in April, after rising by 0.1%, in March, 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% last July, the composite price index of all goods less food and energy goods was 0.1% higher in April, 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 April’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.2% higher, as the price index for furniture and bedding rose 1.5%, the price index for major appliances rose 1.3%, the price index for tools, hardware and supplies rose 1.2% and the price index for household cleaning products was 0.6% higher….on the other hand, the apparel price index was 0.2% lower on a 2.8% decrease in the price index for men’s shirts and sweaters, a 1.1% decrease in the price index for women’s underwear, nightwear, swimwear, and accessories, a 1.3% decrease in the price index for men’s footwear, and a 1.9% decrease in the price index for jewelry and watches….at the same time, the price index for transportation commodities other than fuel was was 0.2% lower, as average prices for new cars rose 0.1%, but the price index for used cars and trucks fell 0.5%, the price index for tires fell 0.4%, and the price index for motor oil, coolant, and fluids was 1.0% lower….however, the price index for medical care commodities was 0.4% higher as the price index for prescription drugs rose 0.4%, the price index for nonprescription drugs rose 0.3%, and the price index for medical equipment and supplies was 0.4% higher…in addition, the recreational commodities index was 0.4% higher, even as the price index for TVs fell 2.1%, as the price index for audio equipment rose 8.8%, the price index for sports vehicles including bicycles rose 1.8%, the price index for photographic equipment and supplies rose 2.2%, and the price index for recreational books was 0.7% higher… at the same time, the education and communication commodities index was 0.3% higher, on a 0.7% increase in the price index for educational computers, peripherals, and smart home assistants and a 3.2% increase in the price index for computer software and accessories.…lastly, a separate price index just for alcoholic beverages was 0.1% lower, while the price index for ‘other goods’ was 0.3% higher. on a 1.2% increase in the price index for miscellaneous personal goods, a 0.5% increase in the price index for cosmetics, perfume, bath, nail preparations and implements, and a 0.6% increase in the price index for cigarettes…

Within core services, the price index for shelter was 0.3% higher, as rents rose 0.3% and homeowner’s equivalent rent rose 0.4%, but prices for lodging away from home at hotels and motels were 0.2% lower, while the price index for household insurance was 0.3% higher, and the price index for water, sewers and trash collection services was 0.3% higher, and the price index for moving, storage, and freight expense was 0.8% lower… at the same time, the price index for medical care services was 0.5% higher, as the price index for services by medical professionals other than doctors and dentists rose 0.6%, price index for outpatient hospital services was 0.7% higher, and the price index for health insurance was 0.4% higher….in addition, the transportation services price index was 0.1% higher, even as the price index for airline fares fell 2.8%, as the price index for car and truck rental rose 4.3%, the price index for vehicle repairs rose 1.2%, the price index for vehicle insurance rose 0.6%….on the other hand, the recreation services price index was 0.3% lower, as the price index for purchase, subscription, and rental of videos fell 1.5%, the price index for admission to sporting events fell 12.2%, and the price index for fees for lessons or instructions was 1.2% lower….in addition, the price index for education and communication services was 0.2% lower, 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 fell 1.5%, and the price index for residential telephone services was 0.7% lower…lastly, the index for other personal services was 0.2% higher, as the price index for funeral expenses rose 0.2% and the price index for ax return preparation and other accounting fees was 1.9% higher..

Retail Sales Rose 0.1% in April after Prior Months’ Sales Revised Lower

Seasonally adjusted retail sales rose 0.1% in April, after retail sales for February and March were revised lower in an intervening annual revision …the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $724.1 billion​ during the month, which was up 0.1 percent (±0.5 percent)* from revised March sales of $723.7 billion, and 4.8 percent (±0.5 percent) above the adjusted sales of April of last year…estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated nominal dollar sales fell 0.6%, from $727,141 million in March to $722,558 million in April, while they were up 5.2% from the $686,711 million of sales in April a year ago….

Retail sales estimates from the prior months were revised on April 25th, benchmarked based on the results of the 2022 Annual Retail Trade Survey and the Service Annual Survey, and hence the changes in sales indicated in this report reflect the revisions from that revision….March adjusted sales were originally reported at $734.9 billion, up 1.4% from February; they were revised to $722.0 billion with the annual revision and are now indicated to have risen 1.7% to $723.7 billion….February adjusted sales were concurrently revised from $724.5 billion to $711.7 billion and then to $711.8 billion​ here, and January’s sales were revised from $722.944 billion to $711.461 million with the rebenchmarking, and were not ​further revised in this report…

We are again including below the table of monthly and yearly percentage changes in sales by business type, taken from the Census marts pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from March to April in the first column, and then the year over year percentage change for those businesses since last April in the 2nd column; the second pair of columns gives us the revision of last month’s March advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the February to March change under “Feb 2025 r (revised)” and the revised March 2024 to March 2025 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance March estimates, before the annual revision, is here….

To compute April’s real personal consumption of goods data for national accounts from this April retail sales report, the BEA will initially use the corresponding price changes from the April 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 April retail sales excluding the 0.5% decrease in sales at gas stations were up by 0.2%….then, by subtracting the dollar values representing the unchanged grocery & beverage sales and the 1.2% increase in food services sales out from that total, we find that core retail sales were down by roughly 0.1% for the month…..since the April CPI report showed that the the composite price index of all goods less food and energy goods was 0.1% higher in April, we can thus figure that real retail sales excluding food and energy would have been down about 0.2% from March….however, the actual adjustment in national accounts 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 down 0.1%, the April price index for transportation commodities other than fuel was was 0.2% lower, which would suggest that real unit sales at auto & parts dealers were actually on the order of 0.1% higher, because the sales decline was due to lower prices… on the other hand, while nominal sales at furniture stores were 0.3% higher in April, the price index for furniture and bedding was 1.5% higher, which means that the furniture store sales increase was due to higher prices, and that real sales of furniture likely fell about 1.2%…

In addition to figuring those core real retail sales, to make an estimate of the change in real sales, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do…the April CPI report indicated that the food price index was 0.1% lower in April, as the price index for food purchased for use at home fell 0.4%, while the index for food bought away from home was 0.4% higher…thus, while nominal sales at food and beverage stores were unchanged, real sales of food and beverages would have been 0.40% higher in light of 0.4% lower prices…on the other hand, the 1.2% nominal increase in sales at bars and restaurants, once adjusted for 0.4% higher prices, suggests that real sales at bars and restaurants were only up by around 0.8% during the month…and while sales at gas stations were down 0.5%, there was also a 0.1% decrease in price of gasoline during the month, which would suggest that real sales of gasoline were down about 0.4%, with a caveat that gasoline stations sell more than just gasoline, products which should not be adjusted with gasoline prices, so the actual decrease in real sales at gas stations might have been impacted by those sales…reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can then estimate that the income and outlays report for April will show that real personal consumption of goods fell by almost 0.2% in April, after rising by 1.6% in March, and by 0.1% in February, but after falling by 1.7% in January…at the same time, the 0.8% increase in real sales at bars and restaurants would boost March real personal consumption of services by about half of 0.1%..

Producer Prices Fell 0.5% in April on Lower Prices for Food, Energy and Trade Services

The seasonally adjusted Producer Price Index (PPI) for final demand fell in 0.5% in April, as the final demand price index for wholesale goods was unchanged, while the price index for final demand for services was 0.7% lower…that 0.5% decrease ​in April​s PPI followed an upwardly revised unchanged PPI in March, when the final demand price index for wholesale goods fell 0.9% while the price index for final demand for services was revised from 0.2% lower to 0.4% higher, and an upwardly revised 0.2% increase in February, when the price index for wholesale goods rose 0.3% while the price index for final demand for services was 0.1% higher, and an upwardly revised 0.7% 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 0.7% higher, ​and also followed 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 unchanged in April, after being 0.9% lower in March, 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 0.5% higher than a year ago….the final demand goods price index was unchanged in April even as the price index for wholesale energy goods was 0.4% lower, after it had been 3.8% lower in March, 1.4% lower in February, 2.0% higher in January, and 2.2% higher in December, and as the price index for wholesale foods was 1.0% lower, after it had been 2.1% lower in March, 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 0.4% higher April , after being 0.3% higher March, 0.3% higher February, 0.2% higher in January and 0.1% higher in December….

Wholesale energy prices were down 0.4% in in April on a 2.1% decrease in wholesale prices for gasoline, a 3.1% decrease in wholesale prices for No. 2 diesel fuel, a 7.5% decrease in wholesale prices for home heating oil and distillates, and a 16.3% decrease in wholesale prices for natural gas liquids, while the final demand for food price index was 1.0% lower on a 39.3% decrease in the wholesale price index for eggs for fresh use, a 1.6% decrease in the wholesale price index for pork, and a 1.6% decrease in the wholesale price index for processed young chickens…. among core wholesale goods, the wholesale price index for industrial material handling equipment rose 5.5%, the wholesale price index for electronic computers and computer equipment rose 1.8%, and the wholesale price index for toys, games, and children's vehicles was 1.8% higher…

Meanwhile, the price index for final demand for services was 0.7% lower in April, the largest decline on record, after being 0.4% higher in March, 0.1% higher in February, 0.7% 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 last July, and is still 3.3% higher than a year ago…the price index for final demand for trade services fell 1.6%, the price index for final demand for transportation and warehousing services fell 0.4%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.3% lower….

Among trade services, seasonally adjusted margins for automobile retailers fell 3.4%, margins for computer hardware, software, and supplies retailers fell 13.5%, margins for food and alcohol retailers were 3.1% lower, and margins for hardware, building materials, and supplies retailers were 3.9% lower, and margins for machinery and vehicle wholesalers were 6.1% lower, but margins for furniture retailers were 8.0% higher,….among transportation and warehousing services, average margins for airline passenger services were 1.5% lower but margins for air transportation of freight were 4.1% higher….among the components of the core final demand for services index, the price index for portfolio management fell 6.9%, the price index for traveler accommodation services fell 3.1%, and the price index for arrangement of flights was 1.4% lower…

This report also showed the price index for intermediate processed goods was 0.2% higher in April, after being 0.1% lower in March, 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 0.2% in April as producer prices for natural gas liquids fell 16.3%, refinery prices for gasoline fell 2.1%, and refinery prices for diesel fuel fell 3.1%….at the same time,the price index for intermediate processed foods and feeds fell 1.0%, as the producer price index for formula feeds fell 1.8%, and the producer price index for dairy products was 1.1% lower….on the other hand, the core price index for intermediate processed goods less food and energy goods was 0.5% higher, as the producer price index for cold rolled sheet and strip steel rose 9.4%, the producer price index for nonferrous wire and cable rose 3.7%, the producer price index for secondary nonferrous metals rose 3.6%, the producer price index for steel mill products rose 5.9%, the producer price index for industrial gases rose 8.1%, and the producer price index for softwood lumber was 2.8% higher….average prices for intermediate processed goods were 0.5% higher than in April 2024, the 5th year over year increase in 26 months, and are therefore way down from their 26.6% year over year increase of November 2021, which had been a 46 year high…

Meanwhile, the price index for intermediate unprocessed goods fell 3.2% in April, after falling 3.4% in March, rising 0.6% in February, 5.7% 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 April price index for crude energy goods fell 5.0%, as crude oil prices fell 4.9%, unprocessed natural gas prices fell 7.1%, and coal prices were0.5% lower…at the same time, the price index for unprocessed foodstuffs and feedstuffs was 3.8% lower, on a 36.2% decrease in producer prices for ungraded chicken eggs, an 8.6% decrease in producer prices for raw milk, a 10.3% decrease in producer prices for slaughter turkeys, and a 6.6% decrease in producer prices for slaughter hogs….meanwhile, the index for core raw materials other than food and energy materials was 0.7% higher, on a 2.4% increase in the price index for iron ore and a 7.5% increase in the price index for nonferrous metal ores….this raw materials price index is still 1.7% higher than a year ago, the 7th year over year increase in the past 27 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 unchanged in April, after being 0.3% higher in March, 0.1% higher in February, 0.1% higher in January, 0.6% 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 1.2% lower, as margins for metals, minerals, and ores wholesalers fell 3.8%, margins for chemicals and allied products wholesalers fell 2.7%, and margins for food wholesalers fell 4.0%, while margins for machinery and equipment parts and supplies wholesalers were 2.6% higher….on the other hand, the price index for transportation and warehousing services for intermediate demand was 0.2% higher, as the intermediate price index for pipeline transportation rose 1.8% while the intermediate index for air transportation of freight was 4.1% higher….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.3% higher, as the intermediate price index for executive search services rose 3.0%, the intermediate price index for data processing and related services rose 2.0%, and the intermediate price index for metal treatment services was 1.7% higher….over the 12 months ended in April, price index for services for intermediate demand was 2.4% higher than it was a year ago, the fifty-fourth 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…

Industrial Production Unchanged in April after February and March Production was Revised Lower

Industrial production was little changed in April after production for February and Janaury were revised lower…the Fed’s G17 release on Industrial production and Capacity Utilization for April reported that industrial production was statistically unchanged in April after being a revised 0.3% lower in March and a revised 0.9% higher in February, which left our total output at a level 1.5% higher than the level of April a year ago….the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, came in at 103.9 in April, after the March index value was revised but unchanged from the 103.9 reported last month, and after the February index value was revised from 104.2 to 104.1, while the January index was revised from 103.3 to 103.2….the effect of those revisions was to revise the March change from +0.8% to +0.9%…

The manufacturing index, which accounts for more than 77% of the total IP index, fell 0.4% to 100.0 in April, led by a 1.9% decrease in the production of motor vehicles and parts, after the March manufacturing index was revised from 100.5 to 100.4, the February manufacturing index was revised from 100.1 to 100.0, the January manufacturing index was revised from 99.1 to 98.9, the December manufacturing index was revised from 99.0 to 98.9, and the November manufacturing index was revised from 98.6 to 98.5, which left the manufacturing index 1.2% above its level of a year ago….meanwhile, the mining index, which includes oil and gas well drilling, fell 0.3%, from 120.7 in March to 120.5 in April, after the March mining index was revised down from the originally reported 120.8, which left the mining index 0.7% higher than it was a year earlier…finally, the seasonally adjusted utility index, which typically fluctuates due to deviations from normal temperatures, rose by 3.3%, from 105.7 in our warmer than normal March to 109.2 in our cooler than normal North and much warmer than normal South April, after the March utility index was revised from 105.5 to 105.7, now down 6.2% from our colder than normal February….with the April increase, the utility index is now 4.3% above that of a year ago, partly due to a milder April last year than this year…

This report also includes April’s capacity utilization stats, which are expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry fell to 77.7% in April from 77.8% in March, with capacity utilization for March unrevised…capacity utilization of NAICS durable goods production facilities fell from an unrevised 75.4% in March to 75.2% in April, while capacity utilization for non-durables producers fell from a downwardly revised 79.0% to 78.4%…capacity utilization for the mining sector fell to 90.2% in April from 90.5% in March, which was previously reported as 90.5%, while utilities were operating at 71.3% of capacity during April, up from their 69.2% of capacity during March, which was reported at 69.1% of capacity a month ago…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..

Business Sales Rose 0.7% in March, Business Inventories Were 0.1% Higher

After the release of the April retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for March (pdf), which incorporates the revised March retail data from that April retail report and the earlier published March wholesale and factory data to give us a complete picture of the business impact on the economy for that month….note that retail sales and inventories were revised on April 25th, which thus revised the figures that were reported a month ago, even before the usual revisions to the prior month’s data that accompany this report, and that changes noted are from those revised figures…

According to the Census Bureau, total manufacturers’ and trade sales were estimated to be valued at a seasonally adjusted $1,919.9 billion in March, up 0.7 percent (±0.2 percent)* from February’s revised sales, and up 4.5 percent (±0.4 percent) from March sales of last year…at the same time, total February sales were revised down from the originally reported $1,921.1 billion to $1,907.3 billion, and are now a 1.0% increase from January….manufacturer’s sales fell 0.1% to $583,878 million in March, while retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, rose 1.5% to $611,381 million, and wholesale sales rose 0.6% to $662,771 million..

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,578.1 billion at the end of March, up 0.1 percent (±0.1 percent)* from the end of February, and up 2.5 percent (±0.3 percent) from inventories of March a year earlier…including the annual revision, the value of end of February inventories was revised from the $2,590.0 billion reported last month to $2,575.1 billion, which is now up 0.2% from January’s inventory valuation….seasonally adjusted inventories of manufacturers were estimated to be valued at $865,252 million, up 0.1% from February, and inventories of retailers were valued at $805,336 million, 0.2% less than those of February, while inventories of wholesalers were estimated to be valued at $907,524 million at the end of March, up0.4% from February…

Two weeks ago, we estimated that there would be a 0.03 percentage point downward revision to 1st quarter GDP based on the inventory change that the full factory report showed, while last week we figured that 1st quarter GDP was overestimated by around 0.01 or 0.02 percentage points based on what the wholesale inventories report showed……in the advance report on 4th 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 $805,759 million at the end of March, down 0.1% from a revised $806,402 million in February….that’s $221 million more than the $805,336 and $806,604 million for those two months that this report shows, which would mean that the quarterly change in 1st quarter retail inventories was overestimated at almost a $0.7 billion annual rate, or by an amount that would subtract about 0.01 or 0.02 percentage points from GDP, depending on how the inflation adjustments shake out…combined with our previous estimates on factory and wholesale inventories, then, this report would suggest that the growth rate of 1sr quarter GDP should be revised downwards by between 0.05 and 0.07 percentage points when the 2nd estimate is released next week….

April Housing Starts Reported Higher, Building Permits Lower

The April report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,361,000 in April, which was 1.6 percent (±11.8 percent)* above the revised March estimated rate of 1,339,000 annually, but was 1.7 percent (±9.2 percent)* below last April’s rate of 1,385,000 housing starts a year….the figures shown in parenthesis indicate the most likely range of the change indicated; in other words, April housing starts could have been down by 10.2% or up by as much as 19.4% from those of March, with revisions of a greater magnitude in either direction from that range possible…with this report, the annual rate for March housing starts was revised from the 1,324,000 reported last month down to 1,339,000, and February starts, which were first reported at a 1,501,000 annual rate, were revised from last month’s initial revised figure of 1,494,000 annually to a 1,490,000 annual rate, while January starts, which were first reported at a 1,366,000 annual rate, and were revised from an annual rate of 1,350,000 to a 1,361,000 annual rate a month ago, were revised to a 1,358,000 annual rate with this report….

The annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 123,700 housing units were started in April, up from the 111,300 housing units that were started in March, and up from the 109,800 housing units that were started in February…of those housing units started in April, an estimated 86,600 were single family homes and 37,500 were housing units in structures with more than 5 units, up from the revised 80,300 single family starts in March, and up from the 29,800 units started in structures with more than 5 units in March…

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data…in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,412,000, which was 4.1 percent below the revised March rate of 1,481,000, and was 3.2 percent below the rate of building permit issuance in April a year earlier….the annual rate for housing permits issued in March was revised from 1,482,000 to 1,481,000…

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 129,100 housing units were issued in April, up from the revised estimate of 124,200 new permits issued in March….of April’s permits, 88,300 were for single family homes, up from 84,500 in March, while 35,300 were in buildings with 5 or more units, up from 34,900 in March…

For graphs and commentary on this report, see the following posts by Bill McBride at Calculated Risk: AM Housing Starts Increased to 1.361 million Annual Rate in April and Newsletter: Housing Starts Increased to 1.361 million Annual Rate in April, which in turn links to his detailed Real Estate Newsletter post covering the same subject..

 

 

(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 pichosen from the aforementioned GGO posts, contact me…)