June’s jobs report; May’s trade deficit, construction spending, factory inventories, and JOLTS

This week’s major agency issued economic releases included the Employment Situation Summary for June and the Job Openings and Labor Turnover Survey (JOLTS) for May, both from the Bureau of Labor Statistics, and three May reports that will input data into 2nd quarter GDP: the BEA’s report on our International Trade for May, and the May report on Construction Spending and the Full Report on Manufacturers’ Shipments, Inventories and Orders for May, both from the Census Bureau…

Privately issued reports released this week included the ADP Employment Report for June, wherein the national payroll processor reported a 33,000 job decrease in May, the light vehicle sales report for June from Wards Automotive, which is the source data for the BEA report, and which estimated that vehicles sold at a 15.34 million seasonally adjusted annual rate in June, down from the 15.65 million annual sales rate in May, but up from the 15.29 million annual rate in June of 2024, and both of the widely followed purchasing manager’s surveys from the Institute for Supply Management (ISM): the June Manufacturing Report On Business indicated that the manufacturing PMI (Purchasing Managers Index) rose to 49.0% in June, up from 48.5% in May, which means that a slightly smaller plurality of manufacturing industry purchasing managers reported deteriorating conditions in various facets of their business in June than a month earlier, and the June Services ISM Report On Business from the Institute for Supply Management, which saw ISM Services index rise to 50.8% in June, up from a slightly contractionary reading of 49.9% in May, indicating that a plurality of service industry purchasing managers reported improving conditions in various facets of their business in June…

Employers Added 147,000 Jobs in June, Unemployment Rate Fell to 4.1%

The Employment Situation Summary for June indicated an increase in payroll jobs that was somewhat more than what had been forecast, and that significantly fewer Americans were considered unemployed in June than were in May, leading to both a lower unemployment rate and a lower labor force participation rate…seasonally adjusted estimates extrapolated from the establishment survey data projected that employers added 147,000 jobs in June, after the payroll job increase for May was revised from 139,000 to 144,000 jobs, and the April jobs increase was revised from 147,000 jobs to 158,000….with those revisions, that means that this report indicates an increase of 163,000 more jobs than were reported last month, compared to expectations for a 129,000 job increase….those revisions also raised the average job gain to 150,000 per month over the past three months, still less than the average 200,000 growth in the working age population….the unadjusted data indicates that there were actually 517,000 more payroll jobs in June than in May, as seasonal job increases that are typical in June for sectors such as construction, trade and transportation, and leisure and hospitality were normalized by the seasonal adjustments…

Increased jobs in state & local education, health care and social assistance dominated the seasonally adjusted job increases in June, while manufacturing and wholesale trade saw modest job decreases…since the BLS summary of the job gains by sector is clear and as adequate as our usual synopsis, we’ll just quote from that summary here:

• Total nonfarm payroll employment increased by 147,000 in June, in line with the average monthly gain of 146,000 over the prior 12 months. In June, job gains occurred in state government and health care. Federal government continued to lose jobs. (See table B-1.)
• Government employment rose by 73,000 in June. Employment in state government increased by 47,000, largely in education (+40,000). Employment in local government education continued to trend up (+23,000). Job losses continued in federal government (-7,000), where employment is down by 69,000 since reaching a recent peak in January. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Health care added 39,000 jobs in June, similar to the average monthly gain of 43,000 over the prior 12 months.
• In June, job gains occurred in hospitals (+16,000) and in nursing and residential care facilities (+14,000). In June, social assistance employment continued to trend up (+19,000), reflecting continued growth in individual and family services (+16,000).
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; and other services..

The establishment survey also showed that the average hourly pay for all employees rose by 8 cents to $36.30 an hour in June, after it had increased by a revised 13 cents an hour in May; at the same time, the average hourly earnings of production and nonsupervisory employees increased by 9 cents to $31.24 an hour….reporting from employers also showed that the average workweek for all private payroll employees edged down by 0.1 hour to 34.2 hours, while hours for production and non-supervisory personnel fell two-tenths of an hour to 33.5 hours….At the same time, the manufacturing workweek was unchanged at 40.1 hours, while factory overtime remained at an average of 2.9 hours..

Meanwhile, the seasonally adjusted extrapolation from the June household survey estimated that the count of those who reported being employed rose by an estimated 93,000 to 163,366,000, while the similarly estimated number of those counted as being unemployed fell by 222,000 to 7,015,000; which together meant that June saw a rounded net decrease of 129,000 in the total labor force…since the working age population had grown by 200,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by 329,000 to 103,204,000….the decrease of those in the labor force was enough to lower the labor force participation rate, from 62.4% in May to 62.3% in June, which was also down from 62.6% in June of 2024 and the lowest since December 2022….however, the increase in the number employed vis a vis the increase in the population was not enough to change the employment to population ratio, which we could think of as an employment rate, as it remained at 59.7% in June, matching its lowest since January 2022…meanwhile, the decrease in the number counted as unemployed was enough to lower the unemployment rate, which fell from 4.2% in May to 4.1% in June….at the same time, the number who reported they were involuntarily working part time fell by 159,000 to 4,465,000 in June, which meant that the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, fell from 7.8% in May to 7.7% in June…

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it alongside the press release to avoid the need to scroll up and down the page..

Job Openings and Job Quitting Rose in May, Hiring and Layoffs were Lower

The Job Openings and Labor Turnover Survey (JOLTS) report for May from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 374,000, from 7,395,000 in April to 7,769,000 in May, after April’ job openings were revised 4,000 higher, from the 7,391,000 reported last month to 7,395,000…May’s jobs openings were still 1.7% lower than the 7,901,000 job openings reported for May a year ago, while the job openings ratio expressed as a percentage of those employed rose from 4.4% in April to 4.6% in May, but was down from 4.8% in May a year ago…the greatest percentage increase in May job openings was in accommodation and food services, where openings rose by 314,000 to 1,041,000, while job openings with the federal government fell by 39,000 to 89,000 (see table 1 for more details)…like most BLS releases, the press release for report is easy to understand and also refers us to the associated tables for the data cited, which are all linked to at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in May, seasonally adjusted new hires totaled 5,503,000, down by 112,000 from the revised 5,615,000 who were hired or rehired in April, as the hiring rate as a percentage of all employed fell from 3.5% in April to 3.4% in May, and it was also down from the hiring rate of 3.5% in May a year earlier (details of hiring by industry since February are in table 2)…meanwhile, total separations fell by 71,000, from 5,313,000 in April to 5,242,000 in May, while the separations rate as a percentage of the employed rose was unchanged at 3.3% in May, which was still down from the separations rate of 3.4% in May a year ago (see table 3)…subtracting the 5,242,000 total separations from the total hires of 5,503,000 would imply there was an increase of 261,000 jobs in May, more than the revised payroll job increase of 144,000 for May reported by the June establishment survey this week, and just outside of the expected +/-110,000 margin of error in these incomplete extrapolations…

Breaking down the seasonally adjusted job separations, the BLS reports that 3,293,000 of us voluntarily quit their jobs in May, up by 78,000 from the 3,215,000 who quit their jobs in April, while the quits rate, widely watched as an indicator of worker confidence, rose 0.1% to 2.1% of total employment in May, which matched the quits rate of a year earlier (see details in table 4)….in addition to those who quit, 1,601,000 were either laid off, fired or otherwise discharged in May, down by 188,000 from the 1,789,000 who were discharged in April, while the discharges rate fell 0.1% to 1.0% of all those who were employed during the month, which was also down from the 1.1% discharges rate of a year earlier… meanwhile, other separations, which includes retirements and deaths, were at 349,,000 in May, up by 40,000 from 309,000 in April, for an ‘other separations’ rate of 0.2%, the same as in April and as in May of a year ago….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release…

US Trade Deficit Rose 18.7% in May on Big Drop in US Exports; Still Adds 797 Basis Pts to GDP

Our trade deficit was 18.7% higher in May as the value of both our exports and our imports both decreased, but the value of our exports fell by 35 times more than our imports did….the Commerce Department report on our international trade in goods and services for May indicated that our seasonally adjusted goods and services international trade deficit rose by a rounded $11.3 billion to $71.5 billion in May, from a April deficit of $60.3 billion, which was revised down from the $61.6 billion deficit reported for April last month….also in rounded totals, the value of our May exports fell by $11.6 billion or by 4.0% to $279.0 billion on an $11.4 billion decrease to $180.2 billion in our exports of goods and a $0.2 billion decrease to $98.8 billion in our exports of services, while our imports fell by $0.3 billion or by 0.1% to $350.5 billion on a $0.2 billion decrease to $277.7 billion in our imports of goods and a $0.1 billion decrease to $72.8 billion in our imports of services…export prices were on average 0.9% lower in May, which means the decrease in our exports was partly price related and that real exports probably fell on the order of 3.1%, while import prices were unchanged, meaning the decrease in our imports was close to real and not price related and that real imports probably fell on the order of 0.1%..

The decrease in May’s exports of goods was largely due to lower exports of industrial supplies and materials and of capital goods, which were partly offset by an increase in exports of consumer goods…. referencing the Full Release and Tables for the May trade report (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials fell by $10,035 million to $65,255 million, led by a $5,522 million decrease in our exports of nonmonetary gold, a $1,076 million decrease in our exports of natural gas, a $1,030 million decrease in our exports of finished metal shapes, a $684 million decrease in our exports of crude oil, a $432 million decrease in our exports of precious metals other than gold, and a $432 million decrease in our exports of chemicals other than those itemized, while our exports of capital goods fell by $1,863 million to $57,437 million on a $612 million decrease in our exports of semiconductors, a $485 million decrease in our exports of civilian aircraft engines, a $425 million decrease in our exports of telecommunications equipment, a $340 million decrease in our exports of medical equipment, and a $310million decrease in our exports of civilian aircraft…in addition, our exports of foods, feeds and beverages fell by $338 million to $13,175 million, and our exports of other goods not categorized by end use fell by $483 million to $8,425 million…partly offsetting the decreases in those export categories, our exports of consumer goods rose by $1,456 million to $22,444 million ox a $1,119 million increase in our exports of pharmaceutical preparations and a $323 million increase in our exports of jewelry and our exports of automotive vehicles, parts, and engines rose by $436 million to $12,523 million on higher exports of passenger cars and of automotive parts and accessories other than tires, engines or bodies…

Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our goods imports and shows that lower imports of consumer goods and of industrial supplies and materials were mostly offset by higher imports of automotive products and other goods.…our imports of consumer goods fell by $3,966 million to $65,942 million as a $827 million decrease in our imports of textile apparel and household goods not otherwise itemized, a $710 million decrease in our imports of toys, games, and sporting goods, a $593 million decrease in our imports of household appliances, a $586 million decrease in our imports of gem diamonds, a $553 million decrease in our imports of jewelry, a $550 million decrease in our imports of furniture, a $514 million decrease in our imports of cell phones, a $478 million decrease in our imports of footwear, and a $468 million decrease in our imports of cotton apparel and household goods was partly offset by a $2,548 million increase in our imports of pharmaceutical preparations, while our imports of industrial supplies and materials fell by $914 million to $51,094 million on a $1,728 million decrease in our imports of finished metal shapes, and a $335 million increase in our imports of natural gas…in addition, our imports of foods, feeds, and beverages fell by $151 million to $18,336 million….partly offsetting the decreases in those import categories, our imports of automotive vehicles, parts and engines rose by $3,435 million to $36,689 million on a $3,067 million increase in our imports of new and used passenger cars, our imports of capital goods rose by $308 million to $90,905 million as a $4,413 million increase in our imports of computers was partly offset by a $2,755 million decrease in our imports of computer accessories and a $420 million decrease in our imports of civilian aircraft, and our imports of other goods not categorized by end use rose by $990 million to $12,716 million…

The press release for this month’s report summarizes Exhibit 19 in the full release pdf for May, which gives us surplus and deficit details on our goods trade with selected countries:

The May figures show surpluses, in billions of dollars, with Netherlands ($4.8), Hong Kong ($3.6), South and Central America ($3.3), Switzerland ($3.3), United Kingdom ($3.0), Australia ($1.5), Brazil ($0.5), Saudi Arabia ($0.5), Belgium ($0.4), Singapore ($0.3), and Israel ($0.1). Deficits were recorded, in billions of dollars, with European Union ($22.5), Mexico ($17.1), Vietnam ($14.9), China ($14.0), Ireland ($11.8), Taiwan ($11.5), Germany ($6.8), Japan ($5.8), South Korea ($5.4), India ($5.1), Canada ($2.8), Italy ($2.6), Malaysia ($2.4), and France ($0.5).

• The deficit with Mexico increased $3.6 billion to $17.1 billion in May. Exports decreased $0.3 billion to $27.5 billion and imports increased $3.3 billion to $44.6 billion.
• The deficit with Ireland increased $2.4 billion to $11.8 billion in May. Exports increased $0.2 billion to $1.6 billion and imports increased $2.5 billion to $13.4 billion.
• The deficit with China decreased $5.7 billion to $14.0 billion in May. Exports decreased $1.7 billion to $6.9 billion and imports decreased $7.4 billion to $20.9 billion.

To gauge the impact of April and May trade on 2nd quarter GDP growth figures, we use exhibit 10 in the pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted for inflation in chained 2017 dollars, the same inflation adjustment that’s used by the BEA to compute trade figures for GDP, with the only difference here being that the figures here are not annualized…. from that table, we can figure that the 1st quarter’s real exports of goods averaged 146,966.7 million monthly in 2017 dollars, while inflation adjusted April and May exports were at 156,507 million and 148,289 million respectively in that same 2017 dollar quantity index representation….after averaging those inflation adjusted April and May goods export figures and then computing the annualized change between that average and the average of the first quarter, we find that the 2nd quarter’s real exports of goods have been running at a 15.22% annual rate above those of the 1st quarter, or at a pace that would add about 1.03 percentage points to 2nd quarter GDP if were to continue at the same rate through June…..In a similar manner, we can figure that our 1st quarter real imports averaged 290,399.3 million monthly in chained 2017 dollars, while inflation adjusted April and May imports were at 240,936 million and 240,786 million in those same inflation adjusted dollars respectively….that would mean that so far in the 2nd quarter, our real imports of goods have decreased at a 52.68% annual rate from those of the 1st quarter…since imports are subtracted from GDP because they allegedly represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, their decrease at a 52.4% rate would conversely add about 6.94 percentage points to 2nd quarter GDP…hence, if our goods trade deficit at the April – May level is maintained through June, our improving balance of trade in goods from the distorted first quarter level would add about 7.97 percentage points to the growth of 2nd quarter GDP….

Note that we have not figured the impact of the usually less volatile change in services here because the Census does not provide inflation adjusted data on those, but that our exports of services decreased by a nominal $0.2 billion while our imports of services decreased $0.1 billion, which thus suggests that May’s trade in services would be slightly negative for 2nd quarter GDP, following what we judged would be a moderately positive impact on 2nd quarter GDP from the change in the balance of trade in services we saw in April….

Construction Spending Fell 0.3% in May, & with April Subtracts 31 Basis Pts from 2nd Quarter GDP

The Census Bureau’s report on construction spending for May (pdf) estimated that May’s seasonally adjusted construction spending would work out to $2,138.2 billion annually if extrapolated over an entire year, which was 0.3 percent (±0.8 percent)* below the revised annualized estimate of $2,145.5 billion of construction spending in April, and 3.5 percent (±1.3 percent) below the estimated annualized level of construction spending in May of last year…with this release, unadjusted construction spending data was revised back to January 2023 and seasonally adjusted data was revised back to January 2018…as a result of that and the usual monthly revision, the April spending estimate was revised 0.3% lower, from $2,152.4 billion to $2,145.5 billion, while the annual rate of construction spending for March was revised 0.5% lower, from $2,162.0 billion to $2,150.8 billion…the downward revision to annualized March construction spending should have negative impact on first quarter GDP when the annual revisions to GDP are released in late September, but since 4th quarter construction was also revised, the entire quarter over quarter inflation adjusted change will need to be recomputed to determine the ultimate impact…after revisions, construction spending tor the first 5 months of 2025 amounted to $841.5 billion, 2.1 percent (±1.0 percent) less than the $859.6 billion in construction spending for the same 5 months of 2024…

A further breakdown of the different subsets of construction spending are provided by a Census summary, which precedes the detailed spreadsheets, is included below:

• Private Construction: Spending on private construction was at a seasonally adjusted annual rate of $1,626.6 billion, 0.5 percent (±0.5 percent)* below the revised April estimate of $1,634.2 billion. Residential construction was at a seasonally adjusted annual rate of $888.9 billion in May, 0.5 percent (±1.3 percent)* below the revised April estimate of $893.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $737.7 billion in May, 0.4 percent (±0.5 percent)* below the revised April estimate of $740.6 billion.
• Public Construction: In May, the estimated seasonally adjusted annual rate of public construction spending was $511.6 billion, 0.1 percent (±1.5 percent)* above the revised April estimate of $511.3 billion. Educational construction was at a seasonally adjusted annual rate of $111.8 billion, 0.2 percent (±2.1 percent)* above the revised April estimate of $111.6 billion. Highway construction was at a seasonally adjusted annual rate of $143.2 billion, 0.3 percent (±4.6 percent)* below the revised April estimate of $143.7 billion.

This construction spending report will be used as source data for 3 subcomponents of GDP; investment in private non-residential structures, investment in residential structures, and government investment outlays, for both state and local governments…. however, gauging the impact of the revised April and May construction spending as reported here on 2nd quarter GDP is difficult because all figures given in this report are in nominal dollars and as you know, data used to compute the change in GDP must be adjusted for changes in price…accurately adjusting construction spending for price changes is no easy matter, either, because the National Income and Product Accounts Handbook, Chapter 6 (pdf), lists a multitude of privately published deflators that are used by the BEA for the various components of non-residential investment, ie, such as using the Engineering News Record construction cost index for utilities’ construction….in lieu of trying to find and adjust for all of the obscure price indices the BEA uses, we’ve opted to just use the producer price index for final demand construction as an inexact shortcut to make an aggregate price adjustment sufficient to make a rough estimate…that index showed that aggregate construction costs were 0.3% higher in May, after being down by 0.5% from March to April, up by 0.3% from February to March, and up by 0.1% from January to February…

On that basis, we can estimate that May’s construction costs were roughly 0.2% less than those of March, but roughly 0.1% more than those of February, and 0.2% more than those of January, and were obviously 0.3% higher than those of April…we then use those percentages to adjust spending in each of those months for the differences in the price of construction vis a vis that of May….annualized construction spending in millions of dollars for the five months in question is given here as 2,138,215 for May, 2,145,537 for April, 2,150,847 for March, 2,165,431 for February, and 2,169,595 for January….thus to figure the annual rate of change of the average of May’s nominal construction spending figure of $2,138,215 and April’s figure of $2,145,537 from those of the ‘inflation adjusted’ figures of the first quarter, our calculation becomes (((2,138,215 + (2,145,537 * 1.003)) / 2) / ((( 2,150,847 * 0.998) + (2,165,431 * 1.001) + (2,169,595 * 1.002)) / 3) ) ^ 4 = 0.967847393, which means that after adjusting for inflation, real construction has been falling at a 3.22% annual rate from the first 2 months of the second quarter.…put another way, that would mean real construction spending has been falling at a $17.6 billion annual rate, which means that if June construction shows no improvement, the 2nd quarter contraction of real construction would subtract a net of about 0.31 percentage points from 2nd quarter GDP across those components that it influences…

Factory Shipments and Factory Inventories Both Rose 0.1% in May

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for May from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods increased in value by $48.5 billion or 8.2 percent to $642.0 billion in May, following a 3.9% decrease to $593.5 billion in April, which was revised from the 3.7% decrease to $594.6 billion reported for April last month….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only accurate as a revised update to the May advance report on durable goods we reported on last week…on those revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we’ll just quote directly from that summary here:

• Summary: New orders for manufactured goods in May, up five of the last six months, increased $48.5 billion or 8.2 percent to $642.0 billion, the U.S. Census Bureau reported today. This followed a 3.9 percent April decrease. Shipments, up following two consecutive monthly decreases, increased $0.7 billion or 0.1 percent to $599.4 billion. This followed a 0.3 percent April decrease. Unfilled orders, up ten of the last eleven months, increased $47.7 billion or 3.4 percent to $1,455.4 billion. This followed a virtually unchanged April decrease. The unfilled orders-to-shipments ratio was 6.98, up from 6.77 in April. Inventories, up seven of the last eight months, increased $0.8 billion or 0.1 percent to $944.1 billion. This followed a 0.1 percent April decrease. The inventories-to-shipments ratio was 1.58, unchanged from April.
• New Orders for manufactured durable goods in May, up five of the last six months, increased $48.3 billion or 16.4 percent to $343.6 billion, unchanged from the previously published increase. This followed a 6.6 percent April decrease. Transportation equipment, also up five of the last six months, led the increase, $47.4 billion or 48.3 percent to $145.4 billion. New orders for manufactured nondurable goods increased $0.2 billion or 0.1 percent to $298.5 billion.
• Shipments of manufactured durable goods in May, up six consecutive months, increased $0.6 billion or 0.2 percent to $300.9 billion, unchanged from the previously published increase. This followed a 0.3 percent April increase. Transportation equipment, up five of the last six months, led the increase, $0.3 billion or 0.3 percent to $98.0 billion. Shipments of manufactured nondurable goods, up following two consecutive monthly decreases, increased $0.2 billion or 0.1 percent to $298.5 billion. This followed a 1.0 percent April decrease. Chemical products, up four of the last five months, drove the increase, $0.6 billion or 0.7 percent to $80.8 billion.
• Unfilled Orders for manufactured durable goods in May, up ten of the last eleven months, increased $47.7 billion or 3.4 percent to $1,455.4 billion, unchanged from the previously published increase. This followed a virtually unchanged April decrease. Transportation equipment, up three consecutive months, led the increase, $47.4 billion or 5.6 percent to $897.7 billion.
• Inventories of manufactured durable goods in May, up eight consecutive months, increased $1.0 billion or 0.2 percent to $587.7 billion, unchanged from the previously published increase. This followed a 0.1 percent April increase. Transportation equipment, up six of the last seven months, led the increase, $0.2 billion or 0.1 percent to $188.6 billion. Inventories of manufactured nondurable goods, down two consecutive months, decreased $0.2 billion or 0.1 percent to $356.4 billion. This followed a 0.4 percent April decrease. Petroleum and coal products, down three consecutive months, drove the decrease, $0.6 billion or 1.3 percent to $44.0 billion. By stage of fabrication, May materials and supplies increased 0.2 percent in durable goods and decreased 0.2 percent in nondurable goods. Work in process decreased 0.1 percent in durable goods and 0.3 percent in nondurable goods. Finished goods increased 0.4 percent in durable goods and 0.2 percent in nondurable goods.

To estimate the effect of those May factory inventories on 2nd quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index….by stage of fabrication, the value of finished goods inventories rose 0.3% to $331,873 million; while the value of work in process inventories fell 0.2% to $260,722 million, and the value of materials and supplies inventories rose 0.1% to $351,486 million…the May producer price index reported that prices for finished goods were on average 0.2% higher, that prices for intermediate processed goods were 0.5% higher, while prices for unprocessed goods averaged 1.6% lower….assuming similar valuations for like types of inventories, those producer price changes would suggest that May’s real finished goods inventories were about 0.1% more than April’s, that real inventories of intermediate processed goods were about 0.7% lower, and that real raw material inventories were about 1.7% higher…however, since real NIPA factory inventories were quite a bit higher in the 1st quarter, accounting for half of the 1st quarter’s big inventory jump, and this report seems to indicate just a modest increase in April’s real inventories, it appears that the real change in factory inventories indicated here would have a negative impact on the growth rate of 2nd quarter GDP, in an amount equal to the difference between the two quarterly inventory changes…

 

 

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