May’s Wholesale Inventories, Consumer Credit, & Mortgage Monitor

There were just two agency economic reports released this past week, neither of which are very widely covered: the May report on Wholesale Trade, Sales and Inventories from the Census Bureau, and the Consumer Credit Report for May from the Fed….the latter indicated that non-real estate consumer debt outstanding grew by a seasonally adjusted $5.1 billion, or at a 1.2% annual rate, as non-revolving credit grew at a 2.8% rate to $3,748.9 billion, while revolving credit outstanding shrunk at a 6.3% rate to $1,345.1 billion…

The major private report released last week was the Mortgage Monitor for July (covering May data), which now comes from the Mortgage Technology unit of Intercontinental Exchange, Inc, after originating with Lender Processing Services and being published by Black Knight Financial Services for several years…what they now call the “July Mortgage Monitor” indicated that 3.20% of mortgages were delinquent in May, down from the 3.22% that were delinquent in April, but up from the 3.04% delinquency rate of May 2024, and that 0.39% of all mortgages were in the foreclosure process in May, up 0.81% from the foreclosure rate of April, and up 2.05% from the foreclosure rate of May a year ago….the full Mortgage Monitor for July (pdf) is a comprehensive and data-dense 21 pages of tables and graphics, with explanatory text..

Wholesale Sales and Wholesale Inventories Both Fell 0.3% in May

The May report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $697.2 billion in May, down 0.3 percent (±0.4 percent)* from the revised April level, but up 4.8 percent (±0.9%) from the value of wholesale sales in May 2024.. the April preliminary estimate of wholesale sales was revised from the $700.2 billion reported a month ago to $699.4 billion, which was enough to revise the March to April percent change from the preliminary estimate of up 0.1 percent (±0.5 percent)* to virtually unchanged (±0.5 percent)*….as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold….

On the other hand, the monthly change in private inventories is a major factor in​ figuring GDP, as any goods left on the shelf or in intermediate storage ​theoretically represent goods that were produced but not sold, and this May report estimated that wholesale inventories were valued at a seasonally adjusted $905.5 billion at month end, down 0.3 percent (±0.2 percent)​ from the revised April level, but 1.4 (±0.5 percent) higher than in May a year ago, with the April preliminary inventory estimate revised from $908.7 billion to $908.3 billion at the same time, now a 0.1% increase from March…

For national accounts purposes, May’s wholesale inventories will be adjusted for price changes by category with the appropriate components of the May producer price index, which indicated a 0.2% increase in prices for finished goods, a 0.5% increase in prices for intermediate goods, and a 1.6% decrease in prices for unprocessed goods​ in May….with most of wholesale inventories finished goods, with the notable exceptions of commodity inventories, there will thus be a small real decrease in May wholesale inventories, following the real wholesale inventory increase of around 0.5% we had figured for April…since the key source data and assumptions (xls) for the third estimate of 1st quarter GDP indicated that the 1st quarter’s real wholesale inventory change was strongly positive, accounting for almost 40% of the ​first quarter’s record increase in inventories, any increase in 2nd quarter real wholesale inventories that’s less than that would subtract from 2nd quarter GDP by an amount equal to the difference between those two quarterly inventory increases…

 

 

(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…)