July’s consumer and producer prices, retail sales, and industrial production; June’s business inventories

The major economic reports released last week were the July Consumer Price Index and the July Producer Price Index, and the June Import-Export Price Index, all from the Bureau of Labor Statistics, the Retail Sales Report for July and the concurrently released Business Sales and Inventories report for June, both from the Census bureau, and the July report on Industrial Production and Capacity Utilization from the Fed… the week also saw the first regional Fed manufacturing survey for August: the Empire State Manufacturing Survey from the New York Fed, which covers New York state, southwestern Connecticut, and northern New Jersey, reported their headline general business conditions index rose from –16.0 in June and +5.5 in July to +11.9 in August, its highest reading since November 2024, and indicating that a significant plurality of Second District manufacturers were reporting improving business conditions in August, in contrast to the majority that reported deteriorating business conditions just two months earlier…

Consumer Prices Rose 0.2% in July on Higher Prices for Shelter, Healthcare, Used Vehicles, and Airfare

The consumer price index was 0.2% higher in July, as higher prices for housing, medical services, airline fares, used vehicles, eating out, furniture, recreational goods, home insurance, and admissions to sporting events were partly offset by lower prices for groceries, gasoline, utilities, appliances, lodging away from home, information technology commodities, and car and truck rental ….the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that their weighted average of seasonally adjusted prices for consumer goods and services was 0.2% higher in July, after being 0.3% higher in June, 0.1% higher in May, 0.2% higher in April, 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 last August, and 0.2% higher in July 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 322.561 in June to 323.048 in July, which left it statistically 2.7049% higher than the index reading of 314.540 from July of last year, which is reported as a 2.7% year over year increase, same as the 2.7% year over year increase that was reported for June, with that widely cited year over year change reflecting the effect of last July’s 0.2% increase dropping out of the comparison and being replaced by the current month’s +0.2%, and not telling us anything more about inflation beyond that….with prices for both groceries and energy lower, seasonally adjusted core prices, which exclude both food and energy, were up by 0.3% for the month, as the unadjusted core price index rose from 328.364 to 328.980, which left the core index 3.05939% ahead of its year ago reading of 319.003, which is reported as a 3.1% year over year increase, higher than the 2.9% year over year core price increase that was reported for June, but still well below the 6.6% annual increase reported for September 2022, which had been the largest annual increase in core prices in forty years…

The volatile seasonally adjusted energy price index was 1.1% lower in July, after being 0.9% higher in June, 1.0% lower in May, 0.7% higher in April, 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 thus is 1.6% lower than in July of a year ago….the price index for energy commodities was 1.9% lower in July, while the price index for energy services was 0.3% lower, after the energy services price index had risen by 0.9% in June….the energy commodities index was down 1.9% on a 2.2% decrease in the price index for gasoline, even as the price index for fuel oil rose 1.8%, while prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 1.1% lower…within energy services, the price index for utility gas service was 0.9% lower in July, after being 0.5% higher in June, but is still 13.8% higher than it was a year ago, while the electricity price index was 0.1% lower in July, after being 1.0% higher in June…. energy commodities are now averaging 9.0% below their year ago levels, with gasoline prices averaging 9.5% lower than they were a year ago, while the energy services price index is still up 7.2% from last July, as electricity prices are still averaging 5.5% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was unchanged in July, after being 0.3% higher in June, 0.3% higher in May, 0.1% lower in April, 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 0.1% lower in July, after being 0.1% higher in June, 0.3% higher in May. 0.4% lower in April, 0.5% higher in March, unchanged in February, and 0.5% higher in January, while the price index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets rose 0.1% and average prices at full service restaurants rose 0.5%, while the price index for food at employee sites and schools was 0.8% higher, and prices for other food away from home were unchanged…

In the food at home categories, the price index for cereals and bakery products was 0.2% lower, even though bread prices rose 0.4%, as the price index for flour and prepared flour mixes fell 1.9%, the price index for rice fell 1.1%, the price index for fresh sweetrolls, coffeecakes, doughnuts fell 1.8% and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers was also 1.8% lower.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.2% higher, as beef prices rose 1.5%, the price index for pork rose 0.5%, and the price index for fish and seafood rose 0.4%, but egg prices were 3.9% lower….at the same time, the seasonally adjusted price index for dairy products was 0.7% higher, as average milk prices rose 1.9% while the price index for dairy products other than milk, cheese and ice-cream was 1.3% higher….meanwhile, the fruits and vegetables price index was unchanged, as the price index for fresh vegetables rose 1.2% and the price index for frozen fruits and vegetables was 1.4% higher, but the price index for fresh fruits fell 1.4% and the price index for canned vegetables was 0.3% lower.…however, the beverages price index was 0.5% lower, as the price index for carbonated drinks fell 1.2% and the price index for noncarbonated juices and drinks fell 1.7%, even while the price index for coffee was 2.3% higher….lastly, the price index for the ‘other foods at home’ category was 0.5% lower, as the price index for sugar and and sugar substitutes fell 0.9%, the price index for fats and oils fell 1.5%, the price index for peanut butter fell 2.6%, the price index for soups fell 1.1%, the price index for snacks fell 0.7%, and the price index for salt and other seasonings and spices was 1.5% lower…

Among the seasonally adjusted core components of the CPI, which rose by 0.3% in July, after rising by 0.2% in June, by 0.1% in May, by 0.2% in April, by 0.1% in March, by 0.2% in February, by 0.4% in January. by 0.2% in December, by 0.3% last August, September, October and November, and by 0.2% last July, the composite price index of all goods less food and energy goods was 0.2% higher in July, while the more heavily weighted composite index for all services less energy services was 0.4% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust June’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.7% higher, as the price index for window and floor coverings rose 1.2%, the price index for furniture and bedding rose 0.9%, the price index for outdoor equipment and supplies rose 2.2%, the price index for nonelectric cookware and tableware rose 2.0%, and the price index for tools, hardware and supplies was 1.2% higher….at the same time, the apparel price index was 0.1% higher on a 2.7% increase in the price index for women’s dresses, a 1.4% increase in the price index for men’s footwear, a 3.3% increase in the price index for infants' and toddlers' apparel, and a 0.7% increase in the price index for boys' and girls' footwear ….in addition, the price index for transportation commodities other than fuel was was 0.2% higher, as average prices for new cars was flat, but the price index for used cars and trucks fell rose 0.5%, and the price index for tires was 1.0% higher…meanwhile, the price index for medical care commodities was 0.1% higher as the price index for prescription drugs fell 0.2% and the price index for nonprescription drugs fell 0.5%, but the price index for medical equipment and supplies was 1.1% higher…in addition, the recreational commodities index was 0.4% higher, as the price index for TVs rose 0.5%, the price index for audio equipment rose 2.2%, the price index for sports vehicles including bicycles rose 1.1%, the price index for toys games, hobbies and playground equipment rose 0.6%, the price index for photographic equipment rose 2.1%, and the price index for sewing machines, fabric and supplies was 2.6% higher… on the other hand, , the education and communication commodities index was 1.3% lower, on a 1.2% decrease in the price index for computers, peripherals, and smart home assistants a 2.6% decrease in the price index for computer software and accessories, and a 1.4% decrease in the price index telephone hardware, calculators, and other consumer information items.…lastly, a separate price index just for alcoholic beverages was 0.1% higher, while the price index for ‘other goods’ was 0.2% higher. on an 0.8% increase in the price index for cigarettes and an 0.8% increase in the price index for miscellaneous personal goods…

Within core services, the price index for shelter was 0.2% higher, as rents rose 0.2% and homeowner’s equivalent rent rose 0.3%, but prices for lodging away from home at hotels and motels were 1.3% lower, while the price index for household insurance was 1.0% higher, and the price index for water, sewers and trash collection services was 0.4% higher, while the price index for moving, storage, and freight expense was 0.9% lower… at the same time, the price index for medical care services was 0.8% higher, as the price index for dental services rose 2.6%, price index for outpatient hospital services was 0.6% higher, and the price index for health insurance was 0.4% higher….in addition, the transportation services price index was also 0.8% higher, as the price index for airline fares rose 4.0%, the price index for vehicle maintenance and servicing rose 1.2%, and the price index for intracity transportation was 0.9% higher….in addition, the recreation services price index was 0.4% higher, as the price index for purchase, subscription, and rental of video discs and other media rose 1.0%, the price index for admissions to sporting events rose 1.9%, and the price index for pet services was 1.1% higher…at the same time, the price index for education and communication services was 0.2% higher, as the price index for internet technical and business school tuition and fees rose 0.5%, the price index for postage and delivery services rose 2.0%, and the price index for daycare was 0.5% higher.…lastly, the index for other personal services was 0.5% higher, as the price index for tax return preparation and other accounting fees rose 3.5% and the price index for apparel services other than laundry and dry cleaning was 0.9% higher..

Retail Sales Rose 0.5% in July After May and June Sales were Revised Higher

Seasonally adjusted retail sales rose 0.5% in July after retail sales for May and June were revised lower….the Advance Retail Sales Report for July (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $726.3 billion during the month, which was up 0.5 percent (±0.4 percent) from June’s revised sales of $702.9 billion, and was 3.9 percent (±0.5 percent) above the adjusted sales in July of last year…June’s seasonally adjusted sales were revised more than 0.3% higher, from the $720.1 billion reported last month to $722.6 billion, while May sales were revised less than 0.1% higher, from $715.5 billion to $716.1 billion, and as a result the rounded June sales percentage increase was revised from up 0.6 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).….estimated unadjusted sales, extrapolated from a survey of a small sampling of retailers, indicated sales actually rose 3.9%, from $716,470 million in June to $744,246 million in July, while they were up 4.3% from the $713,406 million of sales in July a year ago…

Combined, the upward revisions to May and June sales indicate that the 2nd quarter’s adjusted sales were roughly $3.1 billion higher than was previously reported, a revision which would add about $12.4 billion to the BEA’s annual rate calculation of 2nd quarter personal consumption expenditures, before any inflation adjustments….That revision should be enough to increase 2nd quarter GDP by around 0.15 percentage points when the 2nd estimate is published at the end of the month…

Included below we have the table of the monthly and yearly percentage changes in retail sales by business type taken from the July Census pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from June to July in the first sub-column, and then the year over year percentage change for those businesses since last July in the 2nd column; the second pair of columns gives us the revision of last month’s June advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the May to June change under “May 2025 (r)evised” and the revised June 2024 to June 2025 percentage change in the last column shown…should you want to check which sales metrics were most revised, our saved copy of the table of last month’s advance June sale estimates, before this month’s revision, is here….

To compute July’s real personal consumption of goods data for national accounts from this July retail sales report, the BEA will initially use the corresponding price changes from the July consumer price index, which we reviewed above….to estimate what they will find, we’ll first remove the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that July retail sales, excluding the 0.7% increase in sales at gas stations, were also up by 0.5%….then, subtracting the figures representing the 0.5% increase in grocery & beverage sales and the 0.4% decrease in food services sales from that total, we find that core retail sales were up by almost 0.7% over the month…since the July CPI report showed that the the composite price index of all goods less food and energy goods was 0.2% higher in July, we can thus figure that real retail sales excluding food and energy, or real core PCE, would show an increase of about 0.5% for the month….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 up 1.6%, the July price index for transportation commodities other than fuel was 0.2% higher, which would suggest that real sales at auto & parts dealers were about 1.4% higher, once higher prices are taken into account… similarly, while nominal sales at clothing stores were 0.7% higher in July, the apparel price index was 0.1% higher , which would suggest that real sales of clothing were up around 0.6%…

In addition to figuring those core retail sales, to make a complete estimate of July’s real PCE, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do…the July CPI report showed that the food price index unchanged, as the price index for food purchased for use at home fell 0.1% while the index for food bought away from home was 0.3% higher…thus, while nominal sales at food and beverage stores were 0.5% higher, real sales of food and beverages would have been around 0.6% higher in light of the concurrent 0.1% decrease in prices…at the same time, the 0.4% decrease in nominal sales at bars and restaurants, once adjusted for 0.3% higher prices, suggests that real sales at bars and restaurants actually fell by around 0.7% during the month…meanwhile, while sales at gas stations were up 0.7%, the price of gasoline was reported to be 2.2% lower during the month, which would suggest that real sales of gasoline were actually almost 3.0% higher for the month, with a caveat that gasoline stations do sell more than gasoline, products which should not be adjusted with gasoline prices…by 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 July will show that our real personal consumption of goods rose by around 0.7% in July*, after being revised up to a 0.4% increase in June, but after falling by a revised 0.7% in May, and after being unchanged April, but after rising by 1.6% in March, rising by 0.2% in February and falling by 1.7% in January….at the same time, the 0.7% increase in real sales at bars and restaurants would subtract about half of 0.1% from July’s real personal consumption of services… *Note: we have a low confidence in that result because of the unlikely 3.0% increase in gasoline consumption implied by the figures)

Industrial Production Fell 0.1% in July on Weakness in Mining and Utilities

The Fed’s G17 release on Industrial production and Capacity Utilization for July indicated that industrial production fell by 0.1%, after rising by a revised 0.4% in June and by a revised 0.1% in May, and is now up 1.4% from a year ago….the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, fell to 104.0 in July from 104.1 in June, which was revised from the 104.0 reported for June a month ago…at the same time, the April and May readings for the IP index were both revised but left unchanged at 103.7, and the April reading for the index was revised down from 103.7 to 103.6, and the March reading for the index was also revised up from 102.4 to 102.5...

The manufacturing index, which accounts for around 75% of the total IP index, was unchanged at 100.2 in July, after May’s manufacturing index was revised from 100.1 to 100.0, and after earlier months were unrevised, which left the manufacturing index up 1.4% from a year ago….meanwhile, the mining index, which includes oil and gas well drilling, fell by 0.4% to 120.9 in July, after the June index was revised up from 121.1 to 121.4, which left mining 1.9% higher than it was a year ago, …finally, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, slipped 0.2% to 108.3 in our hot July because June’s temperatures were a bit more abnormal, after the June utility index was revised from 108.0 to 108.5, leaving the utility index 0.8% above its year ago reading of 107.4, when July’s temperature were also above normal…

This report also provides capacity utilization figures, which are expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry fell from 77.7% in June to 77.5% in July, after capacity utilization for June was revised up from the 77.6% reported a month ago…capacity utilization for NAICS durable goods production facilities rose from 75.0% in June to 75.2% in July, while capacity utilization for non-durables producers fell from 78.8% to 78.4% at the same time….meanwhile, capacity utilization for the mining sector was at 90.3% in July, after June’s utilization was revised up from 90.6% to 90.8%….meanwhile. utilities were operating at 70.0% of capacity during July, down from their 70.4% of capacity during June, a figure that was originally reported at 70.1%….for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories…

Producer Prices Rose 0.9% in July as Higher Priced Goods Offset Lower Priced Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.9% in July, as the final demand price index for wholesale goods rose 0.7% and the more heavily weighted price index for final demand for services was was 1.1% higher…that July increase, the largest since March 2022, followed an unchanged PPI in June, when the final demand price index for wholesale goods rose 0.3%, while the price index for final demand for services was was 0.1% lower, a May PPI that was revised to a 0.4% increase, now showing the final demand price index for wholesale goods 0.1% higher, and the price index for final demand for services 0.5% higher, and after the April PPI was revised from a 0.3% decrease to a 0.2% decrease, with the final demand price index for wholesale goods unchanged, and the price index for final demand for services 0.3% lower, and also followed a downwardly revised 0.2% decrease in March, when the final demand price index for wholesale goods fell 0.9% while the price index for final demand for services was 0.2% higher, and a unrevised 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 0.1% higher, and an unrevised 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 also 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 last August, when prices for finished wholesale goods averaged unchanged, while the price index for final demand for services was 0.5% higher….on an unadjusted basis, producer prices are now 3.3% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.6% higher for the month, and is 2.8% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.7% higher in July, after being 0.3% higher in June, 0.1% higher in May, unchanged in April, 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, and 0.4% higher last July, and is now 1.9% higher than a year ago….the final demand goods price index was 0.7% higher in July as the price index for wholesale energy goods was 0.9% higher, after it had been 0.9% higher in June, 0.3% lower in May, 0.4% lower in April, 3.9% 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 1.4% higher, after it had been 0.1% higher in June, unchanged in May, 0.9% lower in April, 2.2% lower in March, up 1.6% in February, and up 1.0% in January, while the index for final demand for core wholesale goods (excluding food and energy) was 0.4% higher in July, after it had been 0.2% higher in June, 0.3% higher May, 0.3% higher April, 0.3% higher March, 0.3% higher February, and 0.2% higher in January….

Wholesale energy prices were 0.9% higher in July even after a 1.8% decrease in wholesale prices for gasoline, on a 14.9% increase in wholesale prices for home heating oil and distillates and a 11.8% increase in wholesale prices for no. 2 diesel fuel, while the final demand for food price index was 1.4% higher on a 38.1% increase in the wholesale price index for fresh and dry vegetables, a 4.6% increase in the wholesale price index for beef and veal, a 7.3% increase in the wholesale price index for eggs for fresh use, and a 5.1% increase in the wholesale price index for processed turkeys….among core wholesale goods, the wholesale price index for home electronic equipment rose 5.0%, the wholesale price index for textile house furnishings rose 2.3%, and the wholesale price index for iron and steel scrap was 4.5% higher…

Meanwhile, the price index for final demand for services was 1.1% higher in June, after being 0.1% lower in June, 0.5% higher in May, 0.3% lower in April, 0.2% 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 now 4.0% higher than a year ago…the price index for final demand for trade services rose 2.0%, the price index for final demand for transportation and warehousing services rose 1.0%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.7% higher….

Among trade services, seasonally adjusted margins for computer hardware, software, and supplies retailers rose 3.5%, margins for automobile retailers were 4.8% higher, margins for fuels and lubricants retailers were 4.2% higher, margins for TV, video, and photographic equipment and supplies retailers were 3.8% higher, and margins for machinery and vehicle wholesalers were 6.7% higher….among transportation and warehousing services, average margins for airline passenger services were 1.0% higher, margins for air transportation of freight were 1.0% higher, margins for truck transportation of freight were also 1.0% higher. and margins for courier, messenger, and U.S. postal services were 2.9% higher….among the components of the core final demand for services index, the price index for cable and satellite subscriber services rose 4.2%, the price index for traveler accommodation services rose 3.1%, and the price index for passenger car rental rose 5.4%, the price index for portfolio management rose 5.8% and the price index for securities brokerage, dealing, investment advice, and related services was 3.2% higher…

This report also showed the price index for intermediate processed goods was 0.8% higher in July, after being unchanged in June, 0.1% higher in May, 0.3% higher in April, 0.1% lower in March, 0.4% higher in February, 1.0% 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 rose 2.2% in July as refinery prices for jet fuel rose 12.5%, refinery prices for No. 2 diesel fuel rose 11.8%, producer prices for Industrial natural gas rose 4.1%, and producer prices for industrial electric power rose 3.3% ….on the other hand, the price index for intermediate processed foods and feeds fell 0.1%, as the producer price index for processed poultry fell 5.1% and the index for prepared animal feeds was 0.4% lower, while the producer price index for meats was 4.9% higher….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.5% higher, as the producer price index for primary nonferrous metals rose 8.1%, the producer price index for copper and brass mill shapes rose 5.7%, the producer price index for nonferrous wire and cable rose 4.3%, the producer price index for aluminum mill shapes rose 7.4%, the producer price index for phosphates rose 8.6%, and the producer price index for hardware was 1.3% higher….average prices for intermediate processed goods were 2.1% higher than in July 2024, the 9th year over year increase in 29 months, and are still no where near their 26.6% year over year increase of November 2021, which had been a 46 year high…

Meanwhile, the price index for intermediate unprocessed goods rose 1.8% in July, after rising 2.6% in June, after falling 1.8% in May, 3.8% in April, and 3.9% in March, but after rising 0.2% 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% last August….that was as the July price index for crude energy goods rose 0.5%, as crude oil prices rose 1.7% while unprocessed natural gas prices fell 2.1% and coal prices were 1.7% lower….meanwhile, the price index for unprocessed foodstuffs and feedstuffs was 2.9% higher, as the producer price index for slaughter turkeys rose 23.6%, the producer price index for hay and hayseeds rose 16.1%, and the producer price index for raw milk was 9.1% higher….meanwhile, the index for core raw materials other than food and energy materials was 2.0% higher, on a 13.5% increase in the price index for aluminum base scrap and a 4.5% increase in the price index for iron and steel scrap….this raw materials price index is now 0.5% higher than a year ago, the 9th year over year increase in the past 30 months, which followed a run of 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 was 0.8% higher in July, after being 0.1% higher in June, 0.1% higher in May, 0.2% lower in April, 0.3% higher in March, unchanged 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, and 0.3% higher last July.…the price index for intermediate trade services was 1.3% higher, as margins for metals, minerals, and ores wholesalers rose 2.5%, margins for food wholesalers rose 3.0%, margins for paper and plastics products wholesalers rose 2.5%, and margins for machinery and equipment parts and supplies wholesalers were 0.6% higher….at the same time, the price index for transportation and warehousing services for intermediate demand was 0.8% higher, as the intermediate price index for the U.S. Postal Service rose 6.2%, the intermediate price index for air mail and package delivery services, excluding those by USPS, rose 1.8%, the intermediate index for truck transportation of freight rose 1.0%, and the intermediate index for water transportation of freight was 0.9% higher….at the same time, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.6% higher, as the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 3.2%, the intermediate price index for portfolio management rose 5.8%, the intermediate price index for data processing and related services rose 3.5%, and the intermediate price index for passenger car rental was 5.4% higher….over the 12 months ended in July, price index for services for intermediate demand was 2.0% higher than it was a year earlier, the fifty-seventh 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…

June Business Sales up 0.5%, Business Inventories Up 0.2%, Less than in Q2 GDP Estimate

Following the release of the July retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for June (pdf), which incorporates the revised June retail data from that July retail report and the earlier published wholesale and factory data to give us a composite picture of the business contribution to the economy for that month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $1,924.7 billion in June, up 0.5 percent (±0.2) from May’s revised sales, and up up 3.8 percent (±0.3 percent) from June sales of a year earlier…note that total May sales were revised from the originally reported $1,913.9 billion to $1,914.247 billion, which was still 0.4% lower than April..….manufacturer’s adjusted sales were up 0.5% to $602,411 million in June, while retail trade sales, which exclude restaurant & bar sales from the revised June retail sales reported earlier, were up 0.9% to $623,882 million, and wholesale trade sales were up 0.3% to $698,450 million…

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,660.3 billion at the end of June, up 0.3 percent (±0.1 percent) from May, and 1.6 percent (±0.3 percent) higher than in June of last year…the value of end of May inventories was revised down from the $2,656.7 billion reported last month to $2,655.9 billion, but were still virtually unchanged from April…seasonally adjusted inventories of manufacturers were estimated to be valued at $945,598 million at the end of June, up 0.2from the end of May, inventories of retailers were valued at $808,367 million, 0.2% more than at the end of May, while inventories of wholesalers were estimated to be valued at $906,349 million at the end of June, up 0.1% from May…

Last week, we estimated that there would be a 0.01 percentage point downward revision to second quarter GDP based on the inventory change the June factory report showed, while at the same time, we figured that 2nd quarter GDP was overestimated by around 0.12 percentage points based on what the wholesale inventories report showed……in the advance report on 2nd 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 $808,740 million at the end of June, up 0.3% from a revised $806,655 million in May….that’s $591 billion more than the $808,367 and $806,437 million for those two months that this report shows, which would mean that the quarterly change in 2nd quarter retail inventories was overestimated at roughly a $2.4 billion annual rate, or by an amount that would subtract about 0.04 percentage points from 2nd quarter GDP, give or take, depending on how the inflation adjustments shake out…combined with our previous estimates on revisions to factory and wholesale inventories, then, this report would suggest that the growth rate of 2nd quarter GDP would need to be revised downwards by around 0.17 percentage points when the 2nd estimate is released two weeks hence….

 

 

(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…)