August’s consumer and producer prices; July’s wholesale sales; preliminary employment benchmark revision
Major reports released last week included the August Consumer Price Index, the August Producer Price Index, and the August Import-Export Price Index, all from the Bureau of Labor Statistics, and the Wholesale Trade, Sales and Inventories report for July from the Census Bureau…this week also saw the Consumer Credit Report for July from the Fed, which indicated that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $16.0 billion in July, or at a 3.8% annual rate, as non-revolving credit expanded at a 1.8% rate to $3,749.0 billion, while revolving credit outstanding grew at a 9.7% rate to $1,311.2 billion…
this week also saw a preliminary annual benchmark revision of employment data from the Bureau of Labor Statistics, which estimated there were 911,000 fewer payroll jobs in March of 2025 than had previously been reported, which would have come after revisions to each of the monthly reports of the prior year, and would also impact subsequent employment data revisions going forward….that report includes estimates of the revision to payroll jobs in each major goods producing and service industry sector and government, and would effectively cut the number of jobs created by the economy the past year by more than half….however, this estimated benchmark revision will not be applied to the monthly employment reports until the annual revision is finalized with the release of the January 2026 employment report on the first Friday of February 2026, when the national employment survey figures will be benchmarked to state tax records….
The major privately issued report released this week was the Mortgage Monitor for September, which now comes from the Mortgage Technology unit of ICE, and which indicated that 3.27% of all mortgages were delinquent in July, down from the 3.35% of mortgages that were delinquent in June, and down from the 3.36% delinquency rate of July 2024, and that 0.38% of all mortgages were in the foreclosure process in July, down from the 0.39% of mortgages in foreclosure in June, but up from the 0.35% foreclosure rate of July a year ago….the full Mortgage Monitor for September (pdf), which covers July data, is a comprehensive 19 pages of tables and graphics, with explanatory text..
Consumer Prices Rose 0.4% in August on Higher Prices for Food, Shelter, Clothing, Vehicles, and Fuel
The consumer price index was 0.4% higher in August, as higher prices for groceries, gasoline, housing, home insurance, airline fares, new and used vehicles and vehicle repairs, lodging away from home, eating out, internet services, and furniture were partly offset by lower prices for utility gas, major appliances, drugs, information technology commodities, subscriptions and rental of video and video games, admissions to movies, theaters, and concerts, 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 0.4% higher in August, after being 0.2% higher in July, 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 last September, and 0.2% higher in August 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 323.048 in July to 323.976 in August, which left it statistically 2.9162% higher than the index reading of 314.796 from August of last year, which is reported as a 2.9% year over year increase, higher than the 2.7% year over year increase that was reported for July, with that widely cited year over year change reflecting the effect of last August’s 0.2% increase dropping out of the comparison and being replaced by the current month’s +0.4%, and not telling us anything more about inflation beyond that….with prices for both groceries and energy higher, 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 328.980 to 329.970, which left the core index 3.11015% ahead of its year ago reading of 320.017, which is reported as a 3.1% year over year increase, same as the 3.1% year over year core price increase that was reported for July, 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 0.7% higher in August, after being 1.1% lower in July, 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, and 1.0% lower last August, and thus is 0.2% higher than in August of a year ago….the price index for energy commodities was 1.7% higher in August, while the price index for energy services was 0.2% lower, after the energy services price index had fallen by 0.3% in July….the energy commodities index was up 1.7% on a 1.9% increase in the price index for gasoline, even as the price index for fuel oil fell 0.3%, and even as prices for “other energy commodities”, including propane, kerosene, and firewood, averaged 0.2% lower…within energy services, the price index for utility gas service was 1.6% lower in August, after being 0.9% lower in July, but is still 13.8% higher than it was a year ago, while the electricity price index was 0.2% higher in August, after being 0.1% lower in July…. energy commodities are still averaging 6.2% below their year ago levels, with gasoline prices averaging 6.6% lower than they were a year ago, while the energy services price index is still up 7.7% from last August, as electricity prices are still averaging 6.2% higher than a year ago…
Meanwhile, the seasonally adjusted food price index was 0.5% higher in August, after being unchanged in July, 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 last September, and 0.2% higher last August, and 0.1% higher last July, as the price index for food purchased for use at home was 0.6% higher in August, after being 0.1% lower in July, 0.3% 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 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 0.4%, while the price index for food at employee sites and schools was 0.8% lower, and prices for other food away from home averaged 1.7% higher…
In the food at home categories, the price index for cereals and bakery products was 0.1% higher, even though average bread prices fell 0.2%, as the price index for flour and prepared flour mixes rose 0.4%, the price index for rice rose 1.5%, the price index for fresh crackers, bread, and cracker products rose 1.0%, and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers was 0.4% higher.…at the same time, the price index for the meats, poultry, firjsh, and eggs food group was 1.0% higher, as beef prices rose 2.7%, the price index for bacon, breakfast sausage, and related meats rose 1.2%, and the price index for fish and seafood rose 0.6%….in addition, the seasonally adjusted price index for dairy products was 0.1% higher, even as average milk prices fell 0.2%, as the price index for cheese and related products rose 0.4% and the price index for ice cream and related products was 0.3% higher….meanwhile, the fruits and vegetables price index was 1.6% higher, as the price index for fresh fruits rose 1.0%, the price index for fresh vegetables rose 3.0%, and the price index canned fruits and vegetables was 0.5% higher.…at the same time, the beverages price index was 0.6% higher, even as the price index for carbonated drinks fell 0.3%, because the price index for coffee was 3.6% higher….lastly, the price index for the ‘other foods at home’ category was 0.1% higher, as the price index for sugar and sweets rose 0.7%, the price index for salad dressing rose 1.3%, the price index for prepared salads rose 1.7%, the price index for soups rose 1.8%, the price index for snacks rose 1.0%, and the price index for salt and other seasonings and spices was 0.9% higher…
Among the seasonally adjusted core components of the CPI, which rose by 0.3% in August, after rising by 0.3% in July, 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, and by 0.3% last August, September, October and November, the composite price index of all goods less food and energy goods was 0.3% higher in August, 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 August’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.1% higher, as the price index for furniture and bedding rose 0.3%, the price index for household paper products rose 1.2%, the price index for Indoor plants and flowers rose 2.8%, and the price index for tools, hardware, outdoor equipment and supplies was 0.8% higher….at the same time, the apparel price index was 0.5% higher on a 4.2% increase in the price index for men’s pants and shorts, a 4.4% increase in the price index for women’s outerwear, a 1.5% increase in the price index for boys' and girls' footwear, and a 5.5% increase in the price index for jewelry and watches ….in addition, the price index for transportation commodities other than fuel was was also 0.5% higher, as average prices for new cars rose 0.2%, the price index for used cars and trucks rose 1.0%, and the price index for vehicle parts and equipment other than tires was 2.0% higher…on the other hand, the price index for medical care commodities was 0.3% lower as the price index for prescription drugs fell 0.2% and the price index for nonprescription drugs fell 0.9%, but the price index for medical equipment and supplies was 0.6% higher…however, the recreational commodities index was unchanged, as the price index for TVs rose 2.5%, the price index for sports vehicles including bicycles rose 0.6%, the price index for photographic equipment rose 1.8%, and the price index for sewing machines, fabric and supplies was 9.1% higher, while the price index for other video equipment fell 2.5%, the price index for audio equipment fell 0.8%, the price index for pets and pet products fell 0.5%, and the price index for toys games, hobbies and playground equipment was 1.1% lower… meanwhile, the education and communication commodities index was 0.3% lower, on a 0.6% decrease in the price index for computers, peripherals, and smart home assistants, a 5.5% decrease in the price index for computer software and accessories, and a 0.6% decrease in the price index for educational books and supplies.…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 0.4% higher, as rents rose 0.3%, homeowner’s equivalent rent rose 0.4%, and prices for lodging away from home at hotels and motels were 2.3% higher, while the price index for household insurance was 0.6% 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 1.7% lower… on the other hand, the price index for medical care services was 0.1 lower, as the price index for dental services fell 0.7%, price index for hospital services was unchanged, and the price index for care of invalids and elderly at home was 0.2% lower….however, the transportation services price index was 1.0% higher, as the price index for airline fares rose 5.9%, the price index for motor vehicle repairs rose 5.0%, and the price index for intracity mass transit was 0.4% higher….on the other hand, the recreation services price index was 0.2% lower, as the price index for subscription and rental of video and video games fell 2.7%, the price index for admissions to movies, theaters, and concerts fell 0.7%, and the price index for photographers and photo processing was 0.8% lower…meanwhile, the price index for education and communication services was 0.1% higher, as the price index for technical and business school tuition and fees rose 0.9%, the price index for internet services and electronic information providers rose 1.2%. the price index for postage and delivery services rose 1.4%, and the price index for daycare was 0.7% higher.…lastly, the index for other personal services was 0.1% higher, as the price index for haircuts and other personal care services rose 0.5% and the price index for apparel services other than laundry and dry cleaning was 0.9% higher..
Producer Price Index Fell 0.1% in August on Drop in Margins for Trade Services
The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.1% in August, as the final demand price index for wholesale goods rose 0.1%, but the more heavily weighted price index for final demand for services was was 0.2% lower….that August PPI decrease followed a downwardly revised 0.7% increase in July, when the final demand price index for wholesale goods rose 0.6% and the price index for final demand for services was was 0.7% higher, and followed an upwardly revised 0.1% PPI increase 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 0.4% increase in May, when 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 0.2% decrease to a 0.3% 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 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 0.3% 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 last 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, and an unrevised 0.3% increase last 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 2.6% 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 0.1% higher in August, after being 0.6% higher in July, 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 last September, and unchanged in August of last year, and is now 2.1% higher than a year ago….the final demand goods price index was 0.1% higher in August even as the price index for wholesale energy goods was 0.4% lower, after it had been 0.7% higher in July, 1.1% higher in June, 0.4% lower in May, 0.3% lower in April, 3.9% lower in March, 1.4% lower in February, 2.0% higher in January, and 2.2% higher in December, while the price index for wholesale foods was 1.4% higher, after it had been 1.4% higher in July, 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, and as the index for final demand for core wholesale goods (excluding food and energy) was 0.3% higher in August, after it had been 0.4% higher in July, 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 0.4% lower in July on a 0.6% decrease in wholesale prices for gasoline, a 2.2% decrease in wholesale prices for home heating oil and distillates, a 5.9% decrease in wholesale prices for natural gas liquids, and a 1.8% decrease in wholesale prices for utility natural gas, while the final demand for food price index was 0.1% higher despite a 15.1% decrease in the wholesale price index for fresh and dry vegetables, due to a 6.0% increase in the wholesale price index for beef and veal, a 7.0% increase in the wholesale price index for oilseeds, a 6.9% increase in the wholesale price index for roasted coffee, and a 6.6% increase in the wholesale price index for processed turkeys… among core wholesale goods, the wholesale price index for electronic computers and computer equipment rose 1.8%, the wholesale price index for electronic components and accessories rose 5.1%, the wholesale price index for cigarettes rose 2.4%, and the wholesale price index for iron and steel scrap was 2.7% higher…
Meanwhile, the price index for final demand for services was 0.2% lower in August, after being 0.7% higher in July, 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 last September, and 0.5% higher last August, and is now 2.9% higher than a year ago…the price index for final demand for trade services fell 1.7%, but the price index for final demand for transportation and warehousing services rose 0.9%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.3% higher….
Among trade services, seasonally adjusted margins for furniture retailers fell 7.2%, margins for food and alcohol retailers were 1.5% lower, margins for RVs, trailers, and campers retailers were 3.1% lower, margins for TV, video, and photographic equipment and supplies retailers were 5.6% lower, margins for machinery and vehicle wholesalers were 3.9% lower and margins for professional and commercial equipment wholesalers were 5.2% lower….among transportation and warehousing services, average margins for airline passenger services were 1.0% higher, margins for air transportation of freight were 0.6% higher, and margins for truck transportation of freight were 1.2% higher….among the components of the core final demand for services index, the price index for cable and satellite subscriber services rose 1.2%, the price index for tax preparation and planning rose 1.7%, the price index for application software publishing rose 1.9%, the price index for portfolio management rose 2.0% and the price index for consumer loans was 2.7% higher…
This report also showed the price index for intermediate processed goods was 0.4% higher in August, after being 0.7% higher in July, 0.1% higher 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 last September, and 0.1% lower last August….the price index for intermediate energy goods fell 0.1% in August as refinery prices for gasoline fell 0.6%, refinery prices residual fuels fell 7.6%, producer prices for industrial natural gas fell 3.0%, producer prices for commercial natural gas fell 2.9%, and producer prices for natural gas liquids fell 5.9% ….on the other hand, the price index for intermediate processed foods and feeds rose 1.0%, as the producer price index for processed poultry rose 4.9%, the index for fats and oils rose 1.6%, and the producer price index for meats was 2.8% higher….meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.3% higher, as the producer price index for electronic components and accessories rose 5.1%, the producer price index for asphalt rose 5.7%, the producer price index for paint materials rose 4.4%, the producer price index for aluminum mill shapes rose 5.5%, the producer price index for phosphates rose 4.5%, and the producer price index for nitrogenates was 5.8% higher….average prices for intermediate processed goods were 2.6% higher than in August 2024, the 10th year over year increase in 30 months, but 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 fell 1.1% in August, after rising 2.3% in July and 2.3% in June, after falling 1.7% in May, 3.7% 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% last September and falling 3.2% last August….that was as the July price index for crude energy goods fell 2.5%, as crude oil prices fell 2.8%, unprocessed natural gas prices fell 2.8% and coal prices were 0.5% lower, and as the price index for unprocessed foodstuffs and feedstuffs was 0.3% lower, as the producer price index for corn fell 5.5%, the producer price index for wheat fell 4.9%, the producer price index for slaughter chickens fell 1.4%, and the producer price index for raw milk was 1.6% lower….meanwhile, the index for core raw materials other than food and energy materials was 0.5% lower, on a 7.4% decrease in the price index for copper base scrap, a 10.0% decrease in the price index for hides and skins, and a 0.5% decrease in the price index for logs, bolts, timber, pulpwood, and woodchips….but because last August’s 3.2% decrease dropped out of the YoY comparison, this raw materials price index is now 3.0% higher than a year ago, the 10th year over year increase in the past 31 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 0.3% higher in August, after being 0.7% higher in July, unchanged in June, 0.1% higher in May, 0.3% 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 last September, and 0.1% higher last August.…the price index for intermediate trade services was 0.5% lower, as margins for chemicals and allied products wholesalers fell 3.8%%, and margins for intermediate hardware, building material, and supplies retailers were 0.4% lower….on the other hand, the price index for transportation and warehousing services for intermediate demand was 0.4% higher, as the intermediate price index for transportation of passengers rose 1.0%, the intermediate index for truck transportation of freight rose 1.2%, and the intermediate index for air transportation of freight was 0.6% 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 radio advertising time sales rose 5.7%, the intermediate price index for portfolio management rose 2.0%, the intermediate price index for nonresidential real estate rents rose 2.7%, and the intermediate price index for executive search services was 3.3% higher….over the 12 months ended in August, price index for services for intermediate demand was 2.1% higher than it was a year earlier, the fifty-eighth 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, even as the current annual increase is still much lower than the record 9.5% year over year increase that was indicated for July 2021…
Wholesale Sales Rose 1.4% in July; Wholesale Inventories Were Up 0.2%
The July report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $711.3 billion in July, up 1.4 percent (±0.5 percent) from the revised June level, and was up 6.2 percent (±0.9 percent) from wholesale sales of July 2024… the June preliminary sales estimate was revised to $701.3 billion from the $698.45 billion in sales reported last month, and hence the May to June change was revised to a 0.7% increase from the 0.3% increase that was reported last month.…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 GDP, as additional goods on the shelf or in intermediate storage represent goods that were produced but not sold, and this July report estimated that wholesale inventories were valued at a seasonally adjusted $908.1 billion at month end, up 0.1 percent (+/-0.2%)* from the revised June level. and 0.4 percent (±0.7%)* higher than in June a year ago, while the June preliminary estimate revised from the $906.3 billion reported a month ago to $907.0 billion, which revised the June change from up 0.1% to up 0.2%* from May….
For national accounts purposes, wholesale inventories are adjusted for price changes by category with the appropriate component of the producer price index. The producer price index for July indicated that prices for finished goods were on average 0.7% higher, that prices for intermediate processed goods were on average 0.7% higher, and that prices for unprocessed goods were 3.2% higher….hence, once adjusting for higher prices, July’s real wholesale inventories were at least 0.6% less than those at the end of the 2nd quarter, and most likely even less than that…however, since the key source data and assumptions(xls) for the second estimate of 2nd quarter GDP indicated that real wholesale inventories were down sharply in the 2nd quarter, accounting for over 35% the quarter’s record inventory decrease, that this report appears to indicate a relatively modest real decrease in aggregate July’s wholesale inventories in comparison would therefore mean the change in inventories has increased, meaning that the difference between the 2nd quarter decrease and the July decrease would be added to the 3rd quarter’s real growth in GDP…
(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…)
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