November’s jobs, consumer prices, and existing home sales; October’s retail sales; September’s business inventories, et al

Major shutdown-delayed reports that were released last week included the Employment Situation Summary for November and the November Consumer Price Index, both from the Bureau of Labor Statistics and both reporting after their October reports were cancelled, and the Retail Sales Report for October and the associated Business Sales and Inventories Report for September, both from the Census Bureau...in addition, the week also saw the Existing Home Sales Report for November from the National Association of Realtors (NAR), which was on its usual schedule…

This week also saw the release of the first three regional manufacturing survey for December; the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, an adjacent county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index fell to -3.9 in December, down from +18.7 in November, meaning that a plurality of Second District manufacturers are now reporting deteriorating business conditions, after a significant majority of them had reported improving conditions last month…at the same time, the Philadelphia Fed Manufacturing Survey for December, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell from a reading of -1.7 in November to -10.2 in December, indicating that deteriorating conditions among that region’s manufacturers have become quite a bit more widespread than a month ago, while the Kansas City Fed manufacturing survey for December, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index fell to +1 in December, from +8 in November, and from +6 in October, which means that the small plurality of 10th District manufacturers who saw improvement in business conditions in December were almost matched by those who reported deteriorating conditions...

Employers Added 64,000 Jobs in November: Unemployment Rate Rose to a 50 Month High

The Employment Situation Summary for November from the Bureau of Labor Statistics comes to us late this month, after the publication of the Employment Situation Summary for October was cancelled in the wake of the shutdown…however, for the establishment survey, this November report includes October data that businesses self-reported electronically during the shutdown, and other October data that was collected after the shutdown was over…but since no one was collecting household data during the shutdown, there was no October household data – employment, unemployment and labor force statistics jump straight from September to November, and no monthly change for household data is available…hence, when we report a change in household data, we’ll be citing the September to November change, cause i can see no other way to report it…

Overall, this report shows an increase in payroll jobs that was a little better than expected, after a large drop in payroll jobs in October, which was due to much lower federal government employment, but that the unemployment rate unexpectedly rose 0.2% over two months to a four year high and the labor force participation rate rose 0.1% because more of those unemployed started looking for work, while the employment rate fell 0.1% to match this year's low….estimates extrapolated from the seasonally adjusted establishment survey data projected that employers added 64,000 jobs in November, after cutting 105,000 jobs in October, and after the previously estimated payroll job increase for September was revised from 119,000 down to 108,000, while the payroll jobs decrease for August was revised from a loss of 4,000 jobs to a loss of 26,000 …hence, this report shows a net loss of 74,000 payroll jobs compared to what was reported September, contrasted against the gain of 50,000 jobs that was expected ahead of the report…. meanwhile, the unadjusted data shows that there were actually 241,000 more payroll jobs extent in November than in October, as the normal seasonal job increases in retail, shipping, & the education sector were washed out of the headline number by the seasonal adjustment…

Seasonally adjusted job increases in November were fairly concentrated in health services and construction, while a seasonal adjustment induced payroll job decrease of 17,700 jobs among couriers and messengers was the only serious decrease….since the BLS summary of the job gains by sector is clear and as detailed as our usual synopsis, we’ll again just quote from that summary here:

• Total nonfarm payroll employment changed little in November (+64,000) and has shown little net change since April. In November, employment rose in health care and construction. Federal government employment declined by 6,000, following a loss of 162,000 in October. (See table B-1.)
• In November, health care added 46,000 jobs, in line with the average monthly gain of 39,000 over the prior 12 months. Over the month, job gains occurred in ambulatory health care services (+24,000), hospitals (+11,000), and nursing and residential care facilities (+11,000).
• Construction employment grew by 28,000 in November, as nonresidential specialty trade contractors added 19,000 jobs. Construction employment had changed little over the prior 12 months.
• Employment in social assistance continued to trend up in November (+18,000), primarily in individual and family services (+13,000).
• In November, employment edged down in transportation and warehousing (-18,000), reflecting a job loss in couriers and messengers (-18,000). Transportation and warehousing employment has declined by 78,000 since reaching a peak in February.
• Federal government employment continued to decrease in November (-6,000). This follows a sharp decline of 162,000 in October, as some federal employees who accepted a deferred resignation offer came off federal payrolls. Federal government employment is down by 271,000 since reaching a peak in January. (Federal employees on furlough during the government shutdown were counted as employed in the establishment survey because they received pay, even if later than usual, for the pay period that included the 12th of the month. Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; financial activities; professional and business services; leisure and hospitality; and other services.

The establishment survey also showed that average hourly pay for all employees rose by 5 cents an hour to $35.61 an hour in November, after it had increased by 16 cents an hour in October; at the same time, the average hourly earnings of production and non-supervisory employees increased by 11 cents to $31.76 an hour…employers also reported that the average workweek for all private payroll employees increased by 0.1 hour to 34.3 hours in November, while weekly hours for production and non-supervisory personnel was unchanged at 33.7 hours…at the same time, the manufacturing workweek rose a tenth of an hour to 40.0 hours, while average overtime was unchanged at 2.9 hours…

Meanwhile, the November household survey indicated that the seasonally adjusted extrapolation of those who reported being employed rose by an estimated 96,000 to 163,741,000 from September to November, while the estimated number of those unemployed and looking for work rose by 228,000 to 7,831,000…. as a result, the total labor force increased by a rounded net of 323,000, which was enough to raise the labor force participation rate from 62.4% in September to 62.5% in November….since the working age population had grown by 407,000 over the same period, that meant the number of employment aged individuals who were not in the labor force still rose by 83,000 to 103,061,000…meanwhile, the modest increase in number employed as a percentage of the rising population was enough to lower the employment to population ratio, which we could think of as an employment rate, from 59.8% in September to 59.7% in November…at the same time, the increase in the number unemployed was enough to raise the unemployment rate by 0.2% to 4.6%, the highest since September 2021….meanwhile, the number of those who reported they were forced to accept just part time work rose by 909,000, from 4,579,000 in September to 5,488,000 in November, which was enough to raise the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, from 8.0% of the labor force in September to 8.7% in November, also a four year high….

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..

Consumer Prices Rose 0.2% over October and November on Higher Prices for Energy, Shelter, and Vehicles

Note: the Bureau of Labor Statistics did not collect price data during October because those who normally handle that job were laid off during the government shutdown, so the publication of the Consumer Price Index for October was cancelled…price data collection resumed on November 14th, and by the time of the rescheduled release of the Consumer Price Index for November on December 18th, that data met publication criteria, so November price indices were published…however, since there was very little October price data available, the November CPI news release and database update does not include one-month price percent changes for November in the 90%+ of the indices where that October data was missing….we have November price indices for most goods and services based on prices from the 1982 to 1984 period being equal to 100, but this months release doesn’t even include the equivalent indices for September, so we can’t even figure a two month index change – all we’re given is mostly blank columns for October…and even if we had September indices easily accessible, they wouldn’t be seasonally adjusted, so those price indexes that normally have a significant seasonal change, such as natural gas utilities, would show the seasonal price change and not a change that one could compare to other months…given that, we’ll note some of the highlights from Consumer Price Index Summary for November and wait till next month for comparative data…

The consumer price index was 0.2% higher over the 2 months ending in November, as higher prices for energy, housing, new and used vehicles, household furnishings and operations, communication, and personal care were only partly offset by lower prices for lodging away from home, recreation, and apparel….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 over two months in November, after being 0.3% higher in September, 0.4% higher in August, 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, and 0.3% higher in November of last year….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, actually fell to 324.122 in November from 324.800 in September, which left it statistically 2.7351% higher than the index reading of 315.493 from November of last year, which is reported as a 2.7% year over year increase, lower than the 3.0% year over year increase that was reported for September, with that widely cited year over year change reflecting the effect of last November’s 0.3% increase and last October’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 higher prices for gasoline but barely changed food prices recorded this month, seasonally adjusted core prices, which exclude both food and energy, were also up by 0.2% for the month, as the unadjusted core price index fell from 330.804 in September to 330.425 in November, which left the core index 2.63335% ahead of its year ago reading of 321.947, which is reported as a 2.6% year over year increase, less than the 3.0% year over year core price increase that was reported for September, and well below the 6.6% annual increase reported for September 2022, which had been the largest annual increase in core prices in forty years…

The volatile seasonally adjusted energy price index was 1.1% higher in November, after being 1.5% higher in September, 0.7% higher in August, 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 last December, 0.1% higher last November, and 0.2% lower last October, and thus is 2.8% higher than in September of a year ago….the energy price index was up 1.1% on a 3.0% increase in the price index for gasoline, which is the only month over month energy price change we have this month….energy commodities are now averaging 1.2% above their year ago levels, with gasoline prices averaging 0.9% higher than they were a year ago, after the September report showed they were down 0.4% from the prior September, while the energy services price index is now up 7.4% from last September, as electricity prices now averaging 6.9% higher than a year ago, after the September report had showed the energy services price index up 6.4% from September 2004…

Meanwhile, the seasonally adjusted food price index was 0.1% higher over the 2 months ending November, after being 0.2% higher in September, 0.5% higher in August, 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 last December, and 0.3% higher last November…this report doesn’t even include month over month changes for groceries vs food services, but we can note that the index for food at home rose 1.9% since last November, led by a 4.7% increase in the index for meats, poultry, fish, and eggs, even as egg prices were 13.2% lower than last November, while the food away from home index rose 3.7% over the past year, on a 4.3% increase in the price index for full service meals and a 3.0% increase in the index for limited service meals….

Although the seasonally adjusted core components of the CPI rose by 0.2% over the 2 months ending in November, we again do not have a breakdown of the month over month price changes for goods vs services…vehicles are the only core goods prices we have monthly changes for; new car prices rose 0.4%, new truck prices rose 0.2%, and used cars and truck prices rose 0.3%, after rising 0.7% in October…notable year over year price increases for goods include a 4.6% increase in the price index for living room, kitchen, and dining room furniture; a 6.4% increase in the price index for indoor plants and flowers; a 6.3% increase in the price index for nonelectric cookware and tableware; a 5.6% increase in the price index for tools, hardware and supplies; a 7.4% increase in the price index for women's outerwear; an 8.3% increase in the price index for jewelry; a 10.2% increase in the price index for audio equipment; a 7.5% increase in the price index for photographic equipment; a 7.6% increase in the price index for recreational books, and an 8.2% increase in the price index for cigarettes; at the same time, television prices have fallen 7.3%, and the price index for smartphones is 9.4% lower than a year ago…

Within core services, the price index for leased cars and trucks fell 0.3% from October to November; the price index for postage rose 0.3% from October to November, and the price index for wireless telephone services was 1.1% higher….notable year over year price increases for services include a 7.0% increase in the price index for tenants' and household insurance; a 5.7% increase in the price index for hospital services; a 10.8% increase in the price index for care of invalids and elderly at home; a 9.6% increase in the price index for motor vehicle repairs; a 9.2% increase in the price index for tax return preparation and other accounting fees; a 5.6% increase in the price index for veterinarian services; a 8.5% increase in the price index for subscription and rental of video and video games; a 6.2% increase in the price index for apparel services other than laundry and dry cleaning, and an 8.9% increase in the price index for delivery services…services which saw notable year over year prices declines included the price index for lodging away from home including at hotels and motels but not at schools, which was down 5.7%, and the price index for airline fares, which was down 5.4%…

Retail Sales were Flat in October after September Sales Were Revised 0.1% Lower

Seasonally adjusted retail sales were virtually unchanged October after retail sales for August and September were revised lower…the Advance Retail Sales Report for October (pdf) from the Census Bureau estimated that seasonally adjusted retail and food services sales totaled $732.6 billion during the month, which was statistically unchanged (±0.5%)* from September’s revised sales of $732.44 billion, but 3.5 percent (±0.5 percent) above the seasonally adjusted sales in October of last year… September’s adjusted sales were revised from the $733.3 billion reported last month to $732.44 billion, while August’s sales were revised from $732.1 billion to $731.7 billion, and the combination of those two revisions left the August to September percentage change at up 0.1 percent (±0.3 percent)*, revised from the +0.2% increase previously reported…. estimated unadjusted sales,extrapolated from surveys of a small sampling of retailers, indicated sales actually rose 5.2%, from $708,441 million in September to $745,244 million in October, while they were up 3.8% from the $718,256 million of sales in October a year ago….the net $1.26 billion downward revision to August and September’s retail sales would indicate an downward revision of around $5.0 billion at an annual rate in 3rd personal consumption expenditures, and would decrease our previous estimate of the personal consumption expenditures contribution to 3rd quarter GDP by about 0.08 percentage points, assuming the distribution of price adjustments in the revised figures is similar to those originally published…

Included below is the table of the monthly and yearly percentage changes in retail sales by business type taken from the October Census Marts pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each kind of business from the September revised figure to this month’s October “advance” report in the first sub-column, and then the year over year percentage sales change since last October in the 2nd column…the second double column pair below gives us the revision of the September advance estimates (now called “preliminary”) as of this report, with the new August to September percentage change under “Aug 2025 r” (revised) and the September 2024 to September 2025 percentage change as revised in the last column shown…for your reference, the table of last month’s advance estimate of September sales, before this month’s revisions, is here…

To compute October’s initial estimate of real personal consumption of goods data for national accounts from this October retail sales report, the BEA would normally use the corresponding price changes for each type of sales from the October consumer price index, which was cancelled….for our own estimate, we would normally start by pulling out the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that October retail sales excluding the 0.8% decrease in sales at gas stations were up 0.1%….then, subtracting the figures representing the 0.3% increase in grocery & beverage sales and the 0.4% decrease in food services sales from the figures behind that change, we find that core retail sales were up by 0.16% for the month….however, without some related price indexes to apply to that increase, we have no idea whether real sales were up or down during the month…perhaps by the time the BEA gets to work on October PCE, they will have come up with some reasonable estimates of what October prices did from other sources, but given what we know so far, we can expect whatever is reported for October PCE will incorporate a large margin of error…

Business Sales were Flat in September, Business Inventories Rose 0.2%

After the release of the October retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for September (pdf), which incorporates the revised September retail data from that October report and the earlier published September wholesale and factory data to yield a complete picture of businesses’ impact on 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 $1,947.5 billion in September, virtually unchanged (±0.1 percent)* from August’s revised sales, but up 3.7 percent (±0.3 percent) from September’s sales of a year earlier…note that total August sales were concurrently revised from the originally reported $1,950.9 billion to $1,948.357 billion, and are now virtually unchanged from July, vs the originally reported 0.2% increase….

At the same time, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,670.0 billion at the end of September, up 0.2 percent (±0.1 percent) from August, and 1.2 percent (±0.3 percent) higher than in September a year earlier…the value of end of August inventories was revised from the $2,663.7 billion reported last month to $2,663.6 billion, and are still virtually unchanged from July….seasonally adjusted inventories of manufacturers were estimated to be valued at $946,811 million, 0.1% lower than in August, inventories of retailers were valued at $811,739 million, 0.4% more than in August, while inventories of wholesalers were estimated to be valued at $911,495 million at the end of September, 0.5% higher than in August…

For GDP purposes, all inventories, including retail, are adjusted for inflation with appropriate component price indices of the producer price index… the producer price index for September, released three weeks ago, indicated that aggregate prices for finished goods were on average 0.9% higher, that prices for intermediate processed goods were 0.4% higher, but that prices for unprocessed goods were 0.1% higher….retail inventories are all finished goods, as are about 70% of wholesale inventories, while factory inventories are roughly evenly split between the three stages of production… when we looked at factory inventories two weeks ago, we judged the real 3rd quarter inventory decrease to be smaller than the 2nd quarter decrease, and hence a positive for 3rd quarter GDP… then, with the wholesale inventory report last week, we figured that real wholesale inventories were just a bit lower in the 3rd quarter, after a large 2nd quarter decrease, and hence also a positive for 3rd quarter GDP…since the producer price index for September showed that prices for finished goods were on average 0.9% higher, that means that real retail inventories were roughly 0.5% lower for the month, following smaller decreases in July and August.…however, since real retail inventories saw a small increase in the second quarter, both that 2nd quarter increase and the small decreases in real 3rd quarter retail inventories would be subtracted from GDP in the 3rd quarter…

Existing Home Sales Rose 0.5% in November on Lower Prices

The National Association of Realtors (NAR) reported that their seasonally adjusted extrapolation of existing home sales rose 0.5% from October to November, projecting that 4.13 million existing homes would sell over an entire year if the November home sales pace were extrapolated over that year, a pace that was still 1.0% below the annual sales rate they projected for November of a year ago….October home sales were at a 4.11 million annual rate, revised from the 4.10 million annual rate indicated by last month’s report…the NAR also reported that the median sales price for all existing-home types was $409,200 in November, up 1.2% from the median sales price reported for November of last year, which they report is “the 29th consecutive month of year-over-year price increases.”….. The NAR press release, which is titled “NAR Existing-Home Sales Report Shows 0.5% Increase in November“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find all of that info in that press release…

Since this report is entirely seasonally adjusted and at a not very informative annual rate, we like to look at the raw data overview (pdf), which gives us a close approximation to the actual number of homes that sold each month…that unadjusted data indicates that roughly 293,000 homes sold in November, down 18.4% from the 359,000 homes that sold in October, and 7.0% fewer homes than the 315,000 homes that sold in November of last year, so we can see that the seasonal adjustment gave a sizable boost to the headline monthly change published in the Realtor’s press release….that same pdf indicates that the median home selling price for all housing types fell 1.4%, from a revised $414,900 in October to $409,200 in November, and was also down 5.4% from June high of $432,700, and the lowest median sales price since March…regional median home sales prices ranged from a low of $319,400 in the Midwest, to a high of $618,900 in the West, with prices in the Northeast falling 4.5% in the current report, from $503,600 in October to $ 480,800 in November… for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Increased to 4.13 million SAAR in November and Newsletter: NAR: Existing-Home Sales Increased to 4.13 million SAAR in November, which serves as a link to his in depth newsletter coverage of this report…

 

 

(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…)