December’s consumer prices and existing home sales; November’s retail sales, industrial production, and producer prices, October’s business inventories and new home sales

Major reports released last week included the December Consumer Price Index, the November Producer Price Index, and the November Import-Export Price Index, all from the Bureau of Labor Statistics, the Retail Sales report for November and the associated Business Sales and Inventories report for October, both from the Census Bureau, the November report on Industrial Production and Capacity Utilization from the Fed, a long delayed Census Bureau report on New Home Sales for both September and October, and the Existing Home Sales report for December from the National Association of Realtors (NAR)….

in addition, the prior week saw the Regional and State Employment and Unemployment for October from the Bureau of Labor Statistics, a report which breaks down the two employment surveys from the monthly national jobs report by state and region….while the text of that report provides a useful summary of this data, the serious statistics aggregation can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands…

The week also saw the release of the first two regional Fed manufacturing surveys for January: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose to +7.7 in January, up from –3.9 in December, but down from +18.7 in November, meaning that a plurality of Second District manufacturers are now reporting improving business conditions, after a small plurality of them had reported deteriorating conditions last month, and the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, which reported its broadest diffusion index of current general activity increased from a revised reading of -8.8 in December to 12.6 in January, its highest reading since September, indicating that a majority of that region’s manufacturers are reporting increased activity, after a plurality of them had reported a slowdown last month….

Consumer Prices Rose 0.3% in December on Higher Prices for Food, Shelter, and Clothing

Note: The Consumer Price Index report from the Bureau of Labor Statistics still suffers from shutdown related issues, since they did not collect price data during October because those who normally handle that job were laid off….that means their monthly tables are still displaying blank columns for both October and November, because without October data, they cannot compute the November price change….while we have November price indices for most goods and services based on prices from the 1982 to 1984 period being equal to 100, those price indexes aren’t seasonally adjusted, so one can’t tell if the change between those index figures is real, or just due to a normal seasonal price fluctuation…year over year figures are as accurate as they've ever been, since the seasonal adjustment is the same for both of them..

At any rate, the seasonally adjusted Consumer Price Index was 0.3% higher in December, as higher prices for food, rent, gas utilities, apparel, medical care services and drugs, recreational goods and services, airline fares, lodging away from home, and admissions to entertainment venues were partly offset by lower prices for new and used vehicles, vehicle repairs, car and truck rental, fuel, information technology goods and services, appliances, most furniture, and health insurance….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 0.3% higher in December, after being 0.2% higher the two months ending in November, 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 last January, 0.4% higher last 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 from 324.122 in November to 324.054 in December, which left it statistically 2.6771% higher than the index reading of 315.605 from December 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 November, with that widely cited year over year change reflecting the effect of last December’s 0.36% increase dropping out of the comparison and being replaced by the current month’s +0.31%, and not telling us anything more about inflation beyond that….with higher prices for food and energy recorded this month, seasonally adjusted core prices, which exclude both food and energy, were up by 0.2% for the month, as the unadjusted core price index rose from 330.425 in November to 330.506 in December, which left the core index 2.6394% ahead of its year ago reading of 322.007, which is reported as a 2.6% year over year increase, same as the 2.6% year over year core price increase that was reported for November, but 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 0.3% higher in December, after being 1.1% higher in November, 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 last January, and 2.4% higher last December, and thus is 2.3% higher than in December of a year ago….the price index for energy commodities was 0.5% lower in December, on a 0.4% decrease in the price index for gasoline and a 1.5% decrease in the price index for fuel oil, while the price index for “other energy commodities”, including propane, kerosene, and firewood, averaged out to unchanged….meanwhile, the price index for energy services was 1.0% higher, as the price index for utility gas service was 4.4% higher in December, and is now 10.8% higher than it was a year ago, while the electricity price index was 0.1% lower…. energy commodities are now averaging 3.0% below their year ago levels, with gasoline prices averaging 3.4% lower than they were a year ago, while the energy services price index is still up 7.7% from last December, as electricity prices are still averaging 6.7% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.7% higher in December, after being 0.1% higher over the two months ending November, and 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 last January, and 0.3% higher last December, and is now 3.1% higher than a year ago…the price index for food purchased for use at home was 0.7% higher in December, while the price index for food bought away from home was also 0.7% higher, as average prices at fast food outlets rose 0.6% and average prices at full service restaurants rose 0.8%, while the price index for food at employee sites and schools was 0.3% higher, and prices for other food away from home averaged 0.2% higher…

In the food at home categories, the price index for cereals and bakery products was 0.6% higher, as average bread prices rose 1.1%, the price index for flour and prepared flour mixes also rose1.1%, the price index for rice rose 1.1%, the price index for fresh biscuits, rolls, muffins rose 2.0%, and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers was 1.0% higher.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.2% lower, largely because egg prices fell 8.2%, and as the price index for fresh fish and seafood was 1.2% lower….however, the seasonally adjusted price index for dairy products was 0.9% higher, as average milk prices rose 0.1%, as the price index for cheese and related products rose 1.4%, and the price index for other dairy and related products was 0.9% higher….at the same time, the fruits and vegetables price index was 0.5% higher, as the price index for fresh fruits rose 1.0%, the price index for fresh vegetables rose 3.0%, and the price index for frozen fruits and vegetables was 2.4% higher.…in addition, the beverages price index was 0.4% higher, as the price index for carbonated drinks rose 0.7%, and the price index for coffee was 1.9% higher….lastly, the price index for the ‘other foods at home’ category was 1.6% higher, as the price index for sugar and sweets rose 0.8%, the price index for salad dressing rose 3.0%, the price index for peanut butter rose 4.3%, the price index for frozen and freeze dried prepared foods rose 0.8%, the price index for soups rose 1.8%, the price index for snacks rose 1.1%, and the price index for spices, seasonings, condiments, and sauces was 1.9% higher…

Among the seasonally adjusted core components of the CPI, which rose by 0.2% in December, after rising by 0.2% over the 2 months ending in November, and by 0.3% in August, 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 virtually unchanged in December, while the more heavily weighted composite index for all services less energy services was 0.3% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust December’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.5% higher, as the price index for bedroom furniture rose 1.4%, the price index for window coverings rose 3.6%, the price index dishes and flatware rose 5.8%, the price index for nonelectric cookware and tableware rose 3.5%, and the price index for outdoor equipment and supplies was 2.3% higher….at the same time, the apparel price index was 0.6% higher on a 3.4% increase in the price index for men’s underwear, nightwear, swimwear, and accessories, a 3.5% increase in the price index for women’s underwear, nightwear, swimwear, and accessories, a 3.0% increase in the price index for girls’ apparel, and a 2.3% increase in the price index for infants' and toddlers' apparel….on the other hand, the price index for transportation commodities other than fuel was was 0.3% lower, as average prices for new cars fell 0.1%, the price index for used cars and trucks fell 1.1%, and the price index for vehicle parts and equipment other than tires was 0.9% lower….however, the price index for medical care commodities was 0.3% higher as the price index for prescription drugs rose 0.1% and the price index for nonprescription drugs rose 1.8%, but the price index for medical equipment and supplies was 1.2% lower…meanwhile, the recreational commodities index was 0.1% higher, as the price index for recorded music and music subscriptions rose 1.1%, the price index for sports vehicles including bicycles rose 0.5%, the price index for photographic equipment and supplies rose 1.2%, and the price index for sewing machines, fabric and supplies was 1.8% higher, while the price index for other recreational books fell 3.1%, and the price index for toys games, hobbies and playground equipment was 0.9% lower… meanwhile, the education and communication commodities index was 2.0% lower, on a 1.3% decrease in the price index for computers, peripherals, and smart home assistants and a 3.3% decrease in the price index for telephone hardware, calculators, and other consumer information items.…lastly, a separate price index just for alcoholic beverages was 0.1% lower, while the price index for ‘other goods’ was 0.1% higher on an 0.4% increase in the price index for cigarettes and a 2.6% increase in the price index for miscellaneous personal goods…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.4%, homeowner’s equivalent rent rose 0.3%, and prices for lodging away from home at hotels and motels were 3.5% higher, 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 14.3% lower… ….at the same time, the price index for medical care services was also 0.4 higher, as the price index for dental services rose 0.7%, price index for hospital services rose 1.0%, and the price index for nursing homes and adult day services was 0.3% higher….in addition, the transportation services price index was 0.5% higher, as the price index for airline fares rose 5.2%, and the price index for other intercity transportation was 2.7% higher….moreover, the recreation services price index was 1.8% higher, as the price index for subscription and rental of video and video games rose 19.5%, the price index for cable, satellite, and live streaming television service rose 1.1%, the price index for admissions to sporting events, movies, theaters, and concerts rose 3.6%, and the price index for veterinarian services was 2.0% higher…on the other hand, meanwhile, the price index for education and communication services was 0.8% lower, as the price index for wireless telephone services fell 3.3%, and the price index for internet services and electronic information providers was 0.7% lower.…lastly, the index for other personal services was 0.2% lower, as the price index for financial services services fell 3.5% on a 4.5% decrease in tax return preparation and other accounting fees..

Retail Sales Rose 0.6% in November after Prior Months Sales were Revised Lower

Seasonally adjusted retail sales increased 0.6% in November after retail sales for September and October were revised higher…the Advance Retail Sales Report for November (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $735.9 billion during the month, which was 0.6 percent (±0.4 percent) higher than October’s revised sales of $731.4 billion and 3.3 percent (±0.5 percent) above the adjusted sales in November of last year.…year to date sales thru November totaled $7,884.033 billion, 3.7% higher than the same 11 months of 2024…October’s seasonally adjusted sales were revised down by almost 0.2%, from the $732.6 billion reported last month to $703.7 billion, while September’s sales were revised down by less than 0.1%, from $732.44 billion to $732.19 billion; as a result, the September to October percent change was revised from virtually unchanged (±0.5 percent)* to down 0.1 percent (±0.2 percent)*.…assuming a similar inflation adjustments to the ones used in earlier estimates, the $0.25 billion downward revision to September’s sales might reduce the previous estimate of the personal consumption expenditures contribution to 3rd quarter GDP by about 0.01 or 0.02 percentage points….unadjusted sales, extrapolated from surveys of a small sampling of retailers, were estimated to have fallen 0.8%, from $743,263 million in October to $737,035 million in November, while they were up 1.9% from the $722,947 million of sales in November a year ago…

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

To compute November’s initial estimate of real personal consumption of goods changes for national accounts from this November retail sales report, the BEA would normally use the corresponding monthly price changes for each type of sales from the November consumer price index, which is showing blanks for those figures, because the October CPI was cancelled.…the November CPI report showed some price changes from October, such as that for gasoline, but they didn’t even break down the month over month price changes for goods vs services…i imagine that the BEA will have other sources for monthly price changes by the time they get around to figuring 4th quarter GDP, but given what we have now, we can’t make any estimates of what real retail sales would be that would make any sense, even if other agencies purport to doing so..

Industrial Production Rose 0.4% in December After November was Revised 0.2% Higher

The Fed’s G17 release on Industrial production and Capacity Utilization indicated that industrial production increased by a seasonally adjusted 0.4% in December after the November change was revised from an increase of 0.2% to an increase of 0.4%, and after the October change was revised from a decrease of 0.1% to a decrease of 0.3%, which left industrial production up at a 0.7% annual rate in the 4th quarter, and 2.0% higher than a year earlier….the industrial production index, with the benchmark set for average 2017 production to equal to 100.0, rose to 102.3 in December from 102.0 in November, which was revised from the 101.8 reported for November last month, while the IP index for October was revised from 101.6 to 101.5, the index for September was revised from 101.7 to 101.8, and the August IP index remained at 101.6…

The manufacturing index, which accounts for roughly 74% of the total IP index, rose 0.2% to 97.4 in December, leaving the manufacturing index 2.0% higher than it was a year ago, after the November manufacturing index was revised from 97.0 to 97.2, the October manufacturing index remained at 96.9, the September manufacturing index was revised from 97.3 to 97.5, the August manufacturing index remained at 97.3, and the September manufacturing index was revised from 97.2 to 97.3….meanwhile, the mining index, which includes oil and gas well drilling, fell from 122.7 in November to 121.9 in December, after the November mining index was revised down from 122.8, leaving the mining index at a level 1.7% higher than it was a year earlier…finally, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, rose by 2.6% in our cold December, from 109.7 to 112.5, after the November utility index was revised down from 110.0, and was thus a 0.3% decrease from October….since December 2024 was  milder than this year, the utility index ended the year 2.3% above what it was a year earlier…

This report also includes capacity utilization data, which is 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 rose to 76.3% in December from 76.1% in November, after capacity utilization for November was revised up from the 76.0% utilization rate reported last month…average capacity utilization of NAICS durable goods production facilities was unchanged at 73.6% in December, while capacity utilization for non-durables producers rose from an upwardly revised 77.6% to 77.7%…capacity utilization for the mining sector fell to 85.7% in December from 86.2% in November, which was originally reported as 86.3%, while utilities were operating at 72.3% of capacity during December, up from 70.7% of capacity during November, which was previously reported at 70.9%…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 Price Index Rose 0.2% in November on Higher Prices for Fuels, Transportation and Core Services

Although the Producer Price Index for October was cancelled due to the suspension of price data collection during the shutdown, this release for November is showing price changes for October, so we assume they’ve managed to piece together that month’s price changes well enough to meet publication criteria…so although it’s a month late, we see no further issues with this report, which can now be used to adjust inventories and goods and services output for inflation in national accounts without any unusual asterisks…

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.2% in November, as the final demand price index for wholesale goods was 0.9% higher, while the price index for final demand for services was unchanged….that November PPI increase followed the initial report of an 0.1% increase in October, when the final demand price index for wholesale goods fell 0.4%, but the more heavily weighted price index for final demand for services was 0.3% higher, and also followed a revised 0.6% PPI increase in September, when the final demand price index for wholesale goods rose 0.8% and the price index for final demand for services was 0.2% higher….those post-shutdown reports followed a revised 0.2% decrease in August, when the final demand price index for wholesale goods rose 0.2%, but the more heavily weighted price index for final demand for services was 0.3% lower, and also followed a revised 0.8% 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 0.9% higher, and followed an unrevised 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 unchanged, and a 0.4% increase in May, when the final demand price index for wholesale goods was 0.1% higher, and the price index for final demand for services 0.5% higher, and an unrevised 0.3% decrease in the April PPI, 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 last 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 last 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….on an unadjusted basis, producer prices are now 3.0% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was also 0.2% higher for the month, and is 3.5% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.9% higher in November, after being 0.4% lower in October, 0.8% higher in September, 0.2% higher in August, 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 last January, 0.5% higher last December, and 0.6% higher last November, and is now 3.2% higher than a year ago….the final demand goods price index was 0.9% higher in November because the price index for wholesale energy goods was 4.6% higher, after it had been 3.2% lower in October, 2.9% higher in September, 0.3% lower in August, 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, and 2.0% higher last January, while the price index for wholesale foods was unchanged, after it had been 0.4% lower in October, 0.8% higher in September, unchanged in August, 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 October, 0.2% higher in September, 0.4% higher in August, and 0.4% higher in July….

Wholesale energy prices were 6.4% higher in November on a 10.5% increase in wholesale prices for gasoline, a 12.6% increase in wholesale prices for home heating oil and distillates, a 12.4% increase in wholesale prices for diesel fuel, and a 2.1% increase in wholesale prices for residential electric power, while the final demand for food price index was unchanged as a 14.5% increase the wholesale price index for fresh and dry vegetables, a 9.5% increase the wholesale price index for fresh fruits and melons, and a 7.7% increase the wholesale price index for eggs for fresh use were offset by a 1.1% decrease in the wholesale price index for beef and veal, an 0.9% decrease in the wholesale price index for dairy products, and a 1.0% decrease in the wholesale price index for shortening and cooking oils… among core wholesale goods, the wholesale price index for mobile homes rose 4.0%, the wholesale price index for electronic components and accessories rose 1.4%, the wholesale price index for floor coverings rose 2.3%, the wholesale price index for jewelry, platinum and karat gold rose 1.4%, and the wholesale price index for cigarettes was 0.9% higher…

Meanwhile, the price index for final demand for services was unchanged in in November, after being 0.3% higher in October, 0.4% higher in September, 0.3% lower in August, 0.9% higher in July, unchanged 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, and 0.5% higher last December, and is now 2.9% higher than a year ago….the price index for final demand for trade services fell 0.8%, but the price index for final demand for transportation and warehousing services rose 0.3%, and the core index for final demand for services other than trade, transportation, and warehousing services was also 0.3% higher….

Among trade services, seasonally adjusted margins for automobile retailers fell 9.3%, margins for furniture retailers were 4.7% lower, margins for computer hardware, software, and supplies retailers were 5.5% lower, margins for health, beauty, and optical goods retailers were 4.3% lower, and margins for chemicals and allied products wholesalers were 4.7% lower, but margins for TV, video, and photographic equipment and supplies retailers were 7.6% higher….among transportation and warehousing services, average margins for courier, messenger, and the U.S. postal service were 1.3% higher and margins for truck transportation of freight were 0.5% higher….among the components of the core final demand for services index, the price index for bundled wired telecommunications access services rose 4.6%, the price index for passenger car rental rose 3.5%, the price index for credit intermediation and trust services rose 9.8%, and the price index for motor vehicle repair and maintenance was 3.1% higher…

This report also showed the price index for intermediate processed goods was 0.6% higher in November, after being 0.3% lower in October, 0.3% higher in September, 0.4% higher in August, 0.8% higher in July, 0.1% lower 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 last January, and 0.2% higher last December….the price index for intermediate energy goods rose 3.0% in September as refinery prices for gasoline rose 10.5%. refinery prices for No. 2 diesel fuel rose 12.4% refinery prices for jet fuel rose 4.5%, and producer prices for natural gas to electric utilities rose 3.5% ….on the other hand, the price index for intermediate processed foods and feeds fell 0.3%, as the producer price index for meats fell 0.4%, the producer price index for dairy products fell 0.9% and the producer price index for fats and oils was 2.2% lower…. meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.1% higher, as the producer price index for paint materials rose 3.2%, the producer price index for industrial gases rose 1.1%, the producer price index for primary nonferrous metals rose 11.8%, the producer price index for secondary nonferrous metals rose 2.7%, the producer price index for electronic components and accessories rose 1.4%, and the producer price index for aluminum mill shapes was 3.1% higher….average prices for intermediate processed goods were 3.6% higher than in November 2024, the 13th year over year increase in 33 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 rose 0.4% in November, after falling 1.4% in October, after being unchanged in September, falling 1.7% in August, rising 1.6% in July and 2.2% in June, after falling 1.6% in May, 3.7% in April, and 3.9% in March, but after rising 0.2% in February, 5.8% last January and 2.9% last December….that was as the November price index for crude energy goods rose 1.4%, even as crude oil prices fell 1.1%, as unprocessed natural gas prices rose 10.7% while coal prices were 0.3% lower… meanwhile the price index for unprocessed foodstuffs and feedstuffs was 1.9% lower, as the producer price index for slaughter hogs fell 5.8%, the producer price index for slaughter chickens fell 2.3%, the producer price index for slaughter cattle fell 3.5%, and the producer price index for raw milk was 6.9% lower….meanwhile, the index for core raw materials other than food and energy materials was 1.1% higher, on a 2.3% increase in the price index for copper base scrap, a 1.7% increase in the price index for iron ores, and a 3.3% increase in the price index for nonferrous metal ores….because last November’s 2.2% decrease dropped out of the YoY comparison, this raw materials price index is now only 0.1% higher than a year ago, the 12th year over year increase in the past 34 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 0.2% higher in November, after being 0.3% higher in October, 0.3% higher in September, 0.1% higher in August, 0.7% higher in July, 0.1% higher in June, 0.1% higher in May, 0.3% lower in April, 0.3% higher in March, unchanged in February, 0.1% higher last January, and 0.6% higher last December.…the price index for intermediate trade services was 0.2% higher, as margins for machinery and equipment parts and supplies wholesalers rose 2.5%, margins for metals, minerals, and ores wholesalers rose 5.7%, and margins for intermediate automotive parts and tires retailers were 1.9% higher….at the same time, the price index for transportation and warehousing services for intermediate demand was 0.5% higher, as the intermediate price index for air mail and package delivery services, excluding by USPS, rose 2.2%, the intermediate index for courier and messenger services, except air mail rose 1.8%, and the intermediate index for warehousing, storage, and related services was 1.2% higher….in addition, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.2% higher, as the intermediate price index for radio advertising time sales rose 3.1%, intermediate price index for bundled wired telecommunication access services rose 4.6%, the intermediate price index for management, scientific, and technical consulting services rose 4.2%, the intermediate price index for ‘other’ credit intermediation, including trust services (partial) rose 9.8%, and the intermediate price index for passenger car rental was 3.5% higher….over the 12 months ended in November, price index for services for intermediate demand was 2.5% higher than it was a year earlier, the sixty-first 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…

October Business Sales Fell 0.2%, Business Inventories Rose 0.3%

After the release of the November retail sales report, the Census Bureau released the composite Manufacturing and Trade, Inventories and Sales report for October (pdf), which incorporates the revised October retail data from that November report and the earlier published October wholesale and factory data to give us a complete picture of the business contribution to the economy for the month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $1,943.7 billion in October, down 0.2 percent (±0.2 percent)* from September’s revised sales, but 3.5 percent (±0.3 percent) higher than total October sales of a year earlier…note that total September sales were concurrently revised from the originally reported 1,947.5 billion to $1,946.7 billion, and are now 0.1% lower than those of August…. seasonally adjusted manufacturer’s sales rose 0.1% to $607,039 million in October, while retail trade sales, which exclude restaurant & bar sales from the revised October retail sales reported earlier, fell by 0.1% from September to $631,736 million, and wholesale sales fell 0.4% to $704,897 million…

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,677.8 billion at the end of October, up 0.3 percent (±0.1%)* from September, and 1.4 percent (±0.3 percent) higher than in October a year earlier…at the same time, the value of end of September inventories was revised from the $2,670.0 billion reported last month to $2,670.5 billion, now 0.3% higher than August…that $0.5 billion upward revision to September inventories would increase the previous estimate of the inventory component to 3rd quarter GDP at around at a $2.0 billion annual rate, which should add 0.01 or 0.02 percentage points to 3rd quarter GDP, depending on how the inflation adjustments shake out….seasonally adjusted inventories of manufacturers were estimated to be valued at $947,044 million at the end of October, a decrease of 0.1% from September, while inventories of retailers were valued at $817,208 million, 0.5% more than September, and inventories of wholesalers were estimated to be valued at $913,499 million at the end of October, also 0.5% morel than in September…

For GDP purposes, all inventories, including retail, will be adjusted for inflation with appropriate component price indices of the producer price index for October, which was included in the November report we reviewed earlier….that report showed that prices for finished goods were 0.4% lower in October, that prices for intermediate processed goods were 0.3% lower, and that prices for unprocessed goods were 1.4% lower…retail inventories are all finished goods, as are about 70% of wholesale inventories, with the exception of commodity inventories, while factory inventories are roughly evenly split between finished goods, work in progress, and raw materials….applying the October PPI price changes to October inventories, we can estimate that real inventories were roughly 0.9% higher in October….since real inventories were modestly lower in the 3rd quarter and subtracted 0.22 percentage points from the 3rd quarter’s GDP, any growth in 4th quarter real inventories would first reverse that 3rd quarter hit, then add whatever inventory growth the 4th quarter achieves to 4th quarter GDP…

New Home Sales Barely Changed in October After Summer Sales were Revised Lower; Median Sales Price at a 4 Year Low

Note: The Census Bureau’s monthly reports on New Residential Sales have been suspended since the August report at the end of September because the data collection for it lapsed during the shutdown. Ultimately, a separate report for September sales was cancelled, and hence this week’s October report also incorporates initial estimates for September’s home sales..

The Census report on New Residential Sales for October (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 737,000 homes annually, which was 0.1 percent (±14.2 percent)* below the initial estimated annual rate of 738,000 new single family home sales in September, but was 18.7 percent (±21.7 percent)* above the estimated annual rate that new homes were selling at in October of last year….the asterisks indicate that based on their small sampling of data, Census could not be certain whether October new home sales rose or fell from September, or even from those of last year, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….with this report; sales of new single family homes in August, initially reported at an annual rate of 800,000 in September, were revised to a 711,000 a year rate with this report, while July’s home sale rate, initially reported at an annual rate of 652,000 five months ago and revised to a 664,000 a year rate in September, were revised down to a 639,000 annual rate with this release, and while June’s home sale rate, initially reported at an annual rate of 627,000 six months ago and revised from a 656,000 a year rate to a 676,000 a year rate in September, were revised back down to a 662,000 a year rate with this report…

The annual rates of sales reported here were seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 57,000 new single family homes sold in October, down from the 59,000 estimated new homes that sold in September, but up from the 46,000 new homes that sold in October a year ago…..the raw numbers from Census field agents further estimated that the median sales price of new houses sold in October was at $392,300, the lowest median sales price since July 2021, down from the median sale price of $405,800 in September and down 8.0% from the median home sales price of $426,300 in October a year ago, while the average new home sales price in October was $498,000, up from the $483,500 average sales price in September, but down from the average sales price of $521,900 in October a year ago….a seasonally adjusted estimate of 488,000 new single family houses remained for sale at the end of October, unchanged from September, which represents a 7.9 month supply at the October sales rate, also unchanged from the 7.9 months of new home supply in September…for graphs and commentary on this report, see the following post by Bill McBride at Calculated Risk: New Home Sales at 737,000 Annual Rate in October…

Existing Home Sales Rose 5.1% on lower prices in December; 2025 Sales Match Lowest on Record

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales rose by 5.1% from November to December, after rising by 0.5% in November, projecting that 4.35 million existing homes would sell over an entire year if the December home sales pace were extrapolated over that year, a pace that was also 1.4% above the annual sales rate they projected in December of a year ago.…November sales were at a 4.14 million annual rate, revised from the 4.13 million annual rate indicated by last month’s report…for the entire year, existing home sales totaled 4,060,000, matching the the 4,060,000 existing homes that sold in 2024, which had been lowest sales level in nearly 30 years, and down 0.7% from the 4,090,000 existing homes that sold in 2023…the inventory of existing homes on the market fell to 1,180,000 by the end of December, down 18.1% from 1,440,000 in November, but up 3.5% from a year earlier, which is the now the equivalent of a 3.3 months supply at the current sales pace…

The NAR also reported that the median sales price for all existing-home types was at $405,400 in December, which was 0.4% higher than the median sales price in December of a year earlier, as home price increases in the Northeast and Midwest were offset by home price increases in the West and South…..the NAR press release, which is titled “NAR Existing-Home Sales Report Shows 5.1% Increase in December“, is in easy to read plain English, so if you’re interested in more details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release…as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell for are directly included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

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) to see what actually transpired during the month…this unadjusted data indicates that roughly 345,000 homes sold in December, up by 16.9% from the 295,000 homes that sold in November, and 4.9% more than the 329,000 homes that sold in December of last year, so we can see that the impact of the seasonal adjustment on the annualized published figures was downward for this month….that same pdf indicates that the median home selling price for all housing types was at $405,00 in December, the lowest median price since March, down 1.1% from November, and down 6.3% from the revised $432,700 median selling price in June. while for the year as a whole, the median home sales price was at $414,400, up 6.4% from the median sales prices of $389,300 in 2023, and 1.7% higher than the $407,600 median sales price of 2024….for graphs and commentary on this report, see NAR: Existing-Home Sales Increased to 4.35 million SAAR in December; Lowest Annual Sales since 1995 from Bill McBride; he’s been writing about it for 21 years…

 

 

(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…)