December’s jobs report; November’s JOLTS; October’s trade deficit, housing starts, factory inventories, and wholesale trade, et al

Major economic reports released last week were the Employment Situation Summary for December and the Job Openings and Labor Turnover Survey (JOLTS) for November, both from the Bureau of Labor Statistics (BLS), the Commerce Department’s report on our International Trade for October, and the Full Report on Manufacturers’ Shipments, Inventories and Orders for October, and the October report on Wholesale Trade, Sales and Inventories, and the September and October reports on New Residential Construction, all from the Census bureau….also last week, the Fed released the Consumer Credit Report for November, which showed that overall consumer credit, a measure of non-real estate debt, increased by a seasonally adjusted $4.2 billion, or at a 1.0% annual rate, as non-revolving credit grew at a 2.0% rate to $3,770.9 billion in November, while revolving credit outstanding shrunk at a 1.9% rate to $1,313.9 billion…

Privately issued reports released last week included the ADP Employment Report for December, wherein the payroll data processor estimated an increase of 41,000 private jobs in December, the light vehicle sales report for December from Wards Automotive, which estimated that vehicles sold at a 16.0 million annual rate in December, up from the 15.6 million annual pace of vehicle sales reported for November, but down from the 16.80 million vehicle sales rate reported for December of 2024, and both of the widely followed purchasing manager’s surveys from the Institute for Supply Management (ISM): the December Manufacturing Report On Business® indicated that the manufacturing PMI (Purchasing Managers Index) fell to 47.9% in December, the lowest reading in over a year, down from 48.2% in November, with the below 50% reading indicating that a larger plurality of manufacturing purchasing managers reported worse conditions in various facets of their business in December than in November, and the December Services Report On Business, which saw the Services index rise to 54.4% in December, the highest reading since October 2024, up from 52.6% in November, with the above 50% reading meaning a larger plurality of service industry purchasing managers reported improving conditions in various facets of their business in December, up from a smaller plurality in November…both of those ISM reports are easy to read and include anecdotal comments from purchasing managers from the 34 business types who participate in those surveys nationally…

Employers Added 50,000 Jobs in December, Unemployment Rate and Labor Force Participation Rate Both Fell 0.1%

The Employment Situation Summary for December from the Bureau of Labor Statistics indicated a modest payroll jobs increase that was a bit below expectations, a decrease in the unemployment rate from a revised 4.5% to 4.4%, and a decrease in the the labor force participation rate, because many of the unemployed quit looking for work…estimates extrapolated from the seasonally adjusted establishment survey data projected that employers added 50,000 jobs in December, after the previously estimated payroll job increase for November was revised down by 8,000, from 64,000 to 56,000, while the payroll jobs decrease for October was revised down by 68,000, from a loss of 105,000 jobs to a loss of 173,000….by completely offsetting December’s increase, those revisions means that this report shows a net of 26,000 fewer payroll jobs than last month’s report did, in contrast with the 55,000 job increase that was expected….the unadjusted data, meanwhile, shows that there were 192,000 fewer payroll jobs extent in December than in November, as the usual seasonal layoffs in sectors such as construction and other outdoor services were normalized by the seasonal adjustments to show the modest job changes indicated, more than offsetting the downward seasonal adjustment to jobs in sectors such as retail..

Seasonally adjusted job increases in December were concentrated in the health care and social assistance and the leisure and hospitality sectors, which saw a seasonal adjustment boost from an actual job loss to a sizable gain, while the seasonally adjusted job loss of 25,000 in retail sales came after the seasonal adjustment stripped an actual 119,300 holiday-related job gain from that sector….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 December (+50,000). Employment continued to trend up in food services and drinking places, health care, and social assistance. Retail trade lost jobs. Payroll employment rose by 584,000 in 2025 (an average monthly gain of 49,000), less than the increase of 2.0 million in 2024 (an average monthly gain of 168,000). (See table B-1.)
• Employment in food services and drinking places continued to trend up in December (+27,000). Food services and drinking places added an average of 12,000 jobs per month in 2025, similar to the average increase of 11,000 jobs per month in 2024.
• Health care employment continued its upward trend in December (+21,000), with a gain of 16,000 jobs in hospitals. Health care employment rose by an average of 34,000 per month in 2025, less than the average monthly gain of 56,000 in 2024.
• In December, employment in social assistance continued to trend up (+17,000), mostly in individual and family services (+13,000).
• Retail trade lost 25,000 jobs in December. Over the month, employment declined in warehouse clubs, supercenters, and other general merchandise retailers (-19,000) and in food and beverage retailers (-9,000). Electronics and appliance retailers added 5,000 jobs. Retail trade employment showed little net change in both 2024 and 2025.
• Federal government employment was little changed in December (+2,000). Since reaching a peak in January, federal government employment is down by 277,000, or 9.2 percent. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; professional and business services; and other services.

The establishment survey also showed that average hourly pay for all employees rose by 12 cents an hour to $37.02 an hour in December, after it had increased by a revised 11 cents an hour in November; at the same time, the average hourly earnings of production and nonsupervisory employees increased by 6 cents to $30.62 an hour….employers also reported that the average workweek for all private payroll employees was down by 0.1 hour to 34.2 hours in December, while hours for production and non-supervisory personnel remained at 33.7 hours…at the same time, the manufacturing workweek was down by 0.2 hours to 39.9  hours, while average factory overtime was unchanged at 2.9 hours…

Meanwhile, the December household survey indicated that the seasonally adjusted extrapolation of those who reported being employed rose by an estimated 232,000 to 163,992,000, while the estimated number of those who reported being unemployed and looking for work fell by 278,000 to 7,503,000, and as a result the total labor force decreased by a rounded net of 46,000 to 171,495,000… since the working age population had grown by 183,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by 229000 to 103,321,000….as the number of those in the labor force fell while the civilian noninstitutional population was growing, the labor force participation rate fell from 62.5% in November to 62.4% in December….on the other hand, the increase in the number employed as a percentage of the increase in the population was enough to raise the employment to population ratio, which we could think of as an employment rate, by 0.1% to 59.7%, reversing the 0.1% drop in November…at the same time, the decrease in the number considered unemployed was enough to lower the unemployment rate, from 4.5% in November to 4.4% in December, after a year end seasonal adjustment revision lowered November’s rate from a 50 month high of 4.6%… meanwhile, the number of those who reported they were forced to accept just part time work fell by 146,000, from 5,487,000 in November to 5,341,000 in December, which was enough to lower the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, by 0.3% to 8.5% of the labor force in December, down from the four year high of 8.7% in November…

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 along side the press release to avoid the need to scroll up and down the page..

Job Openings, Hiring and Layoffs Fell in November; Job Quitting Rose

The Job Openings and Labor Turnover Survey (JOLTS) report for November from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 303,000, from 7,449,000 in October to 7,146,000 in November, after October’s job openings were revised 221,000 lower, from 7,670,000 to 7,449,000… November’s jobs openings were also 11.0% lower than the 8,031,000 job openings reported for November a year ago, while the job openings ratio expressed as a percentage of the employed fell from 4.5% in October to 4.3% in November, and was also down from 4.8% in November a year ago….the largest percentage decrease in November’s job openings appears to be the 108,000 job opening decrease to 325,000 openings in the transportation, warehousing, and utilities sector, while the construction sector saw job openings increase by 90,000 to 292,000 (see table 1 for more job openings details)…like most BLS releases, the press release for this report is easy to understand and also refers us to the associated table for the data cited, which are linked at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit their jobs, and ‘other separations’, which includes retirements and deaths….in November, seasonally adjusted new hires totaled 5,115,000, down by 253,000 from the revised 5,368,000 who were hired or rehired in October, as the hiring rate as a percentage of all employed fell from 3.4% in October to 3.2% in November, and it was also down from 3.3% in November a year ago (details on hiring by region and by sector since July are in table 2)….meanwhile, total separations rose by 11,000, from 5,069,000 in October to 5,080,000 in November, as the separations rate as a percentage of the employed fell from 3.3% in October to 3.2% in November, while it was also down from 3.4% in November a year ago (see table 3)…subtracting the 5,080,000 total separations from the total hires of 5,115,000 would imply an increase of just 35,000 jobs in November, somewhat less than the revised payroll job increase of 56,000 for November that was reported by the December establishment survey later in the same week, but well within the expected +/-110,000 margin of error in these incomplete survey extrapolations….

Breaking down the seasonally adjusted job separations, the BLS finds that 3,161,000 of us voluntarily quit our jobs in November, up by 188,000 from the revised 2,973,000 who quit their jobs in October, while the quits rate, widely watched as an indicator of worker confidence, rose from 1.9% to 2.0% of total employment, and it was also up from 1.9% a year earlier (see job quitting details in table 4)….in addition to those who quit, another 1,687,000 were either laid off, fired or otherwise discharged in November, down by 163,000 from the 1,850,000 who were discharged in October, as the discharges rate fell from 1.2% to 1.1% of total employment, which was the same as the 1.1% discharges rate in November a year ago….meanwhile, other separations, which includes retirements and deaths, were at 232,000 in November, down from 246,000 in October, for an ‘other separations’ rate of 0.2%, which was the same rate as in October and as in November of last year….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed easily using the links to tables at the bottom of the press release…

US Trade Deficit Fell 39% in October on Higher Exports of Gold, Lower Imports of Drugs

Our trade deficit fell 39.0% to a sixteen year low in October, as the value of our exports increased and the value of our imports decreased….the Commerce Dept report on our international trade in goods and services for October indicated that our seasonally adjusted goods and services trade deficit fell by a rounded $18.8 billion to $24.9 billion in October, the lowest deficit since June 2009, from a revised deficit of $48.1 billion in September, which had previously been reported as a deficit of $52.8 billion.. .note that trade figures for the months going back to April were also revised to incorporate more comprehensive and updated quarterly and monthly data…in rounded figures, the value of our October exports rose by $7.8 billion to $302.0 billion, on a $7.1 billion increase to $195.9 billion in our exports of goods and a $0.7 billion increase to $106.1 billion in our exports of services, while our imports fell by $11.0 billion to $331.4 billion, as a $12.1 billion decrease to $255.0 billion in our imports of goods was partly offset by a $1.1 billion increase to $76.3 billion in our imports of services….export prices were, on average, unchanged in October, which means the 2.6% nominal increase in our exports was a real change and not due to higher prices, while import prices were also unchanged, meaning that the 3.2% nominal decrease in our imports was also a real decrease…

The $7.1 billion increase in our exports of goods in October was due to greater exports of non-monetary gold and of other precious metals, which were partly offset by lower exports of consumer and other goods…referencing the Full Release and Tables for October (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials rose by $10,173 million to $76,967 million on a $6,846 million increase in our exports of non-monetary gold, a $3,607 million increase in our exports of precious metals other than gold, and a $307 million increase in our exports of fuel oil, which were partly offset by a $668 million decrease in our exports of petroleum products other than fuel oil, and that our exports of automotive vehicles, parts, and engines rose by $702 million to $13,090 million on a $422 million increase in our exports of trucks, buses, and special purpose vehicles...partly offsetting the increases in those end-use categories, our exports of consumer goods fell by $1,010 million to $24,232 million, led by a $923 million decrease in our exports of pharmaceuticals and a $531 million decrease in our exports of gem diamonds, and our exports of capital goods fell by $626 million to $58,375 million as a $1,464 million decrease in our exports of civilian aircraft and a $931 million decrease in our exports of computers were partly offset by a $582 million increase in our exports of civilian aircraft engines, a $352 million increase in our exports of industrial machinery not otherwise itemized, and a $332 million increase in our exports of telecommunications equipment…in addition, our exports of foods, feeds and beverages fell by $291million to $14,119 million on an $810 million decrease in our exports of soybeans, and our exports of other goods not categorized by end use fell by $1,775 million to $8,437 million…

Meanwhile, Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our imports of goods and shows that much lower imports of pharmaceuticals was the major reason for October’s $11.5 billion decrease in our imports of goods, and that their decrease was partly offset by higher imports of capital goods….our imports of consumer goods fell by $14,013 million to $51,513 million on a $14,315 million decrease in our imports of pharmaceuticals and a $446 million decrease in our imports of cotton apparel and household goods, which were partly offset by a $378 million increase in our imports of cellphones, and our imports of industrial supplies and materials fell by $2,733 million to $46,938 million, led by a $1,368 million decrease in our imports of nonmonetary gold, and a $633 million decrease in our imports of fuel oil….in addition, our imports of automotive vehicles, parts and engines fell by $594 million to $32,808 million on $590 million decrease in our imports of of new and used passenger cars, our imports of foods, feeds, and beverages fell by $485 million to $16,159 million, and our imports of other goods not categorized by end use fell by $474 million to $11,950 million…partly offsetting the decreases in those end-use categories, our imports of capital goods rose by $6,839 million to $94,419 million as a $3,685 million increase in our imports of computer accessories, a $1,878 million increase in our imports of telecommunications equipment, and a $1,147 million increase in our imports of computers, were slightly offset by a $302 million decrease in our imports of generators and accessories…

The press release for this month’s report summarizes Exhibit 19 in the Full Release and Tables pdf, giving us surplus and deficit details on our goods trade with selected countries:

The October figures show surpluses, in billions of dollars, with Switzerland ($7.3), United Kingdom ($6.8), South and Central America ($5.6), Netherlands ($5.1), Hong Kong ($2.8), Brazil ($2.7), Singapore ($1.8), Australia ($1.7), Belgium ($1.1), and Saudi Arabia ($0.2). Deficits were recorded, in billions of dollars, with Mexico ($17.9), Taiwan ($15.7), Vietnam ($15.0), China ($13.7), European Union ($6.3), Germany ($5.1), Japan ($4.2), Ireland ($3.2), South Korea ($2.9), India ($2.3), Canada ($2.3), Malaysia ($2.0), France ($1.3), Israel ($0.8), and Italy ($0.5).

• The deficit with Ireland decreased $15.1 billion to $3.2 billion in October. Exports increased $0.1 billion to $1.8 billion and imports decreased $15.0 billion to $5.0 billion.
• The surplus with the United Kingdom increased $5.7 billion to $6.8 billion in October. Exports increased $5.2 billion to $11.4 billion and imports decreased $0.6 billion to $4.6 billion.
• The deficit with Taiwan increased $6.3 billion to $15.7 billion in October. Exports decreased $0.1 billion to $4.8 billion and imports increased $6.2 billion to $20.5 billion.

The $4.7 billion downward revision to the September trade deficit would normally have the effect of lowering the annualized 3rd quarter trade deficit used in the GDP report by about $18.8 billion before inflation adjustment, but since trade figures going back to April were also revised with this report, the trade deficit for the 2nd quarter would need to be recomputed before one could get an accurate read of the impact of the 3rd quarter revisions on the quarter over quarter change in GDP…however, the BEA will not revise the 2nd quarter trade figures in the National Income and Product Accounts until the annual revision to GDP next summer, while the downward revisions to the 3rd quarter trade deficit will be applied to the 3rd estimate of GDP that will be out later this month….hence, that estimate may incorrectly overstate or understate the positive impact of the downward revisions to the 3rd quarter trade deficit that accompanies this report, with the magnitude of that error ultimately depending on the eventual 2nd quarter revisions…as it stands, we’d expect that September trade deficit revision to result in an upward revision of about 0.27 percentage points to 3nd quarter GDP when the “third” estimate is released on January 20th..

Meanwhile, to estimate the impact of October trade in goods on 4th quarter GDP growth figures, we’ll use exhibit 10 in the pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted in chained 2017 dollars, the same inflation adjustment now used by the BEA to compute trade figures for GDP, except that the figures are not annualized here….from that table, we can figure that the 3rd quarter’s real exports of goods averaged 148,555.3 million monthly in 2017 dollars, while inflation adjusted goods exports for October were at 158,895 million in that same 2017 dollar quantity index representation… annualizing the change between those two figures, we find that October’s real exports of goods are running at a 30.9% annual rate above those of the 3rd quarter, or at a pace that would add about 2.08 percentage points to 4th quarter GDP if continued through November and December….in a similar manner, we find that our 3rd quarter real imports of goods averaged 235 877.7 million monthly in chained 2017 dollars, while inflation adjusted October goods’ imports were at 221,955 million in that same 2017 dollar representation…that would indicate that so far in the 4th quarter, our real imports of goods have decreased at annual rate of 21.6% from those of the 3rd quarter…since imports subtract from GDP because they represent the portion of our consumption or investment that occurred during the quarter that was not produced domestically, their decrease at a 21.6% rate would conversely add about 2.42 percentage points to 4th quarter GDP….hence, if the October trade deficit is maintained at the same level throughout the 4th quarter, our improving balance of trade in goods could add a net of roughly 4.50 percentage points to the growth rate of 4th quarter GDP….btw, we don’t believe that will happen, because the biggest drivers of October’s trade deficit improvement, the increase in exports of non-monetary gold and the decrease in imports of pharmaceuticals, appear to be one time anomalies unlikely to repeat in November and December…

Note that we have not computed the impact of the usually less volatile change in services here, because the BEA does not provide inflation adjusted data on those, and we don’t have a straightforward way to adjust the various services for all their price changes, but that our exports in services grew by $0.7 billion in October, whereas our imports in services grew by $1.1 billion, which would suggest a fairly modest hit to GDP on the services side of the trade ledger…

Housing Starts Reported Lower in October; Building Permits Barely Changed

Note: The report on new housing construction for September was cancelled because data collection for it lapsed during the shutdown, so this October report also incorporates September figures..   The report on New Residential Construction (pdf) for October from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,246,000 units during the month, which was 4.6 percent (±11.2 percent)* below the preliminary September estimated annual rate of 1,415,000 housing unit starts, and was 7.8 percent (±11.7 percent)* below last October’s pace of 1,412,000 housing starts a year….note that the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell from September, or even from October of a year ago, with the figures in parenthesis the most likely range of the change indicated; in other words, in other words, October’s housing starts could have been up by 6.6% or down by as much as 15.8% from those of September, with even larger revisions possible after a number of months…with this report, the annual rate for August’s housing starts was revised from the 1,307,000 reported almost four months ago to 1,291,000, while the annual rate for July’s housing starts, which was initially reported at 1,428,000 and revised to a 1,429,000 annual rate in October, was revised down to a 1,420,000 rate with this report…

Those annual rates of starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 106,100 housing units were started in October, down from the 112,300 units that were started in September and the 112,200 housing units that were started in August….of those housing units started in October, an estimated 73,700 were single family homes and 30,300 were units in structures with more than 5 units, up from the preliminary 70,900 single family starts in September, but down from the 40,500 units started in structures with more than 5 units in September…

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data, which can also be impacted by unseasonal weather….for October, Census estimated new building permits were being issued at a seasonally adjusted annual rate of 1,412,000 housing units, which was 0.2 percent below the September rate of 1,415,000 permits, and was 1.1 percent below the rate of building permit issuance in October a year earlier.…the annual rate for housing permits issued in August was revised up from the 1,312,000 rate indicated by the last report to 1,330,000….

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates provided monthly by canvassing census agents, which indicated that permits for 125,300 housing units were issued in October, up from the preliminary estimate of 118,200 new permits issued in September…the October permits included 76,200 permits for single family homes, up from 73,200 single family permits issued in September, and 43,800 permits for housing units in apartment buildings with 5 or more units, up from 40,000 such multifamily permits issued in September..

For graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts Decreased to 1.246 million Annual Rate in October and Newsletter: Housing Starts Decreased to 1.246 million Annual Rate in October, which links to his in-depth housing newsletter article on this report with the same title…

Value of Factory Shipments Rose 0.1% in October, Factory Inventories Barely Changed

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for October from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods fell by $8.1 billion or 1.3 percent to $604.8 billion in October, following an increase of 0.2% to $612.9 billion in September, which was revised from the 0.2% increase to $612.6 billion that was reported for September new orders last month….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only accurate insofar as they are revised updates to the October advance report on durable goods we reported on two weeks ago…on those durable goods revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we’ll just quote directly from that summary here:

• Summary – New orders for manufactured goods in October, down following two consecutive monthly increases, decreased $8.1 billion or 1.3 percent to $604.8 billion, the U.S. Census Bureau reported today. This followed a 0.2 percent September increase. Shipments, up following two consecutive monthly decreases, increased $0.5 billion or 0.1 percent to $607.0 billion. This followed a 0.1 percent September decrease. Unfilled orders, up fifteen of the last sixteen months, increased $2.7 billion or 0.2 percent to $1,492.8 billion. This followed a 0.8 percent September increase. The unfilled orders-to-shipments ratio was 6.92, down from 6.98 in September. Inventories, up following two consecutive monthly decreases, increased $0.4 billion or virtually unchanged to $947.0 billion. This followed a 0.1 percent September decrease. The inventories-to-shipments ratio was 1.56, unchanged from September.
• New Orders for manufactured durable goods in October, down following two consecutive monthly increases, decreased $6.9 billion or 2.2 percent to $307.3 billion, unchanged from the previously published decrease. This followed a 0.6 percent September increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $7.1 billion or 6.4 percent to $103.9 billion. New orders for manufactured nondurable goods decreased $1.2 billion or 0.4 percent to $297.5 billion.
• Shipments of manufactured durable goods in October, up ten of the last eleven months, increased $1.7 billion or 0.6 percent to $309.5 billion, unchanged from the previously published increase. This followed a 0.1 percent September increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $1.4 billion or 1.4 percent to $102.7 billion. Shipments of manufactured nondurable goods, down three consecutive months, decreased $1.2 billion or 0.4 percent to $297.5 billion. This followed a 0.2 percent September decrease. Petroleum and coal products, also down three consecutive months, drove the decrease, $1.3 billion or 2.4 percent to $52.4 billion.
• Unfilled Orders for manufactured durable goods in October, up fifteen of the last sixteen months, increased $2.7 billion or 0.2 percent to $1,492.8 billion, unchanged from the previously published increase. This followed a 0.8 percent September increase. Transportation equipment, up seven of the last eight months, led the increase, $1.3 billion or 0.1 percent to $930.3 billion.
• Inventories of manufactured durable goods in October, up following two consecutive monthly decreases, increased $1.0 billion or 0.2 percent to $590.8 billion, up from the previously published 0.1 percent increase. This followed a 0.1 percent September decrease. Machinery, up seven of the last eight months, led the increase, $0.3 billion or 0.3 percent to $103.3 billion. Inventories of manufactured nondurable goods, down three consecutive months, decreased $0.6 billion or 0.2 percent to $356.3 billion. This followed a 0.1 percent September decrease. Petroleum and coal products, down two consecutive months, led the decrease, $0.4 billion or 0.8 percent to $43.9 billion. By stage of fabrication, October materials and supplies increased 0.2 percent in durable goods and decreased 0.5 percent in nondurable goods. Work in process increased 0.3 percent in durable goods and decreased 0.2 percent in nondurable goods. Finished goods decreased 0.1 percent in durable goods and increased 0.1 percent in nondurable goods.

To estimate the effect of those October factory inventories on 4th quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index…however, publication of the October Producer Price Index, originally scheduled for November 14th, was cancelled “due to the lapse in appropriations”, aka the government shutdown….while the Bureau of Labor Statistics is currently trying to piece together the October price data they missed during that 45 day layoff, that will not be available until January 14, 2026, when the November producer price index will be released…

Wholesale Sales Fell 0.4% in October, Wholesale Inventories Rose 0.2%

The October report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was “$704.9 billion, down 0.4 percent (±0.5 percent)* from the revised September level, but … up 4.6 percent (±0.9 percent) from the revised October 2024 level“.. September’s sales were revised from the $708.2 billion reported last month to $707.8 billion but “The August 2025 to September 2025 percent change was unrevised from the preliminary estimate of down 0.2 percent (±0.4 percent)*…” …as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold..

On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods left in a warehouse represent goods that were produced but not sold, and this October report estimated that wholesale inventories were valued at a seasonally adjusted ”$913.5 billion at the end of October, up 0.2 percent (±0.4 percent)* from the revised September level. Total inventories were up 1.7 percent (±0.9 percent) from the revised October 2024 level.” ….September’s inventory value was essentially unrevised from the $911.5 billion reported last month, a 0.5% increase from July….

To estimate the effect of October’s wholesale inventories on 4th quarter GDP, we we’d need to first adjust them for changes in price with appropriate components of the October producer price index…However, as we’ve just mentioned in re adjusting factory inventories, release of the October producer price index was cancelled due to the government shutdown….so estimating any GDP impacts from October wholesale inventories will have to wait until the November producer price index is released on January 14th..

 

 

(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…)