March producer prices, industrial production, and existing home sales

Major monthly reports released last week included the March Producer Price Index from the Bureau of Labor Statistics, the March report on Industrial Production and Capacity Utilization from the Fed, and the Existing Home Sales Report for March from the National Association of Realtors (NAR)….

The week also saw the release of the first two regional Fed manufacturing surveys for April: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one NYC suburban county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose from –0.2 in March to +11.0 in April, which would indicate that a moderate plurality of First District manufacturers now see improvement in various facets of their business, after they were evenly split between those who reported improving conditions and those who saw deteriorating conditions in March…meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose to +26.7 in April from 18.1 in March, as 32.6% of the respondents reported an increase in general business activity from March to April, 5.9% reported a decrease, and the rest reported ‘no change’….notice that the +26.7 index value is the percentage difference between those reporting increases in activity and those reporting decreases, which is exactly how these diffusion indices are calculated…

Producer Price Index Rose 0.5% in March on Higher Prices for Energy and Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.5% in March, as the final demand price index for wholesale goods rose 1.6% while the more heavily weighted price index for final demand for services was unchanged….that March PPI increase followed a revised 0.5% increase in February, when the final demand price index for wholesale goods was 1.0% higher, and the price index for final demand for services was 0.3% higher, and followed revised 0.6% increase in January, when the final demand price index for wholesale goods was 0.1% lower, but the price index for final demand for services was 0.8% higher, and a revised 0.4% PPI increase in December, when the final demand price index for wholesale goods was 0.1% lower, while the price index for final demand for services was 0.6% higher, and a revised 0.4% PPI increase in November, when the final demand price index for wholesale goods was 0.8% higher, and the price index for final demand for services was 0.3% higher, and followed the unrevised report of a 0.1% PPI increase in October, when the final demand price index for wholesale goods fell 0.2%, but the more heavily weighted price index for final demand for services was 0.2% higher, and also followed a 0.6% PPI increase in September, when the final demand price index for wholesale goods rose 0.6% and the price index for final demand for services was also 0.6% 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 a 0.2% 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 0.1% higher, and a 0.3% increase last May, when the final demand price index for wholesale goods was 0.1% higher, and the price index for final demand for services 0.4% higher….on an unadjusted basis, producer prices are now 4.0% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.2% higher for the month, and is 3.6% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 1.6% higher in March, after being 1.0% higher in February, 0.1% lower in January, 0.1% lower in December, 0.8% higher in November, 0.1% lower in October, 0.6% higher in September, 0.2% lower in August, 0.6% higher in July, 0.3% higher in June, 0.1% higher in May, 0.1% lower last April, and 0.7% lower last March, and is now 4.9% higher than a year ago….the final demand goods price index was 1.6% higher in March because the price index for wholesale energy goods was 8.5% higher, after energy prices had been 2.1% higher in February, 1.8% lower in January, 1.5% lower in December, 3.4% higher in November, 2.2% lower in October, and 2.0% higher in September, and even as the price index for wholesale foods was 0.3% lower, after wholesale foods had been had been 2.4% higher in February, 1.4% lower in January, 0.2% lower in December, 0.1% higher in November, 0.4% lower in October, and 0.8% higher in September, while the index for final demand for core wholesale goods (excluding food and energy) was 0.2% higher in March, after it had been 0.3% higher in February. 0.7% higher in January, 0.4% higher in December, 0.2 higher in November, 0.5% higher in October, and 0.2% higher in September….

Wholesale energy prices were 8.5% higher in March on a 15.7% increase in wholesale prices for gasoline, a 39.4% increase in wholesale prices for home heating oil and distillates, a 42.0% increase in wholesale prices for No. 2 diesel fuel, and a 14.4% increase in wholesale prices for natural gas liquids, while the final demand for food price index was 0.3% lower on a 6.3% decrease the wholesale price index for eggs for fresh use, a 10.7% decrease the wholesale price index for fresh and dry vegetables, and a 6.3% decrease in the wholesale price index for fresh fruits and melons… among core wholesale goods, the wholesale price index for electronic components and accessories rose 2.1%, the wholesale price index for industrial chemicals rose 2.3%, the wholesale price index for nonferrous metals rose 0.8%, the wholesale price index for X-ray and electromedical equipment rose 1.3%, and the wholesale price index for passenger cars was 0.6% higher…

Meanwhile, the price index for final demand for services was unchanged in March, after being 0.3% higher in February, 0.8% higher in January, 0.6% higher in December, 0.2% higher in November, 0.2% higher in October, 0.6% higher in September, 0.3% lower in August, 0.9% higher in July, 0.1% higher in June, 0.4% higher in May, 0.3% lower in April, and 0.1% higher last March, and is now 3.7% higher than a year ago….the price index for final demand for trade services fell 0.3%, while the price index for final demand for transportation and warehousing services rose 1.3%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.1% higher….

Among trade services, seasonally adjusted margins for fuels and lubricants retailers fell 10.2%, margins for automobile retailers were 3.5% lower, margins for sporting good and boat retailers were 3.4% lower, margins for TV, video, and photographic equipment and supplies retailers were 4.6% lower, margins for apparel wholesalers were 7.2% lower, and margins for food and alcohol wholesalers were 6.0% lower, but margins for furniture retailers were 5.4% higher….among transportation and warehousing services, average margins for truck transportation of freight were 1.0% higher and margins for airline passenger services were 2.8% higher….among the components of the core final demand for services index, the price index for application software publishing rose 1.4%, the price index for internet access services rose 1.1%, the price index for consumer loans rose 1.4%, and the price index for tax preparation and planning was 0.8% higher…

This report also showed the price index for intermediate processed goods was 2.6% higher in March, after being 1.6% higher in February, 0.1% higher in January, 0.1% higher in December, 0.6% higher in November, 0.1% lower in October, 0.2% higher in September, 0.4% higher in August, 0.7% higher in July, 0.1% lower in June, 0.2% higher in May, and 0.3% higher last April….the price index for intermediate energy goods rose 11.3% in March as refinery prices for No. 2 diesel fuel rose 42.0%, refinery prices for jet fuel rose 30.7%, refinery prices for residual fuels rose 22.6%, and producer prices for natural gas liquids were 14.4% higher….at the same time, the price index for intermediate processed foods and feeds rose 0.9%, as the producer price index for meats rose 1.3%, the producer price index for dairy products rose 2.7%, and the producer price index for fats and oils was 5.5% higher… in addition, the core price index for intermediate processed goods less food and energy goods was 0.7% higher, as the producer price index for plastic resins and materials rose 2.1%, the producer price index for synthetic rubber rose 1.5%, the producer price index for steel mill products rose 2.1%, the producer price index for building paper and board rose 2.9%, and the producer price index for intermediate electronic components and accessories was 2.1% higher….average prices for intermediate processed goods are now 6.6% higher than in March 2025, the 17th year over year increase in 37 months, but are way off the 26.6% year over year increase of November 2021, which had been a 46 year high…

Meanwhile, the price index for intermediate unprocessed goods fell 2.6% in March, after rising 4.6% in February, 3.4% in January, 2.2% in December and 2.4% in November, after falling 1.3% in October, falling 0.5% in September, and falling 1.8% in August….that was as the March price index for crude energy goods fell 7.7%, even as crude oil prices rose 20.2%, as unprocessed natural gas prices fell 51.7% while coal prices were 0.1% higher… meanwhile, the price index for unprocessed foodstuffs and feedstuffs was 0.5% higher, as the producer price index for raw milk rose 6.6%, the producer price index for hay and hayseeds rose 9.5%, the producer price index for corn rose 7.0%, the producer price index for oilseeds rose 8.0%, and the producer price index for wheat was 12.3% higher….at the same time, the index for core raw materials other than food and energy materials was 0.2% higher, on a 2.7% increase in the price index for nonferrous metal ores, and a 1.1% increase in the price index for recyclable paper….this raw materials price index is now 4.9% higher than a year ago, the 13th year over year increase in the past 38 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 0.1% lower in March, after being 0.4% higher in February, 0.6% higher in January, 0.6% higher in December, 0.2% higher in November, 0.4% higher in October, 0.3% higher in September, unchanged in August, 0.6% higher in July, 0.1% higher in June, and 0.1% higher last May.…the price index for intermediate trade services was 0.7% lower, as margins for food wholesalers fell  6.8%, margins for building materials, paint, and hardware wholesalers fell 3.3%, and margins for intermediate hardware, building material, and supplies retailers were 1.9% lower….on the other hand, the price index for transportation and warehousing services for intermediate demand was 0.5% higher, as the intermediate price index for truck transportation of freight rose 1.0%, the intermediate price index for air mail and package delivery services, excluding by USPS, rose 1.8%, the intermediate index for transportation of passengers rose 2.7%, and the intermediate index for warehousing, storage, and related services was 4.8% higher….meanwhile, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.1% lower, as the intermediate price index for deposit services fell 3.9%, the intermediate price index for cable and satellite subscriber services fell 2.2%, intermediate price index for securities brokerage, dealing, investment advice, and related services fell 1.6%, and the intermediate price index for nonresidential real estate rents was 3.3% lower….over the 12 months ended in March, the price index for services for intermediate demand was 2.9% higher than it was a year earlier, the sixty-fifth 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…

Industrial Production Fell 0.5% in March, After Prior Months were Revised Lower

The G17 release on Industrial production and Capacity Utilization for March from the Fed indicated that industrial production fell by 0.5% in March, after rising by a revised 0.7% in February, and after the 0.7% increase previously reported for January was revised to unchanged, which left production 0.7% higher than a year ago… the industrial production index, with the benchmark set for average 2017 production to be equal to 100.0, fell to 101.8 in March from 102.3 in February, which was revised from the 102.6 figure published a month ago.…in addition, the January index was revised down from 102.4 to 101.6, the December index was revised down from 101.7 to 101.6, the November index was revised from 101.4 to 101.1, and the October index was revised down but unchanged at 101.2…after those revisions and despite the March decrease, US industrial production was up at a 2.4% annual rate for the first quarter as a whole…

The manufacturing index, which accounts for around 77% of the total IP index, fell 0.1% to 97.3 in March from 97.4 in February, which had previously been reported at 97.6…at the same time, the January manufacturing index was revised from 97.4 to 97.1, the December manufacturing index was revised from 96.6 to 96.5, the November manufacturing index was revised from 96.9 to 96.6, and the October manufacturing index was unrevised at 96.6,….after those revisions, the manufacturing index now sits 0.5% above its year ago level, even as first quarter manufacturing still grew at an annual rate of 3.0 percent from that of the 4th quarter of 2025….meanwhile, the mining index, which includes oil and gas well drilling, fell 1.2%, from 121.5 in February to 120.1 in March, after the February mining index was revised up from last month’s reported 120.9, which left the mining index 0.2% below where it was a year earlier…finally, the utility index, which typically fluctuates due to deviations from normal temperatures, fell by 2.3%, from 112.9 in our colder than normal February to 110.3 in our warmer than normal March, after February’s utility index was revised from 114.2 to 112.9 but is still 1.8% higher than our equally cold January…including this month’s revisions, the utility index is now 3.1% above that of a year ago, as last March’s temperatures also averaged warmer than normal…

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…seasonally adjusted capacity utilization for total industry fell to 75.7% in March from 76.1% in February, which was revised from the 76.1% utilization rate  reported a month ago…capacity utilization of NAICS durable goods production facilities fell from an upwardly revised 74.3% in February to 74.1% in March, while capacity utilization for non-durables producers fell from a downwardly revised 76.6% in February to 76.3% in March…capacity utilization for the mining sector fell to 84.5% in March from 85.5% in February, which had been reported as 85.0% last month, while utilities were operating at 70.3% of capacity during March, down from 72.1% in February, after February’s utility utilization was revised down from the previously reported 73.0%….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..

Existing Home Sales Fell 3.6% in March on Prices 1.4% Higher than a Year Ago

The National Association of Realtors (NAR) reported that existing home sales fell at a 3.6% rate from February to March after seasonal adjustment, projecting that 3.98 million existing homes would sell over an entire year if the March home sales pace were extrapolated over that year, a pace that was also 1.0% below the annual sales rate projected for March of a year ago….February homes sales, now indicated at a 4.13 million annual rate, were revised from the 4.09 million rate reported a month ago….the NAR also reported that the median sales price for all existing-home types was at $$408,800 in March, which was 1.4% higher than in March a year earlier, and which they report is “the 33rd consecutive month of year-over-year price increases.“, even though reported monthly prices have decreased six out of the last nine months….the NAR press release, which is titled “NAR Existing-Home Sales Report Shows 3.6% Decrease in March“, is in easy to read plain English, so if you’re interested in a regional breakdown, or the 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 are 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 usually look at the raw data overview (pdf) to see what actually happened during the month….the unadjusted data estimates that roughly 327,000 homes sold in March, up 26.3% from the 259,000 homes that sold in February, and up 3.8% from the 315,000 homes that sold in March of last year, so we can see that it was the effect of a large springtime seasonal adjustment that caused the headline to show a decrease from February….that same pdf indicates that the median home selling price for all housing types rose by 2.7%, from a revised $398,000 in February to $408,800 in March, and was up 1.4% from $403,100 in March of 2025, with regional median home prices ranging from a low of $315,500 in the Midwest to a high of $613,400 in the West…..

(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…)