April’s jobs report; March’s trade deficit, construction spending, new home sales, factory inventories, wholesale inventories, and JOLTS

Major economic reports released last week included the Employment Situation Summary for April and the Job Openings and Labor Turnover Survey (JOLTS) for March, both from the Bureau of Labor Statistics, the Commerce Department’s report on our international trade in goods and services for March, and the March report on Construction Spending (pdf), the March report on new home sales, the Full Report on Manufacturers’ Shipments, Inventories and Orders for March, and the Wholesale Trade, Sales and Inventories report for March, all from the Census Bureau….in addition, the Fed released the Consumer Credit Report for March on Thursday of this week, which indicated that overall consumer credit, a measure of non-real estate debt, had grown by a seasonally adjusted $24.8 billion in March, or at a 5.8% annual rate, as non-revolving credit expanded at a 2.7% annual rate to $3,682.2 billion, while revolving credit outstanding grew at a 9.1% rate to $1,337.0 billion…for the first quarter of 2025, consumer credit increased at a 3.2% seasonally adjusted annual rate, as non revolving credit increased at a 3.0% rate while revolving credit increased at a 3.8% rate…

Privately issued reports released during the week included the ADP Employment Report for April, wherein the payroll processor reported an increase of 109,000 private sector jobs in April, and the April 2025 Services ISM® Report On Business from the Institute for Supply Management , which reported their Services Index fell to 53.6% in April, down from 54.0% in March, indicating that a slightly smaller plurality of service industry purchasing managers reported expansion in various facets of their business than in March

Employers Added 115,000 Jobs in April; Unemployment Rate Remained at 4.3%

The Employment Situation Summary for April indicated that payroll job growth was moderately above expectations, but that the labor force participation rate and the employment rate both fell 0.1%, and that the unemployment rate was unchanged from March…seasonally adjusted estimates extrapolated from the establishment survey data projected that employers added 115,000 jobs in April, after the previously estimated payroll job increase for March was revised up from 178,000 to 185,000, while the payroll jobs decrease for February was revised down from a loss of 133,000 jobs to a loss of 156,000…including those revisions, this report thus represents a net of 99,000 more seasonally adjusted payroll jobs than were reported last month, which was above expectations there’d be an increase of 65,000 jobs with this month’s report….the unadjusted data shows that there were actually 926,000 more payroll jobs extant in April than in March, as the usual seasonal job increases in sectors such as construction, services to buildings and dwellings, and leisure and hospitality were washed out of this month’s report by the seasonal adjustments…

Seasonally adjusted job increases in March were spread through both the goods producing and the service sectors, with the information, financial, and the federal government sectors showing fairly modest job losses…since the BLS summary of the job gains by sector is clear and as detailed as our usual synopsis, we’ll just quote that summary here:

• Total nonfarm payroll employment edged up by 115,000 in April, after showing little net change over the prior 12 months. In April, job gains occurred in health care, transportation and warehousing, and retail trade. Federal government employment continued to decline. (See table B-1.)
• In April, health care added 37,000 jobs, in line with the average monthly gain of 32,000 over the prior 12 months. Over the month, job gains occurred in nursing and residential care facilities (+15,000) and home health care services (+11,000).
• Transportation and warehousing employment increased by 30,000 in April, reflecting a gain in couriers and messengers (+38,000). However, employment in transportation and warehousing is down by 105,000 since reaching a peak in February 2025.
• Retail trade added 22,000 jobs in April. Employment increased in warehouse clubs, supercenters, and other general merchandise retailers (+18,000) and in building material and garden equipment and supplies dealers (+13,000). These gains were partially offset by job losses in department stores (-7,000) and in electronics and appliance retailers (-2,000). Retail trade employment had shown little net change over the prior 12 months.
• Employment in social assistance continued to trend up in April (+17,000), reflecting a gain of 24,000 jobs in individual and family services.
• Federal government employment continued to decline in April (-9,000). Since reaching a peak in October 2024, federal government employment is down by 348,000, or 11.5 percent. Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received (or will receive) pay for the pay period that included the 12th of the month.
• Employment in information continued to trend down in April (-13,000). Telecommunications lost 3,000 jobs, while employment continued to trend down in motion picture and sound recording industries (-6,000) and in computing infrastructure providers, data processing, web hosting, and related services (-4,000). Information employment is down by 342,000, or 11.0 percent, since its most recent peak in November 2022.
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; financial activities; professional and business services; leisure and hospitality; and other services.

The establishment survey also showed that average hourly pay for all employees rose by 6 cents an hour to $37.41 an hour in April, after it had increased by an revised 6 cents an hour in March; at the same time, the average hourly earnings of production and non-supervisory employees increased by 11 cents an hour to $32.23 an hour…reports from employers also showed that the average workweek for all private payroll employees was was up by 0.1 hour at 34.3 hours in April, after a tenth of an hour decrease in March, while hours for production and non-supervisory personnel was unchanged at 33.8 hours, after also decreasing a tenth of an hour in March….however, the manufacturing workweek rose by 0.1 hours to 40.4 hours, while average factory overtime remained unchanged at 3.0 hours…

At the same time, the April household survey indicated that the seasonally adjusted extrapolation of those who reported being employed fell by an estimated 226,000 to 162,622,000, while the similarly estimated number of those counted as unemployed rose by 134,000 to 7,373,000; which together meant there was a rounded 92,000 decrease in the total labor force….since the working age population had grown by 97,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by a rounded 188,000 to 104,959,000… meanwhile, the decrease of those in the labor force was large enough, when compared to the civilian noninstitutional population, to lower the labor force participation rate from 61.9% in March to 61.8% in April….similarly, the decrease in number employed as a percentage of the increase in the population was large enough to lower the employment to population ratio, which we could think of as an employment rate, from 59.2% in March to 59.1% in April….on the other hand, the increase in the number unemployed was not large enough to raise the unemployment rate, as it remained at 4.3% in April (NB: that was due to rounding; take it out two more decimal places, and the unemployment rate rose from 4.256% to 4.337%)….meanwhile, the number who reported they were involuntarily working part time rose by 445,000 to 4,942,000 in April, which was enough to raise the alternative measure of unemployment, U-6, which includes both discouraged workers and those “employed part time for economic reasons”, from 8.0% in March to a 4 month high of 8.2% in April…

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it alongside the press release to avoid the need to scroll up and down the page..

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

The Job Openings and Labor Turnover Survey (JOLTS) report for March from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 56,000 to 6,866,000 in March, after February’s job openings were revised up to 6,922,000 from the originally reported 6,882,000…March’s jobs openings were also down 1.2% from the 6,952,000 job openings reported in March a year earlier, as the job openings ratio expressed as a percentage of the employed fell to 4.1% in March, down from a revised 4.2% rate in February, and also down from the 4.2% rate of March a year ago…since the employment report indicated there were 7,239,000 unemployed during March, that means there were 0.95 job openings for each person who reported they were unable to find work during the month….professional and business services, with a 318,000 job opening decrease to 985,000 openings, saw the largest percentage decrease, while job openings in finance and insurance increased by 98,000 to 428,000..(details on job openings by industry and region can be viewed in Table 1)…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, and ‘other separations’, which includes retirements and deaths….in March, seasonally adjusted new hires totaled 5,554,000, up by 655,000 from the revised 4,899,000 who were hired or rehired in February, as the hiring rate as a percentage of all employed rose from 3.1% in February to 3.5% in March, and it was also up from the 3.4% the hiring rate in March a year ago (details of hiring by sector since November are in table 2)….meanwhile, total separations rose by 356,000 to 5,378,000 in March, as the separations rate as a percentage of the employed rose to 3.4% in March from a 3.2% rate in February, which was also up from the separations rate of 3.3% a year ago (see table 3)…subtracting the 5,378,000 total separations from the total hires of 5,554,000 would imply an increase of 176,000 jobs in March, a bit less than the revised payroll job increase of 185,000 jobs for March reported by the April establishment survey, but still within the expected +/-130,000 margin of error for these incomplete job samplings….

Breaking down the seasonally adjusted job separations, the BLS found that 3,171,000 of us voluntarily quit our jobs in March, up by 125,000 from the revised 3,046,000 who quit their jobs in February, while the quits rate, widely watched as an indicator of worker confidence, rose to 2.0% in March from 1.9% in February, but was still down from the quits rate of 2.2% a year earlier (see details of job quitting by industry in table 4)….in addition to those who quit, another 1,867,000 were either laid off, fired or otherwise discharged in March, up by 153,000 from the revised 1,714,000 who were discharged in February, while the discharges rate rose 0.1% to 1.2% of all those who were employed during the month, which was also up from the discharges rate of 1.0% a year ago (see details of layoffs by industry in table 5)…meanwhile, other separations, which includes retirements and deaths, were at 339,000 in March, up from 263,000 in February, for an ‘other separations rate’ of 0.2%, same as in February and as in March of last year….both seasonally adjusted and the unadjusted details by industry and by region on hires and job separations, and on job quits and discharges, can be accessed using the links to tables at the bottom of the press release…

US Trade Deficit Rose 4.4% in March on Imbalanced Consumer Goods Trade

Our trade deficit rose 4.4% in March, as both the value of our exports and the value of our imports increased, but the value of our imports increased by more…the Commerce Department’s report on our international trade in goods and services for March indicated that our seasonally adjusted goods and services trade deficit rose by $2.5 billion to $60.3 billion in March, from a February deficit that was revised from the originally reported $57.3 billion to $57.8 billion…in rounded totals, the value of our March exports rose by $6.2 billion to $320.9 billion, on a $6.5 billion increase to $213.5 billion in our exports of goods, which was offset by a $0.3 billion decrease to $107.4 billion in our exports of services, while the value of our imports rose by $8.7 billion to $381.2 billion, on a $10.6 billion increase to $302.2 billion in our imports of goods, offset by a decrease of $1.9 billion to $79.0 billion in our imports of services….export prices were on average 1.6% higher in March, which means more than half of the increase in the nominal value of our exports for the month was price related, and that our real exports likely rose on the order of 0.4%, while import prices averaged 0.8% higher, meaning that part of the increase in imports was also price related, and that our real imports probably rose about 1.5%..…

The press release for this month’s report gives us a brief synopsis of Exhibits 7 and 8 in the Full Release and Tables pdf for March, which details the major reasons for the increases in our exports and in our imports:

Exports of goods on a Census basis increased $6.2 billion.

• Industrial supplies and materials increased $5.0 billion.
  • Crude oil increased $2.8 billion.
  • Other petroleum products increased $1.7 billion.
  • Fuel oil increased $1.6 billion.
  • Other precious metals decreased $1.6 billion.
• Foods, feeds, and beverages increased $1.1 billion.
  • Soybeans increased $0.9 billion.
• Consumer goods decreased $1.7 billion.

Imports of goods on a Census basis increased $10.2 billion.

• Automotive vehicles, parts, and engines increased $3.6 billion.
  • Passenger cars increased $2.8 billion.
• Consumer goods increased $2.4 billion.
• Capital goods increased $2.1 billion.
  • Computer accessories increased $2.0 billion.
  • Computers decreased $2.3 billion.
• Industrial supplies and materials increased $2.1 billion.

That press release for this month’s report also summarizes Exhibit 19 in the pdf, which gives us surplus and deficit details on our goods trade with selected countries…

The March figures show surpluses, in billions of dollars, with Netherlands ($7.4), United Kingdom ($6.1), Hong Kong ($5.8), South and Central America ($5.0), Switzerland ($4.3), Australia ($2.2), Singapore ($1.9), Brazil ($1.4), and Belgium ($0.6). Deficits were recorded, in billions of dollars, with Taiwan ($20.6), Vietnam ($19.2), Mexico ($16.4), China ($14.0), European Union ($9.2), Germany ($5.0), South Korea ($4.8), Japan ($4.1), Malaysia ($4.0), India ($3.8), Canada ($3.6), Ireland ($2.9), Italy ($2.3), Saudi Arabia ($0.7), and Israel ($0.4).

• The deficit with the European Union increased $4.1 billion to $9.2 billion in March. Exports decreased $0.3 billion to $37.2 billion and imports increased $3.8 billion to $46.4 billion.
• The surplus with Switzerland decreased $3.5 billion to $4.3 billion in March. Exports decreased $3.9 billion to $8.2 billion and imports decreased $0.3 billion to $3.9 billion.
• The deficit with South Korea decreased $2.9 billion to $4.8 billion in March. Exports increased $1.8 billion to $7.5 billion and imports decreased $1.0 billion to $12.2 billion.

In the advance estimate of 1st quarter GDP published last week, our March trade deficit in goods was estimated based on the sketchy Advance Report on our International Trade in Goods, which was released the day before the GDP release…that report estimated that our seasonally adjusted goods trade deficit was at $87,871 million on a Census basis in March, on exports of goods valued at $211,453 million and imports of goods valued at $299,325 million…in Exhibit 5 of the March trade pdf, this report revises that advance report and shows that our actual Census basis goods trade deficit in March was at $87,446 million, on adjusted goods exports of $212,504 million and adjusted goods imports valued at $299,950 million…at the same time, the February goods trade deficit was revised from the $83,487 million indicated in that advance report to $83,506 million…combined, those revisions from the previously published figures indicate that the nominal trade in goods deficit used in the first quarter GDP report was $406 million too high, which works out to be more than $1.6 billion on an annualized basis…that would mean that 1st quarter GDP would need to revised 0.03 percentage points lower to account for the revisions indicated by this report...

Construction Spending Rose 0.6% in March after Falling 0.2% in February and 1.9% in January

Note: This week's March report on Construction Spending also incorporates previously unpublished February construction spending figures, as the Census Bureau is still trying to catch up several reports the wake of the October government shutdown disruptions to data collection. Whenever we can do so coherently, we’ll include those new February figures here as well…

The Census Bureau’s report on construction spending for March (pdf) estimated that the month’s seasonally adjusted construction spending would work out to $2,185.5 billion annually if extrapolated over an entire year, which was 0.6 percent (±0.5 percent) above the annualized February estimate of $2,173.2 billion, and 1.6 percent (±1.0 percent) above the estimated annualized level of construction spending in March of last year…Census also reports that for the first three months of this year, unadjusted construction spending totaled $$479.4 billion, 0.3 percent (±1.0 percent)* above the $477.9 billion spent during the same three months of 2024… the annualized January construction spending estimate was revised 0.6% lower, from $2,190.4 billionth $2,178.1 billion, while the annual rate of construction spending for December was revised 1.0% higher, from $2,197.6 billion  to $2,219.9 billion….after those revisions, February construction spending was 0.2% lower than January’s, and January’s construction spending was 1.9% lower than December's..

A breakdown of the different subsets of construction spending is provided by a Census Bureau summary, which precedes the more detailed spreadsheets, and which we include below:

• Private Construction - Spending on private construction was at a seasonally adjusted annual rate of $1,659.0 billion, 0.8 percent (±0.5 percent) above the February estimate of $1,645.6 billion. Residential construction was at a seasonally adjusted annual rate of $929.7 billion in March, 1.7 percent (±1.3 percent) above the February estimate of $914.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $729.4 billion in March, 0.2 percent (±0.5 percent)* below the February estimate of $731.0 billion.
• Public Construction In March, the estimated seasonally adjusted annual rate of public construction spending was $526.4 billion, 0.2 percent (±1.0 percent)* below the February estimate of $527.6 billion. Educational construction was at a seasonally adjusted annual rate of $113.0 billion, 0.6 percent (±1.6 percent)* below the February estimate of $113.6 billion. Highway construction was at a seasonally adjusted annual rate of $147.8 billion, 0.1 percent (±2.8 percent)* below the February estimate of $148.0 billion.

The advance estimate of first quarter GDP, released last week, only had the previously published January construction spending figures to go on; the figures they used for February and March were estimated and were off considerably from what this report shows….hence, this construction spending report will revise 3 subcomponents of GDP; investment in private non-residential structures, investment in residential structures, and into government investment outlays, for both state and local governments; however, there is no place in the GDP where those construction figures are totaled, so to estimate the impact of this report on GDP, we need to total the GDP construction figures first (we could figure the revision to each component separately, but that would involve more detail, and for now we’re only interested in the net impact on GDP..)

With the downward revisions to January and February figures shown in this report, construction spending for those two months was lower than what was reported by the BEA in their advance estimate of GDP released last week, while construction spending for March was higher than what was reported in the GDP report.…as we saw above, annualized construction spending for January was revised $12.3 billion lower, and annualized construction spending for December was revised $14.4 billion higher….

In reporting 1st quarter GDP, the BEA’s key source data and assumptions (xls) indicated that they had estimated that annualized March nonresidential construction would be valued $3.5 billion less than that of the reported February figure, that annualized February nonresidential construction would be valued $0.7 billion less than that of the reported January figure and that annualized January nonresidential construction would be valued $3.2 billion less than that of the reported December figure…they also estimated that March residential construction would be valued $6.4 billion less than that of the reported February figure, that annualized February residential construction would be valued $2.0 billion less than that of the reported January figure, and that annualized January residential construction would be valued $1.7 billion less than that of the reported December figure, and that March public construction would be valued $0.3 billion less than the reported February figure, that annualized February public construction would be valued $0.6 billion more than that of the reported January figure, and that annualized January public construction would be valued $2.8 billion more than that of the reported December figure…totaling those figures, the 1st quarter GDP report used figures showing March construction spending was at an $9.9 billion annual rate lower than the February spending level, that February construction spending was at an $2.1 billion annual rate lower than previously reported January levels, and that January construction spending was at an $1.9 billion annual rate lower than previously reported December levels…

Since this report shows that March construction spending actually rose at an $12.3 billion annual rate from February figures that were reported $4.9 billion lower than January, which in turn was revised $12.3 billion lower (NB: in estimating the impact on GDP we can, for now, omit December revisions from our calculation because the BEA will not revise 4th quarter figures until the annual revision at the end of September), that means that the total annualized construction figure used for January in the GDP report was $12.3 billion too high, that the annualized construction figure used for February in the GDP report was $15.1 billion too high, and that the annualized construction figure used March in the GDP report was $7.1 billion too low….averaging that understatement with the the overstatements in the annual rates of construction spending used for January and February in the GDP report, we thus find that this report shows that construction spending was overestimated at an $6.8 billion annual rate in the 1st quarter GDP report, implying an downward revision to the related GDP components at a rate that would result in subtraction of about 0.12 percentage points from first quarter GDP when the 2nd estimate is released on May 28th…we should caution that since our estimate is based on the aggregate change in nominal construction spending, an imbalance of inflation adjustments among the revised construction components might also have a material impact on the final revision…

New Home Sales Reported 7.4% Higher in March on Lower Prices

Note: like construction spending and other Census reports, this week's report on new home sales in March also incorporates previously unpublished February new home sales figures, as the Census Bureau is still trying to catch up several reports the wake of the October government shutdown disruptions to data collection. To the extent that we can do so coherently, we’ll include those new February figures here as well..

The Census report on New Residential Sales for March (pdf) estimated that new single family homes were selling at a seasonally adjusted annual rate of 682,000 homes during the month, which was 7.4 percent (±15.5 percent)* above the revised February annual sales rate of 635,000, and was 3.3 percent (±16.2 percent)* above the estimated annual rate that new homes were selling at during March of last year….the asterisks indicate that based on their small sampling, Census could not tell whether March new home sales rose or fell from home sales of February, or even from the sales of March of last year, with the figures in parenthesis representing the 90% confidence range for the 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 January were revised from the annual rate of 587,000 reported last month to an annual rate of 583,000, and new home sales in December, initially reported at an annual rate of 745,000 and revised to a 712,000 annual rate last month, were revised back to a 728,000 a year rate with this report, while November’s annualized new home sales rate, initially reported at an annual rate of 758,000 and revised to a 764,000 a year rate last month, were revised to a 748,000 rate with this release….

The annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 64,000 new single family homes sold in March, up from the estimated 54,000 new homes that sold in February, and the 48,000 that sold in January….the raw numbers from Census field agents were further used to establish that the median sales price of new houses sold in March was $387,400, down from the median sale price of $409,000 in February and down from the median sales price of $412,900 in March a year ago, while the average new home sales price was $503,100, down from the $521,000 average sales price in February, and down from the average sales price of $509,200 in March a year ago….a seasonally adjusted estimate of 481,000 new single family houses remained for sale at the end of March, which represents a 8.5 month supply at the March sales rate, down from the 9.1 months of new home supply in February, and down from the 9.8 months of new home supply in January. which had previously been reported as a 7.9 month supply…

Value of Factory Shipments Rose 1.4% in March, Value of Factory Inventories Rose 0.6%

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for March from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods increased by increased $9.1 billion or 1.5 percent to $630.4 billion March, following an increase of $2.0 billion or 0.3% to $621.3 billion in February, which was revised from the increase of $0.3 billion to $619.6 billion that was reported for February 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 reliable as revised updates to the March advance report on durable goods which was released last week…on those durable goods orders 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 March, up four of the last five months, increased $9.1 billion or 1.5 percent to $630.4 billion, the U.S. Census Bureau reported today. This followed a 0.3 percent February increase. Shipments, up five of the last six months, increased $8.8 billion or 1.4 percent to $633.9 billion. This followed a 1.7 percent February increase. Unfilled orders, up twenty of the last twenty-one months, increased $1.6 billion or 0.1 percent to $1,540.9 billion. This followed a 0.1 percent February increase. The unfilled orders-to-shipments ratio was 6.88, down from 6.92 in February. Inventories, up six consecutive months, increased $5.8 billion or 0.6 percent to $956.3 billion. This followed a 0.1 percent February increase. The inventories-to-shipments ratio was 1.51, down from 1.52 in February.
• New Orders for manufactured durable goods in March, up following three consecutive monthly decreases, increased $2.7 billion or 0.8 percent to $318.9 billion, unchanged from the previously published increase. This followed a 1.2 percent February decrease. Computers and electronic products, up eleven of the last twelve months, led the increase, $1.0 billion or 3.6 percent to $29.6 billion. New orders for manufactured nondurable goods increased $6.5 billion or 2.1 percent to $311.5 billion.
• Shipments of manufactured durable goods in March, up six of the last seven months, increased $2.4 billion or 0.7 percent to $322.4 billion, unchanged from the previously published increase. This followed a 1.6 percent February increase. Machinery, up four of the last five months, led the increase, $0.9 billion or 2.3 percent to $41.6 billion. Shipments of manufactured nondurable goods, up four consecutive months, increased $6.5 billion or 2.1 percent to $311.5 billion. This followed a 1.9 percent February increase. Petroleum and coal products, up three consecutive months, led the increase, $5.6 billion or 9.9 percent to $62.1 billion.
• Unfilled Orders for manufactured durable goods in March, up twenty of the last twenty-one months, increased $1.6 billion or 0.1 percent to $1,540.9 billion, unchanged from the previously published increase. This followed a 0.1 percent February increase. Computers and electronic products, up six of the last seven months, led the increase, $1.4 billion or 0.9 percent to $152.9 billion.
• Inventories of manufactured durable goods in March, up six consecutive months, increased $1.6 billion or 0.3 percent to $597.1 billion, up from the previously published 0.2 percent increase. This followed a 0.1 percent February increase. Transportation equipment, up five of the last six months, led the increase, $0.7 billion or 0.3 percent to $189.0 billion. Inventories of manufactured nondurable goods, up two consecutive months, increased $4.2 billion or 1.2 percent to $359.2 billion. This followed a 0.1 percent February increase. Petroleum and coal products, also up two consecutive months, drove the increase, $4.3 billion or 9.6 percent to $48.6 billion. By stage of fabrication, March materials and supplies increased 0.2 percent in durable goods and 0.8 percent in nondurable goods. Work in process increased 0.2 percent in durable goods and 3.2 percent in nondurable goods. Finished goods increased 0.4 percent in durable goods and 0.7 percent in nondurable goods.

The BEA’s Key source data and assumptions (xls) for the advance estimate of first quarter GDP indicates on line 151 that they had estimated that the value of manufactured nondurable goods inventories would increase by $4.5 billion on a Census basis (ie, before price adjustments) in March, after an increase of $0.4 billion in February…meanwhile, this report reports total non-durable goods factory inventories increased by $4.2 billion in March, after rising $0.3 billion in February…hence, that means that the GDP report overstated non-durable inventories by $0.5 billion, or at a $2.0 billion annual rate, which would result in a revision that would subtract about 0.04 percentage points from GDP when the second GDP estimate is released May 28th…At the same time, inventories of durable goods “increased $1.6 billion or 0.3 percent to $597.1 billion, up from the previously published 0.2 percent increase.” last week’s advance durable goods report, which was used in computing advance GDP, showed a $1.4 billion increase, so the upward revision to durable inventories would reverse nearly half of the downward revision to non-durable inventories…

March Wholesale Sales Valued 2.8% Higher, Wholesale Inventories Valued 1.3% Higher

The March report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at “$772.2 billion, up 2.8 percent (±0.4 percent) from the revised February level and were up 10.9 percent (±1.2 percent) from the revised March 2025 level”… the February preliminary estimate of wholesale sales was revised from the $751.9 billion reported last month to $751.14 billion, which meant that the “The January 2026 to February 2026 percent change was revised from the preliminary estimate of up 2.7 percent (±0.4 percent) to up 2.6 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 sold..

On the other hand, the monthly change in private inventories is a major factor in GDP, since additional goods sitting in a warehouse represent goods that were produced but not sold, and this March report estimated that wholesale inventories were valued at “$932.8 billion at the end of March, up 1.3 percent (±0.2 percent) from the revised February level. Total inventories were up 2.9 percent (±1.1 percent) from the revised March 2025 level.”, with the February preliminary inventory estimate concurrently revised from the originally reported $919.6 billion to $920.443 billion, which meant the change in inventories from January to February was revised from the increase of 0.8 percent (+/-0.2%)* reported last month to an increase of 0.9 percent from January.…

In the advance report on 1st quarter GDP of a week ago, March wholesale inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories, which was released the day before the GDP release…that report estimated that our seasonally adjusted wholesale inventories were valued at $932,768 at the end of March, up from $920,301 billion in February…that’s a net $217 million less than the $932,843 billion and $920,443 billion for those two months that this report shows, which would imply that the quarterly change in 4th quarter wholesale inventories was underestimated at almost a $0.9 billion annual rate in the GDP report….assuming there’s no distortion caused by reweighting the inflation adjustments to those inventories, that would mean that the growth rate of 1st quarter GDP was underestimated by about 0.02 percentage points based on what this report shows…

(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…)