July’s consumer and producer prices, retail sales, and existing home sales; June’s business inventories

The major economic reports released last week were the July Consumer Price Index and the July Producer Price Index, and the June Import-Export Price Index, all from the Bureau of Labor Statistics, the Retail Sales Report for July and the concurrently released Business Sales and Inventories report for June, both from the Census bureau, and the Existing Home Sales Report for July from the National Association of Realtors (NAR)...in addition, this week also saw the Consumer Credit Report for June from the Fed, which reports on non-real estate consumer borrowing, and which indicated consumer credit outstanding grew by a seasonally adjusted $14.2 billion in June, or at a 3.3% annual rate, as non-revolving credit grew at a 2.3% rate to $3,815.8 billion, while revolving credit outstanding grew at a 6.0% rate to $1,351.1 billion…for the second quarter, consumer credit grew at a 2.6% annual rate, with revolving credit up at an 3.9% annual and non-revolving credit up at a 2.1% annual rate….

CPI Rose 0.1% in June on Higher Prices for Housing, Medical Care, and Vehicles

The consumer price index was 0.1% higher in June, as higher prices for rent, utilities, used cars and trucks, vehicle maintenance and repairs, eating out, medical care, college tuition, air fares, public transportation, clothing, appliances, computers, smartphones, telephone services, video equipment including TVs, video rentals, and trash collection were partly offset by lower prices for fuel, groceries, lodging away from home, car and truck rentals, motor vehicle fees, auto, home, and health insurance, bank services, tax preparation, drugs and medical supplies, and admissions to sporting events….the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the weighted average of seasonally adjusted prices for consumer goods and services was 0.1% higher in July, after being 0.4% lower in June, 0.5% higher in May, 0.6% higher in April, 0.9% higher in March, 0.3% higher in February, 0.2% higher in January, 0.3% higher in December, after being 0.2% higher the two months ending in November 0d 2025, 0.3% higher in September, 0.3% higher in August, and 0.2% higher in July 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 333.952 in June to 333.918 in July, which left it 3.364825% higher than the index reading of 323.048 from July of last year, which is reported as a 3.4% year over year increase, down from the 3.5% year over year increase that was reported for June, with that widely cited year over year change simply reflecting the effect of last July’s +0.2% increase dropping out of the comparison and being replaced by the current month’s +0.1%, and not telling us anything more about inflation beyond that….with just slightly higher prices for food and much lower prices for energy this month, seasonally adjusted core prices, which exclude both food and energy, were 0.2% higher over the month, as the unadjusted core price index rose from 336.882 in June to 337.133 in July, which left the core index 2.478266% ahead of its year ago reading of 328.980, which is reported as a 2.5% year over year increase, down from the 2.6% year over year core price increase that was reported for June, and well below the 6.6% annual increase reported for September 2022, which had been the largest annual increase in core prices in forty years…

The volatile seasonally adjusted energy price index was 1.5% lower in July, after being 5.7% lower in June, 3.9% higher in May, 3.8% higher in April, 10.9% higher in March, 0.6% higher in February, 1.5% lower in January, 0.3% higher in December, 1.1% higher in November, 1.5% higher in September, 0.7% higher last August, and 1.1% lower last July,  and is still 14.7% higher than in July of a year ago….the price index for energy commodities was 2.9% lower in July, on a 2.9% decrease in the price index for gasoline and a 1.7% decrease in the price index for fuel oil, while the price index for “other energy commodities”, including propane, kerosene, and firewood, averaged out to be 0.1% higher….meanwhile, the price index for energy services was 0.3% higher, after falling 0.7% in June, as the price index for utility gas service was 0.7% higher in July, and is still 4.3% higher than it was a year ago, while the electricity price index was 0.1% higher, after falling 1.0% in June…. energy commodities are still averaging 24.7% above their year ago levels, with gasoline prices averaging 24.6% higher than they were a year ago, while the energy services price index is up 4.3% from last July, as electricity prices are still averaging 4.2% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was 0.1% higher in July, after being 0.2% higher in June, 0.2% higher in May, 0.5% higher in April, unchanged in March, 0.4% higher in February, 0.2% higher in January, 0.7% higher in December, 0.1% higher over the two months ending November, and after being 0.2% higher in September, 0.4% higher in August, and unchanged last July, and is still 3.0% higher than a year ago….the price index for food purchased for use at home was 0.1% lower in July, while the price index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets rose 0.4% and average prices at full service restaurants rose 0.2%, while the price index for food at employee sites and schools was 0.5% higher, and prices for other food away from home averaged 1.0% higher…

In the food at home categories, the price index for cereals and bakery products was 0.2% higher, a average bread prices rose 0.2%, the price index for breakfast cereal rose 1.0%, the price index for rice rose 0.9%. the price index for fresh cakes and cupcakes rose 2.8%, and the price index for cookies was 1.1% higher.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.7% lower, as the price index for beef and veal fell 0.8%, the price index for pork fell 1.5%, and fresh whole chicken prices were 0.8% lower….in addition, the seasonally adjusted price index for dairy products was 0.1% lower, even as average milk prices rose 0.5%, as the price index for cheese and related products was 1.0% lower….at the same time,, the fruits and vegetables price index was 0.1% lower, as the price index for fresh vegetables fell 2.6%, the price index for canned fruits fell 2.9%, and the price index for canned vegetables was 0.4% lower.…meanwhile, the beverages price index was 0.9% higher, as the price index for carbonated drinks rose 0.2%, the price index for noncarbonated juices and drinks rose 1.5%, and the price index for beverage materials other than coffee but including tea was 1.1% higher….lastly, the price index for the ‘other foods at home’ category was unchanged, as the price index for sugar and sweets rose 0.5%, and the price index for margarine was 2.9% higher, and the price index for baby food and formula was 0.7% higher, while the price index for salad dressing fell 2.7%, the price index for frozen and freeze dried prepared foods fell 0.7%, and the price index for prepared salads was 1.0% lower…

Among the seasonally adjusted core components of the CPI, which was 0.2% higher in July, after being unchanged in June, after rising by 0.2% in May, by 0.4% in April, 0.2% in March, by 0.2% in February, by 0.3% in January, by 0.2% in December, by 0.2% over the 2 months ending in November, and by 0.3% in August, and by 0.3% last July, the composite price index of all goods less food and energy goods was 0.2% higher in July, while the more heavily weighted composite index for all services less energy services was also 0.2% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust June’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.1% higher, as the price index for bedroom furniture rose 1.0%, the price index for appliances rose 0.8%, the price index for outdoor equipment and supplies rose 0.7%, the price index for household cleaning products rose 0.3%, and the price index for household paper products was 0.9% higher….at the same time, the apparel price index was 0.1% higher, on a 2.9% increase in the price index for women’s outerwear, a 1.6% increase in the price index for boys’ apparel, a 2.2% increase in the price index for jewelry and watches, and a 1.1% increase in the price index for men’s footwear…. in addition, the price index for transportation commodities other than fuel was was 0.2% higher, as average prices for new vehicles rose 0.1%, average prices for used cars and trucks were 0.4% higher, and the price index for vehicle accessories other than tires was 2.5% higher….on the other hand, the price index for medical care commodities was 0.6% lower, as the price index for prescription drugs fell 0.8%, the price index for nonprescription drugs fell 0.3%, and the price index for medical equipment and supplies was 1.6% lower…however, the recreational commodities index was 0.6% higher, as the price index for televisions rose 1.7%,the price index for video equipment other than televisions rose 2.1%, the price index for sports vehicles including bicycles rose 0.5 %, the price index for pets and pet products rose 0.7%, the price index for recreational books rose 4.9%, and the price index for toys, games, hobbies and playground equipment was 0.7% higher… at the same time, the education and communication commodities index was 1.3% higher, as the price index for computers, peripherals, and smart home assistants rose 3.5%, the price index for educational books and supplies rose 0.8%, and the price index for telephone smartphones was 1.1% higher.…lastly, a separate price index just for alcoholic beverages was 0.2% higher, while the price index for ‘other goods’ was 0.4% higher on a 0.5% increase in the price index for tobacco and smoking products, a 0.6% increase in the price index for cosmetics, perfume, bath, nail preparations and implements, and a 0.5% increase in the price index for miscellaneous personal goods…

Within core services, the price index for shelter was 0.1% higher, as rents rose 0.1%, and homeowner’s equivalent rent rose 0.3%, but prices for lodging away from home at hotels and motels were 3.3% lower, while the price index for tenants and household insurance was 0.1% lower, and the price index for water, sewer and trash collection services was 0.4% higher… in addition, the price index for medical care services was 0.6% higher, as price index for hospital services rose 0.5%, the price index for dental’ services rose 0.5%, but the price index for health insurance was 0.2% lower…at the same time, the transportation services price index was 0.3% higher, as the price index for airline fares rose 2.2%, the price index for intracity transportation including mass transit rose 1.2% and the price index for motor vehicle maintenance and repair rose 0.6%, while the price index for motor vehicle insurance was 0.3% lower….meanwhile, the recreation services price index was unchanged, as the price index for purchase, subscription, and rental of video rose 2.0%, but the price index for admission to sporting events was 2.0% lower…meanwhile, the price index for education and communication services was 0.5% higher, as the price index for college tuition and fees rose 0.7% and the price index for telephone services was 0.6% higher.…lastly, the price index for other personal services was 0.5% lower, as the price index for checking account and other bank services fell 2.0%,  the price index for laundry and dry cleaning rose 0.5%, and the price index for tax return preparation and other accounting fees was 0.4% lower…

Retail Sales Fell 0.6% in July After May and June Sales were Revised Lower

Seasonally adjusted retail sales fell 0.6% in July after retail sales for May and June were revised lower….the Advance Retail Sales Report for July (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $763.6 billion during the month, which was down 0.6 percent (±0.4 percent) from June’s revised sales of $768.1 billion, but was 5.0 percent (±0.5 percent) above the adjusted sales in July of last year…June’s seasonally adjusted sales were revised almost 0.1% lower, from the $768.6 billion reported last month to $768.1 billion, while May sales were also revised nearly 0.1% lower, from $766.9 billion to $766.2 billion, and as a result the rounded June sales percentage increase was “unrevised from up 0.2 percent (±0.3 percent)*”….estimated unadjusted sales, extrapolated from a survey of a small sampling of retailers, indicated sales actually rose 0.9%, from $777,641 million in June to $784,610 million in July, while they were up 5.2% from the $745,651 million of sales in July a year ago…

Combined, the downward revisions to May and June sales indicate that the 2nd quarter’s adjusted sales were roughly $1.2 billion lower than was previously reported, a revision which would subtract about $4.8 billion to the BEA’s annual rate calculation of 2nd quarter personal consumption expenditures, before any inflation adjustments….That revision should be enough to lower 2nd quarter GDP by around 0.07 percentage points when the 2nd estimate is published at the end of the month…

Included below we have the table of the monthly and yearly percentage changes in retail sales by business type taken from the July Census pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from June to July in the first sub-column, and then the year over year percentage change for those businesses since last July in the 2nd column; the second pair of columns gives us the revision of last month’s June advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the May to June change under “May 2026 (r)evised” and the revised June 2025 to June 2026 percentage change in the last column shown…should you want to check which sales metrics were most revised, our saved copy of the table of last month’s advance June sale estimates, before this month’s revision, is here….

To compute July’s real personal consumption of goods data for national accounts from this July retail sales report, the BEA will initially use the corresponding price changes from the July consumer price index, which we reviewed above….to estimate what they will find, we’ll first remove the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that July retail sales, excluding the 0.9% decrease in sales at gas stations, were also down by 0.6%….then, subtracting the figures representing the unchanged grocery & beverage sales and the 0.5% increase in food services sales from that total, we find that core retail sales were down by almost 0.9% over the month…since the July CPI report showed that the the composite price index of all goods less food and energy goods was 0.2% higher in July, we can thus figure that real retail sales excluding food and energy, or real core PCE, would show a decrease of about 1.1% for the month….however, the actual adjustment in national accounts for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at motor vehicle & parts dealers were down 1.8%, the July price index for transportation commodities other than fuel was 0.2% higher, which would suggest that real sales at auto & parts dealers were actually about 2.0% lower, once higher prices are taken into account… similarly, while nominal sales at clothing stores were 1.9% higher in July, the apparel price index was 0.1% higher, which would suggest that real sales of clothing were up around 1.8%…

In addition to figuring those core retail sales, to make a complete estimate of July’s real PCE, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do…the July CPI report showed that the food price index 0.1% higher, as the price index for food purchased for use at home fell 0.1% while the index for food bought away from home was 0.3% higher…thus, while nominal sales at food and beverage stores were virtually unchanged, real sales of food and beverages would have been around 0.1% higher in light of the concurrent 0.1% decrease in prices…at the same time, the 0.5% increase in nominal sales at bars and restaurants, once adjusted for 0.3% higher prices, suggests that real sales at bars and restaurants only rose by around 0.2% during the month…meanwhile, while sales at gas stations were down 0.9%, the price of gasoline was reported to be 2.9% lower during the month, which would suggest that real sales of gasoline were actually almost 2.1% higher for the month, with a caveat that gasoline stations do sell more than gasoline, products which should not be adjusted with gasoline prices…by reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can then estimate that the income and outlays report for July will show that our real personal consumption of goods fell by almost 0.7% in July*, after a revised 0.6% increase in June, and a revised 0.5% increase in May, but after falling 0.2% April, after rising by 0.9% in March, rising by 0.8% in February and falling by 0.6% in January….at the same time, the 0.2% increase in real sales at bars and restaurants could add a basis point to July’s real personal consumption of services… (*Note: we again have a low confidence in that result because of the unlikely 2.1% increase in gasoline consumption implied by the figures; without gasoline, our estimate would show that July's real PCE goods would be more than 0.8% lower)

Producer Price Index Unchanged in July as Lower Energy & Transportation Prices Offset Higher Core Services

The seasonally adjusted Producer Price Index (PPI) for final demand was unchanged  in July, as the final demand price index for wholesale goods fell 0.7%, while the more heavily weighted price index for final demand for services was 0.2% higher…that flat July PPI reading followed a revised 0.1% decrease in June, when the final demand price index for wholesale goods fell 1.4%, while the price index for final demand for services was 0.5% higher, and followed a revised 0.5% PPI increase in May, when the final demand price index for wholesale goods rose 2.3%, while price index for final demand for services was 0.3% lower, and followed a revised 1.1% increase in April, when the final demand price index for wholesale goods rose 1.9% and the price index for final demand for services was 0.8% higher, and a revised 0.8% increase in March, when the final demand price index for wholesale goods rose 2.0%, while the price index for final demand for services was 0.3% higher, and followed an unrevised 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 an unrevised 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 0.9% higher, and an unrevised 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  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 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 last 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 last 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 last 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….on an unadjusted basis, producer prices are 4.7% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.4% higher for the month. and is still 4.7% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 0.7% lower in July, after being 1.4% lower in June, 2.3% higher in May, 1.9% higher in April, 2.0% higher in March, 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 last August, and 0.6% higher last July, and is still 6.5% higher than a year ago….the final demand goods price index was 0.7% lower in July because the price index for wholesale energy goods was 3.1% lower, after energy prices had been 6.5% lower in June, 8.2% higher in May, 7.2% higher in April, 10.2% higher in March, 2.0% higher in February, and 1.7% lower in January,  and because the price index for wholesale foods was 0.9% lower, after wholesale foods had been had been 0.5% lower in June, 0.6% higher in May, 0.2% higher in April, 0.6% lower in March, 2.3% higher in February, and 1.1% lower in January, and as the price index for final demand for core wholesale goods (excluding food and energy) was 0.1% higher in July, after it had been 0.2% higher in June, 0.7% higher in May, 0.7% higher in April, 0.3% higher in March, 0.4% higher in February. and 0.7% higher in January….

Wholesale energy prices were 3.1% lower in June on a 5.7% decrease in wholesale prices for gasoline, a 6.7% decrease in wholesale prices for No. 2 diesel fuel, and a 9.8% decrease in wholesale prices for natural gas liquids, while the final demand for food price index was 0.9% lower on a 34.9% decrease in the wholesale price index for fresh and dry vegetables and a 15.3% decrease the wholesale price index for processed turkeys… among core wholesale goods, the wholesale price index for transformers and power regulators rose 4.2%, the wholesale price index for food products machinery rose 1.2%, the wholesale price index for electronic computers and computer equipment rose 1.1%, and the wholesale price index for pumps, compressors, and equipment was also 1.1% higher…

Meanwhile, the price index for final demand for services was 0.2% higher in July, after being 0.5% higher in June, 0.3% lower in May, 0.8% higher in April, 0.3% higher in March, 0.3% higher in February, 0.9% 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 last August, and 0.9% higher last July, and is thus 3.9% higher than a year ago….the price index for final demand for trade services slipped 0.1% in July, and the price index for final demand for transportation and warehousing services fell 1.8%, but the core index for final demand for services other than trade, transportation, and warehousing services was 0.6% higher….

Among trade services, seasonally adjusted margins for lawn, garden, and farm equipment and supplies retailers rose 21.3%, margins for TV, video, and photographic equipment and supplies retailers were 31.0% higher, and margins for computer hardware, software, and supplies retailers were 11% higher, while margins for furniture retailers fell 1.8%  and margins for machinery and vehicle wholesalers were 9.0% lower….among transportation and warehousing services, average margins for truck transportation of freight fell 1.8%, margins for air transportation of freight fell 1.6%, and margins for airline passenger services were 3.4% lower….among the components of the core final demand for services index, the price index for portfolio management rose 6.5%, the price index for cable and satellite subscriber services rose 2.9%, the price index for arrangement of vehicle rentals and lodgings rose 2.7%, the price index for arrangement of cruises and tours rose 2.4%, and the price index for management, scientific, and technical consulting services was 3.3% higher…

This report also showed the price index for intermediate processed goods was 1.2% lower in June, after being 1.1% lower in June, 2.9% higher in May, 2.7% higher in April, 3.0% higher in March, 1.5% 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 last August, and 0.7% higher last July….the price index for intermediate energy goods fell 3.1% in July as refinery prices for gasoline fell 5.7%, refinery prices for No. 2 diesel fuel fell 6.7%, refinery prices for jet fuel fell 15.2%, and producer prices for natural gas liquids were 9.8% lower….at the same time, the price index for intermediate processed foods and feeds fell 0.5%, as the producer price index for prepared animal feeds fell 1.4%, the producer price index for meats fell 1.7%, the producer price index for refined sugar and byproducts fell 1.5%, and the producer price index for dairy products was 0.3% lower… on the other hand, the core price index for intermediate processed goods less food and energy goods was 0.1% higher, as the producer price index for industrial gases rose 2.1%, the producer price index for paper boxes and containers rose 1.9%, the producer price index for softwood lumber rose 8.2%, the producer price index for switchgear, switchboard, and industrial controls equipment rose 1.5%, the producer price index for steel mill products rose 3.9%, and the producer price index for nonferrous foundry shop products was 2.0% higher….average prices for intermediate processed goods are still 9.9% higher than in July 2025, the 21st year over year increase in 41 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 1.8% in July, after falling 6.4% % in June, rising 3.2% in May and 1.7% in April, falling 0.2% in March, rising 5.9% in February, rising 4.3% in January, and 2.1% in December and 2.4% in November, after falling 1.3% in October, falling 0.5% in September, and falling 1.8% last August….that was as the July price index for crude energy goods fell 7.4%, as crude oil prices fell 11.9%, unprocessed natural gas prices rose 10.4%, and coal prices were 1.2% higher… meanwhile, the price index for unprocessed foodstuffs and feedstuffs was 0.7% higher, as the producer price index for wheat rose 9.3%, the producer price index for corn rose 16.7%, the producer price index for oilseeds rose 9.5%, and the producer price index for hay and hayseeds was 12.7% higher….at the same time, the index for core raw materials other than food and energy materials was 1.6% higher, on an 11.0% increase in the price index for raw cotton, a 5.8% increase in the price index for aluminum base scrap, and a 1.5% increase in the price index for iron and steel scrap….this raw materials price index is still 7.1% higher than a year ago, the 17th year over year increase in the past 42 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 0.3% higher in June, after being 0.7% higher in June, 0.4% higher in May, 0.9% higher in April, 0.1% higher in March, 0.3% 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 last August, and 0.6% higher last July.…the price index for intermediate trade services was 0.7% higher, as margins for metals, minerals, and ores wholesalers rose 5.5%, margins for intermediate automotive parts, including tire retailers, rose 6.6%, and margins for intermediate food wholesalers rose 3.2%….on the other hand, the price index for transportation and warehousing services for intermediate demand was 0.5% lower, as the intermediate price index for truck transportation of freight fell 1.8%, the intermediate price index for air transportation of freight fell 1.6%, the intermediate index for air mail and package delivery services, excluding by USPS, fell 1.9%, and the intermediate index for transportation of passengers was 3.4% lower….meanwhile, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.6% higher, as the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 3.1%, the intermediate price index for portfolio management rose 6.5%, the intermediate price index for internet advertising time sales rose 4.9%, and the intermediate price index for executive search services was 9.6% higher….over the 12 months ended in July, the price index for services for intermediate demand was 5.1% higher than it was a year earlier, the sixty-ninth 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 lower than the record 9.5% year over year increase that was indicated for July 2021…

June Business Sales Fell 1.1%, Business Inventories Virtually Unchanged, Less than in Q2 GDP Estimate

Following the release of the July retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for June (pdf), which incorporates the revised June retail data from that July retail report and the earlier published wholesale and factory data to give us a composite picture of the business contribution to the economy for that month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $2,111.3 billion in June, down 1.1 percent (±0.2 percent) from May’s revised sales, but up 10.0 percent (±0.3 percent) from June sales of a year earlier…note that total May sales were revised from the originally reported $2,135.0 billion to $2,135.5 billion, which was still 2.1% higher than April..….manufacturer’s adjusted sales were down 0.2% to $652,143 million in June, while retail trade sales, which exclude restaurant & bar sales from the revised June retail sales reported earlier, were up 0.2% to $665,054 million, but wholesale trade sales were down 3.0% to $794,101 million…

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,740.2 billion at the end of June, virtually unchanged (±0.1 percent)* from May, but 3.0 percent (±0.5 percent) higher than in June of last year…the value of end of May inventories was revised up from the $2,736.2 billion reported last month to $2,739.2 billion, and are now shown to be be 0.4% higher than April…seasonally adjusted inventories of manufacturers were estimated to be valued at $962,917 million at the end of June, up 0.1% from the end of May, inventories of retailers were valued at $832,612 million, 0.2% less than at the end of May, while inventories of wholesalers were estimated to be valued at $944,710 million at the end of June, up 0.2% from May…

Last week, we estimated that there could be a 0.01 percentage point upward revision to second quarter GDP based on the inventory change the June factory report showed, while at the same time, we figured that 2nd quarter GDP was overestimated by around 0.09 percentage points based on what the wholesale inventories report showed……in the advance report on 2nd quarter GDP of two weeks ago, retail 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 retail inventories were valued at $831,274 million at the end of June, virtually unchanged from a revised $831,373 million in May….that’s $4.017 billion less than the $832,612 and $834,052 million for those two months that this report shows, which would mean that the quarterly change in 2nd quarter retail inventories was underestimated at roughly a $16.1 billion annual rate, or by an amount that would add about 0.21 percentage points to 2nd quarter GDP, give or take, depending on how the inflation adjustments shake out…combined with our previous estimates on revisions to factory and wholesale inventories, then, this report would suggest that the growth rate of 2nd quarter GDP would need to be revised upwards by around 0.13 percentage points when the 2nd estimate is released two weeks hence….

Existing Home Sales Fell 1.7% in July on Lower Prices

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales fell 1.7% from June to July, projecting that 4.06 million homes would sell over an entire year if the July home sales pace were extrapolated over that year, a pace that was still 0.7% above the annual sales rate projected for July of a year ago….June home sales were revised from the 4.09 million annual rate shown in last month’s report to a 4.13 million rate, but were still down 1.4% from May….the NAR also reported that the median sales price for all existing-home types was $434,100 in July, 0.2% higher than in July a year earlier, which they report marked “the 37th consecutive month of year-over-year price increases.“…..the NAR press release, which is titled “NAR Existing-Home Sales Report Shows 1.7% Decrease in July“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release….since 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…

Since this report is entirely seasonally adjusted and at a not very informative annual rate, we usually look at the raw data overview (pdf), which gives us a close approximation of the actual number of homes that sold each month…this unadjusted data indicates that roughly 400,000 homes sold in July, down by 5.7% from the 424,000 homes that sold in June, but up by 2.8% from the estimated 389,000 homes that sold in July of last year, so we can see there was a modest upward seasonal adjustment to bring the annualized published figures up to the level reported…that same pdf indicates that the median home selling price for all housing types fell 2.0%, from a revised $442,800 in June to $434,100 in July, while the regional median home sales prices ranged from a low of $342,900 in the Midwest to a high of $622,200 for homes 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…)