August retail sales; July consumer credit, business inventories, and job openings

it was a fairly light week for economic data, with the key release being on retail sales for August from the Census Bureau; in addition, there were also two reports on July business inventories, which will have an impact on third quarter GDP…we also saw the Fed’s monthly G19 on consumer credit for July, and the Job Openings and Labor Turnover Survey (JOLTS) for July from the Bureau of Labor Statistics..

August Retail Sales Increase 0.6% Over July’s 0.3% Upwardly Revised Sales

the Advance Retail Sales Report for August (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales were at $444.4 billion in August, which was an increase of 0.6% (±0.5%) from the revised July sales of $441.8 billion, and 5.0% (±0.9%) above sales in August of last year….July’s seasonally adjusted sales were originally reported at $439.8 billion, and with the upward revision the June to July percentage change in sales was revised from the previously reported virtually unchanged (±0.5%)* to an increase of 0.3% (±0.2%), while June sales were revised up by over 0.1%, from $439.8 billion to $440.3 billion….estimated unadjusted sales in August, extrapolated from surveys of a small sampling of retailers, indicated sales rose to $455,181 million in August from $448,745 million in July, and up from the $441,013 million in August a year ago, so we can see there was a fairly small downward seasonal adjustment to sales data for both months…

to break down the details of this August retail sales estimate, we’ll again start by including a picture of the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf…..the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from July to August in the first sub-column, and then the year over year percentage change for those businesses since last August in the 2nd column; the second pair of columns gives us the revision of last month’s July advance estimates (now called “preliminary”) as of this report, likewise for each business type, with the June to July change under “June 2014 revised” and the revised July 2013 to July 2014 percentage change in the last column shown…for reference, here is what those July percentage changes looked like before this month’s revision….  

August 2014 retail sales

looking at the details for August sales in the first column above, it’s fairly clear that the seasonally adjusted 1.5% increase in motor vehicle and parts sales to $89,999 million was the major reason for the stronger than expected headline increase for the month; excluding motor vehicles and parts, retail sales rose 0.3% to $354,378…other than automotive products, August’s retail sales were stronger than July’s for miscellaneous store retailers, where sales rose 2.5% to $10,247 million, for building material and garden supply stores, where sales rose 1.4% to $27,979 million, for specialty stores, such as sporting goods, book and music stores, where sales rose 0.9% to $7,387 million, for furniture stores, where sales rose 0.7% to $8,451 million, for electronics and appliance stores, where sales also rose 0.7% to $8,847 million; for restaurants and bars, where sales rose 0.6% to $47,746 million, and for drug stores, where sales rose 0.6% to $25,338 million…the only business types that saw seasonally adjusted sales fall in August were gas stations, where sales fell 0.8% to $45,216 million, and general merchandise stores, where sales fell 0.1% to $55,538 million…

looking at the revisions to July in the table above and comparing them to the table from the advance report for July as released last month, we find that a large factor in the revision of July’s sales from unchanged to an increase of 0.3% was the revision of sales of motor vehicles and parts, from the previously reported decrease of 0.3% to an increase of 0.6%; July’s sales without automotive sales are now up 0.3% vs the previously reported 0.1% increase…another major upward revisions to last months sales was sales at general merchandise stores, which were originally reported as being 0.5% lower but have now been revised to an increase of 0.5%…we also find that sales at specialty stores, ie, sporting goods, book and music stores, have been revised from an increase of 0.2% to an increase of 1.0%, that sales at non-store retailers (mostly online) were revised from a decline of 0.1% to an increase of 0.5%, and that July sales at clothing stores were revised from an increase of 0.4% to an increase of 0.9%..meanwhile, July sales at miscellaneous store retailers were revised from a 0.9% increase to an increase of just 0.1%, while sales at building material and garden supply stores were revised from a increase of 0.2% to a decrease of 0.5% for July…

Consumer Credit Increases in July by the Most Since 2001

Monday saw the G.19 Release on Consumer Credit for July from the Fed, a report which we watched closely a few years back when student debt issued by the federal government was growing at a 50% annual rate…in July, total seasonally adjusted consumer credit increased at a 9.7% annual rate, or by $26.01 billion annualized to $3.24 trillion, its largest increase since November 2001… the revolving credit portion of the aggregate, which would mostly be credit card debt, increased by $5.3 billion, a 3.4% annual rate, to $880.5 billion, while non-revolving credit, which includes loans for cars and college tuition but not for real estate, rose by $20.65 billion to $2,357.1 billion, an annual growth rate of 10.6%….June’s seasonally adjusted credit increase was revised to an $18.81 billion rate of increase instead of the previously reported $17.2 billion, showing a $1.81 billion increase in revolving credit and a $16.99 billion increase in non-revolving credit…the Zero Hedge bar graph below shows the seasonally adjusted monthly change in non-revolving credit outstanding in red and revolving credit monthly in blue since the beginning of 2011, with decreases in credit outstanding for any either type pointing down…the black line sums the two to track the headline change in credit that this release reports on…the heavier use of credit over the past five months has been powering auto sales to post recession highs…

July 2014 consumer credit via ZH

July Wholesale Inventories Increase by 0.1%

the first release covering inventories we saw this week was on Wholesale Trade, Sales and Inventories for July from the Census Bureau, which reported that seasonally adjusted sales of wholesale merchants rose 0.7% (+/-0.5%) to $458.6 billion from the revised June estimate of $455.2 billion, and were up 7.5% (+/-1.8%) from July a year earlier…the June preliminary sales estimate was revised upward $0.7 billion or 0.2%, and hence was up 0.4% over May…July wholesale sales of durable goods were up 0.4 percent (+/-0.9%)* over June and were up 8.0 percent (+/-1.4%) from July a year ago, as wholesale metal sales rose 4.5% while wholesale sales of professional and commercial equipment fell 0.6%…seasonally adjusted sales of nondurable goods were up 1.0 percent (+/-0.7%) from June and were up 7.2 percent (+/-2.8%) from last July as wholesale sales of groceries rose 2.9% while sales of alcoholic beverages fell 1.9%…meanwhile, seasonally adjusted wholesale inventories were valued at $533.8 billion at the end of July, 0.1% (+/-0.4%) higher than the revised June level and  7.9% (+/-0.7%) above last July’s level, while June’s preliminary estimate was revised downward $0.5 billion or 0.1%…wholesale durable goods inventories were up 0.3 percent (+/-0.2%) from June and up 8.4 percent (+/-1.2%) from a year ago, with wholesale inventories of hardware up 1.8% while inventories of computer equipment were down 4.0%…inventories of nondurable goods were virtually unchanged (+/-0.7%)* in July while they were up 7.0% (+/-1.2%) from last July, as wholesale inventories of drugs and druggists’ sundries were up by 3.4% while wholesale inventories of farm products were down 8.2%… finally, the closely watched inventory to sales ratio of merchant wholesalers was at 1.16, down slightly from the 1.17% ratio of June but unchanged from the inventory to sales ratio of 1.16 in July of last year…

July Business Inventories Rise 0.4%

on Friday, the Census Bureau released the Manufacturing and Trade Inventories and Sales report for July, covered in the media as the business inventories report, which estimated the combined value of seasonally adjusted distributive trade sales and manufacturers’ shipments increased by 0.8 percent (±0.2%) from June to $1,360.3 billion in June, which was 5.3% (±0.6%) above the total monthly sales level of July of last year…manufacturers sales were estimated at $507,362 million, retailer’s sales were estimated at $394,381 million, while merchant wholesalers accounted for $458,563 million of the overall total….meanwhile, total manufacturer’s and trade inventories were estimated to have increased 0.4 percent (±0.1%) from June to a seasonally adjusted $1,750.1 billion in July, which was up 5.9 percent (±0.4%) from July a year earlier…seasonally adjusted inventories of manufacturers were estimated to be valued at $653,831 million, inventories of retailers were estimated to be valued at $562,475 million, and inventories of wholesalers were estimated to be valued at $533,763 million at the end of July…the month end total business inventories to total sales ratio, the metric which is watched to determine if inventories are becoming excessive, was at 1.28, down fractionally from 1.29 in both June and from July a year ago…generally, inventory growth in July was slightly off the pace of the second quarter and should the slower growth rate of July persist, it could be a slight negative for third quarter GDP…

New Hires at a Post Recession High in July as Job Openings are Unchanged

according to the Job Openings and Labor Turnover Survey for July (JOLTS) from the Bureau of Labor Statistics, seasonally adjusted job openings were at 4,673,000, virtually unchanged from June’s 4,675,000, a figure which was revised up 4,000 from the originally reported 4,671,000 openings….job openings in retail sales rose by 22,000 to 487,000, while job openings in education and health care services fell by 15,000 to 806,000….job openings as a percentage of the employed labor force was unchanged from the 3.3% reading of June, but up from 2.7% a year earlier…based on 9,671,000 officially unemployed in July, there would be 2.1 unemployed who were actually looking for work during July for every job opening, and that, of course, does not count those who might have wanted a job but didn’t look for work during the month…

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 include retirements and death…. in July, seasonally adjusted new hires totaled 4,872,000, up 81,000 from the 4,791,000 hired or rehired in June and the highest level of hiring since July 2007, though the hiring rate as a percentage of all employed remained unchanged from June at 3.5%, and up from 3.3% a year earlier….total hiring in construction jumped by 98,000 to 366,000, while hiring in manufacturing fell by 9,000 from June to 259,000….total separations also rose, from 4,520,000 in June to 4,559,000 in July, as the separations rate as a percentage of the employed remained unchanged at 3.3%, while it was up from 3.2% a year ago…subtracting the 4,559,000 total separations from the total hires of 4,791,000 would imply an increase of 232,000 jobs in July, 20,000 more than the revised payroll job increase of 212,000 for July reported by the BLS establishment survey last week, a difference not unexpected between these two surveys that both have wide confidence intervals…

further breaking down the seasonally adjusted job separations, we find 2,517,000 quit their jobs in July, 33,000 more than the revised 2,484,000 who quit their jobs in June, while the quits rate, an indicator of worker confidence which is being watched by the Fed, remained unchanged at 1.8% of total employment… addition to those who quit, another 1,659,000 were either laid off, fired or otherwise discharged in July, not much changed from 1,657,000 discharges in June, which left the discharges rate at 1.2% of all those who were employed during the month….meanwhile, other separations, which includes retirement and death, were at 382,000 in July, up a bit from 378,000 in June, for an ‘other separations’ rate of 0.3%, which was unchanged….our FRED graph for this report below shows job openings in blue in thousands monthly since January 2005, and monthly hires in orange and monthly separations in violet over the same span.note that when separations in purple were above  hires in orange we were losing jobs…the two major components of separations are also included, the count of layoffs and firings is tracked in red, while the number of those quitting their jobs monthly is shown in green….

July 2014 JOLTS

(the above is the synopsis that accompanied my regular sunday morning 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 that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

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