July consumer prices, new home construction, existing home sales, state jobs, et al

the key report released this week was the Consumer Price Index for July from the Bureau of Labor Statistics; other widely watched releases included the New Residential Construction report for July (pdf) from the Census Bureau, and the National Association of Realtors’ report on July existing home sales…other Labor Department releases included the Regional and State Employment and Unemployment Summary for July and the July report on Real Average Hourly Earnings, which indicated that inflation adjusted and seasonally adjusted earnings for all employees increased by 0.1% from June to July as a 0.2% increase in average hourly earnings was partially offset by a 0.1% increase in the Consumer Price Index, while real average weekly earnings increased by 0.4% on a 0.1% increase in real average hourly earnings and a 0.3% increase in the average workweek….in addition, this week also saw the release of the first two regional Fed manufacturing indexes for August: the Empire State Manufacturing Survey from the New York Fed, which covers New York and northern New Jersey, saw their headline general business conditions index plummet nearly 19 points, from +3.9 to -14.9, its lowest reading since 2009, indicating the onset of a severe regional contraction, while the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose from 5.7 in July to 8.3 in August, indicating an ongoing expansion in the area’s manufacturing facilities….

Consumer Prices Moderate to a 0.1% increase in July

consumer inflation was subdued in July as prices for food, shelter, clothing, and gasoline saw the only significant increases…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose 0.1% in July after rising 0.3% in June and 0.4% in May, while lower energy costs held the year over year change to just 0.2%….the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, rose to 238.654 in July from 238.638 in June, actually less than 0.2% higher than the 238.250 reading of July of last year….since increases in energy and food prices were both modest, core prices, which exclude food and energy, also rose by 0.1% in July, as the unadjusted core index rose from 242.354 to 242.436, to a level 1.80% ahead of its year ago reading of 238.138…regionally, prices for urban consumers rose 0.3% in the West, fell 0.1% in the South, 0.1% in the Northeast and were mostly unchanged in the Midwest for the month, while they’ve risen 1.3% in the West while falling slightly elsewhere over the past year, with a trend toward greater price increases within regions in cities of more than 1,500,000 people…

the seasonally adjusted energy price index rose by 0.1% in July after rising 1.7% in June and 4.3% in May; nonetheless, energy prices are still averaging 14.8% lower than they were in July a year ago…prices for energy commodities were 0.7% higher in July while the index for energy services saw a 0.6% decrease, its 4th drop in 5 months….the increase in the energy commodity index was driven by a 0.9% increase in the price of gasoline, the largest component, while fuel oil prices fell 3.4% and prices for other fuels, including propane, kerosene and firewood, averaged a 2.2% decrease…within energy services, the index for utility gas service fell by 1.4%, leaving utility gas priced 14.2% below a year ago, while the electricity price index fell by 0.4%, as prices for electricity turned negative by 0.7% from last year…energy commodities are still priced 22.4% below their year ago levels, with gasoline still 22.3% lower than a year ago, while the energy services price index is now 3.7% lower than last July…

the seasonally adjusted food index rose by 0.2% in July, after rising 0.3% in June and being statistically unchanged in April and May, as prices for food at home rose 0.3% while prices for food away from home were statistically unchanged, as a 0.3% average price increase at full service restaurants was offset by a 4.0% decrease in food prices at employee sites and schools…prices for all food at home categories rose in July, led by an 0.8% increase in prices for dairy and related products, which saw milk prices rise 1.4 and cheese prices 1.1% higher…the index for cereals and bakery products rose 0.2% on a 1.2% increase in prices for biscuits, rolls, muffins and a 1.5% increase in prices for frozen and refrigerated bakery products, while bread prices fell 0.5%….prices for the meat, poultry, fish, and egg group also rose 0.2% on a 3.3% increase in egg prices and and a 0.5% increase in pork prices, which were partially offset by a 0.6% decrease in chicken prices…the fruit and vegetable index rose 0.3% on a 1.1% increase in prices for canned fruits and vegetables and a 0.8% increase in citrus fruit prices, while lettuce prices fell 3.1% and apples price were 2.2% lower…lastly, the beverages index rose 0.4% as coffee prices rose 1.0% and carbonated drinks prices rose 0.9%, while the index for other foods at home rose 0.2% on 0.7% higher prices for sugar and 1.7% higher butter prices, which probably should be included in the dairy category…over the past year, egg prices are now up by 24.9% and average beef prices have risen by 10.0%, while bacon prices have declined 11.4%….the itemized list for price changes in over 100 separate food items is included at the beginning of Table 2, which gives us a line item breakdown for prices of more than 200 CPI items overall

among the seasonally adjusted core components of the CPI, which rose by 0.1% in July, the composite of all CPI commodities less food and energy commodities fell by 0.1%, while the composite for all services less energy services rose by 0.2% on 0.4% increase in the cost of shelter, which accounts for nearly more than half of the services index and one third of the total CPI…within the shelter components, both rent of one’s primary residence and owner’s equivalent rent rose by 0.3%, but the cost of lodging away from home rose 2.5% on a 3.0% increase in hotel and motel charges…other than shelter, prices for other services were subdued; medical care services rose 0.1% as a 0.1% decrease in prices for hospital services offset a 0.2% increase in doctor’s fees, while transportation services fell 0.2% on a 5.6% drop in airfares…other services seeing a price change greater than 1% in July included intercity train fares, which were up 2.2%, ship fares, which were up 3.8%, car and truck rentals, which were up 1.8%, vehicle registration and license fees, which were up 2.3%, film processing, which was up 1.6%, video media rental, which was up 1.2%, and delivery services, which were up 1.5%..

the 0.1% lower prices for core commodities would suggest a greater increase in real personal consumption expenditures of goods for July than the 0.6% increase we saw in last week’s retail report, with the caveats that retail sales of gasoline and food would need to be adjusted separately with their appropriate price change index, and that the 0.7% increase in consumption at bars and restaurants would be included with personal consumption of services…as sales of food were flat and gas station sales were up only 0.4%, the prices changes here suggest a pullback in real consumption of both of those…but prices for new cars were down 0.4%, suggesting at least a 1.8% increase in real consumption of automotive equipment, and other key components also saw real gains, so real personal consumption expenditures of goods should see an increase at least as great as the nominal sales increase…

major consumer commodities which saw prices decreases greater than 1% in July included laundry equipment, which was priced 2.9% lower, bedroom furniture, which was 1.5% lower, men’s apparel, which was 1.2% lower, boys apparel, which was 2.2% lower, petfood, which was 2.0% lower. televisions, which were 1.5% lower, computer software and accessories, which were also 1.5% lower, and toys, games and playground equipment, which were priced an average of 1.0% lower than in June…meanwhile, prices for women’s outerwear rose 2.5%, prices for women’s footwear rose by 2.4%, and prices for newspapers & magazines rose by 1.2%…other than the aforementioned eggs, beef, bacon, and energy commodities, only telephones, which saw prices fall by 13.0%, and televisions, which were 12.3% cheaper, saw their prices change by more than 10% over the past year…

New Housing Starts Flat in July; New Permits Drop

the report on New Residential Construction for July (pdf) from the Census Bureau estimated that the widely watched count of new housing starts was at a seasonally adjusted annual rate of 1,206,000 in July, which was 0.2 percent (±15.2%)* above the revised June estimate of 1,204,000 annually and 10.1 percent (±10.8%)* above last July’s rate of 1,095,000 housing starts a year…the asterisks indicate that the Census does not have sufficient data to determine whether housing starts rose or fell over the past month or even over the past year, with the figure in parenthesis the most likely range of the change indicated; thus, July housing starts could have been down 15.0% or up 15.4% for all they know, with revisions further obscuring the change, as the June annual rate of starts was revised up from 1,174,000 to 1,204,000 units…those annual rates of starts indicated by the headline change are extrapolated from a survey of a small percentage of permit offices visited by Census field agents, which estimated that 112,300 housing units were started in July, down from 112,700 units started in June, which was initially estimated at 110,400 housing starts…the unadjusted estimates also show that housing starts were down in the Northeast and down slightly in the West, while they were up in the South and Midwest, with only the 28.5% decrease to 14,800 units started in the Northeast greater than the statistical margin of error for that region…

as we’ve noted previously, the monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised starts data, but these have also presented us with an anomaly of late… in July, Census estimated new permits were issued at a seasonally adjusted annual rate of 1,119,000, which was 16.3 percent (±1.1%) below the revised June rate of 1,337,000 permits annually, the largest one month drop since 2008, but still 7.5 percent (±1.4%) above the rate of permit issuance a year earlier…the drop in permits was precipitated by the expiration of a New York tax break for multi-family construction, which resulted in builders bulking up on permits in the months prior to the expiration, only to stop seeking permits in July…not only did this result in this month’s record drop, but the back to back 8 year record highs of new permits we reported on in May and June…the estimates for new permits reported here were extrapolated from the unadjusted estimate which showed permits for 100.900 housing units were issued in July, which was down from the estimated 134100 new permits issued in June…that change was driven by the change in permits in the Northeast, which dropped to 10,700 in July from 31,100 in June and 25,600 in May, an anomaly which we noted at the time but didn’t understand until this week….permits were down in all other regions as well, though, so the July drop in permits was real even without that Northeast anomaly…

July Existing Home Sales Top June Post-Recession Sales Record

the National Association of Realtors (NAR) reported that seasonally adjusted existing home sales rose by 2.0% in July, projecting that 5.59 million homes would sell over an entire year if July sales were extrapolated over that year, a rate 10.3% higher than the annual rate projected in July of a year ago, and the greatest pace of existing home sales since February 2007…the annual rate of June home sales was revised from 5.49 million to 5.48 million….the NAR also says that the median existing-home price for all housing types in June was $234,000, which was up 5.6% from a year earlier and the 41st consecutive year over year increase in home prices…the NAR press release, which is titled Existing-Home Sales Maintain Solid Growth in July , is in easy to read plain English, so there’s no point in our restating what they already clearly report…as sales of existing properties do not add to our national output, neither these 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 fairly meaningless annual rate, we’ll take a look at the raw data overview (pdf), which shows that 552,000 homes actually sold in July, down 3.5% from the 572,000 homes that sold in June (which was revised from 573,000) but still up 11.7% from the 494,000 homes that sold in July last year…the regional change in July sales ranged from an increase of 11.1% to 80,000 home sales in the Northeast to a 12.4% decrease to 113,000 home sales in the West….that same pdf indicates that the median home selling price for all housing types fell from a revised $236,300 in June to $234,000 in July, while the average home sales price was $278,000, down 1.8% from the $273,000 average in May, and up 4.6% from the $268,100 average home sales price of June a year ago, with the regional averages ranging from a low of $223,300 in the Midwest to a high of $360,600 in the West…for additional coverage with long term graphs on this report, see Existing Home Sales Are On Fire by Robert Oak at The Economic Populist…

July State and Regional Employment Report

the Regional and State Employment and Unemployment Summary for June expands on the national employment situation summary of two weeks ago by breaking down the state and regional details…as with most BLS reports, the press release is very readable & self explanatory, with BLS referring to appropriate tables linked to at the bottom of the press release wherever relevant, and with tables and coverage of 50 states, it’s more thorough than we can meaningfully cover in a short synopsis….the BLS table corresponding to household survey data, including the seasonally adjusted count of the unemployed and the unemployment rate for each state, is here….for graphics on that, David Cooper at the Economic Policy Institute includes current and long term interactive maps of the unemployment rates for the 50 states here: More of the Same in the July State Jobs Report….

the pdf version of this report also includes map graphics for both the employment rate and the year over year payroll jobs increase by state and region…for a breakdown of payroll employment by job type for each state over the past 3 months, and the change in employment since last July, see the following two BLS tables accompanying this release: Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted and Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted …the latter two tables are very detailed, giving you both actual and seasonally adjusted totals for jobs in each state and the District of Columbia in several categories, including construction, manufacturing, trade, transportation and utilities, financial, professional and business services, education and health services, leisure and hospitality and government….

(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 theglobal glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

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