April retail sales and producer prices, March wholesale and business inventories, and March JOLTS

major releases of this past week included the Retail Sales report for April and the Business Sales and Inventories report for March, both from the Census bureau, the Producer Price Index for April, and the Import-Export Price Indexes for April from the Bureau of Labor Statistics, and the the Job Openings and Labor Turnover Survey (JOLTS) for March, also from the BLS…preceding the Business Inventories report, the Census also released the March report on Wholesale Trade, Sales and Inventories, which feeds into the former… the Import-Export Price Indexes indicated import prices rose 0.3% in April, largely on higher oil prices, while export prices averaged a 0.5% increase in an across the board gain…that data will be used to adjust trade figures for April when they’re published 3 weeks from now…

April Retail Sales Up 1.3% in Broad Based Increase

this week’s retail sales report for April was preceded by an April 29th benchmark revision based on the results of the 2014 Annual Retail Trade Survey and the final results from the 2012 Economic Census, which revised prior estimates of retail sales back to 1992 broadly higher…thus this release reports changes from that revision, as if the prior reports we’ve covered had never been published…from that revised figure for March then, the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $453.4 billion for the month, which was a increase of 1.3 percent (±0.5%)* from March sales of $447.8 billion and 3.0 percent (±0.7%) above the adjusted sales of April of last year….estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated unadjusted sales fell 2.0%, from $460,078 in March to $450,888 in April, while they were up 2.9% from the $438,217 million of sales in April a year ago, so we can see that it took a seasonal adjustment to turn those headline April sales that positive….

once again, we are including below the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf….taking into account the benchmark revision, the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from March to April in the first sub-column, and then the year over year percentage change for those businesses since last April in the 2nd column; the second pair of columns gives us the revision of last month’s March advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the February to March change under “Feb 2016 revised” and the revised March 2015 to March 2016 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance March estimates, before the benchmark revision, is here….

April 2016 retail sales

looking at the above table, it’s clear that a 3.2% jump to $92,574 million in seasonally adjusted sales at motor vehicle and parts dealers was in part responsible for the surprise strength in April sales, but even without that jump in automotive sales, other retail sales still increased by 0.8% to $360,864 million…2.2% higher sales at gasoline stations were a factor, but at $32,637 million they’re a smaller part of the aggregate than they were when gasoline prices were higher…other retailers showing well above average increases in April sales included non-store retailers, including catalog and online, which saw sales rise by 2.1% to $45,238 million; miscellaneous store retailers, where sales rose 1.5% to $10,534 million; groceries, where sales rose 1.1% to $52,237 million; clothing stores, where sales rose 1.0% to $21,402 million; and drug stores, where sales rose 0.9% to $27,725 million…only building material and garden supply stores, where sales fell 1.0% to $29,468, saw lower sales in April, but note their year over year sales are still up 8.2%

April Producer Prices Rise 0.2%

the seasonally adjusted Producer Price Index (PPI) for final demand increased by 0.2% in April as prices for finished wholesale goods rose by 0.2%, while margins of final services providers rose by 0.1%…this followed a March report that showed the overall PPI had decreased 0.1%, with prices for finished goods up 0.2% while final demand for services was down 0.2%….producer prices are now unchanged from a year ago, but still down 1.3% from two years ago, as most of the prices reductions relating to lower oil and commodity prices were seen in early 2015…

as we noted, the index for final demand for goods, aka ‘finished goods’, was up 0.2% in April for the second month in a row, after falling by 0.6% in each month from December thru February, as the index for wholesale energy prices rose 0.2%, the price index for wholesale foods was 0.3% lower, and the index for final demand for core wholesale goods (ex food and energy) rose by 0.3% in April…major price changes were seen in wholesale eggs for fresh use, which were down by 29.5%, and by home heating oil, which fell by an adjusted 30.5%, as unseasonable price swings have distorted the monthly seasonally adjusted prices for heat oil all year…pet foods, which were up 2.7% in April, saw the largest price change among core goods…

meanwhile, the index for final demand for services rose by 0.1% in April after falling 0.2% in March, as the index for final demand for trade services fell 0.1%, the index for final demand for transportation and warehousing services fell 0.4%, while the core services index for final demand for services less trade, transportation, and warehousing services was 0.3% higher….noteworthy among trade services, seasonally adjusted margins for fuels and lubricants retailers were 11.5% higher, while margins for TV, video, and photographic equipment retailers were 3.9% lower…among transportation and warehousing services, margins for air transportation of freight fell 5.1% and margins for airline passenger services fell 1.7%…in the core final demand services index, margins for passenger car rentals rose 8.9% and margins for portfolio management services were 4.5% higher..

this report also showed the price index for processed goods for intermediate demand increased by 0.3%, after falling in each of the prior nine months, as intermediate processed goods prices still remain 4.6% lower than in April a year ago…. the price index for processed foods and feeds fell 0.3%, while prices for intermediate energy goods rose by 0.5% and the price index for processed goods for intermediate demand less food and energy was 0.3% higher…meanwhile, the price index for intermediate unprocessed goods was up by 2.6% after rising by 2.5% in March, in the only increases in that index since June of last year…driving that increase was a 9.0% jump in the index for crude energy goods, while the index for unprocessed foodstuffs and feedstuffs was down 1.9%, and producer prices for raw materials other than food and energy materials were up 3.5%, following a 2.1% increase in March… this raw materials index remains 12.3% lower than it was a year ago, as more than half of the year over year decrease of 26.4% seen in November has now been given up…

lastly, the price index for services for intermediate demand was 0.1% higher in April after it fell 0.3% in March, on a 0.4% increase in the index for trade services for intermediate demand and a 0.1% increase in the core price index for services less trade, transportation, and warehousing for intermediate demand, while the index for transportation and warehousing services for intermediate demand was 0.5% lower…major contributors to the rise in prices for services for intermediate demand were the 4.5% increase in intermediate portfolio management services and a 0.9% increase in index for business loans (partial)…over the 12 months ended in April, the year over year price index for services for intermediate demand, which has never turned negative, remains 0.9% higher than it was a year ago…   

March Wholesale Sales Up 0.7%, Wholesale Inventories Up 0.1%

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 $430.7 billion, up 0.7 percent (+/-0.5%) from the revised February level, but still down 2.0% percent (+/-1.4%) from wholesale sales of March 2015… the February preliminary estimate was revised $0.1 billion lower than reported last month, which the Census considers ‘virtually unchanged’ … March wholesale sales of durable goods were down 0.2 percent (+/-0.7%)* from last month and were down 0.4 percent (+/-1.9%)* from a year earlier, with a 2.2% decrease in wholesale sales of plumbing and heating equipment and supplies showing the largest drop for the month, while wholesale sales of electrical and electronic goods rose 1.3%….wholesale sales of nondurable goods were up 1.6 percent (+/-0.7%) from February but were down 3.5 percent (+/-1.9%) from last March, with wholesale sales petroleum and petroleum products up 13.5% on higher prices…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, as additional goods on the shelf represent goods that were produced but not sold, and this March report estimated that wholesale inventories were valued at a seasonally adjusted $583.6 billion at month end, an increase of 0.1 percent (+/-0.4%)* from the revised February level and 0.3 percent (+/-1.6%)* higher than in March a year ago, with the February preliminary estimate revised downward $0.4 billion or almost 0.1% at the same time….inventories of durable goods were down 0.1 percent (+/-0.4%)* from February, and down 2.2 percent (+/-1.6%)* from a year earlier, with inventories of metals and minerals down 2.0% on lower prices, while inventories of motor vehicle and parts were up 1.0%…at the same time, the value of wholesale inventories of nondurable goods were up 0.5 percent (+/-0.7%)* from February and were up 4.6 percent (+/-1.9%) from last March, as the value of inventories of raw farm products fell 4.2% while wholesale inventories of petroleum and petroleum products rose 3.3%…since the BEA assumed an increase in non-motor-vehicle merchant wholesale inventories for March when computing 1st quarter GDP, and since non-vehicle inventories were actually fairly flat, this report suggests a possible subtraction of several basis points from the next 1st quarter GDP revision…

March Business Sales Up 0.3%, Business Inventories Up 0.4%

following the release of the April retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for March (pdf), which incorporates the revised March retail data and earlier published wholesale and factory data to give us a complete 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 $1,289.2 billion in March, up 0.3 percent (±0.2%) from February’s revised sales, but down 1.7 percent (±0.5%) from March sales of a year earlier…note that total February sales were also revised up by almost 0.1%, from $1,284.4 billion to $1,285.2 billion, although that does include the retail benchmark revision….manufacturer’s sales rose by 0.5% from February to $464,674 million in March, while retail trade sales, which exclude restaurant & bar sales from the March retail sales we reported earlier, fell 0.3% to $393,859 million, and wholesale sales rose 0.7% to $430,671 million…

meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,818.6 billion at the end of March, up 0.4 percent (±0.1%) from February, and 1.5 percent (±0.5%) higher than in March a year earlier…the value of end of February inventories was revised down by less than 0.1%, from the $1,812.1 billion reported last month to $1,810,560 million with this report…seasonally adjusted inventories of manufacturers were estimated to be valued at $635,070 million, 0.2% higher than in February, inventories of retailers were valued at $599,924 million, 1.0% greater than February, while inventories of wholesalers were estimated to be valued at $583,582 million at the end of March, up 0.1% from February…when computing advance figures for GDP without this data, the BEA had assumed an increase in non-motor-vehicle retail inventories for March; we certainly have that, but since the BEA didn’t put precise data behind its assumption, it’s difficult to determine if, and how much, the retail increase included here is more than was assumed by the BEA….

Job Openings Up, Hiring and Firing Down in March

the Job Openings and Labor Turnover Survey (JOLTS) report for March from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 149,000, from 5,608,000 in February to 5,757,000 in March, after February’s job openings were revised higher, from 5,445,000 to 5,608,000…March jobs openings were also 11.1% higher than the 5,180,000 job openings reported in March a year ago, as the job opening ratio expressed as a percentage of the employed rose to 3.9% in March from 3.8% in February, also up from 3.5% a year ago…the greatest increase in job openings was in the large professional and business services category, where openings rose by 124,000 to 1,225,000, while job openings in retail fell by 80,000 to 569,000 (see table 1 for more details)…like most BLS releases, the press release for report is easy to understand and also refers us to the associated table for the data cited, 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 5,292,000, down by 218,000 from the revised 5,510,000 who were hired or rehired in February, as the hiring rate as a percentage of all employed fell from 3.8% to 3.7%, which was still better than the hiring rate of 3.6% in March a year earlier (details of hiring by industry since September are in table 2)….meanwhile, total separations also fell, by 114,000, from 5,159,000 in February to 5,045,000 in March, while the separations rate as a percentage of the employed fell from 3.6% to 3.5%, which was the same separations rate as in March a year ago (see table 3)…subtracting the 5,045,000 total separations from the total hires of 5,292,000 would imply an increase of 247,000 jobs in March, a bit more than the revised payroll job increase of 208,000 for March reported by the April establishment survey last week, but still not an unusual difference and within the expected +/-115,000 margin of error in these incomplete samplings… 

breaking down the seasonally adjusted job separations, the BLS finds that 2,980,000 of us voluntarily quit their jobs in March, up by 25,000 from the revised 2,955,000 who quit their jobs in February, while the quits rate, widely watched as an indicator of worker confidence, remained unchanged at 2.1% of total employment, which was still up from 1.9% a year earlier (see details in table 4)….in addition to those who quit, another 1,671,000 were either laid off, fired or otherwise discharged in March, down by 137,000 from the revised 1,808,000 who were discharged in February, as the discharges rate fell to 1.2% of all those who were employed during the month, from 1.3% in February and from 1.4% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 395,000 in March, down from 397,000 in February, for an ‘other separations’ rate of 0.3%, which was unchanged….both seasonally adjusted and 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

(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, most from the aforementioned GGO posts, contact me…)   

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