March consumer prices, retail sales, & producer prices; February’s business inventories and job openings

regular monthly reports released this week included the the March Consumer Price Index, the March Producer Price Index, and the March Import-Export Price Index from the Bureau of Labor Statistics, and the Retail Sales report for March and the Business Sales and Inventories report for February from the Census Bureau…in addition, the BLS also released the Job Openings and Labor Turnover Survey (JOLTS) for February…

Consumer Prices Fall 0.3% in March on Lower Energy, Phone Bills, Vehicles and Clothing

the consumer price index decreased by 0.3% in March, as lower prices for energy, wireless services, and most goods more than offset higher prices for groceries…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the seasonally adjusted price index for urban consumers fell 0.3% in March after it had risen 0.1% in February, 0.6% in January, 0.3% in December, 0.2% in November, 0.4% in October, 0.3% in September, and 0.2% in August….the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, actually rose to 243.801 in March from 243.603 in February, which left it statistically 2.381% higher than the 238.132 index reading in March of last year…with lower prices for gasoline a major drag on the overall index, seasonally adjusted core prices, which exclude food and energy, fell by 0.1% for the month, with the unadjusted core index rising from  251.143 to 251.290, which left the core index 2.002% ahead of its year ago reading of 246.358…

the volatile seasonally adjusted energy price index fell by 3.2% in March, after it had fallen by 1.0% in February, but after it had risen by 4.0% in January, 1.5% in December, 1.2% in November, 3.5% in October, and 2.9% in September…hence, energy prices are still averaging 10.9% higher than a year ago, after seeing negative year over year comparisons through most of 2015 and 2016…prices for energy commodities were 6.0% lower in March, while the index for energy services fell by 0.3%, after rising 1.0% in February ….the drop in the energy commodity index included a 6.2% decrease in the price of gasoline, the largest component, and a 0.8% decrease in the price of fuel oil, while prices for other fuels, including propane, kerosene and firewood, fell by an average of 0.3%…within energy services, the index for utility gas service fell by 0.8% in its first decrease after 8 increases, and hence utility gas is still priced 10.8% higher than it was a year ago, while the electricity price index was down 0.1%, after it rose 0.8% in February but was unchanged in December and January….energy commodities are still priced 19.8% above their year ago levels, with gasoline prices averaging 19.9% higher than they were a year ago.…meanwhile, the energy services price index is still 3.4% higher than last March, as even electricity prices have increased by 1.6% over that period..

the seasonally adjusted food price index rose 0.3% in March, after rising 0.2% in February, 0.1% in January, but after being unchanged for the 6 prior months, as prices for food purchased for use at home rose 0.5% while prices for food bought to eat away from home rose 0.2%, with average prices at fast food outlets up 0.2% while average prices at full service restaurants were 0.1% higher…in the food at home categories, the price index for cereals and bakery products increased by 0.3% as prices for flour and mixes were 1.4% higher…the price index for the meats, poultry, fish, and eggs group was also up 0.3% as pork prices rose 1.5% and poultry prices rose 1.0%, while the index for dairy products was 0.6% lower on 0.9% decrease in the price of cheese and a 0.7% price decrease for ice cream….the fruits and vegetables index was 1.6% higher on a 2.4% increase in prices for fresh fruits and a 1.1% increase in the index for processed fruits and vegetables….the beverages index was 0.1% lower as carbonated drink prices fell 0.5% and coffee prices were unchanged….lastly, prices in the ‘other foods at home’ category were on average 0.7% higher, as olives, pickles and relishes averaged a 3.6% increase and snacks rose 1.4%…..among food at home line items, only eggs, which are still priced 21.8% lower than a year ago, have seen price changes greater than 10% over the past year…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 fell by 0.1% in March after rising by 0.2% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.1% in September, 0.3% in August, 0.1% in July and by 0.2% in April, in May and in June, the composite of all goods less food and energy goods was down 0.3%, while the more heavily weighted composite for all services less energy services was 0.1% lower….among the goods components, which will be used by the Bureau of Economic Analysis to adjust March retail sales for inflation in national accounts data, the index for household furnishings and supplies fell by 0.1% as prices for furniture and bedding fell 0.8%…the apparel price index was 0.7% lower, led by a 3.2% decrease in prices for men’s apparel….prices for transportation commodities other than fuel were down 0.4%, as prices for new vehicles fell 0.3% and prices for used cars and trucks fell 0.9%…prices for medical care commodities were 0.2% higher on a 0.6% increase in non-prescription drug prices….meanwhile, the recreational commodities index fell 0.3% on 0.8% lower prices for sport vehicles including bicycles and 1.5% lower priced toys, while the education and communication commodities index was 0.9% lower on 1.5% decreases in prices for both personal computers and telephones…lastly, a separate price index for alcoholic beverages was up 0.3% on 1.2% higher prices for whiskey bought for drinking at home, while the price index for ‘other goods’ was down 0.3% on a 0.6% increase in prices for personal care products…

within core services, the price index for shelter rose 0.1% on a 0.3% increase in rents and a 0.2% increase in owner’s equivalent rent, offset by a 2.4% decrease in lodging away from home at hotels and motels, while the household operations services index was up 0.1%….the index for medical care services was also up 0.1% as hospital services rose 0.4% while eye care services fell 0.7%…meanwhile, the transportation services index was 0.4% higher on a 1.2% increase in motor vehicle insurance…in addition, the recreation services price index was up 0.2% as cable and satellite television and radio services rose 0.5%, while on the other hand, the index for education and communication services was 1.9% lower as charges for wireless telephone services were 7.0% lower…lastly, the index for other personal services was up 0.5% as tax return preparation and other accounting fees were 2.4% higher…among core prices, only televisions, which are now 18.9% cheaper than a year ago, and wireless phone services, which have now dropped 11.4% from a year ago, have seen prices drop by more than 10% over the past year, while nothing has seen prices rise by a double digit magnitude..  

Retail Sales Down 0.2% in March after February and January Sales Revised Lower

seasonally adjusted retail sales decreased by 0.2% in March after retail sales for February were revised lower…the Advance Retail Sales Report for March (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $470.8 billion during the month, which was down 0.2 percent (±0.5%) from February’s revised sales of $473.6 billion but still 5.2 percent (±0.9%) above the adjusted sales in March of last year…February’s seasonally adjusted sales were revised down from $474.0 billion to $471.9 billion, while January’s sales were revised down from $473.6 billion to $473.1 billion; as a result, the January to February change was revised up from up 0.1 percent (±0.5%) to down 0.3 percent (±0.2%)…..estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated sales were up 14.9%, from $419,730 million in February to $482,257 million in March, while they were up 4.8% from the $460,093 million of sales in March of a year ago..

included below is the table of the monthly and yearly percentage changes in retail sales by business type taken from the February Census Marts pdf…to once again explain what this table shows, the first double column shows us the seasonally adjusted percentage change in sales for each kind of business from the February revised figure to this month’s March “advance” report in the first sub-column, and then the year over year percentage sales change since last March in the 2nd column; the second double column pair below gives us the revision of the February advance estimates (now called “preliminary”) as of this report, with the new January to February percentage change under “Jan 2017 r” (revised) and the February 2016 to February 2017 percentage change as revised in the 2nd column of the pair…for your reference, our copy of this same table from last month’s advance February estimates, before this month’s revisions, is here…. lastly, the third pair of columns shows the percentage change of the first 3 months of this year’s sales (January, February and March) from the preceding three months of the 4th quarter (October thru December) and from the same three months of a year ago…. 

March 2017 retail sales table

as we could see from the consumer price survey, this decrease in March retail sales was largely due to lower prices, since the composite price index of all goods less food and energy goods was down 0.3% for the month…certainly, there are areas of weakness and strength within that aggregate; as we can see, adjusted sales at motor vehicle dealers were down 1.5% to $87,845 million, and the 0.3% drop in prices of new vehicles and the 0.9% drop in prices of used vehicles only accounts for part of that….on the other hand, clothing store sales were up 1.0% while clothing prices were down 0.7%, which means that real clothing sales were up on the order of 1.7%…still, the downward revisions to January and February sales will put a statistically significant hit on previously reported personal consumption expenditures (PCE), which as we saw two weeks ago, were already on track to log the weakest contribution to GDP since the fourth quarter of 2009…  

Producer Prices Down 0.1% in March on Lower Energy Prices

the seasonally adjusted Producer Price Index (PPI) for final demand fell 0.1% in March, as prices for finished wholesale goods decreased 0.1%, while margins of final services providers also decreased by 0.1%…this followed a February that indicated the PPI was 0.3% higher, with prices for finished wholesale goods up 0.3%, while margins of final services providers increased by 0.4%, and a January report that indicated the PPI was 0.6% higher, with prices for finished goods up 1.0% while final demand for services rose 0.3%….on an unadjusted basis, producer prices are now 2.3% higher than a year earlier, up from the 2.2% YoY increase indicated a month ago, for the largest year over year increase since March 2012…

as noted, the price index for final demand for goods, aka ‘finished goods’, fell by 0.1% in March, after rising by 0.3% in February, 1.0% in January, 0.6% in December, 0.1% in November, 0.3% in October, and 0.5% in September.. the index for wholesale energy prices fell 2.9%, the price index for wholesale foods rose 0.9%, and the index for final demand for core wholesale goods (ex food and energy) rose 0.4%…the largest wholesale energy price change was a 20.4% drop in wholesale prices for liquefied petroleum gas, while the wholesale food price index moved up on increases of 7.7% for fresh fruits and 7.1% for fresh and dry vegetables….among wholesale core goods, prices for industrial chemicals increased 2.6%, while wholesale prices for light trucks were up 1.3%..

meanwhile, the index for final demand for services fell by 0.1% in March, after rising by 0.4% in February, 0.3% in January, and by 0.1% in December, in November and in October, as the index for final demand for trade services was down 0.1%, the index for final demand for transportation and warehousing services fell 0.2%, while the index for final demand for services less trade, transportation, and warehousing services was 0.5% higher….among trade services, seasonally adjusted margins for apparel, footwear, and accessories retailers decreased 3.1% while margins for fuels and lubricants retailers rose 13.8%…among transportation and warehousing services, margins for truck transportation of freight were 0.4 lower…in the core final demand for services index, margins for loan services (partial) fell 4.1% and margins for securities brokerage, dealing, and investment advice fell 3.8%..

this report also showed the price index for processed goods for intermediate demand was 0.1% higher, after rising 0.4% in February, 1.1% in January, 0.4% in December, and by a revised 0.4% in November…prices for intermediate processed goods are now 5.3% higher than in March a year ago, the fifth year over year increase after 16 months of lower year over year comparisons, as intermediate goods prices fell every month from July 2015 through March 2016…. in March, the price index for intermediate energy goods fell 2.7%, while prices for intermediate processed foods and feeds rose 0.6%, and the core price index for processed goods for intermediate demand less food and energy was 0.7% higher…

at the same time, the price index for intermediate unprocessed goods fell 4.2% in March, after falling 0.2% in February, but after rising 3.8% in January and 8.4% in December…the index for crude energy goods fell 14.6% as prices for raw natural gas fell 30.0% after falling 18% in February, while the price index for unprocessed foodstuffs and feedstuffs rose 0.8%, as the index for slaughtered chickens rose 5.8%…in addition, the index for core raw materials other than food and energy materials rose 2.0%, as wholesale prices for iron and steel scrap rose 6.9% and wholesale prices for paper scrap rose 14.9% … this raw materials index is still up 12.7% from year ago, in contrast to a prior year over year decrease of 26.4% that we saw just 16 months ago, in November of 2015…

lastly, the price index for services for intermediate demand was 0.2% lower in March, after being 0.5% higher in February, 0.3% higher in January, 0.1% higher in December and 0.4% higher in November.. the index for trade services for intermediate demand was 0.3% higher as margins for hardware, building material, and supplies retailers rose 4.0%…the index for transportation and warehousing services for intermediate demand was also up 0.3%, as intermediate prices for air transportation of freight rose 1.1%…meanwhile, the core price index for services less trade, transportation, and warehousing for intermediate demand fell 0.4%, as the intermediate price index for securities brokerage, dealing, and investment advice fell 6.8 percent…over the 12 months ended in February, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is still 1.7% higher than it was a year ago…   

February Business Sales Up 0.2%, Business Inventories Up 0.3%

after the release of the March retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for February (pdf), which incorporates the revised February retail data from that March report and the earlier published February 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 $1,360.7 billion in February, up 0.2 percent (±0.2 percent)* from January ‘s revised sales, and up 7.1 percent (±0.4 percent) from February sales of a year earlier…note that total January sales were concurrently revised up from the originally reported $1,359.3 billion to $1,357.8 billion, now a 0.3% increase from December….manufacturer’s sales rose 0.3% to $479,959 million in February; retail trade sales, which exclude restaurant & bar sales from the revised February retail sales reported earlier, fell 0.3% to $415,823 million, while wholesale sales rose 0.6% to $464,911 million…

meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,839.9 billion at the end of February, up 0.3 percent (±0.1%) from the end of January, and 2.8 percent (±0.3%) higher than in February a year earlier…at the same time, the value of end of January inventories was revised down from the $1,841.4 billion reported last month to $1,834.3 billion, still 0.3% higher than January, as there must have been an annual revision that we missed….seasonally adjusted inventories of manufacturers were estimated to be valued at $629,966 million, up 0.2% from January, and inventories of retailers were valued at $615,759 million, 0.3% more than in December, while inventories of wholesalers were estimated to be valued at $594,194 million at the end of February, 0.4% higher than in January… 

Job Openings Up in February; Hiring, Job Quitting and Layoffs All Down

the Job Openings and Labor Turnover Survey (JOLTS) report for February from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 118,000, from 5,625,000 in January to 5,743,000 in February, after January job openings were revised from the originally reported 5,626,000…February’s jobs openings were also 177,000 higher than the 5,743,000 job openings reported in February a year ago, as the job opening ratio expressed as a percentage of the employed rose from 3.7% in January to 3.8% in February, which was also from the 3.7% rate of February a year ago…(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 February, seasonally adjusted new hires totaled 5,314,000, down by 110,000 from the revised 5,424,000 who were hired or rehired in January, as the hiring rate as a percentage of all employed fell from 3.7% in January to 3.6% in February, which was also down from the 3.8% hiring rate in February a year earlier (details of hiring by sector since October are in table 2)….meanwhile, total separations rose by 176,000, from 5,247,000 in January to 5,071,000 in February, as the separations rate as a percentage of the employed fell from 3.6% to 3.5%, which was also down from 3.6% in February a year ago (see table 3)…subtracting the 5,071,000 total separations from the total hires of 5,314,000 would imply an increase of 243,000 jobs in February, somewhat more than the revised payroll job increase of 218,000 for February reported in the March establishment survey last week but still within the expected +/-115,000 margin of error in these incomplete samplings

breaking down the seasonally adjusted job separations, the BLS founds that 3,084,000 of us voluntarily quit our jobs in February, down from the revised 3,186,000 who quit their jobs in January, while the quits rate, widely watched as an indicator of worker confidence, fell by 0.1% to 2.1% of total employment, the same as it was a year earlier (see details in table 4)….in addition to those who quit, another 1,584,000 were either laid off, fired or otherwise discharged in February, down by 75,000 from the revised 1,659,000 who were discharged in January, as the discharges rate remained unchanged at 1.1% of all those who were employed during the month, while it was down from the discharges rate of 1.3% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 404,000 in February, up from 402,000 in January, for an ‘other separations rate’ of 0.3%, the same as in January and as in February of last year….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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