April’s factory inventories, wholesale sales, and job openings reports, et al

monthly agency reports released this week included the Full Report on Manufacturers’ Shipments, Inventories and Orders for April and the April report on Wholesale Trade, Sales and Inventories, both from the Census Bureau, the Job Openings and Labor Turnover Survey (JOLTS) for April from the Bureau of Labor Statistics, and the Consumer Credit Report for April from the Fed…the latter showed that overall consumer credit, a measure of non-real estate personal debt, expanded by a seasonally adjusted $8.1 billion, or at a 2.6% annual rate, as non-revolving credit expanded at a 2.9% rate to $2810.4 billion and revolving credit outstanding rose at a 1.8% rate to $1010.6 billion…April’s increase represented the slowest monthly consumer credit growth rate since August 2011, but since last April’s increase was previously the lowest in over two years, it’s possible the seasonal adjustment for the month has gone awry….

the Fed also released the 1st Quarter Flow of Funds report, a 198 page pdf report that tracks the flow of money throughout the economy as it moves between households, businesses, and government, and which is usually reported on for household net worth, which tends to fluctuate with the stock market and the value of homes, as measured by the CoreLogic Home Price Index…this week’s report showed that household net worth rose from $92.5 trillion in the 4th quarter of 2015 to a record $94.8 trillion in the 1st quarter of 2017, as the value of real estate owned by households rose by $500 billion to $23.5 trillion while the value of corporate stock owned by households increased by $1.3 trillion….the week also saw the release of the Mortgage Monitor for April (pdf) from Black Knight Financial Services; in a report focusing on new mortgage originations in the first quarter, BKFS also reported that 4.08% of mortgages were delinquent in April, up from the 12 year low of 3.62% delinquent in March, but down from 4.24% delinquency rate in April 2016, and that 0.85% of mortgages remained in the foreclosure process in April, down from 0.88% of all mortgages in March and down from 1.17% a year ago…

Factory Shipments Flat in April, Factory Inventories Up 0.1%

the April Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods fell by $0.8 billion or 0.2 percent to $469.0 billion in April, following an increase of 1.0% in March, which was revised from the 0.2% increase to $478.2 billion reported last month….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only useful as a revised update to the April advance report on durable goods we reported on two weeks ago…this report now shows that new orders for manufactured durable goods fell by $1.8 billion or 0.8 percent to $231.0 billion in March, revised from the 0.7% decrease to $231.2 billion figure that was published two weeks ago….

this report also indicated that the seasonally adjusted value of April factory shipments rose for the 4th time in 5 months, but increased by just $0.1 billion to $470.8 billion, following a 0.2 percent decrease in March, which had previously been reported as an 0.1% decrease…shipments of durable goods were down by $0.9 billion or 0.4 percent to $232.8 billion, revised from the 0.3% decrease that was reported in the advance report…meanwhile, the value of shipments (and hence of “new orders”) of non-durable goods rose by $1.0 billion or 0.4 percent to $238.0 billion, as a 1.1% increase in the value of food products shipments led the increase…

meanwhile, the aggregate value of April factory inventories rose for the 6th consecutive month, increasing by $0.5 billion or 0.1 percent to $649.7 billion, following a March increase of 0.2%….inventories of durable goods increased $0.7 billion or 0.2 percent to $394.6 billion, revised from the $0.5 billion 0.1% increase that was reported two weeks ago….the value of non-durable goods’ inventories decreased $0.2 billion or 0.1 percent to $255.1 billion, following a statistically insignificant decrease in March….

to gauge the effect of these April factory inventories on 1st quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index…by stage of fabrication, the value of finished goods inventories fell by 0.2% to $228,069 million; the value of work in process inventories was down 0.3% to $199,800 million, and materials and supplies inventories were valued 0.7% higher at $221,831 million…the April producer price index reported that prices for finished goods increased 0.5%, prices for intermediate processed goods were also 0.5% higher, while prices for unprocessed goods were 3.3% higher….assuming similar valuations for inventories, that would suggest that April’s real finished goods inventories were roughly 0.7% lower, real inventories of intermediate processed goods were 0.8% lower, and real raw material inventory inventories were 2.6% lower.. 

April Wholesale Sales Down 0.4%, Wholesale Inventories Down 0.5%

the April report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $462.3 billion, down 0.4 percent (+/-0.5%) from the revised March level, but still up 7.3% percent (+/-0.9%) from wholesale sales of April 2016… the March preliminary estimate was revised down $0.8 billion or nearly 0.2% from the $465.5 level reported last month… April wholesale sales of durable goods were up 0.3 percent from last month and were up 7.3 percent (+/-1.8%)* from a year earlier, while wholesale sales of nondurable goods were down 1.1% from March but were up 7.3 percent from last April, with wholesale sales of farm products down 5.6% on lower 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 produced or finally 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 April report estimated that wholesale inventories were valued at a seasonally adjusted $591.0 billion at month end, a decrease of 0.5 percent (+/-0.2%) from the revised March level but 1.1 percent (+/-1.1%)* higher than in April a year ago, with the March preliminary estimate revised down $0.5 billion, or about 0.1%, at the same time….inventories of durable goods were down 0.3% from March, but up 2.0 percent from a year earlier, while the value of wholesale inventories of nondurable goods were down 0.8% from March but were up 1.1 percent from last April, as the value of inventories of raw farm products inventories fell 2.4%…the downward revision to March wholesale inventories implies an downward revision of about 0.02 percentage points to 1st quarter GDP, while April wholesale inventories, after an adjustment for price increases for all categories of wholesale goods except raw farm goods, as indicated by the components of the April producer price index, indicates a real inventory decrease in the 2nd quarter as well…

Job Openings at a Record High in April; Hiring, Firing, and Job Quitting All Down

the Job Openings and Labor Turnover Survey (JOLTS) report for April from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 259,000, from 5,785,000 in March to a record high of 6,044,000 job openings in April, after March job openings were revised higher, from 5,743,000 to 5,785,000…April’s jobs openings were also 7.1% higher than the 5,643,000 job openings reported in April a year ago, as the job opening ratio expressed as a percentage of the employed rose to 4.0% in April from 3.8% in March, which was also up from 3.8% a year ago…the greatest increase in job openings was in the accommodation and food services category, where openings rose by 118,000 to 775,000, while job openings in professional and business services fell by 18,000 to 1,134,000 …(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 to 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 April, seasonally adjusted new hires totaled 5,051,000, down by 253,000 from the revised 5,304,000 who were hired or rehired in March, as the hiring rate as a percentage of all employed fell from 3.6% to 3.5%, the same as the hiring rate in April a year earlier (details of hiring by industry since December are in table 2)….meanwhile, total separations also fell, by 225,000, from 5,198,000 in March to 4,973,000 in April, as the separations rate as a percentage of the employed fell from 3.6% to 3.4%, which was also the same separations rate as in April a year ago (see table 3)…subtracting the 4,973,000 total separations from the total hires of 5,051,000 would imply an increase of 78,000 jobs in April, quite a bit less than the revised payroll job increase of 174,000 for April reported by the May 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 finds that 3,027,000 of us voluntarily quit their jobs in April, down by 111,000 from the revised 3,138,000 who quit their jobs in March, while the quits rate, widely watched as an indicator of worker confidence, slipped from 2.2% to 2.1% of total employment, which was still up from 2.0% a year earlier (see details in table 4)….in addition to those who quit, another 1,590,000 were either laid off, fired or otherwise discharged in April, down by 71,000 from the revised 1,661,000 who were discharged in March, as the discharges rate was unchanged at 1.1% of all those who were employed during the month, but also down from 1.2% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 357,000 in April, down from 399,000 in March, for an ‘other separations’ rate of 0.2%, which was down from 0.3% in both March and in April a year ago….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…)

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s