July’s consumer and producer prices, June’s job openings and labor turnover

major agency reports released this past week included the July Consumer Price Index, the July Producer Price Index, and the July Import-Export Price Index, all from the Bureau of Labor Statistics, and the June report on Wholesale Trade, Sales and Inventories from the Census Bureau…the BLS also released the Job Openings and Labor Turnover Survey (JOLTS) for June, while the Fed released the Consumer Credit Report for June, which showed that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $12.4 billion, or at a 3.9% annual rate, as non-revolving credit expanded at a 3.5% rate to $2,834.1 billion and revolving credit outstanding rose at a 4.9% rate to $1,021.7 billion….in addition, the privately issued Mortgage Monitor for June (pdf) released by Black Knight Financial Services indicated that 3.80% of all mortgages nationally were delinquent in June, up from 3.79% in May but down from 4.31% in June a year ago, and that 0.81% of all mortgages remained in the foreclosure process, down from 0.83% in May and down from 1.10% in foreclosure a year ago…

Consumer Prices Up 0.1% in July on Higher Food, Clothing and Medical Care

the consumer price index rose 0.1% in July, as higher prices for food, clothing and medical care were only partially offset by lower prices for energy and automobiles …the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose 0.1% in July after being unchanged in June and  falling 0.1% in May, but after rising 0.2% in April….the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, actually fell from 244.955 in June to 244.786 in July, which left it statistically 1.728% higher than the 240.628 index reading in July of last year…with prices for energy lower and prices for food higher, seasonally adjusted core prices, which exclude food and energy, also rose by 0.1% for the month, even as the unadjusted core index fell from 252.014 to 251.936, which left the core index 1.692% ahead of its year ago reading of 247.744…

the normally volatile seasonally adjusted energy price index decreased by just 0.1% in July, after it had dropped 1.6% in June and 2.7% in May, but rose by 1.1% in April, fell by 3.2% in March and 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 by 2.9% in September….thus, energy prices are still averaging 3.4% higher than a year ago, after seeing negative year over year comparisons through most of 2015 and 2016…prices for energy commodities were unchanged in July, while the index for energy services fell by 0.2%, after falling 0.5% in June.. the energy commodity index was unchanged despite a 2.0% decrease in the index for fuel oils because the price of gasoline, the largest component, was unchanged, while prices for other energy commodities, such as propane, kerosene, and firewood, averaged 0.5% higher…within energy services, the index for utility gas service fell by 2.3% after falling by 0.2% in June but after rising by 1.9% in May and by 2.2% in April, and hence utility gas is still priced 7.5% higher than it was a year ago, while the electricity price index was up 0.4%, after it fell 0.6% in June….energy commodities are now 3.1% higher than their year ago levels, with gasoline prices averaging 3.0% higher than they were a year ago, while the energy services price index is 3.6% higher than last July, as electricity prices have also increased by 2.6% over that period…

the seasonally adjusted food price index was up 0.2% in July, after being unchanged in June, rising 0.2% in May, 0.2% in April, 0.3% in March, 0.2% in February, and 0.1% in January, but after being unchanged in each of the prior 6 months, as prices for food purchased for use at home rose 0.2% in July, while prices for food bought to eat away from home was also 0.2% higher, as prices at fast food outlets rose 0.3% while full service restaurant prices rose 0.1%…in the food at home categories, the price index for cereals and bakery products decreased by 0.4% as bread prices were 1.4% lower…however, the price index for the meats, poultry, fish, and eggs group was up 0.7% as beef and veal prices rose 1.2% and ham prices rose 3.1%, while the index for dairy products was 0.3% higher on 1.5% increase in the price of ice cream….the fruits and vegetables index was 0.5% higher on a 1.2% increase in prices for fresh fruits as apple prices rose 1.8%…meanwhile, the beverages index was 0.3% lower as coffee prices were down 0.8% and carbonated drink prices fell 1.1%….lastly, prices in the ‘other foods at home’ category were on average unchanged, as salad dressing prices rose 2.1% while snack prices were 0.7% lower….as of July, no food line item has seen a price change 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 rose by 0.1% in each of the last 4 months after falling by 0.1% in March, the composite of all goods less food and energy goods was down 0.1% in July, while the more heavily weighted composite for all services less energy services was 0.2% higher….among the goods components, which will be used by the Bureau of Economic Analysis to adjust July retail sales for inflation in national accounts data, the index for household furnishings and supplies fell by 0.5%, as prices for laundry appliances fell 2.2% and non-core furniture prices fell 1.9%…the apparel price index, meanwhile, was 0.3% higher, as prices for women’s outerwear rose 2.6% and prices for women’s dresses rose 3.3%….prices for transportation commodities other than fuel were down 0.4%, as prices for new cars fell 0.7% and prices for used cars and trucks fell 0.5%…on the other hand, prices for medical care commodities were 1.0% higher on a 1.3% increase in prices for prescription drugs…meanwhile, the recreational commodities index fell 0.4% on 1.4% lower prices for audio equipment and 2.3% lower priced toys…however, the education and communication commodities index was 0.9% higher on a 1.6% increase in prices for computer software and accessories and 1.3% higher college textbooks…lastly, a separate price index for alcoholic beverages was down 0.2%, while the price index for ‘other goods’ was unchanged as a 0.6% increase in the index for tobacco products other than cigarettes was offset by a 0.4% decrease in the index for infants’ equipment…

within core services, the price index for shelter rose 0.1% as a 0.1% increase in rents and a 0.3% increase in homeowner’s equivalent rent were offset by a 4.9% decrease in prices for other lodging away from home including hotels and motels…the index for medical care services was up 0.3% as hospital prices rose 0.5%, while the transportation services index was 0.2% higher on a 0.5% increase in car and truck rental and a 1.0% increase in parking fees and tolls…at the same time, the recreation services price index was up 0.6% as admissions to sporting events rose 1.7%, while the index for education and communication services down 0.1% as providers of internet services and electronic information cut prices 1.1%…lastly, the index for other personal services was 0.3% higher as tax return preparation and other accounting services were 1.3% higher…among core prices, only the index for clocks, lamps, and decorator items, which is now 10.2% lower than a year ago, and prices for wireless phone services, which have now dropped 13.3% from a year ago, have seen prices drop by more than 10% over the past year, while no line item has seen prices rise by a double digit magnitude in that span..   

Producer Prices Down 0.1% in July, Largely on Lower Margins for Services

the seasonally adjusted Producer Price Index (PPI) for final demand was down 0.1% in July, as prices for finished wholesale goods decreased 0.1%, while margins of final services providers decreased by 0.2%…this followed a June report that indicated the PPI was up 0.1%, with prices for finished wholesale goods up 0.1%, and margins of final services providers up 0.2%, and a May report that indicated the PPI was unchanged, with prices for finished wholesale goods down 0.5%, while margins of final services providers increased by 0.3%….on an unadjusted basis, producer prices are now 1.9% higher than a year earlier, down from the 2.0% YoY increase indicated a month ago, and the 2.5% YoY increase seen in April, which had been the largest year over year increase in the PPI since February 2012…

as we noted, the price index for final demand for goods, aka ‘finished goods’, slipped 0.1% in July, after rising by 0.1% in June, falling by 0.5% in May, rising by 0.5% in April, falling by 0.2% in March, and rising by 0.4% in February, and by 1.0% in January… the index for wholesale energy prices fell 0.3%, while the price index for wholesale foods was unchanged and the index for final demand for core wholesale goods (ex food and energy) was 0.1% lower…the largest wholesale energy price change was a 9.8% increase in the wholesale price diesel fuel, but wholesale gasoline prices were down 1.4% and pulled the overall index down….meanwhile, a 17.1% increase in the wholesale price of grains was offset by a 12.0% increase in the wholesale price for beef and veal and left the wholesale food price index unchanged….among wholesale core goods, the index for sanitary paper products was up 1.4%, while wholesale prices for industrial chemicals were 2.7% lower…

at the same time, the index for final demand for services fell by 0.2% in July, after rising by 0.2% in June, 0.3% in May, and a revised 0.6% in April and 0.2% in March, as the July index for final demand for trade services was down 0.5% and the index for final demand for transportation and warehousing services fell 0.8%, while the index for final demand for services less trade, transportation, and warehousing services was 0.2% higher….among trade services, seasonally adjusted margins for chemicals and chemical products wholesalers decreased 5.8% while margins for TV, video, and photographic equipment retailers rose 8.1%…among transportation and warehousing services, margins for airline passenger services were 2.7% lower…in the core final demand for services index, margins for portfolio management and for passenger car rental both fell 3.2%..

this report also showed the price index for processed goods for intermediate demand was 0.1% lower, after falling 0.2% in June, rising 0.1% in May and 0.5% in April, but falling by a revised 0.3% in March….the price index for intermediate energy goods rose 0.8%, while prices for intermediate processed foods and feeds fell 0.5%, and the core price index for processed goods for intermediate demand less food and energy was 0.3% lower, as prices for primary basic organic chemicals fell 3.3%…prices for intermediate processed goods are still 3.5% higher than in July a year ago, now the ninth consecutive year over year increase, after 16 months of negative year over year comparisons, as intermediate goods prices fell every month from July 2015 through March 2016….

meanwhile, the price index for intermediate unprocessed goods fell 0.4% in July, after rising 1.5% in June, falling 3.0% in May, and rising a revised 2.6% in April….the index for crude energy goods fell 5.1%, as crude oil prices fell 8.1%, while the price index for unprocessed foodstuffs and feedstuffs rose 2.4%, as unprocessed grain prices rose 17.1%, led by a 24.6% increase in prices for unprocessed wheat…in addition, the index for core raw materials other than food and energy materials rose 1.2%, as prices for nonferrous metal ores rose 0.9% and wholesale prices for paper scrap rose 4.9% …this raw materials index is now up just 5.2% from a year ago, in contrast to the year over year increase of 19.3% that we saw in February, just 5 months ago..

lastly, the price index for services for intermediate demand fell 0.3% in June, in its first decrease since September… the index for trade services for intermediate demand was 0.3% lower, as margins for intermediate chemicals and chemical products wholesalers fell 5.8 percent…the index for transportation and warehousing services for intermediate demand was down 0.4%, as intermediate prices for air transportation of passengers (partial) fell 2.6% while the intermediate warehousing and storage price index fell 1.6%…meanwhile, the core price index for services less trade, transportation, and warehousing for intermediate demand was 0.2% lower, as margins for intermediate services related portfolio management fell 3.2%…however, over the 12 months ended in June, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is still 2.2% higher than it was a year ago…   

Job Openings at a Record High in June, Hiring and Job Quitting Down

the Job Openings and Labor Turnover Survey (JOLTS) report for June from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 461,000, from 5,702,000 in May to a record high of 6,163,000 in June, after May job openings were revised higher, from 5,666,000 to 5,702,000…June jobs openings were also 11.3% higher than the 5,535,000 job openings reported in June a year ago, as the job opening ratio expressed as a percentage of the employed rose from 3.8% in May to 4.0% in June, which was also up from 3.7% a year ago…job openings increased in several sectors, with the 179,000 job opening increase to 1,208,000 openings in professional and business services the largest increase for the month (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, 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 June, seasonally adjusted new hires totaled 5,356,000, down by 123,000 from the revised 5,459,000 who were hired or rehired in May, even as the hiring rate as a percentage of all employed was unchanged at 3.7%, and up from 3.6% in June a year earlier (details of hiring by industry since January are in table 2)….meanwhile, total separations fell by 21,000, from 5,245,000 in May to 5,224,000 in June, while the separations rate as a percentage of the employed was unchanged at 3.6%, which was up from the 3.4% separations rate of June a year ago (see table 3)…subtracting the 5,224,000 total separations from the total hires of 5,356,000 would imply an increase of 132,000 jobs in June, somewhat less than the revised payroll job increase of 231,000 for June reported by the July 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 3,134,000 of us voluntarily quit their jobs in June, down from the revised 3,206,000 who quit their jobs in May, while the quits rate, widely watched as an indicator of worker confidence, fell from 2.2% to 2.1% of total employment, which was the same quits rate as a year earlier (see details in table 4)….in addition to those who quit, another 1,701,000 were either laid off, fired or otherwise discharged in June, up by 28,000 from the revised 1,673,000 who were discharged in May, as the discharges rate rose from 1.1% to 1.2% of all those who were employed during the month, which was also up from a discharges rate of 1.1% a year earlier (see table 5)…meanwhile, other separations, which includes retirements and deaths, were at 389,000 in June, up from 365,000 in May, for an ‘other separations rate’ of 0.3%, which was up from 0.2% in May and also up from 0.2% in June 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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