April retail sales, industrial production and new housing starts; March business inventories

regular monthly reports that were released this week included the Retail Sales report for April, the Wholesale Trade, Sales and Inventories report for March, both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, the April report on New Residential Construction from the Census Bureau, and the Regional and State Employment and Unemployment Summary for April from the Bureau of Labor Statistics…the week also saw the release of the first two regional Fed manufacturing surveys for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index rose to +20.1, up from +15.8 in April, indicating an accelerating pace of growth for First District manufacturing… meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose to +34.4 in May from +23.2 in April, indicating a significant plurality of the region’s manufacturing firms reported increases in their activity this month…

April Retail Sales Up 0.3% after February and March Sales Revised Higher

seasonally adjusted retail sales increased by 0.3% in April after retail sales for February and March were both revised higher…the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $497.6 billion for the month, which was a increase of 0.3 percent (±0.4%)* from revised March sales of $496.1 billion and 4.7 percent (±0.5 percent) above the adjusted sales of April of last year…March sales were originally reported at $494.6 billion, up 0.6% from February; they are now indicated to have risen 0.8% to $496.1 billion …February adjusted sales were concurrently revised from $491.8 billion to $492,379 million….estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated unadjusted sales fell 5.2%, from $511,939 in March to $485,432 in April, while they were up 3.8% from the $461,954 million of sales in April a year ago….

we are again including below the table of monthly and yearly percentage changes in sales by business type taken from the Census marts pdf….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 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 2018 revised” and the revised March 2017 to March 2018 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 2018 retail sales table

as you know, to judge the economic impact of these sales, they first have to be adjusted for inflation…recall that last week’s release of the April Consumer Price Index showed that gasoline prices were up 3.0% in April, while prices for food at home rose 0.3% and prices for food away from home were 0.2% higher…that suggests that real gasoline sales actually fell in April, rather than rising 0.8%, and that restaurant sales were down on the order of 0.5%, while grocery store sales only rose 0.2%…on the other hand, prices for transportation commodities other than fuel were 0.9% lower, as prices for new cars fell 0.5%, prices for used cars were down 1.6%, and tire prices fell 0.7%; those lower prices would suggest that real sales at auto and parts dealers were up a full one percent, rather than the tenth of a percent indicated…overall, the composite price index for all goods less food and energy goods was 0.1% lower, which would mean that real sales other than food or energy were 0.1% higher in April than what the nominal dollar increase indicates; however, that boost from lower prices appears to be more than offset by higher food and energy prices, suggesting overall real sales for the month were weaker than what this report shows…

Industrial Production Up 0.7% in April after Prior Months Revised Lower

industrial production increased in April, but only after production for the four prior months was revised lower…the Fed’s G17 release on Industrial production and Capacity Utilization for April reported that industrial production rose 0.7% in April after rising by a revised 0.7% in March, which left total output 3.5% higher than a year ago…the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, was at 107.3 in April, after the March index value was revised from the 107.2 reported last month down to 106.5, the February index was revised from 106.6 to 105.7, the January index was revised up from 105.6 to 105.3, and the December index was revised from 105.8 to 105.7…

the manufacturing index, which accounts for more than 77% of the total IP index, rose 0.5% to 104.1 in April, after the March index was revised from 104.2 to 103.6, the February index was revised from 104.1 to 103.6, the January index was revised up from 102.6 to 102.1, and the December index was revised from 103.0 to 102.8…as a result, the manufacturing index now stands 1.8% above its year ago level….meanwhile, the mining index, which includes oil and gas well drilling, rose 1.2%, from 118.0 in March to 119.3 in April, after the March index was revised down from from the originally reported 118.2, which left the mining index 10.6% higher than it was a year earlier…finally, the utility index, which typically fluctuates due to deviations from normal temperatures, rose by 1.9% in our cooler than normal April, from 104.4 to 106.4, after the March utility index was revised from 104.4 to 106.6, now up 6.1% from February, because the February index was revised from 102.8 to 98.4, now down 9.6% from January….

this report also includes capacity utilization data, which is expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry rose to 78.0% in April from 77.6% in March, after capacity utilization for March was revised from 78.0%, and  capacity utilization for both January and February was also revised lower…capacity utilization of NAICS durable goods production facilities rose from a revised 75.3% in March to 75.5% in April, while capacity utilization for non-durables producers rose from a revised 76.9% to 77.7%…capacity utilization for the mining sector rose to 90.6% in April from 90.0% in March, which was previously reported as 90.1%, while utilities were operating at 79.2% of capacity during April, up from their 77.9% of capacity during March, which was previously reported at 79.0%…for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories..   

April Housing Starts and Building Permits Reported Lower

the April report on New Residential Construction (pdf) from the Census Bureau estimated that new housing units were being started at a seasonally adjusted annual rate of 1,278,000 in April, which was 3.7 percent (±11.4 percent)* below the revised March estimated rate of 1,336,000 annually, but was still 10.5 percent (±9.7 percent) above last April’s rate of 1,165,000 housing starts a year…the asterisk indicates that the Census does not have sufficient data to determine whether housing starts actually rose or fell during April, with the figures in parenthesis the most likely range of the change indicated; in other words, April housing starts could have been up by 7.7% or down by as much as 15.1% from those of March, with revisions of a greater magnitude in either direction possible…with this report, the annual rate for March housing starts was revised from the 1,319,000 reported last month to 1,336,000, while February starts, which were first reported at a 1,236,000 annual rate, were revised from last month’s initial revised figure of 1,295,000 annually back to a 1,290,000 annual rate with this report….these annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 117,600 housing units were started in April, up from the 107,500 housing units that were started in March and the 87,900 housing units that were started in February..

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 housing starts data…in April, Census estimated new building permits for housing units were being issued at a seasonally adjusted annual rate of 1,352,000, which was 1.8 percent (±1.3 percent) below the revised March rate of 1,377,000 permits, but was still 7.7 percent (±0.9 percent) above the rate of building permit issuance in April a year earlier…the annual rate for housing permits issued in March was revised from 1,354,000 to 1,377,000….again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for roughly 118,600 housing units were issued in April, actually up from the revised estimate of 117,600 new permits issued in March…. for graphs and commentary on this report, see the following two posts by Bill McBride at Calculated Risk: Housing Starts decreased to 1.287 Million Annual Rate in April and Comments on April Housing Starts…  

March Business Sales Rose 0.5%, Business Inventories Were Unchanged

after the release of the April retail sales report, the Census Bureau also released the composite Manufacturing and Trade, Inventories and Sales report for March  (pdf), which incorporates the revised March retail data from that April report and the earlier published March 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 $1,438.3 billion in March, up 0.5 percent (±0.2 percent) from February’s revised sales, and up 6.4 percent (±0.3 percent) from March sales of a year earlier…note that total February sales were concurrently revised up from the originally reported $1,430.4 billion to $1,431.4 billion, now a 0.5% increase from January….manufacturer’s sales rose 0.4% to $502,794 million in March; retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, rose 0.7% to $437,564 million, while wholesale sales rose 0.3% to $497,935 million…

meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,929.6 billion at the end of March, essentially unchanged (±0.1%) from the end of February, but 3.8 percent (±0.3 percent) higher than in March a year earlier…the value of end of February inventories was revised but remained statistically unchanged from the $1,928.8 billion reported last month, 0.6% higher than January’s inventory valuation….seasonally adjusted inventories of manufacturers were estimated to be valued at $677,285 million, up 0.3% from February, while inventories of retailers were valued at $624,902 million, 0.5% less than in February, and while inventories of wholesalers were estimated to be valued at $627,396 million at the end of March, 0.3% higher than in February…  


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

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