May’s consumer and producer prices, retail sales, industrial production; April’s business inventories

major reports released during the past week included the May Consumer Price Index, the May Producer Price Index, and the May Import-Export Price Index, all released by the Bureau of Labor Statistics; the reports on Retail Sales for May and Business Sales and Inventories for April, both from the Census bureau; the report on Industrial Production and Capacity Utilization for May from the Fed, and the Regional and State Employment and Unemployment report for May from the BLS…in addition, this week also saw the release of the first regional Fed manufacturing index for June: the Empire State Manufacturing Survey from the New York Fed, which covers New York, northern New Jersey, an adjacent suburban county in Connecticut, and Puerto Rico, saw their headline general business conditions index rise from +20.1 in May to + 25.0 in June, indicating an accelerating pace of growth for First District manufacturing…

Consumer Price Index Up 0.2% in May on Higher Priced Gasoline, Shelter

the consumer price index was 0.2% higher in May, as higher prices for gasoline, shelter and most services more than offset lower priced groceries, cars, and a number of other goods…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose 0.2% in May after rising 0.2% in April but after falling 0.1% in March, and after it had risen by 0.2% in February, 0.5% in January, 0.1% in December, 0.4% in November, 0.1% in October, 0.5% in September, 0.4% in August, and 0.1% last July….the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, rose from 250.546 in April to 251.588 in May, which left it statistically 2.801% higher than the 244.733 index reading in May of last year…with higher prices for energy offsetting lower prices for food, seasonally adjusted core prices, which exclude food and energy, also rose by 0.2% for the month, with the unadjusted core price index rising from 257.025 to 257.469, which left the core index 2.237% ahead of its year ago reading of 251.835, which is reported as a 2.2% increase…..

the volatile seasonally adjusted energy price index rose by 0.9% in May, after it had increased by 1.4% in April, fallen by 2.8% in March, risen by 0.1% in February, 3.0% in January, fallen by 0.2% in December, risen by 3.2% in November and by 2.0% in October, and thus is now 11.7% higher than in May a year ago…prices for energy commodities were 1.6% higher in May, while the index for energy services fell by 0.1%, after falling 0.5% in April….the increase in the energy commodity index was driven by a 1.7% increase in the retail price of gasoline, the largest component, while the price of fuel oil fell 0.7%, and prices for other fuels, including propane, kerosene and firewood, rose by an average of 1.2%…as a result, the energy commodities index is now 21.7% above its year ago levels, with gasoline prices averaging 21.8% higher than they were a year ago…within energy services, the index for utility (piped) gas service fell 0.6% after falling by 0.4% in April, which left utility gas priced 0.8% lower than it was a year ago, while the electricity price index was 0.1% higher, after falling 0.6% in April…the energy services price index is now only 0.6% higher than last May, as electricity prices have increased by 1.0% over that period…

the seasonally adjusted food price index was unchanged in May, after rising 0.3% in April, 0.1% in March, being unchanged in February, rising 0.2% in January, 0.2% in December, being unchanged in October and November, rising 0.1% in September, 0.1% in August, 0.2% in July, being unchanged in June, and rising 0.2% last May, as the index for food purchased for use at home was 0.2% lower in May, while prices for food bought to eat away from home were 0.3% higher, as prices at fast food outlets rose 0.3% and prices at full service restaurants rose 0.4%, while food prices at at employee sites and schools were up 0.8%…

in the food at home categories, the price index for cereals and bakery products was unchanged, as prices for bread rose 1.5% while prices for crackers fell 1.7% and prices for rice and flour both fell 0.8%…the price index for the meats, poultry, fish, and eggs group was down 0.7% after rising 0.7% in April, as egg prices fell 3.3% and the beef and veal index was 1.4% lower, while at the same time the index for dairy products was 0.1% lower on a 0.4% decrease in the price of fresh whole milk…in addition, the fruits and vegetables index was 0.3% lower on a 0.8% decrease in the price index for fresh fruits and a 2.4% decrease in prices for frozen fruits and vegetables….on the other hand, the beverages index was 0.2% higher, as coffee prices rose 0.4% and noncarbonated juices and drink prices were priced 0.3% higher…lastly, the index for the ‘other foods at home’ category was down 0.2%, as prices for sweets other than candy and sugar fell 2.0% and prices for prepared salads fell 2.7%…. among food at home line items, only prices for eggs, which are still up 21.6% since last May, have seen price increase greater than 10% over the past year, while just lettuce prices, down 11.2%, are the only food item that has fallen in price by more 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 0.2% in May after rising by by 0.1% in April, 0.2% in March, 0.2% in February, 0.3% in January, 0.3% in December, 0.1% in November, 0.2% in October, 0.1% in September, 0.2% in August and by 0.1% in each of the prior 4 months, the composite of all goods less food and energy goods was down 0.1% in May, while the more heavily weighted composite for all services less energy services was 0.3% higher….among the goods components, which will be used by the Bureau of Economic Analysis to adjust May retail sales for inflation in national accounts data, the index for household furnishings and supplies fell by 0.6%, as the index for window and floor coverings fell 1.3%, the index for tools, hardware, outdoor equipment and supplies fell 1.0%  and the index for bedroom furniture was 0.8% lower…meanwhile, the apparel price index was unchanged, as prices for men’s suits, sportcoats and outerwear fell 4.5% while the index for infants apparel was 2.5% higher…prices for transportation commodities other than fuel were down 0.1%, as prices for new cars and trucks rose 0.4% and prices for used cars and trucks fell 0.9%…on the other hand, prices for medical care commodities were 1.3% higher on a a 1.4% increase in prescription drug prices and a 2.5% increase in prices for medical equipment and supplies…but the recreational commodities index fell 0.7% on 1.7% lower prices for TVs and 2.5% lower prices for photographic equipment and supplies, while the education and communication commodities index was 0.7% higher on a 3.3% increase in prices for college textbooks…lastly, a separate price index for alcoholic beverages was down 0.3%, while the price index for ‘other goods’ was unchanged…

within core services, the price index for shelter rose 0.3% on a 0.3% increase in rents, a 0.3% increase in homeowner’s equivalent rent, and a 3.3% increase in costs for lodging away from home at hotels and motels, while the sub-index for water, sewers and trash collection rose 0.4%, and other household operation costs were on average 0.6% higher….on the other hand, the index for medical care services was down 0.1%, as dental services fell 0.5% and eye care services were priced 0.4% lower…the transportation services index was unchanged as car truck rentals fell 3.0% while parking and other auto fees rose 1.1%…meanwhile, the recreation services index rose 0.4% as pet services rose 2,5% and admissions to sporting events rose 2.1%….in addition, the index for education and communication services was also up 0.4%, as internet and electronic information services rose 1.5%…lastly, the index for other personal services was unchanged as laundry and dry cleaning services fell 0.1% while the index for tax return preparation and other accounting fees rose 0.4%…among core line items, prices for televisions, which are now 17.0% cheaper than a year ago, the price index for audio equipment, which has fallen 14.6% over the past year, the index for toys, games, hobbies and playground equipment, which is down by 10.2% from a year ago, and the index for clocks, lamps, and decorator items, which is now 10.6% lower than last May, have all seen prices drop by more than 10% over the past year, while nothing has seen prices rise by a double digit magnitude over that span…

May Retail Sales Up 0.8% After April Sales Revised Higher

seasonally adjusted retail sales rose 0.8% in May after retail sales for April were revised higher….the Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $502.0 billion for the month, which was an increase of 0.8 percent (±0.5%) from April’s revised sales of $497.9 billion and 5.9 percent (±0.5 percent) above the adjusted sales of May of last year…April’s seasonally adjusted sales were revised from the $497.6 billion reported last month to $497.9 billion, while March sales were revised but remained statistically unchanged at $496.1 billion, all revisions including an intervening benchmark revision on May 25th which we did not cover….estimated sales before seasonal adjustments, which were extrapolated from surveys of a small sampling of retailers, indicated unadjusted sales rose 9.0%, from $484,492 million in April to $527,943 million in May, while they were up 6.4% from the $496,410 million of sales in May a year ago…

included below is the table of the monthly and yearly percentage changes in sales by business type taken from the Census pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from April to May in the first sub-column, and then the year over year percentage change for those businesses since last May in the 2nd column; the second pair of columns gives us the revision of last month’s April advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the March to April change under “Mar 2018 r” (revised) and the revised April 2017 to April 2018 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance April estimates, before this month’s revision, is here….

May 2018 retail sales table

generally, real retail sales for May, or price-adjusted sale that would be considered as evidence of an increase in the output of goods in the 2nd quarter GDP computation, will be stronger than what appears on the table above, because as we just saw, the composite price index for all goods less food and energy goods was 0.1% lower in May…for example, while sales at vehicle and parts dealer were 0.5% higher in May, prices for transportation commodities other than fuel, which includes automobiles and trucks, were down 0.1%, suggesting real vehicle and parts sales increased an average of 0.6% overall…in a like manner, retailers who saw lower dollar sales, such as the 2.4% decrease in sales at furniture stores, would have their real sales change boosted by the 0.6% decrease in the price index for household furnishings and supplies…an exception of course would be sales at gasoline stations, which rose 2.0% because gasoline prices were 1.7% higher; that would suggest that real gasoline sales only rose 0.3%, with the caveat that gas stations do sell more than just gasoline…on the other hand, dollar sales at grocery stores were statistically unchanged, but prices for food bought to use at home were on average 0.2% lower, so real sales of groceries actually rose on the order of 0.2%….

Industrial Production Down 0.1% in May; Capacity Utilization Down 0.2%

May saw a pullback in durable goods manufacturing, largely because truck assemblies were disrupted by a major fire at a parts supplier, and hence the Fed’s G17 release on Industrial production and Capacity Utilization indicated that industrial production decreased 0.1% in May after rising by a revised 0.9% in April, which left total output 3.5% higher than a year ago, unchanged from last month’s YoY figure…the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, fell from 107.4 in April to 107.3 in May, after April’s index was revised up from the originally reported 107.3 …at the same time, the March reading for the index was revised down from 106.5 to 106.4, the February index was revised from 105.7 to 105.9, the January index was revised from 105.3 to 105.4, and the December index was revised from 105.7 to 105.8…despite the May decrease, the average of the April and May production indexes is still almost 1.4% above the average of the indexes for the 1st quarter months, so to the extent that this report plays into GDP, this report suggests average 2nd quarter growth at a 5.6% rate in the GDP components that this report influences…

the manufacturing index, which accounts for more than 77% of the total IP index, decreased by 0.7, from 104.2 in April to 103.5 in May, leaving manufacturing output just 1.7% higher than a year ago, after the manufacturing index for April was revised up from 104.1, the manufacturing index for March unrevised at 103.6, the manufacturing index for February was revised up from 103.6 to 103.7, and the manufacturing index for January was revised up from 102.1 to 102.3…. meanwhile, the mining index, which includes oil and gas well drilling, increased for the 4th consecutive month, rising from 120.0 in April to 122.1 in May, and is now 12.6% higher than it was a year ago….finally, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, rose 1.1% in May after increasing a revised 3.3% in April and 4.1% in March, as the utility index rose from 105.8 in April to 106.9 in May and is now 4.0% above it’s year earlier level…

this report also includes capacity utilization figures, which are expressed as the percentage of our  plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry fell to 77.9% in May from 78.1% in April, with April’s figure revised up from 78.0%….capacity utilization for all manufacturing industries fell from an upwardly revised 75.9% in April to 75.3% in May, as utilization of NAICS durable goods production facilities fell from 75.7% in April to 74.8% in May, while capacity utilization for non-durables slipped from 77.0% to 76.9%….capacity utilization for the mining sector rose to 92.4% in May, from 91.1% in April, which was originally published as 90.6%, while utilities were operating at 79.4% of capacity during May, up from the revised 78.8% of capacity during April, which was was originally reported at 79.2% ….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…. 

Producer Prices Up 0.5% in May on Higher Wholesale Energy Prices and Trade Margins

the seasonally adjusted Producer Price Index (PPI) for final demand was 0.5% higher in May, as prices for finished wholesale goods increased 1.0%, while margins of final services providers increased by 0.3%…that followed an April report that indicated the PPI rose 0.1%, as prices for finished wholesale goods averaged no change, while margins of final services providers increased by 0.1%, and a March report that indicated the PPI was 0.3% higher, with prices for both finished goods and final demand for services up by 0.3%….on an unadjusted basis, producer prices are now 3.1% higher than a year ago, up from the year over year increase of 2.6% that was indicated in last month’s report, and matching their one year rise of the year ending January 2012…meanwhile, the core producer price index, which excludes food, energy and trade services, was up just 0.1% for the month, and is now 2.6% higher than in May a year ago…

as noted, the price index for final demand for goods, aka ‘finished goods’, was up 1.0% in May, after being unchanged in April, up 0.3% in March, and rising a revised 0.2% in February and 0.5% in January…the price index for wholesale energy was up 4.6% in May after rising 0.1% in April, falling 2.1% in March, and rising a revised 0.1% in February and 2.9% in January, while the price index for wholesale foods rose 0.1%, and the index for final demand for core wholesale goods (ex food and energy) was 0.3% higher….the largest wholesale energy price change was a 10.1% increase in wholesale prices for LP gas, while wholesale prices for gasoline were 9.8% higher…the wholesale food price index saw an increase of 20.0% for fresh and dry vegetables and a decrease of 35.2% in wholesale prices for eggs….among wholesale core goods, prices for cleaning and polishing products increased 3.3%, while the index for computers and computer equipment moved up 1.1%…

at the same time, the index for final demand for services rose 0.3%, after rising 0.1% in April, 0.3% in February and March and 0.5% in January, as the May index for final demand for trade services rose 0.9%, the index for final demand for transportation and warehousing services rose 0.7%, while the index for final demand for services less trade, transportation, and warehousing services was unchanged….among trade services, seasonally adjusted margins for chemicals and allied products wholesalers rose 5.5% and margins for machinery, equipment, parts, and supplies wholesalers rose 1.5%… among transportation and warehousing services, margins for air transportation of freight rose 1.0%…among the components of the core final demand for services index, the index for health and medical insurance rose 2.8% while the index for cellphone and other wireless telecommunication services services fell 1.9%..

this report also showed the price index for intermediate processed goods was 1.5% higher in May, after rising 0.5% in April, falling 0.3% in March, but rising by a revised 0.6% in February, and by a revised 0.8% in January….the price index for intermediate energy goods rose 4.6%, as refinery prices for jet fuel rose 15.8% and prices for diesel fuel rose 6.5%, while prices for intermediate processed foods and feeds rose 0.2%, as the indexes for both processed meats and dairy products both rose 1.7%…meanwhile, the core price index for processed goods for intermediate demand less food and energy was 0.8% higher on a 4.3% increase in the index for steel mill products and a 5.0% increase in prices for aluminum mill shapes….prices for intermediate processed goods are now 6.3% higher than in May a year ago, now the 18th 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 rose 2.5% in May, after rising 0.9% in April, falling 4.8% in March, and rising a revised 2.0% in February, and 1.9% in January….that was as the price index for crude energy goods rose 6.3% as crude oil prices rose 8.4%, while on the other hand the index for unprocessed foodstuffs and feedstuffs fell 0.1%, as prices for alfalfa hay fell 7.2% and prices for oilseeds fell 5.8%…at the same time, the index for core raw materials other than food and energy materials was also 0.1% lower, as prices for corrugated wastepaper fell 6.1% and prices for copper base scrap fell 2.2%…still, this raw materials index is now up by 6.8% from a year ago, up from the year over year increase of 3.2% that we saw in April…

lastly, the price index for services for intermediate demand rose 0.3% in May, after rising 0.3% in April, 0.3% in March and a revised 0.2% in February…the index for trade services for intermediate demand was up 0.9%, as margins for intermediate chemicals and allied products wholesalers rose 5.5% and margins for metals, minerals, and ores wholesalers also rose 5.5%…the index for transportation and warehousing services for intermediate demand rose 0.4%, as the index for water transportation of freight rose 1.8%…meanwhile, the core price index for services less trade, transportation, and warehousing for intermediate demand was 0.1% higher, as the index for business loans (partial) rose 3.3% while the index for internet advertising space sales by non-print publishers fell 4.9%….over the 12 months ended in May, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is now 3.3% higher than it was a year ago… 

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

following the release of the May retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for April (pdf), which incorporates the revised April retail data from that May report 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 $1,425.9 billion in April, up 0.4 (±0.1 percent) from March revised sales, and up 6.7 percent (±1.1 percent) from April sales of a year earlier…note that total March sales were revised from the originally reported $1,438.3 billion to $1,420.1 billion as part of annual revisions and rebenchmarking that took place on May 25th….manufacturer’s sales were statistically unchanged from March at $492,846 million in April, while retail trade sales, which exclude restaurant & bar sales from the revised April retail sales reported earlier, rose 0.4% to $439,712 million, and wholesale sales rose 0.8% to $493,298 million..

meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,930.0 billion at the end of April, up 0.3 percent (±0.1%) from March, and 4.4 percent (±1.3 percent) higher than in April a year earlier…the value of end of March inventories was revised from the $1,929.6 billion reported last month to $1,923.7 billion with this release, also part of the benchmark revisions…seasonally adjusted inventories of manufacturers were estimated to be valued at $666,867 million, 0.3% higher than in March, inventories of retailers were valued at $632,956 million, 0.5% more than in March, while inventories of wholesalers were estimated to be valued at $630,171 million at the end of April, up 0.1% from March…

 

(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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