March consumer and producer prices; February’s Wholesale Trade and Job Openings Survey

Regular monthly reports released this week included the March Consumer Price Index, the March Producer Price Index, and the Job Openings and Labor Turnover Survey (JOLTS) for February, all from the Bureau of Labor Statistics, while the Census Bureau released the February report on Wholesale Trade, Sales and Inventories….in addition, the Fed released the Consumer Credit Report for February, which indicated that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $22.3 billion, or at a 6.4% annual rate, as non-revolving credit expanded at a 7.0% annual rate to $3,129.4 billion and revolving credit outstanding grew at a 4.8% rate to $1,096.1 billion…

Also noteworthy was this week’s Weekly Claims for Unemployment from the Labor Department, which indicated that another 6.6 million of us have filed for unemployment for the first time, bringing the 3 week total to 16.6 million, or about 11% of the labor force…moreover, continuing claims were at a new record high of 7,455,000, already topping their 6,635,000 peak at the depth of the 2008-2009 Great Recession…

Consumer Prices Fell 0.4% in March on Lower Prices for Gasoline, Clothing, & Airfares

The consumer price index fell 0.4% in March, the biggest drop since January 2015, as lower prices for energy, clothing, lodging, transportation services and new vehicles were only partly offset by higher prices for food, rent, and medical services…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices fell by 0.4% in March, after rising by 0.1% in February, by 0.1% in January, by 0.2% in December, 0.2% in November, 0.2% in October, 0.1% in September, 0.1% in August and rising by 0.3% last July…the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, fell from 258.678 in February to 258.115 in March, which left it statistically 1.5393% higher than the 254.202 index reading of March of last year, which is reported as a 1.5% year over year increase, down from a 2.3% year over year increase a month ago….with lower prices for energy a major drag on the overall index increase, seasonally adjusted core prices, which exclude food and energy, fell by 0.1% for the month, even as the unadjusted core price index rose from 267.268 to 267.312, which left the core index 2.0914% ahead of its year ago reading of 261.836, which is reported as a 2.1% year over year increase, down from the 2.4% year over year increase that was reported for February…

The volatile seasonally adjusted energy price index fell 5.8% in March, after falling 2.0% in February and 0.7% in January, but after rising 1.6% in December, 0.8% in November and by 1.7% in October, but after falling 0.8% in September, falling 1.4% in August and rising 0.9% in July, and is now 5.7% lower than in March a year ago…the price index for energy commodities was 10.4% lower in March, while the index for energy services was 0.5% lower, after falling 0.3% in February….the energy commodity index was down 10.4% due to a 10.5% decrease in the price of gasoline, the largest component, and a 13.7% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.7% lower…within energy services, the price index for utility gas service fell 1.4% after falling 0.9% in February and is now 2.9% lower than it was a year ago, while the electricity price index fell 0.2% after falling 0.1% in February….energy commodities are now averaging 10.4% lower than their year ago levels, with gasoline prices averaging 10.2% lower than they were a year ago, while the energy services price index is now down 0.5% from last March, as electricity prices are still 0.2% higher than a year ago…

The seasonally adjusted food price index rose 0.3% in March, after rising 0.4% February, 0.2% January, 0.2% December, 0.1% in November, 0.2% October, 0.2% September, but being unchanged last June, July & August, as the price index for food purchased for use at home was 0.5% higher in March, while the index for food bought to eat away from home was 0.2% higher, as average prices at fast food outlets were unchanged while prices at full service restaurants rose 0.4% and food prices at employee sites and schools were also on average 0.4% higher…

In the food at home categories, the price index for cereals and bakery products was 0.1% higher as average bread prices rose 0.3%, prices for breakfast cereals rose 1.8%, and the price index for cakes, cupcakes, and cookies also rose 1.8%, while the price index for sweetrolls, coffeecakes, & doughnuts fell 2.3%…at the same time, the price index for the meats, poultry, fish, and eggs group was also 0.1% higher, as ham prices rose 1.2%, egg prices rose 2.8%, and the poultry index was 1.3% higher… meanwhile, the seasonally adjusted index for dairy products was 0.6% higher, as prices for ice cream & related products rose 2.2% and the index for ‘other’ dairy products rose 1.4%…in addition, the fruits and vegetables index was 0.8% higher as the price index for fresh fruits rose 1.0%, the price index for fresh vegetables rose 0.3, and the price index for canned fruits and vegetables rose 1.1%…at the same time, the beverages index was 0.8% higher as the price index for carbonated drinks rose 1.3% and the price index for beverage materials including coffee and tea rose 1.1%….lastly, the index for the ‘other foods at home’ category was up 0.6%, as the price index for sugar and sugar substitutes rose 1.7%, butter and margarine prices rose 3.1%, and the price index for salt and other seasonings and spices rose 2.2%…the itemized list for price changes of over 100 separate food items is included at the beginning of Table 2 for this release, which also gives us a line item breakdown for prices of more than 200 CPI items overall…since last March, just the price index for oranges and tangerines, which has risen 10.8%,  is the only food item with a price change greater than 10% over the past year…

Among the seasonally adjusted core components of the CPI, which fell by 0.1% in March after rising by 0.2% in February, 0.2% in January, 0.1% December, 0.2% November, 0.1% October, 0.2% in September, 0.2% in August, and by 0.3% in July, the composite price index of all goods less food and energy goods was 0.3% lower in March, while the more heavily weighted composite for all services less energy services was unchanged….among the goods components, which will be used by the Bureau of Economic Analysis to adjust March’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.3% lower, as the price index for window and floor coverings fell 0.7% and the index for bedroom furniture fell 2.0%….in addition, the apparel price index was 2.0% lower on a 5.7% decrease in the price index for women’s dresses, a 2.4% decrease in the price index for girl’s apparel, a 2.8% decrease in the price index for footwear, and a 4.3% increase in the price index for infants’ and toddlers’ apparel…on the other hand, the price index for transportation commodities other than fuel was 0.1% higher even though prices for new cars fell 0.5% as prices for used cars and trucks rose 0.8% and the price index for vehicle parts and equipment other than tires rose 0.1%….meanwhile, prices for medical care commodities were unchanged as prescription drugs prices fell 0.2%, non-prescription drugs prices rose 0.8% and the medical equipment price index fell 0.2%…at the same time, the recreational commodities index was 0.8% lower on a 1.0% decrease in the price index for pets, pet supplies, and accessories, a 2.0% decrease in the price index for sporting goods,  and a 7.1% decrease in the price index for sewing machines, fabric and supplies…on the other hand, the education and communication commodities index was 0.4% higher on a 0.8% increase in the price index for computers, peripherals, and smart home assistants…lastly, a separate price index for alcoholic beverages was 0.5% higher, while the price index for ‘other goods’ was 0.3% higher on a 2.4% increase in the index for infants’ equipment and a 1.0% increase in cigarette prices..

Within core services, the price index for shelter was unchanged even though rents rose 0.3% and homeowner’s equivalent rent rose 0.3% because prices for lodging away from home at hotels and motels fell 7.7%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.3%, and other household operation costs were 0.1% higher….in addition, the price index for medical care services was 0.5% higher, as the price index for hospital inpatient services rose 0.6%, the price index for care of invalids and elderly at home rose 1.7% and the price of health insurance rose 1.3%… on the other hand, the transportation services price index was 1.6% lower as the price index for car and truck rental fell 6.9%, airline fares fell 12.6% and other intercity transportation costs fell 4.0%….at the same time, the recreation services price index rose 0.6% as the index for rental of video discs and other media rose 0.8% and the index for admission to sporting events rose 2.2%…meanwhile, the index for education and communication services was 0.1% higher as elementary and high school tuition and fees rose 0.4%, and postage rose 0.2%….lastly, the index  for other personal services was up 0.2% as the price index for apparel services other than laundry and dry cleaning rose 1.6%, and the index for checking account and other bank services was 1.2% higher…

Among core line items, prices for televisions, which are now averaging 16.8% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 13.5% since last March, the rental of video discs and other media, which has fallen 16.0% from a year ago, the price index for sewing machines, fabric and supplies, which is down 11.2% year over year, the price index for women’s dresses, which has fallen by 10.0% in the past year, airline fares, which are now down by 10.6% since last March and the price index for computer software and accessories, which is down 10.9% year over year, have all seen prices drop by more than 10% over the past year, while the cost of health insurance, which is now up by 20.6% over the past year, and the price index for Infants’ equipment, which has risen 11.6%, are the only line items to have increased by a double digit magnitude over that span….

Producer Prices Down 0.2% in March on Lower Energy Prices, Lower Margins for airline passenger services

The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.2% in March, as prices for finished wholesale goods averaged 1.0% lower, while average margins of final services providers increased by 0.2%…that follows a February report that showed the PPI had fallen 0.6%, with prices for finished wholesale goods averaging 0.9% lower, while average margins of final services providers fell by 0.3%, a January report that indicated the PPI had risen 0.5%, as prices for finished wholesale goods had been on average 0.1% higher, while margins of final services providers increased by 0.7%, a revised December report that indicated the PPI was up 0.2%, with prices for finished wholesale goods up 0.3% while margins of final services providers were 0.1% higher, and a revised November report that shows the PPI was 0.1% lower, with prices for finished wholesale goods rising 0.3% while margins of final services providers fell 0.3%….on an unadjusted basis, producer prices are now now just 0.7% higher than a year ago, down from the 1.3% year over year increase indicated by last month’s report, while, the core producer price index, which excludes food, energy and trade services, fell by 0.2% for the month, and is now 1.0% higher than in March a year ago, down from the 1.4% year over year increase shown in February…

As noted, the price index for final demand for goods, aka ‘finished goods’, was 1.0% lower in March, after being 0.9% lower in February, 0.1% higher in January, 0.3% higher in December, 0.3% higher in November, 0.5% higher in October, 0.2% lower in September, 0.3% lower in August, 0.3% higher in July, 0.5% lower in June, 0.2% lower in May, 0.3% higher in April, and 0.9% higher in March of last year….the finished goods index fell 1.0% in March because the price index for wholesale energy goods was 6.7% lower, after falling by 3.6% in February and 0.7% in January but after rising by 1.5% in December, 0.5% in November and 1.8% in October, while the price index for wholesale foods was unchanged after falling 1.6% in February, rising 0.2% in January, falling 0.3% in December and after rising 1.2% in November, and while the index for final demand for core wholesale goods (excluding food and energy) was 0.2% higher after falling 0.1% in February but rising 0.3% in January and 0.2% in December…wholesale energy prices were lower due to a 16.8% decrease in wholesale prices for gasoline, a 21.1% decrease in wholesale prices for liquefied petroleum gas, and a 12.6% decrease in wholesale prices for diesel fuel, while the wholesale food price index was unchanged as a 2.5% decrease in the wholesale price index for fresh fruits and melons, a 3.0% decrease in the wholesale price index for pork and a 3.1% decrease in the wholesale price index for oilseeds were offset by a 26.4% increase in the wholesale price of eggs for fresh use….among wholesale core goods, wholesale prices for mobile homes rose 1.5%, wholesale prices for light motor trucks rose 1.3%, and the wholesale price index for commercial furniture rose 1.1%, while the wholesale price index for industrial chemicals fell 2.2%..

At the same time, the index for final demand for services rose 0.2%in March, after falling 0.3% in February, rising 0.7% in January, rising by a revised 0.1% in December, and falling by a revised 0.3% in November, as the index for final demand for trade services rose 1.4%, the index for final demand for transportation and warehousing services fell 3.3%, and the core index for final demand for services less trade, transportation, and warehousing services was unchanged… among trade services, seasonally adjusted margins for apparel, jewelry, footwear, and accessories retailers rose 8.1%, margins for fuels and lubricants retailers rose 17.2%, and margins for food and alcohol wholesalers rose 1.8%, while margins for automobile retailers fell 3.6% … among transportation and warehousing services, margins for airline passenger services fell 10.0%, margins for truck transportation of freight fell 1.1%, and margins for air transportation of freight fell 0.9% …among the components of the core final demand for services index, margins for consumer loans (partial) rose 5.7%, margins for arrangement of cruises and tours rose 7.3%, margins for securities brokerage, dealing, investment advice, and related services rose 4.8%, and margins for sales and subscriptions of periodicals and newspapers rose 3.7%, while margins for deposit services (partial) fell 7.7%…

This report also showed the price index for intermediate processed goods fell 1.1% in March, after falling 0.9% in February and 0.3% in January, rising 0.1% in December, and rising 0.2% in November….the price index for intermediate energy goods fell 5.9%, as refinery prices for gasoline fell 16.8%, refinery prices for jet fuel fell 8.2% and refinery prices for No. 2 diesel fuel fell 12.6%, while producer prices liquefied petroleum gas fell 21.1%…at the same time, prices for intermediate processed foods and feeds fell 0.8%, as the producer price index for meats fell 2.2% and the index for prepared animal feeds fell 1.4%…meanwhile, the core price index for intermediate processed goods less food and energy fell 0.1% as the producer price index for secondary nonferrous metals fell 3.5%, the producer price index for copper and brass mill shapes fell 1.8% and producer prices for synthetic rubber decreased 1.5%… prices for intermediate processed goods are now 3.7% lower than in March a year ago, the eleventh consecutive year over year decrease, following 29 months of year over year increases, which had been preceded by 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 8.0% in March, after falling 7.7% in February and 0.6% in January, but after rising a revised 1.3% in December and a revised 3.1% in November….that was as the March price index for crude energy goods fell 19.1% as crude oil prices fell 34.6% and as coal prices fell 3.1%, while the price index for unprocessed foodstuffs and feedstuffs fell 3.6% on a 10.5% decrease in producer prices for slaughter cattle, a 10.4% decrease in producer prices for slaughter chickens, and a 5.0% decrease in producer prices for alfalfa hay…at the same time, the index for core raw materials other than food and energy materials rose 1.3%, as prices for wastepaper rose 14.8%, the price index for carbon steel scrap increased 3.8%, and the price index for unprocessed iron and steel scrap rose 3.2%….this raw materials index is now 15.4% lower than a year ago, as the year over year change on this index remained negative all last year…

Lastly, the price index for services for intermediate demand fell 0.1% in March after falling 0.1% in February, being unchanged in January, rising a revised 0.6 percent in December, but after falling a revised 0.1 percent in November…the price index for intermediate trade services was 0.7% higher, as margins for intermediate metals, minerals, and ores wholesalers rose 3.0%, margins for building materials, paint, and hardware wholesalers rose 2.8% and margins for intermediate food wholesalers rose 1.3%…meanwhile, the index for transportation and warehousing services for intermediate demand was 1.3% lower, as the intermediate price index for airline passenger services fell 10.0% and the price index for arrangement of freight and cargo fell 4.6%…at the same time, the core price index for intermediate services less trade, transportation, and warehousing was 0.1% lower, as the intermediate price index for passenger car rental fell 4.4%, the intermediate price index for deposit services (partial) fell 7.7%, the price index for radio advertising time sales fell 4.5% and the index for “internet advertising space sales, excluding Internet ads sold by print publishers” fell 4.6%, while the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 4.8% and the price index for business loans (partial) rose 4.0%…over the 12 months ended in March, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is now just 1.0% higher than it was a year ago, down from 1.4% in February and from 1.7% in January…

February Wholesale Sales Down 0.8%, Wholesale Inventories Down 0.7% Due to Lower Prices

The February report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $500.7 billion, down 0.8 percent (±0.5 percent) from the revised January level, but 1.1 percent (±0.9 percent) higher than wholesale sales of February 2019… the December 2019 to January 2020 percent change was revised from the preliminary estimate of up 1.6 percent (±0.5 percent) to $504,570 million to an increase of 1.3 percent (±0.9 percent) to $504,733 million in conjunction with an annual revision based on the results of the 2018 Annual Wholesale Trade Survey, which makes such comparisons to previous published amounts nonsense….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 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 February report estimated that wholesale inventories were valued at $655.8 billion at month end, a decrease of 0.7 percent (+/-0.4%) from the revised January level and also 1.3 percent (±1.1 percent) lower than February a year ago, with the January preliminary inventory estimate revised downward from the advance estimate of down 0.5 percent (±0.2 percent) to down 0.7 percent (±0.2 percent)….

For national accounts, the wholesale inventories reported here will be adjusted the February producer price index, ie the index a month prior to the one we just reported on…with notable exceptions such as inventories of farm products, chemicals and petroleum, we’ve previously estimated that wholesale inventories appear to be roughly 70% finished goods….with the February producer price index for finished goods down by 0.9% while the producer price indexes for intermediate goods & raw goods were 0.9% and 7.7% lower respectively, we can thus figure that February’s real wholesale inventories would have increased by at least 0.2% and probably more…since the real wholesale inventories saw a substantial decrease over the 4th quarter, any real increase in the 1st quarter will not only reverse that, but also add to the growth of GDP in accordance with the size of the real inventory increase..

Job Openings, Hiring & Quitting were Lower in February; Layoffs inched Higher

The Job Openings and Labor Turnover Survey (JOLTS) report for February from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 130,000, from 7,012,000 in January to 6,882,000 in February, after January job openings were revised up from the originally reported 6,963,000 …February’s jobs openings were also 2.4% lower than the 7,048,000 job openings reported in February a year ago, as the job opening ratio expressed as a percentage of the employed fell from 4.4% in January to 4.3% in February, which was also down from the 4.5% rate of February a year ago…since February’s job openings in bars and restaurants were reported 12,000 higher, we can probably figure that most other jobs opening figures in this report are equally meaningless by now (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 5,896,000, down by 29,000 from the revised 5,925,000 who were hired or rehired in January, as the hiring rate as a percentage of all employed remained at 3.9% in February, which was up 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 fell by 143,000, from 5,703,000 in January to 5,560,000 in February, as the separations rate as a percentage of the employed fell from 3.7% in January to 3.6% in February, while it was down from 3.8% in February a year ago (see details in table 3)…subtracting the 5,560,000 total separations from the total hires of 5,896,000 would imply an increase of 336,000 jobs in February, somewhat more than the revised payroll job increase of 275,000 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 3,497,000 of us voluntarily quit our jobs in February, down by 77,000 from the revised 3,574,000 who quit their jobs in January, while the quits rate, widely watched as an indicator of worker confidence, remained at 2.3% of total employment, which was down from the quits rate of 2.4% year earlier (see details in table 4)….in addition to those who quit, another 1,755,000 were either laid off, fired or otherwise discharged in February, up by 14,000 from the revised 1,741,000 who were discharged in January, as the discharges rate rose from 1.1% to 1.2% of all those who were employed during the month, while it was unchanged from the discharges rate of a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 308,000 in February, down from 388,000 in January, for an ‘other separations rate’ of 0.2%, down from 0.3% in January but the same 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 picked from the aforementioned GGO posts, contact me…)      

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