April’s consumer and producer prices, retail sales, and industrial production; March business inventories and JOLTS..

Regular monthly reports that were released this week included the the April Consumer Price Index, the April Producer Price Index and the April Import-Export Price Index from the Bureau of Labor Statistics, the Retail Sales report for April and the Manufacturing and Trade, Inventories and Sales report for March (pdf), both from the Census Bureau, the April report on Industrial Production and Capacity Utilization from the Fed, and the Job Openings and Labor Turnover Survey (JOLTS) for March, also from the BLS.…the week also saw the release of the first regional Fed manufacturing survey 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 48.5, up from a record low of -78.2 in April, but still the second worst reading in the survey’s history, indicating a slightly less severe depression in First District manufacturing this month than last…

Consumer Prices Fell 0.8% in April on Lower Prices for Gasoline, Clothing, & Airfares

The consumer price index fell 0.8% in April, the biggest CPI drop since December 2008, as lower prices for energy, clothing, lodging, transportation services and used 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 0.8% in April, after falling by 0.4% in March, 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 258.115 in March to 256.389 in April, which left it statistically 0.3291% higher than the 255.548 index reading of April of last year, which is reported as a 0.3% year over year increase, down from a 1.5% year over year increase a month ago….with lower prices for energy the largest drag on the overall index increase, seasonally adjusted core prices, which exclude food and energy, fell by 0.4% for the month, as the unadjusted core price index fell from  267.312 to 266.089, which left the core index 1.4322% ahead of its year ago reading of 262.332, which is reported as a 1.4% year over year increase, down from the 2.1% year over year increase that was reported for March…

The volatile seasonally adjusted energy price index fell 10.1% in April, after falling 5.8% in March, 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% last July, and is now 5.7% lower than in April a year ago…the price index for energy commodities was 20.0% lower in April, while the index for energy services was 0.1% higher, after falling 0.5% in March….the energy commodity index was down 20.0% due to a 20.6% decrease in the price of gasoline, the largest component, and a 15.6% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 2.9% lower…within energy services, the price index for utility gas service rose 0.2% after falling 1.4% in March and is now 1.9% lower than it was a year ago, while the electricity price index rose 0.1% after falling 0.2% in March….energy commodities are now averaging 31.4% lower than their year ago levels, with gasoline prices averaging 32.0% lower than they were a year ago, while the energy services price index is still down 0.2% from last April, as electricity prices are still 0.2% higher than a year ago…

The seasonally adjusted food price index rose 1.5% in April, after rising 0.3% in March, 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 2.6% higher in April, the largest increase since February 1974, while the index for food bought to eat away from home was 0.1% higher, as average prices at fast food outlets were 0.7% higher while prices at full service restaurants fell 0.3% and food prices at employee sites and schools were on average 0.1% higher…

In the food at home categories, the price index for cereals and bakery products was 2.9% higher as average bread prices rose 3.7%, prices for fresh biscuits, rolls, muffins rose 4.7%, and the price index for cakes, cupcakes, and cookies rose 5.0%…at the same time, the price index for the meats, poultry, fish, and eggs group was 4.3% higher, egg prices rose 16.1%, chicken prices rose 5.8%, and the index for pork roasts, steaks, and ribs was 10.1% higher… meanwhile, the seasonally adjusted index for dairy products was 1.5% higher, as milk prices rose 1.5% and prices for cheese & related products rose 1.8%…in addition, the fruits and vegetables index was also 1.5% higher as the price index for fresh fruits rose 1.3%, the price index for fresh vegetables rose 1.1, the price index for canned fruits and vegetables rose 3.6% and the price index for frozen fruits and vegetables rose 2.6%…at the same time, the beverages index was 2.9% higher as the price index for carbonated drinks rose 4.5% and the price index for noncarbonated juices and drinks rose 3.6%….lastly, the index for the ‘other foods at home’ category was up 1.9%, as the price index for sugar and sugar substitutes rose 1.9%, the fats and oils including peanut butter but not including butter or margarine rose 2.6%, and the price index for snacks rose 3.8%…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 April, only the price of eggs, which is up 17.3%, and the price index for the index for pork roasts, steaks, and ribs, which has risen 13.3%, are the only food items with a price change greater than 10% over the past year…

Among the seasonally adjusted core components of the CPI, which fell by 0.4% in April, after falling by 0.1% in March, 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 0.7% lower in April, while the more heavily weighted composite for all services less energy services was down 0.4%….among the goods components, which will be used by the Bureau of Economic Analysis to adjust April’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.7% lower, as the price index for living room, kitchen, and dining room furniture fell 1.9% and the index for bedroom furniture fell 2.4%, while the price index for household paper products rose 4.5%….at the same time, the apparel price index was 4.7% lower on an 11.3% decrease in the price index for men’s suits, sport coats, and outerwear, a 9.6% decrease in the price index for women’s dresses, an 8.3% decrease in the price index for women’s outerwear, and a 5.7% decrease in the price index for women’s footwear…in addition, the price index for transportation commodities other than fuel was 0.2% lower as prices for new cars fell 0.2% as prices for used cars and trucks fell 0.4% and the price index for vehicle parts and equipment other than tires fell 0.4%….meanwhile, prices for medical care commodities were 0.1% lower, even as prescription drugs prices rose 0.6%, because non-prescription drugs prices fell 0.5% and the medical equipment price index fell 0.6%…at the same time, the recreational commodities index was 0.9% lower on a 2.7% decrease in the price index for pets, pet supplies, and accessories, a 1.0% decrease in the price index for sporting goods, and a 1.3% decrease in the price index for sewing machines, fabric and supplies…on the other hand, the education and communication commodities index was 0.2% higher on a 1.0% increase in the price index for college textbooks and a 0.7% increase in the price index for computers, peripherals, and smart home assistants…lastly, a separate price index for alcoholic beverages was 0.3% higher, while the price index for ‘other goods’ was 0.1% lower on a 0.4% decrease in the index for cosmetics, perfume, bath, nail preparations and implements and a 0.5% decrease in cigarette prices..

Within core services, the price index for shelter was unchanged even though rents rose 0.2% and homeowner’s equivalent rent rose 0.2% because prices for lodging away from home at hotels and motels fell 8.1%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.1%, and other household operation costs were on average unchanged….meanwhile, 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 nursing homes and adult day services rose 0.5% and the price of health insurance rose 1.1%… on the other hand, the transportation services price index was 4.7% lower as the price index for car and truck rental fell 16.6%, airline fares fell 15.2% and vehicle insurance costs fell 7.2%….however, the recreation services price index rose 0.2% as the index for video discs and other media rose 0.9% and the index for admission to sporting events rose 2.6%…at the same time, the index for education and communication services was 0.1% higher as technical and business school tuition and fees rose 0.7% and postage rose 0.4%….lastly, the index for other personal services was down 0.1% as the price index for legal services fell 0.4%, and the index for ax return preparation and other accounting fees was 1.0% lower…

Among core line items, prices for televisions, which are now averaging 16.2% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 14.2% since last April, the rental of video discs and other media, which has fallen 13.4% from a year ago, the price index for sewing machines, fabric and supplies, which is down 10.0% year over year, the price index for women’s dresses, which has fallen by 17.8% in the past year, the price index for women’s outerwear, which has fallen by 14.9% from a year ago, the price index for men’s suits, sport coats, and outerwear, which has fallen by 13.1% in the past year, the price index for infants’ and toddlers’ apparel, which has fallen by 10.9% in the past year, airline fares, which are now down by 24.3% since last April and the price index for computer software and accessories, which is down 10.6% 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 20.2% over the past year, the price index for infants’ equipment, which has risen 11.3% over the past year, and the price index for window coverings, which has risen 10.1% from a year ago, are the only line items to have increased by a double digit magnitude over that span…. 

Retail Sales Down 16.4% in April after Revisions to Prior Months Sales

Seasonally adjusted retail sales decreased by a record 16.4% in April after retail sales March were revised slightly higher while sales for February were revised lower …the Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $403.9 billion for the month, which was a decrease of 16.4 percent (±0.5%) from revised March sales of $514.3 billion and 21.6 percent (± 0.7 percent) below the adjusted sales of April of last year…March sales were originally reported at $483.1 billion, down 8.7% from February; they are now indicated to have fallen 8.3% to $483.5 billion, because February adjusted sales were concurrently revised from $529.3 billion to $527.3 billion….the net of those revisions February and March sales would subtract about 0.11 percentage points, give or take, from 1st quarter GDP when the 2nd estimate is released at the end of the month…estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated nominal dollar sales fell 16.6%, from $481,539 in March to $401,451 in April, while they down 21.2% from the $509,413 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 2020 r (revised)” and the revised March 2019 to March 2020 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance March estimates, before this report’s revision, is here….

April 2020 retail sales table

Looking at the first and third columns, representing the percentage change in sales in April and March, should give you an idea how thoroughly some parts of the consumer driven economy have shut down…and it’s important to realize that the April decreases are from the already depressed March levels…for example, March sales at clothing stores were down 49.4% from February; April sale at clothing stores were down another 78.8% from that…in seasonally adjusted dollars, clothing store sales fell from $22,135 million in February to $11,209 million in March, and then to $2,371 million in April…similarly, sales at furniture stores fell from $10,133 million in February to $7,994 million in March, and then to $3,301 million in April…even sales at grocery stores, which had risen a revised 28.6% in March, gave almost half of that sales gain back in falling 13.2% in April…

To compute April’s real personal consumption of goods data for national accounts from this April retail sales report, the BEA will use the corresponding price changes from the April consumer price index, which we reviewed earlier…to estimate what they will find, we’ll first separate out the volatile sales of gasoline from the other totals…from the third line on the above table, we can see that April retail sales excluding the 28.8% partly price-related decrease in sales at gas stations were down by 15.5%….then, removing the figures representing the 13.1% decrease in grocery & beverage sales and the 29.5% decrease in food services sales out from that total, we find that core retail sales were down by more than 14.1% for the month…since the April CPI report showed that the the composite price index of all goods less food and energy goods was 0.7% lower in April, we can thus figure that real retail sales excluding food and gasoline will show an decrease of around 13.4%…however, the actual adjustment in national accounts for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at clothing stores were 78.8% lower in April, the apparel price index was 4.3% lower, which means part of the sales decrease was price related and that real sales of clothing likely fell by around 77.9% (click for the math)…

In addition to figuring those core retail sales, we should adjust food and energy retail sales for their price changes separately, just as the BEA will do…the April CPI report showed that the food price index was 1.5% higher, as the price index for food purchased for use at home rose 2.6% while the index for food bought away from home was 0.1% higher…thus, while nominal sales at food and beverage stores were 13.1% lower, real sales of food and beverages would have been around 15.4% lower in light of the 2.6% higher prices…on the other hand, the 29.5% decrease in nominal sales at bars and restaurants, once adjusted for 0.1% higher prices, suggests that real sales at bars and restaurants actually fell around 29.6% during the month…and while sales at gas stations were down 28.8%, there was a 20.6% decrease in price of gasoline during the month, which would suggest that real sales of gasoline were down on the order of 10.1%, with a caveat that gasoline stations do sell more than gasoline, and we haven’t accounted for those other sales…averaging real sales that we have thus estimated back together, and excluding food services, we’ll then estimate, without doing the tedious math, that the income and outlays report for April will show that real personal consumption of goods fell by around 13.8% in April, after falling by a revised 2.1% in March, and after falling by a revised 0.8% in February…at the same time, the 29.6% decrease in real sales at bars and restaurants would have a substantial negative impact on April’s real personal consumption of services, lowering it on the order of 3%…

Industrial Production Fell 11.2% in April after March Production was Revised Higher

Industrial production decreased in April after production for March was revised higher…the Fed’s G17 release on Industrial production and Capacity Utilization for April reported that industrial production fell 11.2% in April, the largest monthly drop in history, after falling by a revised 4.5% in March, which left our total output 15.0% lower than a year ago…the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, came in at 92.6 in April, after the March index value was revised from the 103.7 reported last month up to 104.3, the February index was revised from 110.6 to 109.3, and the November index was revised down from 110.1 to 110.0…

The manufacturing index, which accounts for more than 75% of the total IP index, fell by 13.7% to 85.5 in April, after the March manufacturing index was revised from 98.3 to 99.1, while the February manufacturing index was left unchanged 104.9, and prior months were unrevised as well…the output of motor vehicles and parts fell more than 70 percent in April, while other manufacturing dropped 10.3 percent, leaving the manufacturing index 18.0% below its year ago level….meanwhile, the mining index, which includes oil and gas well drilling, fell 6.1%, from 131.5 in March to 123.4 in April, after the March index was revised up from from the originally reported 130.1, which still left the mining index 7.5% lower than it was a year earlier…finally, the seasonally adjusted utility index, which typically fluctuates due to deviations from normal temperatures, fell by 0.9% in April, from 100.2 to 99.3, after the March utility index was revised from 101.3 to 100.2, now a 1.9% decrease from February, while the February index was revised from 105.5 to 102.2, now up 3.6% from January….after this month’s revisions, the utility index is now 3.8% below that of a year ago…

This report also includes capacity utilization stats, which are expressed as a percentage of our plant and equipment that was in use during the month…seasonally adjusted capacity utilization for total industry fell to 64.9% in April from 73.2% in March, after capacity utilization for March was revised up from 72.7%…capacity utilization of NAICS durable goods production facilities fell from a revised 68.6% in March to 55.3% in April as capacity utilization for motor vehicles and parts manufacturers fell from 54.6% to 15.4%, while capacity utilization for non-durables producers fell from a revised 74.1% to 68.0%.. capacity utilization for the mining sector fell to 81.7% in April from 87.2% in March, which was previously reported at 86.3%, while utilities were operating at 71.1% of capacity during April, down from their 71.9% of capacity during March, which was previously reported at 72.7%…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 Down 1.3% in April on Lower Energy Prices, Lower Margins for Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand fell 1.3% in April, the largest drop in the history of the index, as prices for finished wholesale goods averaged 3.3% lower, and average margins of final services providers decreased by 0.2%…that follows a March report that had the PPI down 0.2%, as prices for finished wholesale goods averaged 1.0% lower, while average margins of final services providers increased by 0.2%, 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 now revised January report that indicates the PPI had risen 0.4%, as prices for finished wholesale goods had been on average 0.3% higher, while margins of final services providers increased by 0.4%, and a re-revised December report that indicates the PPI was up 0.3%, with prices for finished wholesale goods up 0.2% while margins of final services providers were 0.3% higher….on an unadjusted basis, producer prices are now 1.2% lower than a year ago, a reversal of the 0.7% 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 0.9% for the month, and is now 0.3% lower than in April a year ago, down from the 1.0% year over year increase shown in March…

As noted, the price index for final demand for goods, aka ‘finished goods’, was 3.3% lower in April, after being 1.0% lower in March, 0.9% lower in February, 0.3% higher in January, 0.2% 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, and 0.3% higher in April of last year….the finished goods index fell 3.3% in March because the price index for wholesale energy goods was 19.0% lower, after falling by 6.7% in Match, 3.6% in February but after rising by 0.2% in January and 1.1% in December, while the price index for wholesale foods fell 0.5%, after being unchanged in March, falling 1.6% in February, being unchanged in January, and falling 0.2% in December, and while the index for final demand for core wholesale goods (excluding food and energy) was 0.4% lower after rising 0.2% in March and falling 0.1% in February…wholesale energy prices were lower due to a record 56.6% drop in wholesale prices for gasoline, a 35.6% drop in wholesale prices for home heating oil, a 27.2% decrease in wholesale prices for liquefied petroleum gas, and a 27.8% decrease in wholesale prices for diesel fuel, while the wholesale food price index fell 0.5% on a 12.5% decrease in the wholesale price index for grains and a 10.5% decrease in the wholesale price index for fresh fruits and melons, which were only partly offset by a 31.8% increase in the wholesale price of eggs for fresh use….among wholesale core goods, the wholesale price index for industrial chemicals fell 11.5% and the wholesale price index for iron & steel scrap fell 15.6% while the wholesale price index for alcoholic beverages rose 1.4%%..

At the same time, the index for final demand for services fell 0.2% in April, after rising 0.2% in March, falling 0.3% in February, rising by a revised 0.4% in January, and rising by a revised 0.3% in December, as the index for final demand for trade services rose 1.6%, the index for final demand for transportation and warehousing services fell 3.5%, and the core index for final demand for services less trade, transportation, and warehousing services fell 0.9%… among trade services, seasonally adjusted margins for fuels and lubricants retailers rose 41.6%, margins for TV, video, and photographic equipment and supplies retailers rose 5.6%, and margins for computer hardware, software, and supplies retailer rose 5.1%, while margins for RVs, trailers, and campers retailers fell 15.2% … among transportation and warehousing services, margins for airline passenger services fell 11.3%, margins for truck transportation of freight fell 0.8%, and margins for air transportation of freight fell 1.1% …among the components of the core final demand for services index, margins for passenger car rental fell 20.5%, margins for portfolio management fell 12.0%, margins for traveler accommodation services fell 9.7%, and margins for arrangement of cruises and tours fell 5.5%, while margins for arrangement of vehicle rentals and lodging rose 3.9%…

This report also showed the price index for intermediate processed goods fell 3.7% in April, after falling 1.1% in March, 0.9% in February and 0.2% in January….the price index for intermediate energy goods fell 15.1%, as refinery prices for gasoline fell 56.6%, refinery prices for jet fuel fell 49.1% and refinery prices for No. 2 diesel fuel fell 27.8%, while producer prices liquefied petroleum gas fell 27.2%…meanwhile, prices for intermediate processed foods and feeds fell 0.1%, as the producer price index for processed fruits and vegetables fell 4.4% while the index for beef and veal rose 12.6%…at the same time, the core price index for intermediate processed goods less food and energy fell 1.5% as the producer price index for basic organic chemicals fell 13.5%, the producer price index for softwood lumber fell 10.8% and producer prices for building paper and board decreased 5.1%… prices for intermediate processed goods are now 7.3% lower than in April a year ago, the twelfth 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 13.7% in April, after falling 8.0% in March, 7.7% in February and a revised 0.5% in January, but after rising a revised 1.2% in December….that was as the April price index for crude energy goods fell 27.5% as crude oil prices fell 48.9% and as unprocessed natural gas prices fell 20.4%, while the price index for unprocessed foodstuffs and feedstuffs fell 9.7% on a 17.4% decrease in producer prices for slaughter hogs, a 48.2% decrease in producer prices for slaughter chickens, and a 19.1% decrease in producer prices for corn…at the same time, the index for core raw materials other than food and energy materials fell 4.3%, as prices for wastepaper fell 50.4%, the price index for unprocessed iron & steel scrap decreased 15.6%, and the price of iron ore fell 7.2%….this raw materials index is now 28.2% 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 1.6% in April after falling 0.1% in March, 0.1% in February, rising a revised 0.1% in January, and rising a revised 0.5 percent in December…the price index for intermediate trade services was 0.4% lower, as margins for intermediate metals, minerals, and ores wholesalers fell 5.6%, margins for building materials, paint, and hardware wholesalers fell 2.2% and margins for intermediate machinery and equipment parts and supplies wholesalers fell 2.0%…meanwhile, the index for transportation and warehousing services for intermediate demand was 1.4% lower, as the intermediate price index for transportation of passengers fell 11.3% and the price index for air mail and package delivery services other than USPS fell 3.4%…at the same time, the core price index for intermediate services less trade, transportation, and warehousing was 2.0% lower, as the intermediate price index for passenger car rental fell 20.5%, the intermediate price index for portfolio management fell 12.0%, the price index for television advertising time sales fell 11.0% and the price index for intermediate traveler accommodation services fell 9.7%, while the intermediate price index for internet advertising space sales, excluding internet ads sold by print publishers rose 5.5%…over the 12 months ended in April, the year over year price index for services for intermediate demand is now 1.2% lower than it was a year ago, the first year over year negative change in the history of this index…..

March Business Sales Fell 5.2%, Business Inventories Were Down 0.2%

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 retail report and the earlier published March wholesale and factory data to give us a complete picture of the business impact on the economy for that month….for this report, we should note that wholesale sales and inventories were revised on April 27th, which thus revised the figures that were reported a month ago, even before the usual revisions to the prior month’s data that accompany this report…

According to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $1,386.1 billion in March, down 5.2 percent (±0.2 percent) from February’s revised sales, and down 4.9 percent (±0.3 percent) from March sales of a year earlier…note that total February sales were concurrently revised up from the originally reported $1,464.2 billion to $1,462.640 million, still a 0.5% decrease from January….manufacturer’s sales fell 5.2% to $473,613 million in March; retail trade sales, which exclude restaurant & bar sales from the revised March retail sales reported earlier, fell 5.3% to $437,561 million, while wholesale sales fell 5.2% to $474,974 million…

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,012.5 billion at the end of March, down 0.2% (±0.1%) from the end of February, and 0.3 percent (±0.4 percent)* lower than in March a year earlier…the value of end of February inventories was revised from the $2,012.7 billion reported last month to $2,016.7 billion, which is now 0.5% lower than January’s inventory valuation….seasonally adjusted inventories of manufacturers were estimated to be valued at $693,481 million, down 0.8% from February, while inventories of retailers were valued at $668,320 million, 1.0% more than those of February, and while inventories of wholesalers were estimated to be valued at $650,703 million at the end of March, 0.8% less than in February…

Last week we figured that there would be little impact on 1st quarter GDP based on the inventory change the wholesales report showed, and that 1st quarter GDP was overestimated by around 0.16 percentage points based on what the factory inventories report showed…the BEA’s Key source data and assumptions (xls) that accompanied the release of the advance estimate of 1st quarter GDP indicates that they had estimated that the value of retail inventories March would increase by $3.1 billion before adjustment with the PPI, so the $6.6 billion increase that this report shows means that they underestimated the 1st quarter retail inventory component at an annual rate of around $14.0 billion….with a minimal inflation adjustment, that would imply that the contribution of the retail inventory component of 1st quarter GDP was underestimated by around 0.25 percentage points, so after netting out the 3 inventory changes, this report indicates there should be a net upward adjustment of around 0.09 percentage points to 1st quarter GDP when the 2nd estimate is released at the end of May…

Job Openings, Hiring, & Job Quitting All Way Down in March, Layoffs at a Record High

The Job Openings and Labor Turnover Survey (JOLTS) report for March from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 813,000 to 6,191,000 in March, after February job openings were revised up by 122,000 from the originally reported 6,882,000…March’s jobs openings were also 15.9% lower than the 7,364,000 job openings reported in March a year ago, as the job opening ratio expressed as a percentage of the employed fell to 3.9% in March, down from the 4.4% rate in February and the 4.7% rate of March a year ago…(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…note that the BLS reports that the response to their survey for March was 57 percent, while response rates prior to the pandemic averaged 67 percent, so we should figure that this month’s report will have a higher than normal margin of error than usual…

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 March, seasonally adjusted new hires totaled 5,206,000, down by 658,000 from the revised 5,864,000 who were hired or rehired in February, as the hiring rate as a percentage of all employed fell from 3.8% in February to 3.4% in March, which was also down from the 3.8% hiring rate in March a year earlier (details of hiring by sector since November are in table 2)….meanwhile, total separations rose by a record 8,922,000 to 14,517,000 in March, as the separations rate as a percentage of the employed rose from 3.7% to 9.6%, which was also up from 3.7% a year ago (see table 3)…subtracting the total hires of 5,206,000 from the 14,517,000 total separations would imply an decrease of 9,311,000 jobs in March, way more than the revised payroll job decrease of 870,000 for March reported in the April establishment survey last week, with the difference likely due to the date of the surveys, which is at month end for JOLTS but during the week of the 12th for the employment situation…..

Breaking down the seasonally adjusted job separations, the BLS found that 2,782,000 of us voluntarily quit our jobs in March, down from the revised 3,436,000 who quit their jobs in February, while the quits rate, widely watched as an indicator of worker confidence, fell from 2.3% to 1.8% of total employment, which was also down from 2.3% a year earlier (see details in table 4)….in addition to those who quit, a record 11,372,000 were either laid off, fired or otherwise discharged in March, up by 9,526,000 from the revised 1,846,000 who were discharged in February, as the discharges rate rose from 1.2% to 7.5% of all those who were employed during the month, which was also up from the discharges rate of 1.1% a year ago…meanwhile, other separations, which includes retirements and deaths, were at 363,000 in March, up from 313,000 in February, for an ‘other separations rate’ of 0.2%, same as in February and as in March 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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