Tag: Producer Prices

Mixed Inflation Numbers: July 8 – 12

Mixed Inflation Numbers: July 8 – 12

Kevin Roth

Core consumer prices rose, but core wholesale prices did not. Here are the five things we learned from U.S. economic data released during the week ending July 12.

#1Core inflation firmed in June. Consumer Price Index (CPI) gained 0.1 percent on a seasonally adjusted basis during the month, per the Bureau of Labor Statistics. Growth in the headline CPI measure was modest as energy prices fell 2.3 percent (including gasoline CPI dropping 3.6 percent) and food prices held steady. Core CPI, which removes the impact of energy and food, jumped 0.3 percent, its most significant single-month increase since January 2018. Rising were prices for used cars/trucks (+1.6 percent), apparel (+1.1 percent), medical care services (+0.4 percent), shelter (+0.3 percent), and new vehicles (+0.1 percent). Over the past year, CPI has risen 1.6 percent while the core measure of consumer prices has a 12-month comparable of +2.1 percent.Consumer Prices 2017-9 071319

#2…While wholesale prices did not. The Producer Price Index (PPI) for final demand inched up by a seasonally adjusted 1/10th of a percentage point during June, matching its May increase. The core wholesale price measure, which nets out foods, energy, and trade services, was unchanged after having jumped 0.4 percent during the two prior months. PPI for final demand goods dropped for a second consecutive month with a 0.2 percent decline. Energy PPI plummeted 3.1 percent, pulled down by plunging wholesale gasoline prices (-5.0 percent), while food PPI grew 0.6 percent (corn prices: +19.9 percent). PPI for final demand services increased 0.4 percent, boosted by trade services PPI (i.e., margins at retailers and wholesalers) jumping 1.3 percent. Over the past year, final demand PPI has grown 1.7 percent (its smallest 12-month comparable since January 2017) while the year-to-year change in core wholesale prices was +2.1 percent.

#3Job openings softened (slightly) in May, hiring more so. The Bureau of Labor Statistics estimates there were a seasonally adjusted 7.323 million job openings at the end of May, off 49,000 from the previous month but up 2.8 percent from a year earlier and keeping it very near the data series high. Industries with sizeable year-to-year percentage increases in job openings included construction (+32.3 percent), accommodation/food services (+8.6 percent), manufacturing (+8.3 percent), and professional/business services (+7.1 percent). Hiring slowed 4.4 percent during May to 5.725 million workers (-2.3 percent vs. May 2018). Also falling were the number of people leaving their job as separations decreased by 192,000 to 5.495 million (May 2018: 5.495 million). The number of people quitting their job—3.425 million—was up 2.5 percent from a year earlier while those affected by a layoff—1.760 million—was down 2.8 percent from May 2018.

#4Small business owner sentiment took a step back in June. The Small Business Optimism Index from the National Federation of Independent Business lost 1.7 points during the month to a seasonally adjusted reading of 103.3. This followed a 1.5 point gain during the prior month. Only three of the index’s ten components advanced during the month: current inventories, expected credit conditions, and plans to increase inventories. Falling during June were index components linked to earnings trends, whether it was a good time to expand, real sales expectations, plans to make capital outlays, plans to increase employment, and current job openings. The press release noted increased “uncertainty” on weighing on business owner sentiment.

#5The U.S. budget deficit continued to track well ahead of last year’s pace. The Bureau of the Fiscal Service reports that the U.S. government had collected $2.609 trillion over the first nine months of FY2019, a 2.7 percent increase over the comparable nine months during the prior fiscal year. Meanwhile, outlays totaled $3.356 trillion during those same nine months, 6.7 percent ahead of the previous year’s total. As a result, the U.S. government has run up a budget deficit totaling -$747.1 billion from the period of October 2018 to June 2019, well ahead of the year-to-date deficit for the first nine months of FY18 of -$607.1 billion. The Bureau currently forecasts a budget deficit for FY19 of -$1.092 trillion

Other U.S. economic data released over the past week:
– Jobless Claims (week ending July 6, 2019, First-Time Claims, seasonally adjusted): 209,000 (-13,000 vs. previous week; -3,000 vs. the same week a year earlier). 4-week moving average: 219,250 (-0.7% vs. the same week a year earlier).
– FOMC Minutes– Consumer Credit (May 2019, Outstanding Consumer Credit (not mortgages) Balances, seasonally adjusted): $4.088 trillion (+$17.1 billion vs. April 2019, +5.2% vs. May 2018).
– Wholesale Trade (May 2019, Inventories of Merchant Wholesalers, seasonally adjusted): $679.1 billion (+0.4% vs. April 2019, +7.7% vs. May 2018).

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

Retail Sales Improve, Job Openings Remain at (Near) Record Levels: June 10 – 14

Retail Sales Improve, Job Openings Remain at (Near) Record Levels: June 10 – 14

Kevin Roth

The retail picture improved while employers continue to struggle filling open positions. Here are the five things we learned from U.S. economic data released during the week ending June 14.

#1Retail sales firmed in May, with an upward revision for April. Retail and food services sales grew 0.5 percent to a seasonally adjusted $519.0 billion, up 3.2 percent since May 2018. The Census Bureau also upwardly revised its April sales estimate from a previously reported 0.2 percent sales drop to a 0.3 percent gain. Sales blossomed at both auto dealers/parts stores (+0.7 percent) and gas stations (+0.3 percent). Netting out both, core retail sales also gained 0.5 percent for the month and 3.2 percent over the past year. Sales increased during May at retailers focused on electronics/appliances (+1.1 percent), sporting goods/hobbies (+1.1 percent), health/personal care (+0.6 percent), and building materials (+0.1 percent). May was not as good of a month for department stores (-0.7 percent) and food/beverage stores (-0.1 percent).Retail Sales 061419

#2Employers continued posting a near-record number of job openings in April. The Bureau of Labor Statistics reports that there were a seasonally adjusted 7.449 million job openings on the final day of April, off 25.000 from the prior month but up 4.8 percent from a year earlier. (By comparison, a separate BLS report indicates that there were “only” 5.824 million unemployed people in April.) Industries reporting significant year-to-year percentage increases in openings were construction (+56.6 percent), financial activities (+11.3 percent), and manufacturing (+11.1 percent), while job openings in retail slumped 18.9 percent. Employers hired 5.937 million workers in Apri1, up 240,000 from March and 4.3 percent from a year earlier. 5.578 million people left their jobs in April, up 70,000 for the month and 2.0 percent over the previous year. This included 3.482 million people quitting their jobs during the month (+4.3 percent versus April 2018) and 1.752 million being laid off (-2.0 percent versus April 2018).

#3Manufacturing output grew in May for the first time since January. The Federal Reserve reports that manufacturing production expanded a seasonally adjusted 0.2 percent during the month, following a 0.5 percent drop during the previous month. Durable goods production gained 0.3 percent, boosted by jumps for wood products, machinery; electrical equipment/appliances, and motor vehicles. The output of nondurables eked out a 0.1 percent bump. Manufacturing output has expanded by only 0.7 percent over the past 12 months. Overall industrial production grew 0.4 percent during the month, rebounding from a 0.4 percent drop in April and leaving the measure up 2.0 percent over the past year. Mining output increased 0.1 percent during the month while production at utilities rose 2.1 percent.

#4Headline inflation was soft in May. The Consumer Price Index (CPI) increased by a modest 0.1 percent on a seasonally adjusted basis during the month, following gains of 0.3 percent and 0.4 percent during the two prior months. The Bureau of Labor Statistics report also notes that consumer energy prices fell 0.6 percent (gasoline CPI: -0.5 percent) while food prices jumped 0.5 percent (thanks to higher prices for non-alcoholic beverages and meat/poultry/fish/eggs). Net of both energy and food, core CPI grew by a 0.1 percent for the fourth consecutive month. Prices rose for medical care services (+0.5 percent), shelter (+0.2 percent), new vehicles (+0.1 percent) but fell for used cars/trucks (-1.4 percent) and medical care commodities (-0.4 percent). CPI has risen 1.8 percent over the past 12 months, while core CPI has gained 2.0 percent over the same period.

The Producer Price Index (PPI) for final demand edged up a seasonally adjusted 0.1 percent, its smallest increase over the past four months. Core PPI for final demand, which removes the impact of food, energy, and trade services, climbed 0.4 percent (matching its increase in April).  Final demand goods PPI dropped 0.2 percent, pulled down by declines in wholesale prices for both energy (-1.0 percent) and food (-0.3 percent). Final demand services PPI grew 0.3 percent, thanks to higher prices for transportation/warehouse services. Headline PPI has risen 1.8 percent over the past year while the core measure has a more robust 12-month comparable of +2.3 percent.

#5Small business owner confidence improved for a fourth straight month in May. The Small Business Optimism Index added 1.5 points during the month to a seasonally adjusted reading of 105.0 (1986=100). This was the highest mark for the National Federation of Independent Business’ measure since last October. Six of the ten index components gained in May, led by whether it is a good time to expand, plans to make capital outlays, expectations for the economy, and expected real sales. Only one index component—expected credit conditions—slipped during the month. The press release noted that “[s]mall business owners are demonstrating a continued confidence in the strength of the economy.”

Other U.S. economic data released over the past week:
– Jobless Claims (week ending June 8, 2019, First-Time Claims, seasonally adjusted): 222,000 (+3,000 vs. previous week; -3,000 vs. the same week a year earlier). 4-week moving average: 217,750 (-1.8% vs. the same week a year earlier).
– University of Michigan Surveys of Consumers (June 2019, Index of Consumer Sentiment (100=1966Q1), seasonally adjusted): 97.9 (May 2019: 100.0, June 2018: 98.2)
– Business Inventories (April 2019, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.230 trillion (+0.5% vs. March 2019, +5.3% vs. April 2018).
– Monthly Treasury Statement (1st 8 months of FY19 (May 2019), Budget Surplus/Deficit): -$738.6 billion (vs. 1st 8 months of FY18: -$532.2 billion). 

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

Core Prices Chill, Job Openings Grow: May 6 – 10

Core Prices Chill, Job Openings Grow: May 6 – 10

Kevin Roth

Core inflation was on spring break in April, except at the gas pump.  Here are the five things we learned from U.S. economic data released during the week ending May 10.

#1Core consumer inflation was restrained (again) in April. The Bureau of Labor Statistics tells us that the Consumer Price Index (CPI) grew 0.3 percent on a seasonally adjusted basis during the month, following a 0.4 percent bounce in March. Energy prices jumped 2.9 percent, led by a 5.7 percent surge in gasoline prices. Food CPI, however, slipped 0.1 percent (including a 0.5 percent drop in the prices for food consumed at home). Core CPI, which nets out energy and food, edged up 0.1 percent for the third consecutive month. Rising were prices for medical care commodities (+0.9 percent), shelter (+0.4 percent), medical care services (+0.2 percent), transportation services (+0.1 percent), and new vehicles (-0.1 percent). Prices slumped for used cars/trucks (-1.3 percent) and apparel (-0.8 percent). CPI has risen 2.0 percent over the past year while the core price measure has a 12-month comparable of +2.1 percent.

#2Wholesale prices also moderated. Final demand Producer Price Index (PPI) grew at a seasonally adjusted 0.2 percent during April, down from the 0.6 percent burst a month earlier. The Bureau of Labor Statistics’ core wholesale price measure, which removes the impact of energy, food and trade services, jumped 0.4 percent. Both the headline and core PPI measures have risen 2.2 percent over the past year. During April, wholesale energy prices rose 1.8 percent (PPI for gasoline surged 5.9 percent) while food PPI slipped 0.2 percent. Net of energy and food, PPI for core goods was unchanged for the month (the first time it failed to increase since last December).

#3 Job openings rebounded in March. The Bureau of Labor Statistics reports that there were 7.488 million job openings on the final day of March (on a seasonally adjusted basis), up 346,000 from February, reversing January’s 483,000 contraction, up 8.6 percent from a year earlier, and well ahead of the 6.211 unemployed people during the month. Industries with large percentage year-to-year increases in job openings included construction (+53.8 percent), wholesale trade (+20.9 percent), professional/business services (+18.3 percent), and manufacturing (+11.7 percent). Hiring continued to lag, however, slipping by 35,000 jobs during the month to 5.660 million (up a measly 0.6 percent from a year earlier). Job separations fell by 142,000 to 5.434 million (essentially matching the March 2018 count). Voluntarily quits were 3.3 percent ahead of their year-ago pace (to 3.409 million) while layoffs slowed 4.0 percent over the same period to 1.700 million workers.

#4The trade deficit widened slightly in March. The Census Bureau and the Bureau of Economic Analysis indicates the U.S. trade deficit expanded by $0.7 billion to a seasonally adjusted -$50.0 billion as exports grew by $2.1 billion and imports expanded by $2.8 billion. Over the past year, exports have increased by 1.3 percent while imports have risen 2.1 percent. The goods deficit grew by $0.5 billion to -$72.4 billion while the services surplus narrowed by $0.2 billion to +$22.4 billion. The U.S. had its largest goods deficits with China, the European Union, and Mexico.

#5Consumer put away their credit cards in March. The Federal Reserve estimates consumer revolving credit balances shrank by $2.2 billion during the month to a seasonally adjusted $1.057 trillion. Over the past year, revolving credit balances have grown 3.2 percent. Non-revolving credit balances, which includes college and auto loans, increased by $12.4 billion during March (and 5.6 percent over the past year) to $2.995 trillion. In total, outstanding consumer credit balances (not including mortgages and other real estate backed loans) expanded by $10.3 billion during the month to $4.052 trillion, representing a 4.9 percent since March 2018.

Other U.S. economic data released over the past week:
– Jobless Claims (week ending May 4, 2019, First-Time Claims, seasonally adjusted): 228,000 -2,000 vs. previous week; +17,000 vs. the same week a year earlier). 4-week moving average: 220,250 (+2.3% vs. the same week a year earlier).
– Wholesale Trade (March 2019, Inventories of Merchant Wholesalers, seasonally adjusted): $669.8 billion (-0.1% vs. February 2019, +6.7% vs. March 2018).
– Monthly Treasury Statement (First 7 Months of FY2019, Federal Government Budget Deficit): -$530.9 billion (+37.8% vs. First 7 Months of FY2018).
– Senior Loan Officers Opinion Survey

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.