Written by rjs, MarketWatch 666
September’s consumer price and producer price indexes, retail sales, and industrial production; August’s business inventories
Major reports released this past week included the September Consumer Price Index, the September Producer Price Index, and the September Import-Export Price Index from the Bureau of Labor Statistics, the Retail Sales report for September and the corresponding Business Sales and Inventories report for August from the Census Bureau, and Industrial production and Capacity Utilization for September from the Fed.
Please share this article – Go to very top of page, right hand side, for social media buttons.
This week also saw the release of the first two regional Fed manufacturing surveys for October: the Empire State Manufacturing Survey for October from the New York Fed, which covers New York and northern New Jersey, reported their headline general business conditions index fell from +17.0 in September to +10.5 in October, suggesting that First District manufacturing is recovering at a slower pace than a month ago, while the Philadelphia Fed Manufacturing Survey for October, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose from +15.0 in September to +32.3 in October, suggesting that the region’s manufacturing is recovering at a much more rapid pace than a month ago..
See also:
Consumer Prices Rose 0.2% in September on Higher Prices for Utilities, Used Cars, and Fast Food
The consumer price index rose 0.2% in September, as higher prices for energy services, new & used vehicles, and restaurant meals were only partly offset by lower prices for groceries, clothing, appliances, and transportation services …the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose by 0.4% in August, after rising by 0.4% in August, by 0.6% in July and by 0.6% in June, after falling by 0.1% in May, falling by 0.8% in April and by 0.4% in March, but 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, and rising by 0.1% last September…the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 259.918 in August to 260.280 in September, which left it statistically 1.317% higher than the 256.759 reading of September of last year, which is reported as a 1.3% year over year increase, same as the year over year increase reported a month ago….with higher prices for utilities offset by lower prices for groceries, seasonally adjusted core prices, which exclude food and energy, also rose by 0.2% for the month, as the unadjusted core price index rose from 268.756 to 269.054, which left the core index 1.713% ahead of its year ago reading of 264.522, which is reported as a 1.7% year over year increase, up from the 1.6% the year over year core price increase that was reported for August…
The volatile seasonally adjusted energy price index rose 0.8% in September, after rising 0.9% in August, 2.5% in July, 5.1% in June, falling by 1.8% in May, by 10.1% in April, 5.8% in March, 2.0% in February and by 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 August, and is still 7.7% lower than in September a year ago…the price index for energy commodities was 0.1% lower in September, while the index for energy services was 1.6% higher, after falling 0.2% in August….the energy commodity index was down 0.1% despite a 0.1% increase in the price of gasoline, due to a 5.3% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.6% lower…within energy services, the price index for utility gas service rose 4.2% after falling 0.2% in August and is now 3.8% higher than it was a year ago, while the electricity price index rose 0.9% after falling 0.2% in August….energy commodities are averaging 15.5% lower than their year ago levels, with gasoline prices averaging 15.4% lower than they were a year ago, while the energy services price index is now up 1.4% from last September, as electricity prices are also 0.7% higher than a year ago…
The seasonally adjusted food price index was unchanged in September, after rising 0.1% in August, falling 0.4% in July, rising 0.6% in June, 0.7% in May, 1.5% in April, 0.3% in March, 0.4% February, 0.2% January, 0.2% December, 0.1% in November, 0.2% October, 0.2% September, but after being unchanged last June, July & August, as the price index for food purchased for use at home was 0.4% lower in September, after falling 0.1% in August, while the index for food bought to eat away from home was 0.6% higher, as average prices at fast food outlets were a record 0.9% higher while prices at full service restaurants rose 0.3%, and while food prices at employee sites and schools averaged 0.3% lower…
In the food at home categories, the price index for cereals and bakery products was unchanged as average bread prices rose 0.3% and breakfast cereal prices rose 2.0%, while the price index for fresh sweetrolls, coffeecakes, and doughnuts fell 2.0%, the price index for cookies fell 0.8%, and the price index for flour and prepared flour mixes fell 0.5%….at the same time, the price index for the meats, poultry, fish, and eggs group was 0.4% lower as the price index for beef and veal fell 0.6%, egg prices fell 0.9%, and the price index for pork was 1.2% lower… meanwhile, the seasonally adjusted index for dairy products was 0.5% lower, as milk prices fell 0.2%, the index for cheese and related products was 0.6% lower, and the index for other dairy products fell 0.9%…in addition, the fruits and vegetables index was 0.4% lower as the price index for fresh fruits fell 1.3%, potato prices fell 3.8%, and the price index for dried beans, peas, and lentils fell 3.1%…at the same time, the beverages price index was 0.8% lower as the price index for carbonated drinks fell 1.7% and the prices index for beverage materials including coffee and tea fell 0.4%….lastly, the price index for the ‘other foods at home’ category was 0.6% lower, as butter prices fell 1.7%, peanut butter prices fell 2.6%, the price index for salt and other seasonings and spices fell 1.5%, and the price index for frozen and freeze dried prepared foods fell 0.9%…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 September, the price index for uncooked beef roasts has risen 11.9%, the price index for pork chops is up 11.2%, the price index for poultry other than chicken is 12.5% higher, and the price index for frankfurters is up 10.2% over the year, while the 3.2% decrease in banana prices is the largest drop of the few food prices that have declined over the past year…
Among the seasonally adjusted core components of the CPI, which rose by 0.2% in September, after rising by 0.4% in August, by 0.6% in July and by 0.2% in June, after falling by 0.1% in May, by 0.4% in April and by 0.1% in March, but after rising by 0.2% in February, 0.2% in January, 0.1% December, 0.2% November, 0.1% October, 0.2% in September, and by 0.2% last August, the composite price index of all goods less food and energy goods was 0.8% higher in September, 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 September’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.2% lower, as the price index for major appliances fell 2.0% on a 5.6% decrease in prices for laundry equipment, the price index for window coverings fell 0.9%, the price index for floor coverings fell 0.8%, and the price index for dishes and flatware decreased by 1.9%….at the same time, the apparel price index was 0.5% lower on a 3.1% decrease in the price index for men’s suits, sport coats, and outerwear, a 4.7% decrease in the price index for boy’s apparel, a 2.1% decrease in the price index for boys’ and girls’ footwear, and a 3.7% decrease in the price index for infants’ and toddlers’ apparel…on the other hand, the price index for transportation commodities other than fuel was 2.7% higher, as new car prices rose 0.3% prices for used cars and trucks rose 6.7% and the price index for vehicle parts and equipment other than tires rose 1.9%….however, prices for medical care commodities were unchanged, as non-prescription drug prices rose 0.2% while the price index for medical equipment and supplies fell 2.0%…meanwhile, the recreational commodities index was 0.4% lower on a 2.0% decrease in the price index for pets, pet supplies, accessories, a 1.7% decrease in the price index for photographic equipment and supplies, and a 1.3% decrease in the price index for sports vehicles including bicycles…at the same time, the education and communication commodities index was 2.5% lower on a 4.1% decrease in the price index for computers, peripherals, and smart home assistants and a 5.6% decrease in the price index for computer software and accessories…lastly, a separate price index for alcoholic beverages was 0.2% lower, while the price index for ‘other goods’ was up 0.1% on a 0.9% increase in the price index for miscellaneous personal goods..
Within core services, the price index for shelter was 0.1% higher as rents rose 0.1% and homeowner’s equivalent rent rose 0.1% while prices for lodging away from home at hotels and motels fell 0.5%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.2%, and other household operation costs were on average 0.4% higher on a 1.9% increase in moving, storage, freight expenses….meanwhile, the price index for medical care services was unchanged, as the price index for eyeglasses and eye care rose 0.8%, the price index for hospital services rose 0.6%, and the price index for care of invalids and elderly at home rose 0.6%, while the price of health insurance fell 1.5%… however, the transportation services price index was 0.9% lower as airline fares fell 2.0% and vehicle insurance costs fell 3.5%, even as the price index for intracity mass transit rose 13.3%…meanwhile, the recreation services price index rose 0.5% as the index for photographers and photo processing rose 1.2%, the index for pet services rose 0.5% and the index for “club membership for shopping clubs, fraternal, or other organizations, or participant sports fees” rose 2.6%….at the same time, the index for education and communication services was unchanged as the price index for college tuition and fees fell 0.5% while the price index for land line telephone services rose 0.5% and the index for delivery services rose 0.8%…lastly, the index for other personal services was up 0.2% as the price index for haircuts and other personal care services rose 0.3%, the index for tax return preparation and other accounting fees rose 0.7%, and the price index for apparel services other than laundry and dry cleaning was 1.0% higher…
Among core line items, prices for televisions, which are still averaging 11.3% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 13.6% since last September, the price index for computer software and accessories, which is down 14.3% year over year, the price index for men’s suits, sport coats, and outerwear, which has fallen 18.7% from a year ago, the price index for women’s dresses, which has fallen by 16.8% in the past year, the price index for women’s outerwear, which has fallen by 10.3% from a year ago, the price index for boys’ apparel, which has fallen by 11.4% in the past year, the price index for lodging away from home including hotels and motels, which has fallen by 15.0% in the past year, and airline fares, which are now down by 25.0% since last September, have all seen prices drop by more than 10% over the past year, while the cost of health insurance, which is still up by 14.1% over the past year, the price index for used cars and trucks, which has risen 10.3% from a year ago, the price index for infant’s equipment, which is up by 13.7% year over year, and the price index for infant’s furniture, which is up 10.7% from last September, are the only line items to have increased by a double digit magnitude over that span.
See also:
Retail Sales Increased by 1.9% in September after July and August Sales were Revised 0.3% Higher
Seasonally adjusted retail sales rose 1.9% in September after retail sales for July and August were revised 0.3% higher….the Advance Retail Sales Report for September (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $549.3 billion during the month, which was 1.9 percent (± 0.5 percent) above August’s revised sales of $526.9 billion, and 5.4 percent (± 0.7 percent) above the adjusted sales in September of last year…August’s seasonally adjusted sales were revised from $537.5 billion to $539.0 billion, while July sales were also revised higher, from $534.6 billion to $535.9 billion, with this release….unadjusted sales estimates, extrapolated from surveys of a small sampling of retailers, indicated sales actually fell 2.8%, from $546,720 million in August to $531,172 million in September, while they were up 7.1% from the $496,074 million of sales in September a year ago…
Since it’s the end of the quarter for retail sales, we’ll include the entire table from this report showing the change in retail sales by business type, including the quarter over quarter data…again, to explain what it shows, the first double column below shows us the seasonally adjusted percentage change in sales for each kind of business from the August revised figure to this month’s September “advance” report figure in the first sub-column, and then the year over year percentage sales change since last September in the 2nd column; the second double column pair below gives us the revision of the August advance estimates (now called “preliminary”) as of this report, with the new July to August percentage change under “Jul 2020 (r)” (revised) and the August 2019 to August 2020 percentage change as revised in the 2nd column of the pair.. (for your reference, the table of last month’s advance estimate of August sales, before this month’s revisions, is here)…. then, the third pair of columns shows the percentage change of the most recent 3 months of this year’s sales (July, August and September) from the preceding three months of the 2nd quarter (April, May and June) and then from the same three months (July, August and September) of a year ago….that first column of that pair gives us a snapshot comparison of 2nd quarter sales to third quarter sales which, after adjustment for price changes, can be useful in estimating the impact of this report on 3rd quarter GDP:
To compute September’s real personal consumption of goods data for national accounts from this September retail sales report, the BEA will use the corresponding price changes from the September consumer price index, which we reviewed earlier…to estimate what they will find, we’ll start by pulling out the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that September retail sales excluding the 1.5% increase in sales at gas stations were also up by 1.9%….then, subtracting the figures representing the little changed grocery & beverage sales and the 2.1% increase in food services sales from that total, we find that core retail sales were up by almost 2.3% for the month….since the CPI report showed that the composite price index for all goods less food and energy goods was up 0.8% in September, we can thus figure that real retail sales excluding food and energy were up by nearly 1.5% month over month…however, the adjustment 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 motor vehicle & parts dealers were up by 3.6%, the price index for transportation commodities other than fuel was 2.7% higher, as new car prices rose 0.3%, prices for used cars and trucks rose 6.7% and the price index for vehicle parts and equipment other than tires rose 1.9%…that would suggest that real unit sales at auto & parts dealers would only be on the order of 0.9% higher…on the other hand, while sales at clothing stores were 11.0% higher in September, the apparel price index was 0.5% lower, which means that real sales of clothing actually rose almost 11.6%…similarly, while nominal sales at sporting goods, hobby, music and book stores rose 5.7%, the price index for recreational commodities fell 0.4%, so real sales of recreational goods were up roughly 6.1%…
In addition to figuring those core retail sales, to make a complete estimate of real September PCE, we’ll need to adjust food and energy retail sales for their price changes separately, just as the BEA will do….the September CPI report showed that the food price index was unchanged in September, with the price index for food purchased for use at home 0.4% lower, while prices for food bought for eating away from home were 0.6% higher… hence, with nominal sales at food and beverage stores were unchanged, real sales of food at groceries would be roughly 0.4% higher.…on the other hand, the 2.1% increase in nominal sales at bars and restaurants, once adjusted for 0.6% higher prices, suggests that real sales at bars and restaurants only rose by 1.5%…similarly, while sales at gas stations were up 1.5%, there was a 0.1% increase in the retail price of gasoline, which would suggest real sales of gasoline were up on the order of 1.4%, with the caveat that gasoline stations do sell more than gasoline, and we haven’t accounted for those other sales…by averaging those estimated real sales figures with a sales appropriate weighting, and 1.2excluding food services, we’d estimate that the income and outlays report for September will show that real personal consumption of goods rose 1.2% in September, after rising by a revised 0.1% in August and by a revised 1.2% in July….at the same time, the 1.5% increase in real sales at bars and restaurants will have a significant positive impact on September’s real personal consumption of services.
See also:
Industrial Production Fell 0.6% in September after Prior Months Revised Higher
The Fed’s G17 release on Industrial production and Capacity Utilization indicated that industrial production decreased by 0.6% in September after rising by 0.4% in August and by 4.2% in July, which was revised from the 3.5% increase previously reported…the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, fell from a revised 102.2 in August to 101.5 in September; after the index for August was revised from the previously reported 101.4 to 102.2, the index for July was revised from the previously reported 101.0 to 101.7, the index for June was revised from the previously reported 97.5 to 97.6, while the April index was revised from 90.0 to 90.3, and the May index of 91.9 was unchanged from the previous report….for the 3rd quarter as compared to the 2nd quarter, industrial production rose at a 39.8% annual rate, even as total industrial production was still 7.3% lower than in September a year earlier, due to the production decrease in the second quarter of this year….
The manufacturing index decreased by 0.3% in September, from 98.5 in August to 98.3 in September, after August’s manufacturing index was revised from 97.9 to 98.5, July’s manufacturing index was revised from 97.0 to 97.4, June’s manufacturing index was revised from 93.4 to 93.5, May’s manufacturing index was revised but remained at 86.9, and the April manufacturing index was revised from 83.6 to 83.9…..meanwhile, the mining index, which includes oil and gas well drilling, rose from 112.0 in August to 113.9 in September, after the August index was revised up from 109.7 , but is still 14.8% lower than it was a year ago….finally, the utility index, which often fluctuates due to above or below normal temperatures, fell 5.6% to 99.6 in September, after the August index was revised 105.2 to 105.5, and is now 6.1% lower than in September of a year ago…
This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry fell from 72.0% in August to 71.5% in September, after rising from 71.6% in July….capacity utilization of NAICS durable goods production facilities fell from 69.8% in August to 69.4% in September, while capacity utilization for non-durables producers was unchanged at 72.9%…capacity utilization for the mining sector rose to 77.6% in September from 76.1% in August, which was revised from the 74.5% that was originally reported, while utilities were operating at 70.4% of capacity during September, down from their 74.7% of capacity during August, which was revised up from 74.5%…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.
See also:
Producer Prices rose 0.4% in August on Higher Wholesale Food Prices and Higher Margins for Core Services
The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.4% in September, as prices for both finished wholesale goods and margins of final service providers averaged 0.4% higher….that followed an August report that indicated that the PPI was 0.3% higher, as prices for finished wholesale goods averaged 0.1% higher while margins of final service providers averaged 0.5% higher, a July report that had the PPI 0.6% higher, as prices for finished wholesale goods averaged 0.8% higher while margins of final service providers averaged 0.5% higher, a now revised June report that had the PPI 0.1% higher, as prices for finished wholesale goods averaged 0.4% higher, while margins of final service providers averaged 0.2% lower, and a re-revised May report that has the PPI 0.5% higher, as prices for finished wholesale goods averaged 1.5% higher, while margins of final service providers increased by 0.1%….on an unadjusted basis, producer prices are now 0.4% higher than a year ago, up from the 0.2% year over year decrease indicated by last month’s report, while the core producer price index, which excludes food, energy and trade services, rose by 0.4% for the month, and is now 0.7% higher than in September a year ago, up from the 0.3% year over year increase shown in August…
As noted, the price index for final demand for goods, aka ‘finished goods’, was 0.4% higher in September, after being 0.1% higher in August, 0.8% higher in July, 0.4% higher in June, 1.5% higher in May, 3.0% lower in April, 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, and 0.3% lower in August of last year….the finished goods index rose 0.4% in September even as the price index for wholesale energy goods was 0.3% lower, after it had fallen by 0.1% in August, risen by 5.3% in July, by 9.7% in June and 4.3% in May, because the price index for wholesale foods rose 1.2%, after falling 0.4% in August, 0.5% in July, and a revised 4.9% in June, but after rising a revised 5.6% in May, while the index for final demand for core wholesale goods (excluding food and energy) was 0.4% higher, after being 0.3% higher in July and August….wholesale energy prices averaged 0.3% lower due to a 2.8% decrease in wholesale prices for gasoline, a 3.8% decrease in wholesale prices for LP gas, and a 4.9% decrease in wholesale prices for No.2 diesel fuel, while the wholesale food price index rose 1.2% on a 16.7% increase in wholesale prices for fresh eggs, a 19.4% increase in the wholesale price index for oilseeds, and a 16.4% increase in the wholesale price index for grains….among wholesale core goods, the wholesale price index for iron a steel scrap rose 14.7%, the wholesale price index for industrial chemicals rose 4.0%, and the wholesale price index for mobile homes rose 6.6%…
At the same time, the index for final demand for services rose 0.4% in September, after rising 0.5% in August, and 0.5% in July, after falling a revised 0.2% in June and rising a revised 0.1% in May, as the index for final demand for trade services rose 0.2%, the index for final demand for transportation and warehousing services rose 0.4%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.5% higher… among trade services, seasonally adjusted margins for RVs, trailers, and campers retailers rose 31.8%, margins for hardware, building materials, and supplies retailers rose 13.8%, margins for major household appliance retailers rose 4.9%, and margins for fuels and lubricants retailers rose 4.0%… among transportation and warehousing services, margins for airline passenger services rose 2.5% while margins for air transportation of freight fell 1.1%…among the components of the core final demand for services index, the index for arrangement of cruises and tours rose 5.0%, the index for credit intermediation, incl. trust services (partial) rose 4.6%, margins for traveler accommodation services rose 3.9%, and margins for consumer loans (partial) rose 3.3%…
This report also showed the price index for intermediate processed goods rose 1.0% in September, the largest jump since January 2016, after rising 0.6% in August, 1.5% in July, a revised 1.3% in June, but after being unchanged in May and falling the prior 5 months….the price index for intermediate energy goods rose 0.2%, as producer prices for natural gas sold to electric utilities rose 14.1% and producer prices for natural gas sold to industry rose 7.7%, while refinery prices for No. 2 diesel fuel fell 4.9%… meanwhile, the price index for intermediate processed foods and feeds was unchanged, as the producer price index for processed fruits and vegetables fell 3.4% and the producer price index for dairy products fell 2.5% while the producer price index for prepared animal feeds rose 2.6% and the producer price index for meat rose 2.0%…at the same time, the core price index for intermediate processed goods less food and energy rose 1.3% as the producer price index for plywood rose 10.3%, the producer price index for softwood lumber increased 28.6%, the producer price index for building paper and board rose 18.7%, and the producer price index for aluminum mill shapes rose 6.8%…however, prices for intermediate processed goods are still 1.5% lower than in September a year ago, the 17th 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 prices for intermediate goods fell every month from July 2015 through March 2016….
Meanwhile, the price index for intermediate unprocessed goods rose 3.9% in September, after rising 7.0% in August, falling 0.7% in July, rising a revised 4.0% in June and a revised 8.6% in May, but after falling 12.6% in April and 8.5% in March….that was even as the September price index for crude energy goods fell 0.7% as crude oil prices fell 9.8% while unprocessed natural gas prices rose 12.1%, as the price index for unprocessed foodstuffs and feedstuffs rose 5.6% on a 55.9% increase in producer prices for slaughter barrows and gilts, a 20.7% increase in producer prices for slaughter cattle and a 19.6% increase in producer prices for oilseeds…at the same time, the index for core raw materials other than food and energy materials rose 7.2%, as prices for iron and steel scrap and aluminum base scrap both rose 14.7% and the price index for nonferrous metal ores increased 7.0%….however, this raw materials index is still 5.4% lower than a year ago, as the year over year change on this index has been negative since the beginning of 2019…
Lastly, the price index for services for intermediate demand rose 1.0% in September, after rising 0.7% in August, 0.7% in July, and a revised 0.2% in June, after falling revised 0.3% in May, and falling 1.7% in April…the price index for intermediate trade services was 2.1% higher, as margins for intermediate hardware, building material, and supplies retailers rose 13.8% and margins for intermediate building materials, paint, and hardware wholesalers rose 4.5%…meanwhile, the index for transportation and warehousing services for intermediate demand was 0.9% higher, as the intermediate price index for arrangement of freight and cargo rose 11.8% and the intermediate price index for transportation of passengers (partial) rose 2.5%…at the same time, the core price index for intermediate services less trade, transportation, and warehousing was 0.6% higher, as the price index for gross rents for retail properties increased 7.9%, the price index for investment banking rose 8.9%, the intermediate price index for business loans (partial) rose 4.4%, the intermediate price index for traveler accommodation services rose 3.9%, and the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 2.9%…over the 12 months ended in September, the year over year price index for services for intermediate demand is now 0.3% higher than it was a year ago, the first positive annual change since it turned negative year over year in April for the first time in the history of this index.
See also:
Business Sales Rose 0.6% in August; Business Inventories Rose 0.3%
After the release of the September retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for August (pdf), which incorporates the revised August retail data from that September report and the earlier published August 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 $1,452.4 billion in August, up 0.6 percent (±0.1%) from July’s revised sales, but down 0.4 percent (±0.4 percent)* from August sales of a year earlier….note that total July sales were concurrently revised up from the originally reported $1,441.1 billion to $1,443.470 billion, now a 3.4% increase from June….manufacturer’s sales were 0.3% higher at $481,280 million in August, and retail trade sales, which exclude restaurant & bar sales from the revised August retail sales we reported earlier, were were 0.2% higher at $484,510 million, while wholesale sales were 1.4% higher at $486,636 million…
Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $1,919.2 billion billion at the end of August, up 0.3 percent (±0.1 percent) from July, but 5.5 percent (±0.3%) lower than in August a year earlier…the value of end of July inventories were revised to $1,914.2 billion from the $1,914.3 billion reported last month but is still a 0.1% increase from June…seasonally adjusted inventories of manufacturers were estimated to be valued at $686,554 million, statistically unchanged from July, while inventories of retailers were valued at $597,075 million, 0.4% more than in July, and inventories of wholesalers were estimated to be valued at $635,525 million at the end of August, also 0.4% higher than in July…
For GDP purposes, all inventories, including retail, are adjusted for inflation with appropriate component price indices of the producer price index…while we reviewed the September index above, the producer price index for August indicated that aggregate prices prices for finished goods were on average 0.1% higher, that prices for intermediate processed goods were 0.6% higher, while prices for unprocessed goods were 7.0% higher…retail inventories are all finished goods, as are about 70% of wholesale inventories, while factory inventories, which we looked at two weeks ago, are roughly evenly split between the three stages of production…hence, although the nominal value of August inventories was 0.3% higher, real inventories would have been little changed August, following an increase of around 0.4% in real July inventories…since the recent GDP report showed that real private inventories saw a substantial decrease in the second quarter, any real increase in real inventories over the 3rd quarter would thus have a substantial positive impact on 3rd quarter GDP, first by reversing the 2nd quarter drop, and then by incrementally adding to that by the amount of the 3rd quarter increase.
See also:
.
