Written by rjs, MarketWatch 666
October’s consumer price and producer price indexes, September’s job openings and labor turnover
The major reports released this past week were the October Consumer Price Index, the October Producer Price Index, and the Job Openings and Labor Turnover Survey (JOLTS) for September, all from the Bureau of Labor Statistics.
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CPI Unchanged in October as Higher Rents and Airfares Offset Lower Prices for Clothing and Gasoline
The consumer price index was unchanged in October, as higher prices for housing, new vehicles, airline fares, and restaurant meals were offset by lower prices for clothing, gasoline, household furnishings, and medical services…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that average seasonally adjusted prices were unchanged in October after rising by by 0.2% in September, 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, and rising by 0.2% last October….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 260.280 in September to 260.388 in October, which left it statistically 1.182% higher than the 257.346 reading of October of last year, which is reported as a 1.2% year over year increase, down from the 1.3% year over year increase reported a month ago….with higher prices for food services offset by lower prices for fuels, seasonally adjusted core prices, which exclude food and energy, were also unchanged for the month, as the unadjusted core price index rose from 269.054 to 269.328, which left the core index 1.6106% ahead of its year ago reading of 265.059, which is reported as a 1.6% year over year increase, down from the 1.7% the year over year core price increase that was reported for September…
The volatile seasonally adjusted energy price index rose 0.1% in October, after rising 0.8% in September, 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% last October, and is still 9.2% lower than in October a year ago…the price index for energy commodities was 0.5% lower in October, while the index for energy services was 0.8% higher, after rising 1.6% in September….the energy commodity index was down 0.5% on a 0.5% decrease in the price of gasoline and a 0.3% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.9% higher…within energy services, the price index for utility gas service fell 0.7% after rising 4.2% in September and is still 1.8% higher than it was a year ago, while the electricity price index rose 1.2% after rising 0.9% in September….energy commodities are averaging 18.1% lower than their year ago levels, with gasoline prices averaging 18.0% lower than they were a year ago, while the energy services price index is now up 1.4% from last October, as electricity prices are also 1.3% higher than a year ago…
The seasonally adjusted food price index rose 0.2% in October, after being unchanged in September, 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 0.1% higher in October, after falling 0.4% in September, while the index for food bought to eat away from home was 0.3% higher, as average prices at fast food outlets and at full service restaurants both rose 0.3%, and while food prices at employee sites and schools averaged 0.1% higher…
In the food at home categories, the price index for cereals and bakery products was 0.3% higher as average bread prices rose 0.7%, the price index for fresh sweetrolls, coffeecakes, and doughnuts rose 1.5%, the price index for cookies rose 2.1%, and the price index for flour and prepared flour mixes rose 1.1%….at the same time, the price index for the meats, poultry, fish, and eggs group was 0.4% higher as the price index for beef and veal rose 0.7%, egg prices rose 1.5%, and the price index for pork was 1.3% higher…on the other hand, the seasonally adjusted index for dairy products was 0.9% lower, as milk prices fell 2.5% and the index for ice cream and related products was 1.9% lower….meanwhile, the fruits and vegetables index was 0.1% higher as the price index for fresh fruits rose 0.2% on a 3.0% increase in apple prices and the price index for fresh vegetables rose 0.2% on a 7.2% increase in lettuce prices…at the same time, the beverages price index was 0.1% lower as the price index for noncarbonated juices and drinks fell 0.6% and the price index for beverage materials including tea fell 1.2%….lastly, the price index for the ‘other foods at home’ category was 0.3% higher, as peanut butter prices rose 3.4%, the price index for salt and other seasonings and spices rose 1.1%, and the price index for sugar and sugar substitutes rose 2.8%…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 September, the price index for uncooked beef roasts has risen 11.9%, the price index for pork roasts, steaks, and ribs is up 10.4%, the price index for poultry other than chicken is 11.3% higher, the price index for frankfurters is up 10.4% over the year, lettuce prices have risen 10.5%, tomato prices have risen 10.3%, while the 3.2% decrease in apple 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 was unchanged in October, after rising by 0.2% in September, 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% last October, 0.2% and by 0.2% last September, the composite price index of all goods less food and energy goods was 0.2% lower in October, while the more heavily weighted composite for all services less energy services was 0.1% higher….
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 0.5% lower, as the price index for furniture and bedding fell 0.4%, the price index for window and floor coverings fell 1.5%, and the price index for dishes and flatware decreased by 4.1%….at the same time, the apparel price index was 1.2% lower on a 6.3% decrease in the price index for men’s suits, sport coats, and outerwear, a 2.9% decrease in the price index for men’s shirts and sweaters, a 3.6% decrease in the price index for girls’ apparel, and a 3.4% decrease in the price index for infants’ and toddlers’ apparel…on the other hand, the price index for transportation commodities other than fuel was 0.2% higher, as new truck prices rose 0.7%, prices for new cars rose 0.1% and the price index tires rose 0.3%….however, prices for medical care commodities 0.8% lower, as non-prescription drug prices fell 1.3% and the price index for medical equipment and supplies fell 1.4%…meanwhile, the recreational commodities index was 0.1% lower on a 0.4% decrease in TV prices, a 1.4% decrease in the price index for pets, pet supplies, accessories, a 1.0% decrease in the price index for photographic equipment, and a 1.5% decrease in the price index for sports equipment…at the same time, the education and communication commodities index was 0.2% lower on a 0.5% decrease in the price index for computers, peripherals, and smart home assistants and a 0.1% decrease in the price index for telephone hardware, calculators, and other consumer information items…lastly, a separate price index for alcoholic beverages was 0.3% higher, while the price index for ‘other goods’ was down 0.1% on a 0.4% decrease in the price index for hair, dental, shaving, and miscellaneous personal care products..
Within core services, the price index for shelter was 0.1% higher as rents rose 0.2% and homeowner’s equivalent rent rose 0.2% while prices for lodging away from home at hotels and motels fell 3.7%, 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 0.3% higher on a 1.2% increase in domestic services….meanwhile, the price index for medical care services was 0.3% lower, as the price index for hospital services fell 0.6% and the price of health insurance fell 1.2%… however, the transportation services price index was 0.1% higher as airline fares rose 6.3% and car and truck rentals rose 7.4% while vehicle insurance costs fell 2.3% and the price index for intracity mass transit fell 9.3%…meanwhile, the recreation services price index rose 0.7% as the index for photo processing rose 3.2%, the index for pet services rose 0.8% and the index for admissions to movies, concerts and sporting events rose 1.0%….at the same time, the index for education and communication services was 0.1% higher as the price index for technical and business schools tuition and fees rose 0.6% and the price index for land line telephone services rose 1.9%…lastly, the index for other personal services was down 0.1% as the price index for checking account and other bank services fell 3.2% and the price index for apparel services other than laundry and dry cleaning was 0.2% lower…
Among core line items, prices for televisions, which are still averaging 10.4% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 12.5% since last October, the price index for computer software and accessories, which is down 13.4% year over year, the price index for men’s suits, sport coats, and outerwear, which has fallen 23.4% from a year ago, the price index for women’s dresses, which has fallen by 16.5% in the past year, the price index for men’s shirts and sweaters, which is down by 12.4% from a year ago, the price index for boys’ apparel, which has fallen by 10.1% in the past year, the price index for lodging away from home including hotels and motels, which has fallen by 15.9% in the past year, and airline fares, which are now down by 20.0% since last October, have all seen prices drop by more than 10% over the past year, while the cost of health insurance, which is still up by 10.2% over the past year, the price index for used cars and trucks, which has risen 11.5% from a year ago, the price index for infant’s equipment, which is up by 11.3% year over year, and the price index for major appliances, which is up 13.7% from last October, are the only line items to have increased by a double digit magnitude over that span.
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Producer Prices rose 0.3% in October on Higher Wholesale Food & Energy Prices and Higher Margins for Transportation Services
The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.3% in October, as prices for finished wholesale goods averaged 0.5% higher while margins of final service providers averaged 0.2% higher….that followed a September report that showed the PPI rose 0.4%, as prices for both finished wholesale goods and margins of final service providers averaged 0.4% higher, 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 revised July report that now has the PPI 0.4% higher, as prices for finished wholesale goods averaged 0.9% higher while margins of final service providers averaged 0.3% higher, and a re-revised June report that has the PPI 0.3% higher, as prices for finished wholesale goods averaged 0.4% higher, while margins of final service providers averaged 0.2% higher….on an unadjusted basis, producer prices are now 0.5% higher than a year ago, up from the 0.4% year over year increase indicated by last month’s report, while the core producer price index, which excludes food, energy and trade services, rose by 0.2% for the month, and is now 0.8% higher than in October a year ago, up from the 0.7% year over year increase shown in September…
As noted, the price index for final demand for goods, aka ‘finished goods’, was 0.5% higher in October, after being 0.4% higher in September, 0.1% higher in August, 0.9% 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, a 0.5% higher in October of last year….the finished goods index rose 0.5% in October because the price index for wholesale energy goods was 0.8% higher, after it had fallen by 0.3% in September, 0.1% in August, risen by 5.4% in July, by 9.6% in June and 4.3% in May, and because the price index for wholesale foods rose 2.4%, after rising by 1.2% in September, falling 0.4% in August, 0.5% in July, and a revised 4.9% in June, while the index for final demand for core wholesale goods (excluding food and energy) was unchanged, after being 0.4% higher in September and 0.3% higher in July and August….wholesale energy prices averaged 0.8% higher due to a 5.5% increase in wholesale prices for gasoline, a 2.5% increase in wholesale prices for LP gas, and a 3.0% increase in wholesale prices for No.2 diesel fuel, while the wholesale food price index rose 2.4% on a 25.5% increase in wholesale prices for fresh eggs, a 26.8% increase in the wholesale price index for fresh and dry vegetables, and a 6.7% increase in the wholesale price index for grains….among wholesale core goods, the wholesale price index for metal forming machine tools rose 3.3% and the wholesale price index for mobile homes rose 6.6% while the wholesale price index for light trucks fell 1.1% and the wholesale price index for passenger cars fell 0.8%,,…
At the same time, the index for final demand for services rose 0.2% in October, after rising 0.4% in September, 0.5% in August, and a revised 0.2% in both June and July, as the index for final demand for trade services rose 0.2%, the index for final demand for transportation and warehousing services rose 1.1%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.1% higher… among trade services, seasonally adjusted margins for RVs, trailers, and campers retailers rose 9.9%, margins for hardware, building materials, and supplies retailers rose 7.3%, margins for auto parts and tire retailers rose 4.5%, and margins for fuels and lubricants retailers rose 2.2%… among transportation and warehousing services, margins for airline passenger services rose 1.2% while margins for truck transportation of freight rose 1.3%…among the components of the core final demand for services index, the index for arrangement of cruises and tours rose 13.4%, the index for securities brokerage, dealing, investment advice, and related service rose 3.1%, and margins for tax preparation and planning also rose 3.1%, while margins for gaming receipts (partial) fell 6.7%…
This report also showed the price index for intermediate processed goods rose 0.3% in October, after rising 1.0% in September, 0.6% in August, 1.5% in July, and 1.3% in June, but after being unchanged in May and falling the prior 5 months….the price index for intermediate energy goods fell 0.3%, as producer prices for natural gas sold to electric utilities fell 10.6% and producer prices for natural gas sold to industry fell 6.4%, while refinery prices for gasoline rose 5.5%… meanwhile, the price index for intermediate processed foods and feeds rose 2.2%, as the producer price index for meats rose 3.7%, the producer price index for fats and oil rose 2.7% and the producer price index for prepared animal feeds rose 3.4%…at the same time, the core price index for intermediate processed goods less food and energy rose 0.2% as the producer price index for plywood rose 7.3%, the producer price index for building paper and board rose 7.7%, and the producer price index for secondary nonferrous metals rose 3.7%…however, prices for intermediate processed goods are still 1.5% lower than in September a year ago, the 18th 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 2.6% in October, after rising 3.9% in September, 7.0% in August, falling a revised 1.8% in July and rising a revised 5.1% in June and 8.6% in May, but after falling 12.6% in April and 8.5% in March….that was as the October price index for crude energy goods rose 4.5% as crude oil prices rose 13.8% while unprocessed natural gas prices fell 4.6%, and as the price index for unprocessed foodstuffs and feedstuffs rose 2.3% despite an 18.4% drop in the price of raw milk, as producer prices for slaughter hogs rose 14.2%, producer prices for slaughter chickens rose 11.2%, and producer prices for wheat rose 10.1%…at the same time, the index for core raw materials other than food and energy materials rose 0.6%, as producer prices for hides and skins rose 28.7% and the producer price index for logs, bolts, timber, pulpwood, and woodchips increased 2.5%….however, this raw materials index is still 3.4% 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 0.8% in October, after rising 1.0% in September, 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 1.1% higher, as margins for intermediate automotive parts, including tires, retailers rose 4.5% and margins for intermediate metals, minerals, and ores wholesalers rose 8.3%…meanwhile, the index for transportation and warehousing services for intermediate demand was 1.6% higher, as the intermediate price index for arrangement of freight and cargo rose 17.3% and the intermediate price index for truck transportation of freight rose 1.3%…at the same time, the core price index for intermediate services less trade, transportation, and warehousing was 0.5% higher, as the price index for broadcast and network television advertising time rose 15.0%, the price index for internet advertising space sales, excluding internet ads sold by print publishers rose 7.5%, and the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 3.1%…over the 12 months ended in October, the year over year price index for services for intermediate demand is now 1.6% higher than it was a year ago, the second positive annual change since it turned negative year over year in April for the first time in the history of this index.
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Job Openings and Job Quitting Higher in September, Hiring Down, Layoffs at a Record Low
The Job Openings and Labor Turnover Survey (JOLTS) report for September from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 84,000, from 6,352,000 in August to 6,436,000 openings in September, after August job openings were revised 141,000 lower, from 6,493,000 to 6,352,000…September jobs openings were still 8.7% lower than the 7,046,000 job openings reported in September a year ago, as the job opening ratio expressed as a percentage of the employed was unchanged at 4.3% in September, while it was down from 4.4% in September a year ago…largest percentage job opening changes included a 41,000 job opening increase to 279,000 openings in the transportation, warehousing, and utility sector and a 52,000 decrease to 653,000 openings in retail (see table 1 for more details)…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 September, seasonally adjusted new hires totaled 5,871,000, down by 119,000 from the revised 5,952,000 who were hired or rehired in August, as the hiring rate as a percentage of all employed fell to 4.1% in September from 4.2% in August, while it was up from the 3.9% rate in September a year earlier (details of hiring by sector since March are in table 2)….meanwhile, total separations fell by 25,000, from 4,689,000 in August to 4,664,000 in September, while the separations rate as a percentage of the employed remained unchanged at 3.3%, while it was down from 3.8% in September a year ago (see table 3)…subtracting the 4,664,000 total separations from the total hires of 5,871,000 would imply an increase of 1,207,000 jobs in September, quite a bit more than the revised payroll job increase of 672,000 for September reported in the October establishment survey last week, with at least some of that difference likely due to the difference in the date of the surveys, which is at month end for this report but is during the week of the 12th for the employment situation……
Breaking down the seasonally adjusted job separations, the BLS finds that 3,018,000 of us voluntarily quit our jobs in September, up from the revised 2,839,000 who quit their jobs in August, while the quits rate, widely watched as an indicator of worker confidence, rose from 2.0% of total employment in August to 2.1% in September, which was still down from 2.3% a year earlier (see job details in table 4)….in addition to those who quit, another 1,333,000 were either laid off, fired or otherwise discharged in September, down by 200,000 from the revised 1,533,000 who were discharged in August and the lowest on record, as the discharges rate fell from 1.1% to a record low at 0.9% of all those who were employed during the month, which was also down from the discharges rate of 1.3% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 314,000 in September, down from 317,000 in August, for an ‘other separations rate’ of 0.2%, which was unchanged from August and from September 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.
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