Written by rjs, MarketWatch 666
January’s consumer prices, December’s wholesale trade and December’s JOLTS
Major reports released this week included the January Consumer Price Index and the January Import-Export Price Index from the Bureau of Labor Statistics, the December report on Wholesale Trade, Sales and Inventories from the Census Bureau, and the Job Openings and Labor Turnover Survey (JOLTS) report for December, also from the BLS.
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CPI Rose 0.3% in January on Higher Prices for Fuel, Clothing, and Medical Services
The consumer price index rose 0.3% in January, as higher prices for fuel, clothing, medical services and restaurant meals were only partly offset by lower prices for groceries, new & used vehicles, utilities and airline fares…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.3% higher in January, after rising by a revised 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, after falling by 0.1% in May, falling by 0.7% in April and by 0.3% in March, but after rising by 0.1% in February, and by 0.2% last January (all revised)….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 260.474 in December to 261.582 in January, which left it statistically 1.3998% higher than the 257.971 reading of January of last year, which is reported as a 1.4% year over year increase, the same year over year increase reported a month ago….with higher prices for gasoline a major factor in the overall index increase, seasonally adjusted core prices, which exclude food and energy, were unchanged for the month, as the unadjusted core price index rose from 269.226 to 269.755, which left the core index 1.4101% ahead of its year ago reading of 266.004, which is reported as a 1.4% year over year increase, down from the 1.6% the year over year core price increase that was reported for December…note that this release includes revisions to 2020’s monthly seasonal adjustment factors for each index, which does not affect any of the year over year changes in price indicated…
The volatile seasonally adjusted energy price index rose 3.5% in January, after rising by a revised 2.6% in December, 0.7% in November, 0.6% in October, 1.4% in September, 0.9% in August, 2.1% in July, and by 4.4% in June, but after falling by 2.3% in May, by 9.5% in April, 5.8% in March, 2.5% in February and by 0.3% last January, and hence is still 3.6% lower than in January a year ago…the price index for energy commodities was 7.3% higher in January, while the index for energy services was 0.3% lower, after rising 0.1% in December….the energy commodity index was up 7.3% on a 7.4% increase in the price of gasoline and a 5.4% increase in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 1.2% higher…within energy services, the price index for utility gas service fell 0.4% after falling 0.8% in December but is still 4.3% higher than it was a year ago, while the electricity price index fell 0.2% after rising 0.4% in December….energy commodities are still averaging 8.7% lower than their year ago levels, with gasoline prices also averaging 8.6% lower than they were a year ago, while the energy services price index is still up 2.1% from last January, as electricity prices are still 1.5% higher than a year ago…
The seasonally adjusted food price index rose 0.1% in January, after rising by a revised 0.3% in December, after being unchanged in November, rising 0.2% in October, rising 0.1% in August and in September, after falling 0.3% in July, rising 0.5% in June, 0.7% in May, 1.4% in April, 0.3% in March, 0.3% February, and by 0.2% last January, as the price index for food purchased for use at home was 0.1% lower in January, after rising 0.1% in December, while the index for food bought to eat away from home was 0.4% higher, as average prices at fast food outlets rose 0.6% and prices at full service restaurants rose 0.3%, while food prices at employee sites and schools averaged 4.7% lower…
In the food at home categories, the price index for cereals and bakery products was 0.8% lower as average bread prices fell 0.8%, the price index for breakfast cereal fell 0.7%, the price index for cookies fell 0.9% and the price index for frozen and refrigerated bakery products, pies, tarts, turnovers fell 3.5%…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.5% higher as the price index for beef and veal rose 1.1%, the price index for poultry rose 0.5%, and egg prices rose 1.1%…at the same time, the seasonally adjusted index for dairy products was 0.4% lower, as whole milk prices fell 1.2% and the index for cheese and related products was 0.4% lower….meanwhile, the fruits and vegetables index was 0.2% lower as the price index for fresh vegetables fell 1.5% and the price index for canned fruits fell 1.7%….on the other hand, the beverages price index was 0.1% higher as the price index for carbonated drinks rose 0.8% and the price index for coffee also rose 0.8%….lastly, the price index for the ‘other foods at home’ category was 0.3% lower, as the price index for sugar and sugar substitutes fell 2.5%, the price index for margarine fell 2.9%, the price index for snacks fell 1.8%, and the price index for soups fell 3.0%…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 January, there are no food line items showing a price change greater than 10% over the past year…
Among the seasonally adjusted core components of the CPI, which was unchanged in January after being unchanged in December, after rising by 0.2% in November, by 0.1% in October, by 0.2% in September, by 0.3% in August, by 0.5% in July and by 0.2% in June, after falling by 0.1% in May, by 0.4% in April and being unchanged in March, but after rising by 0.2% in February, and 0.2% last January, the composite price index of all goods less food and energy goods was 0.1% higher in December, 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 January’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 major appliances fell 1.3%, the price index for furniture and bedding fell 0.5%, and the price index for outdoor equipment and supplies fell 2.5%….on the other hand, the apparel price index was 2.2% higher on a 5.3% increase in the price index for men’s pants and shorts, a 5.5% increase in the price index for women’s suits and separates, a 2.1% increase in the index for women’s outerwear, a 6.2% increase in the price index for girls’ apparel, and a 3.4% increase in the price index for boys’ apparel….however, the price index for transportation commodities other than fuel was 0.6% lower as prices for new cars fell 0.5%, prices for new trucks fell 0.6% and prices for used cars and trucks fell 0.9%…meanwhile, the price index for medical care commodities 0.1% lower, as prescription drug prices fell 0.5% and nonprescription drug prices fell 1.1% while the price index for medical equipment and supplies rose 3.5%…on the other hand, the recreational commodities index was 0.1% higher on a 0.7% increase in TV prices, a 2.2% increase in the price index for other video equipment, a 3.3% increase in the price index for audio equipment, a 2.1% increase in the price index for newspapers and magazines, and a 1.3% increase in the price index for sports equipment…at the same time, the education and communication commodities index was 0.6% lower on a 3.1% decrease in the price index for telephone hardware, calculators, and other consumer information items and a 1.2% decrease in the price index for computer software and accessories….lastly, a separate price index for alcoholic beverages was 0.1% lower, while the price index for ‘other goods’ was up 1.1% on a 1.3% increase in the price index for stationery, stationery supplies, gift wrap, etal and a 1.8% increase in cigarette prices…
Within core services, the price index for shelter was 0.1% higher as rents and homeowner’s equivalent rent were both 0.1% higher, while prices for lodging away from home at hotels and motels fell 2.2%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.4% and other household operation costs were on average 0.7% higher on a 1.3% increase in domestic services and a 2.0% increase in moving, storage, freight expense….meanwhile, the price index for medical care services was 0.5% higher, as the price index for physicians’ services rose 1.6% and the price index for services by other medical professionals also rose 1.6%….on the other hand, the transportation services price index was 0.3% lower even though vehicle insurance costs rose 1.6% as airline fares fell 3.2%, car and truck rentals fell 1.1%, and the price index for intracity mass transit fell 0.6%…at the same time, the recreation services price index fell 1.0% as the index for cable and satellite television service fell 0.4% and the index for admissions to movies, concerts and sporting events fell 5.5%….meanwhile, the index for education and communication services was unchanged as the price index delivery services rose 0.6% and the price index for internet services and electronic information providers fell 0.4%…lastly, the index for other personal services was down 0.3% as the price index for checking accounts and other bank services fell 11.2% while the price index for laundry and dry cleaning services was 0.7% higher…
Among core line items, the price index for telephone hardware, calculators, and other consumer information items, which is now down by 17.8% since last January, the price index for men’s suits, sport coats, and outerwear, which is still down 15.6% from a year ago, the price index for women’s dresses, which has fallen by 11.6% in the past year, the price index for checking account and other bank services, which is down by 13.1% from a year ago, the price index for lodging away from home including hotels and motels, which has fallen by 13.3% in the past year, the price index for admission to sporting events, which is down by 21.4% from a year ago, and airline fares, which are now down by 21.3% since last January, have all seen prices drop by more than 10% over the past year, while the price index for used cars and trucks, which has risen 10.0% from a year ago, and the price index for major appliances, which is up 15.8% from last January, are the only line items to have increased by a double digit magnitude over that span.
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Job Openings and Job Quitting Up In December; Hiring and Layoffs Down
The Job Openings and Labor Turnover Survey (JOLTS) report for December from the Bureau of Labor Statistics estimated that seasonally adjusted job openings increased by 74,000, from 6,572,000 in November to 6,646,000 in December, after November’s job openings were revised 45,000 higher, from 6,527,000 to 6,572,000….December’s jobs openings were also 1.4% higher than the 6,552,000 job openings reported in December a year ago, and the most since July, as the job opening ratio expressed as a percentage of the employed at 4.5% was up from the 4.4% ratio logged in November, and up from 4.1% in December a year ago…the professional and business services sector, with a 296,000 job opening increase to 1,523,000 openings, saw the largest percentage increase, while the arts, entertainment, and recreation sector saw job openings decrease by 50,000 to 66,000 (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 to 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 December, seasonally adjusted new hires totaled 5,539,000, down by 396,000 from the revised 5,935,000 who were hired or rehired in November, as the hiring rate as a percentage of all employed fell from 4.2% in November to 3.9% in December, which was the same as in December a year earlier (details of hiring by sector since August are in table 2)….meanwhile, total separations fell by 63,000, from 5,523,000 in November to 5,460,000 in December, as the separations rate as a percentage of the employed rose fell to 3.8% in November from 3.9% in December, the same rate as in December a year ago (see table 3)…subtracting the 5,460,000 total separations from the total hires of 5,539,000 would imply an increase of 79,000 jobs in December, far off from the revised payroll job decrease of 277,000 for December reported in the January establishment survey of 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 3,286,000 of us voluntarily quit our jobs in December, up by 106,000 from the revised 3,180,000 who quit their jobs in November, while the quits rate, widely watched as an indicator of worker confidence, rose by 0.1% to 2.3% of total employment, the same at it was a year earlier (see details in table 4)….in addition to those who quit, another 1,812,000 were either laid off, fired or otherwise discharged in December, down by 243,000 from the revised 2,055,000 who were discharged in November, as the discharges rate fell from 1.4% to 1.3% of all those who were employed during the month, which was still up from the discharges rate of 1.2% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 362,000 in December, up from 288,000 in November, for an ‘other separations rate’ of 0.3%, up from 0.2% in November and up from 0.2% in December 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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December Wholesale Sales Up 1.2%; Wholesale Inventories Up 0.3%
The December report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $503.8 billion, up 1.2 percent (±0.4 percent) from the revised November level, and up 1.7 percent (±1.2 percent)* from wholesale sales of December 2019… the November preliminary estimate was revised up to $497.6 billion from the $496.7 billion in sales reported last month, which is now 0.3% more than October sales…as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold….
On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods on the shelf or in intermediate storage represent goods that were produced but not sold, and this December report estimated that wholesale inventories were valued at a seasonally adjusted $651.5 billion at month end, up 0.3 percent (±0.4 percent)* from the revised November level but 1.6 percent (±0.9 percent) lower than in December a year ago, with the November preliminary estimate revised lower, from $649.8 billion to $649.5 billion at the same time, now statistically unchanged from October….
In the advance report on 4th quarter GDP of two weeks ago, wholesale inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories which was released the day before the GDP release…that report estimated that our seasonally adjusted wholesale inventories were valued at $650.4 billion at the end of December, up from $649.6 billion in November….that’s $1.1 billion less than the $651.5 billion that this report shows, which would imply that the quarterly change in 4th quarter wholesale inventories was underestimated at roughly a $4.4 billion annual rate…assuming there’s no distortion caused by reweighting the inflation adjustments to those inventories, that would mean that the growth rate of 4th quarter GDP was underestimated by around 0.09 percentage points based on what this report shows.
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