April’s consumer and producer prices, retail sales, and industrial production; March business inventories and JOLTS, Commenter RJS, Market Watch 666

Producer Prices rose 0.6% in April on Higher Wholesale Food Prices, Wider Margins for Transportation Services

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.6% in March, as prices for both finished wholesale goods and margins of final services providers rose 0.6%. That increase followed a March report that had the PPI 1.0% higher, as prices for finished wholesale goods rose 1.7% while margins of final services providers rose 0.7%, a February report that the PPI was 0.5% higher, with prices for finished wholesale goods on average 1.4% higher, while margins of final services providers increased by 0.1%, a revised January report that still has the PPI 1.3% higher, with average prices for finished wholesale goods now rising 1.6%, while margins of final services providers increased by 1.1%, and a re-revised December report that indicates the PPI was up 0.3%, with prices for finished wholesale goods up 0.9% while margins of final services providers were unchanged on an unadjusted basis, producer prices are now 6.2% higher than a year ago, up from the 4.2% 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 0.7% for the month, and is now 4.6% higher than in April a year ago, up from the 3.1% year over year increase as was shown in February…

Credits: Reuben Walker, animation and music. Tom Walker, concept and design. Charles Wentworth Dilke, Sydney John Chapman, and Arthur Olaus Dahlberg, analysis and inspiratio.

New jobless claims continue to improve, while continuing claims concerningly stall

New jobless claims continue to be the most important weekly economic datapoint, as increasing numbers of vaccinated people and outdoor activities have led to an abatement of the pandemic – both new infections and deaths are near their lowest points in a year. 

We have hit my objective for new claims to be under 500,000 by Memorial Day. My second objective is for them to be below 400,000 by Labor Day. 

New jobless claims declined 34,000 to 473,000. On a unadjusted basis, new jobless claims declined 26,286 to 487,436. The 4 week average of claims also declined by 28,250 to 534,000. All of these were new pandemic lows.
Here is the trend since last August: 

April retail sales “disappoint,” but maintain almost all of March’s surge

[Note: I’ll comment on industrial production in a separate post later]

At first glance, April’s retail sales report looks like another Big Miss. Nominally (blue) sales increased less than 0.1% (rounded to unchanged). Adjusted for inflation (red), they declined -0.7%:

But the important point is that the big jump in March didn’t get taken back.  As I wrote last month: “if the big March gain in sales isn’t taken back in the next month or two, then there’s likely to be a similarly large jump in employment by the end of summer.” Further, as I wrote a couple days ago in response to the inflation report, I fully expected the big jump in sales and income fueled by stimulus payments to peter out over the next few months, just as they did last year.

April’s consumer and producer prices, retail sales, and industrial production; March business inventories and JOLTS, Commenter RJS, Market Watch 666

Retail Sales Unchanged in April after Big Revisions to Prior Months’ Sales

Seasonally adjusted retail sales were statistically unchanged in April, after retail sales March were revised higher, while sales for February were revised much lower. The Advance Retail Sales Report for April (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $619.9 billion for the month, which was virtually unchanged (±0.5 percent)* from revised March sales of $619.8 billion, but 51.2 percent (± 0.7 percent) above the adjusted sales of April of last year.

March sales were originally reported at $619.1 billion, up 9.8% from February; they are now indicated to have risen 10.7% to $619.8 billion because February adjusted sales were concurrently revised from $563.7 billion to $559.97 billion. The net of those revisions to February and March sales would reduce first quarter sales by about a $12 billion annual rate and subtract about 0.24 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 2.1%, from $629,941 million in March to $616,697 million in April, while they were up 51.4% from the $407,227 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

For just a pocketful of Russia’s rubles, Putin facilitated Brexit, doing irreparable harm to the UK and the EU. With what was left over, he did enormous harm to the US, and weakened NATO. No shots were fired, no missiles were launched, and no missions were flown. No weapons that go bang were deployed, and not a single Russian boot trod foreign soil. Putin did more damage with that pocketful of change than his army could have ever done. Yet, the United States continues to spend $billions upon $billions on weapons, troop readiness; and military adventures. China will not be fighting any boots on the ground war, nor one with missiles launched, with the US. China is not stupid. Only the US would be so stupid.

Back when, Ike tried to warn us. Today, we see the rows of generals and admirals lined up to testify before Congress, on CNN and Fox, … , as to the need for more generals and admirals, land, air, sea and space forces. Theirs is also those of the defense contractors. Shills for one another, where would they be without us. Where would Alabama, Texas, Louisiana, Georgia, Virginia, and South Carolina be without them.

Why waste good money on diplomacy when we can spend $billions on less effective troops, ships, planes and missiles? If economics is at the heart of any war; armed conflict represents a complete lack of understanding of the both.

Taking out socialists governments is good for American businesses. So is installing and propping up tin-horned dictators. Worked like a charm in Latin America and in the Middle East. One only need look to Afghanistan, Venezuela, Chile, Cuba, … today. Well, it possibly could have. What if, America?

September 1, 1939, Nazi Germany invades Poland. Poland met Hitler’s armies with its cavalry, that’s cavalry as in men on horses. Is what we’re doing any less foolish?

Weekly Indicators for May 10 – 14 at Seeking Alpha

 by New Deal democrat

My Weekly Indicators post is up at Seeking Alpha.

The big news in this past week, even though it has been expected for several months, was on the inflation front. That doesn’t affect the nowcast, and hasn’t affected the short term forecast yet. The long term forecast continues to be buffetted by increased interest rates.

In my commentary this week, I make reference to supply constraints. I bring this up here because I read a tweet today by someone whose political analysis I respect, showing a graph of the spike in lumber prices, and stating that lumber was “in a bubble.”

No it’s not. The defining feature of a bubble is speculation on the continuing increase in prices. Fifteen+ years ago it was “everyone knows real estate only goes up!” In 1999 it was “everyone knows these internet companies are going to completely take over commerce!” In 1929 it was “stock prices have reached a permanently high level!” In the 1700s it was “the price of land in the Mississippi Valley is going to explode!” – which was sort of correct, but it took 200 years to happen. As they say, “being early” is a synonym for “being wrong.”

What is happening with lumber, and computer chips, is similar to what happened during the Oil Embargo of the 1970s. This is a supply constraint. Product cannot (in the 1970s, would not) be supplied fast enough to meet the demand. So the way the product gets rationed is to raise prices until enough buyers stop buying.Whether it is a significant problem or not depends upon how quickly the pace of supply can be increased, a question that I do not pretend to know the answer to.

In any event, as usual, clicking over and reading will bring you up to the virtual moment, and bring me my lunch money.

April Industrial Production slightly disappoints – but only due to supply chain bottlenecks

Industrial production is the King of Coincident Indicators, and is the one whose peaks and troughs most frequently mark the beginning and end of recessions. It had been bouncing back strongly, but in the last several months, has hit something of a snag.

In April, total production increased 0.7%, while manufacturing production increased 0.4%:

Both of these, however, remain slightly below January’s levels, and -2.7% and -1.4% respectively below their February 2020 peak just before the pandemic hit.

Trade Deficit Increases 5.6% to Record High in March on Rising Imports of Consumer Goods, MarketWatch666, Commenter RJS

Our trade deficit was at another record high in March, 5.6% higher than in February, as both our imports and exports increased, but our imports increased by more. The Commerce Department’s report on our international trade in goods and services for March indicated that our seasonally adjusted goods and services trade deficit rose by $3.9 billion to $74.4 billion in March, from a February deficit that was revised from the originally reported record $71.1 billion to $70.5 billion. In rounded totals, the value of our March exports rose by $12.4 billion to $200.0 billion on a $11.7 billion increase to $142.9 billion in our exports of goods and a $0.8 billion increase to $57.1 billion in our exports of services, while our imports rose by $16.4 billion to $274.5 billion on a $15.3 billion increase to $234.4 billion in our imports of goods and a $1.1 billion increase to $40.0 billion in our imports of services. Export prices averaged 2.1% higher in March, which means the change in our real exports was less than than the nominal increase by that percentage, while import prices were 1.2% higher, meaning that our real imports were likewise smaller than than their nominal value by that percentage…

“Ambivalence” has dropped!

 Two things I am especially pleased about that were sort of incidental at the time:

1. The prominence in the title of “Ambivalence” — the future is ambivalent — and

2. The ending quote by Benjamin of a quote about stereoscopic vision. 

The “author’s original version” can be downloaded from his drop box .