Producer Price Index YoY Records for Final Demand and Intermediate Services; 46 year High for Intermediate Goods, 48 year High for Raw Materials

Commenter RJS and MarketWatch 666 blogger

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.8% in April, as prices for finished wholesale goods rose 1.5% while margins of final services providers rose 0.6%…that increase followed an April report that the PPI was 0.6% higher, as prices for both finished wholesale goods and margins of final services providers rose 0.6%, 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 revised February report that now has the PPI 0.6% higher, with prices for finished wholesale goods on average 1.4% higher, while margins of final services providers increased by 0.2%, and a re-revised January report that now has the PPI 1.2% higher, with average prices for finished wholesale goods rising 1.6%, while margins of final services providers increased by 1.0%….on an unadjusted basis, producer prices are now a record 6.8% higher than a year ago, up from the 6.2% 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 5.3% higher than in May a year ago, up from the 4.6% year over year increase as was shown in April . . .

Commenter RJS and MarketWatch 666 blogger

Seasonally adjusted retail sales fell 1.3% in May after retail sales for April were revised 1.4% higher . . . the Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $620.2 billion for the month, which was a decrease of 1.3 percent (±0.5%) from April’s revised sales of $628.7 billion, but 28.1 percent (±0.7 percent) above the adjusted sales of May of last year…April’s seasonally adjusted sales were revised from the $619.9 billion reported last month to $628.7 billion, while March sales were revised from $619.8 billion to $623.12 billion, which meant that March to April percent change was revised from virtually unchanged (±0.5%) to an increase of 0.9 percent (± 0.2 percent) . . . the $3.3 billion upward revision to March sales should increase nominal first quarter PCE at around a $13 billion annual rate and add about 0.23 percentage points, give or take, to 1st quarter GDP when the 3rd estimate is released at the end of the month . . . estimated sales before seasonal adjustments, which were extrapolated from surveys of a small sampling of retailers, indicated sales actually rose 3.0% before the adjustment, from $625,636 million in April to $644,362 million in May, while they were up 27.7% from the $504,607 million in actual sales of May a year ago . . .

Included below is the table of the monthly and yearly percentage changes in sales by business type taken from the Census pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from April to May in the first sub-column, and then the year over year percentage change for those businesses since last May in the 2nd column; the second pair of columns gives us the revision of last month’s April advance monthly estimates (now called “preliminary”) as revised with this report, likewise for each business type, with the March to April change under “Mar 2021 r” (revised) and the revised April 2020 to April 2021 percentage change in the last column shown…for your reference, our copy of the table of last month’s advance April estimates, before this month’s revision, is here . . .

Record High Job Quitting; Record Low Layoff Rate, MarketWatch 666, AB Commenter and Blogger RJS

The Job Openings and Labor Turnover Survey (JOLTS) report for April from the Bureau of Labor Statistics estimated seasonally adjusted job openings jumped by by 998,000, from 8,288,000 in March to 9,286,000 job openings in April, after March’s record job openings were revised 165,000 higher, from 8,123,000 to 8,288,000 . . . April’s jobs openings were up by 37.5% from the beginning of this year, and also more than double the 4,630,000 job openings reported for April a year ago, as the job opening ratio expressed as a percentage of the employed rose from 5.4% in March to 6.0% in April, and it was up from 3.4% a year ago . . . the greatest percentage increase in April job openings was in the accommodation and food services sector, where openings jumped by 349,000 to 1,338,000, while job openings in private educational services services fell by 23,000 to 883,000… (details on job openings by industry and region can be viewed in Table 1) . . . 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 . . .

CPI Rose 0.6% in May on Higher Prices for New and Used Vehicles, Clothing, and Airfares; Now Up 5% Year over Year, MarketWatch666, Commenter RJS

The consumer price index rose 0.6% in May, as higher prices for new and used vehicles, clothing, airfares, car and truck rentals, and utilities were only slightly offset by lower prices for gasoline and for health insurance…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.6% higher in May, after rising by 0.8% in April. 0.6% in March, 0.4% in February, 0.3% in January, 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, but after falling by 0.1% last May….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 267.054 in April to 269.195 in May, which left it statistically 4.9927% higher than the 256.394 index reading of May of last year, which is reported as a 5.0% year over year increase, up from the 4.2% year over year increase reported a month ago, and the largest annual increase since 2008…with lower prices for gasoline holding back the overall index increase, seasonally adjusted core prices, which exclude food and energy, were up by 0.7% for the month, as the unadjusted core price index rose from 273.968 to 275.893, which left the core index 3.7976% ahead of its year ago reading of 265.799, which is reported as a 3.8% year over year increase, up from the 3.0% year over year core price increase that was reported for March, and the largest year over year core price index increase since May 1992 . . .

April Trade Deficit Decreased 8.2% on Lower Imports of Consumer Goods and Automotives, Commenter and blogger RJS

Our trade deficit was 8.2% lower in April, as our exports increased and our imports decreased . . . the Commerce Dept report on our international trade in goods and services for April, incorporating an annual revision, indicated that our seasonally adjusted goods and services trade deficit fell by a rounded $6.1 billion to $68.9 billion in April, from a March deficit that was revised from the originally reported $74.4 billion to $75.0 billion, a revision which should result in an downward revision of about 0.10 percentage points to 1st quarter GDP when the third estimate is released at the end of June; however, this month’s report also reflects revised statistics on trade in goods on both a Census basis and a balance of payments (BOP) basis going back to 2016, and revised statistics on trade in services beginning with 2013, so the 4th quarter basis for the 1st quarter’s growth in trade will also need to be revised to determine the ultimate impact on 1st quarter GDP, and the BEA will not make that revision till the annual revision to GDP is released at the end of July . . .

In rounded figures, the value of our April exports rose by $2.3 billion, or 1.1%, to $205.0 billion, on a $1.6 billion increase to $145.3 billion in our exports of goods and a $0.7 billion increase to $59.7 billion in our exports of services, while our imports fell by $3.8 billion, or 1.4% to $273.9 billion on a $4.5 billion decrease to $232.0 billion in our imports of goods, which was partly offset a $0.7 billion increase to $41.9 billion in our imports of services…export prices averaged 0.8% higher in April, which means the change in our real exports was less than than the nominal increase by roughly that percentage, while import prices were 0.7% higher, meaning that our real imports were likewise smaller than than their nominal value by that percentage . . .

Angry Bear Commenter RJS blogs at MarketWatch 666 and presents current economic market information. Estimates the impact of the February and March revisions on the 1st quarter GDP and is estimating the impact of this April report on 2nd quarter GDP (see below past Census reports.

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The Census Bureau’s report on construction spending for April (pdf) estimated that the month’s seasonally adjusted construction spending was at a $1,524.2 billion annual rate during the month, up 0.2 percent (±0.8 percent) from the revised March annual sales rate of $1,521.0 billion, and 9.8 percent (±1.2 percent) above the estimated annualized level of construction spending in April of last year…the annualized March construction spending estimate was revised 0.5% higher, from $1,513.1 billion to $1,521.0 billion, while the annual rate of construction spending for February was revised 0.2% lower, from $1,509.9 billion to $1,506.64 billion…taken together, those revisions would suggest an upward revision of $2.1 billion to first quarter construction spending on a annualized basis, which would in turn add around 0.05 or 0.06 percentage points to 1st quarter GDP when the third estimate is released at the end of June…

“Revised 1st Quarter GDP Report Still Shows Growth at a 6.4% Rate,” Marketwatch 666, Commenter RJS and analyst

The Second Estimate of our 1st Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 6.4% rate in the 1st quarter, unchanged from the 6.4% growth rate reported in the advance estimate last month, as upward revisions to growth of real personal consumption expenditures and to growth of real fixed investment were offset by downward revisions to inventories, to state and local government investment, and to exports, and by an upward revision to imports, which subtract from GDP…..in current dollars, our first quarter GDP grew at a 10.96% annual rate, increasing from what would work out to be a $21,494.7 billion a year output rate in the 4th quarter of last year to a $22,061.0 billion annual rate in the 1st quarter of this year, with the headline 6.4% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 4.3%, aka the GDP deflator, was computed from the price changes of the components and applied to their current dollar change….

As we review this month’s revisions, remembe this release reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a change a bit over 4 times of that what actually occurred from one 3 month period to the next, and that the prefix “real” is used to indicate that each change has been adjusted for inflation using price changes now chained from 2012, and then that all percentage changes in this report are calculated from those 2012 dollar figures, which would be better thought of as a quantity indexes than as any reality based dollar amounts…for our purposes, all the data that we’ll use in reporting the changes here comes directly from the Full Release & Tables for the second estimate of 1st quarter GDP, which is linked to on the BEA’s main GDP page . . . specifically, we’ll be using table 1, which shows the real percentage change in each of the GDP components annually and quarterly since the 2nd quarter of 2017; table 2, which shows the contribution of each of the components to the GDP figures for those months and years; table 3, which shows both the current dollar value and the inflation adjusted value in 2012 dollars of each of those components; and table 4, which shows the change in the price indexes for each of the GDP components…the full pdf for the 1st quarter advance estimate, which this estimate revises, is here….

April Personal Income Down a Record 13.1%, Disposable Personal Income Down a Record 14.6%, Savings Falls 54.0%, Marketwatch 666, RJS

The April report on Personal Income and Outlays from the Bureau of Economic Analysis reflects the partial unwinding of the March government stimulus in just about every metric it tracks except for prices, which are said to be “transitory“, influenced by temporary shortages and supply chain issues….as you’ll recall, this report includes the month’s data for our personal consumption expenditures (PCE), which usually accounts for nearly 70% of the month’s GDP, and with it the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated…in addition, this release reports national personal income data, disposable personal income, which is income after taxes, and our monthly savings rate…however, because this report feeds in to GDP and other national accounts data, the change reported for each of those metrics is not the current monthly change; rather, they’re seasonally adjusted amounts expressed at an annual rate, ie, they tell us how much national income and spending would change over a year if April’s change in seasonally adjusted income and spending were extrapolated over an entire year . . . however, the percentage changes are computed monthly, from one month’s annualized figure to the next, and in this case of this month’s report they give us the percentage change in each annualized metric from March to April..

Commenter and blogger RJS at Market Watch 666

Just two widely watched reports were released this week: the April report on New Residential Construction from the Census Bureau and the Existing Home Sales Report for April from the National Association of Realtors…in addition to those, the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Summary for April this week, which breaks down the two employment surveys from the monthly national jobs report by state and region….while the text of that report provides a useful summary of this data, the serious statistical aggregation can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands…

This week also saw first two regional Fed manufacturing surveys for May: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, a NYC suburban county in Connecticut, northern New Jersey, and Puerto Rico, reported their headline general business conditions index slipped to +24.3, down from +26.3 in April, still suggesting a broad expansion of First District manufacturing… Meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell to +31.5 in May from +50.2 in April, indicating a smaller majority of the region’s manufacturing firms reported an increase in their activity this month than in April…

April Housing Starts Reported Lower After Prior Months Revised Lower

Oil exports drop by the most on record to least since October 2018; global oil shortage at 1.73 million barrels per day, Focus on Fracking, RJS

The “global oil shortage” is from my coverage of the May OPEC report, which i’ll paste below; I also revise global oil shortage/surplus estimates for prior months. I don’t know of anyone else who digs this stuff out of this report (a 100 page report is more than most journos can handle)…

OPEC’s Monthly Oil Market Report

Tuesday of this past week saw the release of OPEC’s May Oil Market Report, which covers OPEC & global oil data for April, and hence it gives us a picture of the global oil supply & demand situation for the 4th month after OPEC, the Russians, and other oil producers agreed to increase their oil production by 500,000 barrels per day starting January, from their prior 2020 commitment to cut production by 7.7 million barrels a day from an October 2018 peak, which had been earlier reduced from the 9.7 million barrels a day cuts they had imposed on themselves during May, June and July of 2020, and after the Saudis unilaterally committed to further cut their own production by a million barrels per day during February, March, and then later during April of this year…before we start, we want to again caution that the oil demand estimates made herein, while the course of the Covid-19 pandemic still remains uncertain, should be considered as having a much larger margin of error than we’d expect from this report during stable and hence more predictable periods.. 

The first table from this monthly report that we’ll check is from the page numbered 50 of this month’s report (pdf page 60), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate…for all their official production measurements, OPEC uses an average of estimates from six “secondary sources”, namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures…