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 . . .

Coronavirus dashboard for June 17: big progress since 1 year ago; big “Delta” challenge still ahead

One year ago today, in my Coronavirus Dashboard for June 17, here was my graph of cases

Which I described as:

As shown in the graph above, [after Arizona at 214 per million population] the remaining “top 10” are all States in the Confederacy, High Plains, and Mountain West. In order, (showing rates of new infections per million as of June 15 in parentheses) they are: Alabama (156), Arkansas (150), South Carolina (125), Louisiana (127), North Carolina (117), Utah (102), Mississippi (98), Florida (83), and Iowa (83).

One year later, the scale of the current pandemic is an order or more of magnitude lower. But the regions with the worst outbreaks remain the same (sadly, ingrained behavior patterns are incredibly resistant to change).
Let’s begin the current situation with CNN’s graph of vaccination rates in the 50 States plus DC and PR:

And if it continues to be this dry, it could become the most severe megadrought on this entire chart.

“The only reason this drought is lagging behind that 1500s drought is because it’s so young,” Williams said.

Via The Guardian comes this article on the current heatwave in the US…personally I have stories ranging from ducks not reproducing because of the heat and drought in Montana to severe water use restrictions in San Jose…

What tree rings reveal about America’s megadrought

https://www.theguardian.com/us-news/ng-interactive/2021/jun/17/tree-rings-america-megadrought-visual

Also see this NYT link:

https://www.nytimes.com/interactive/2021/06/11/climate/california-western-drought-map.html

Commenter Fred Dobbs had much of this in the Open Thread, June 19th at 9:33AM. I highjacked it, added more up to date detail, and an opinion. I did find it interesting.

Somewhere there is a print(s) and BOM for this structure along with specifications (which were alluded to as BD vs BC steel) for materials along with a comparison of structural strength necessary. The Chinese did not build this on a whim.

And why Chinese steel and components?

Bay Bridge spokesperson Bart Ney disputed the accuracy of Paul’s claims and said 70 percent of the steel being used for the new span is fabricated in America. Ney said foreign companies are used out of necessity for some parts of the project.

“The primary contractor chose China to deliver those parts because the capacity is not here in the United States right now. There was no American fabricator that would build those specific parts of the bridge,”

Manufacturing Group Protests Chinese Steel Used in Bay Bridge Construction, KPIX CBS

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Bridge Comes to San Francisco With a Made-in-China Label

June 25, 2011

SHANGHAI — Talk about outsourcing. At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

The project is part of China’s continual move up the global economic value chain — from cheap toys to Apple iPads to commercial jetliners — as it aims to become the world’s civil engineer. The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

The news is that Joe Manchin has described a voting rights compromise which he supports. Also Republicans immediately said it was unacceptable to them. This reminds everyone that there will be no bipartisan compromise on an issue where the two parties have diametrically opposite interests. If there were any Republicans who did not equate democrats with Democrats, and pigs could fly, it would be different, but there aren’t.

I am reasonably confident that nothing will come of this. To pass a bill it would be necessary to eliminate the filibuster and Manchin (and Sinema) won’t do that. However, I am actually interested in an incredibly vague part of Manchin’s proposed bill “Ban partisan gerrymandering and ‘use computer models,’ the latter of which isn’t further specified;”

It does seem that “computer models” doesn’t narrow things down much. However, I think it is quite simple really. It is possible to use precinct level data to calculate the ratio of Republicans elected to Republican votes statewide implied by districts. It is easy to compare proposed districting with the rule that if the ratio is closer to one with one set of districts then it must be preferred. The only non obvious detail I propose is that the results of the most recent 2 elections be used, because the turnout in midterm elections is very different from that in presidential year elections.

I would propose that only if two proposed sets of districts have the exact same estimated partisan bias according to this formula may any other properties of the districts be considered. I am reasonably confident that the bias can be reduced to the fact that we can cut congress people in half (even if the idea is sometimes appealing). In any case, the party with a minority in the state legislature has a very strong incentive to look very hard for proposals to reduce the bias.

I often read that Democrats are necessarily automatically at a disadvantage, because, even aside from partisan gerrymandering, Democratic voters are concentrated in cities and so many Democratic votes must be wasted. I do not believe this at all. Rather I think not explicitly partisan rules about compactness and respecting municipal and county boundries if possible favor the Republicans. There is no reason such rules deserve consideration at all comparabile to the importance that legislative majorities correspond as nearly as possible to the popular vote. I think that (except of course for the US Senate) they can correspond almost exactly.

I would like a law requiring that they do.

Again, I don’t expect to get it, or anything, but the problem is very simple, and the solution is obvious.

Bottom Line On The Biden-Putin Summit

 According to Robyn Dixon of the Washington Post on 6/18/21 regarding the outcome of the Buden-Putin summit in Geneva, I shall simply quote directly from what looks to be the bottom line from Putin himself:

Despite a packed European tour schedule, Biden “looked fresh” and was “fully aware of the materials” during the two hours of talks, Putin said:

‘Biden is a professional. One should be very observant when working with him in order not to miss anything. He misses nothing. I can assure you,” he added.

 Barkley Rosser

May housing permits and starts continue down from recent peak

In May housing permits (blue in the graph below), including the least volatile single-family permits (red, right scale), continued to decline from their January peak. Meanwhile, the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak:

The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now, I interpret this to mean a sign of a slowing down of economic growth next year.

The decline in new jobless claims stalls, as the “delta” variant is ready to strike the unvaccinated States

New jobless claims continue to be the most important weekly economic data point, as increasing numbers of vaccinated people and outdoor activities have led to an abatement of the pandemic, with both new infections and deaths at their lowest point since the onset of the pandemic in March 2020. I’ll have more to say on the intersection of the pandemic with claims in the conclusion.

My final objective is for claims to average 325,000 or below, which would signify a return to normal expansion levels in the past 30 years.

Turning to this week’s report, new jobless claims rose 37,000 to 412,000, the first increase in weekly claims in nearly 2 months. The 4 week average of claims declined by 8,000 to 395,000, a new pandemic low. (Note that I have discontinued comparisons of non-seasonally adjusted claims, as the period of lockdown distortions YoY has passed.)
At the peak of the pandemic lockdowns, new claims were running 6 million to 7 million per week. Here is the trend since the beginning of last August:

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 . . .