Financial Options

The inflation risk showed signs of moderating at both retail and wholesale levels with the release Friday of Producer Price Index data by the Labor Department and retail sales figures from the Commerce Department. Bad news on inflation came from the manufacturing sector where sales increased relative to inventories.

The core Producer Price Index for Finished Goods. the main measure of wholesale price inflation, was unchanged in April according to the report released Friday by the Bureau of Labor Statistics; the full index, including volatile food and energy components, was up 0.7%. Intermediate goods rose 0.9% while crude goods, those closest to the underlying commodity prices, fell 1.5%. (All seasonally adjusted)

Retail sales fell 0.2% in April and retail sales excluding autos were unchanged, according to the Commerce Department retail sales report, representing a drop in inflation pressure at the retail level.

Manufacturing and trade sales rose 1.4% to $1,075.2 billion in March while business inventories fell 0.1% to $1,366.3 billion. The inventory-to-sales ratio was 1.27.

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ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES
April 2007
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for
seasonal variation and holiday and trading-day differences, but not for price changes, were $372.0 billion, a decrease of 0.2
percent (±0.7%)* from the previous month, but up 3.2 percent (±0.7%) from April 2006. Total sales for the February through April
2007 period were up 3.7 percent (±0.5%) from the same period a year ago. The February to March 2007 percent change was
revised from 0.7 percent (± 0.7%)* to 1.0 percent (± 0.3%).
Retail trade sales were down 0.2 percent (±0.7%)* from March 2007, but were 3.0 percent (±0.8%) above last year. Nonstore
retailers were up 9.3 percent (±4.5%) from April 2006 and sales of health and personal care stores were up 8.1 percent (±1.7%)
from last year.
The advance estimates are based on a subsample of the Census Bureau’s full retail and food services sample. A stratified random sampling
method is used to select approximately 5,000 retail and food services firms whose sales are then weighted and benchmarked to represent the
complete universe of over three million retail and food services firms. Responding firms account for approximately 65% of the MARTS dollar
volume estimate. For an explanation of the measures of sampling variability included in this report, please see the Reliability of Estimates
section on the last page of this publication.

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MANUFACTURING AND TRADE INVENTORIES AND SALES
MARCH 2007
Intention to Revise: Revisions to the not adjusted and adjusted monthly estimates of manufacturing shipments and
inventories are scheduled for release on May 18, 2007. For further information on these revisions, see
http://www.census.gov/indicator/www/m3. These estimates will be reflected in the June 13 release of this report.
Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’
shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at
$1,075.2 billion, up 1.4 percent (±0.2%) from February 2007 and up 3.7 percent (±0.5%) from March 2006.
Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were
estimated at an end-of-month level of $1,366.3 billion, down 0.1 percent (±0.1%)* from February 2007 and up 4.8
percent (±0.6%) from March 2006.
Inventories/Sales Ratio. The total business inventories/sales ratio based on seasonally adjusted data at the end of
March was 1.27. The March 2006 ratio was 1.26.

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