The estimated dollar value of manufacturers' shipments of consumer nondurable goods increased by 0.4% between Sept. and Oct. 02, following gains totaling a cumulative 1.2% over the prior two months. Nevertheless, the cumulative value of shipments over the first ten months of 02 was a disappointing 3.5% less than over Jan-Oct. of 01. The combined value of food/beverage products shipped rose by a solid 1.3% last Oct., but through the first ten months of 02 were worth 0.4% less than during the same period a year earlier. Dairy product shipments soared 3.4% between Sept. and Oct., while shipments of both meat and beverage products increased by 0.8%. But the value of pharmaceuticals/medicines fell by 3.5% during Oct. after rising by more than 13% during Sept. Pharmaceutical sales through Oct. 02 were worth 10.3% less than over the first ten months of 02. Since food prices were generally firming over Q4 01, we expect that the overall dollar value of consumer nondurable sales by the final month of 02 was running at least marginally ahead of the shipments total for the final month of 01. And steady, but modest improvement should be the rule as we move through 03.

Converting's exclusive packaged goods price index (PGPI) declined by 0.3% between Sept. and Oct., following a 0.4% increase the month before. Our composite index stood just 0.8% higher this past Oct. than during Oct. 01. Average prices for 8 of the 16 components that make up the PGPI measure fell over the most recent month, 7 increased, and one product group (cosmetics) was flat. The sharpest over-the-month price increase was posted in the alcoholic beverages product category. Also up sharply in Oct. were the average price measures for shortening/cooking oils (+1.0%) and pharmaceuticals (+0.9%). But these were offset by sharp declines in the price indexes covering soft drinks (-0.6%) and soaps and detergents (-0.5%), as well as smaller price drops for six other product groups. Between Oct. 01 and 02, average prices increased for 12 of the 16 PGPI index components. Inflation as measured by the PGPI should gradually begin to accelerate a bit over the first half of this year because of a general upward trend in food prices. But the overall change in consumer packaged goods prices should remain at just 1%-1.5% right through 03.