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Chart and compare multiple data series with accompanying data table of values

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DLXVG3

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DLX Add-ins for all versions of Excel provide instant data updates of entire workbooks

Use DLXVG3 to locate data series codes from within any file, easily creating new spreadsheets for analysis

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Haver offers timely, accurate, and professionally supported data via an update service, meeting the strictest demands of the institutional research community

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HaverView

[Matlab](http://matlab.com) by The MathWorks lets you access, visualize, and analyze historic time-series data to identify patterns or uncover complex relationships. From within a single environment you can:

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MATLAB

[Stata Data Analysis and Statistical Software](https://www.stata.com) by StataCorp LP is an integrated statistical package designed for researchers of all disciplines. It provides the ability to do data analysis, data management and graphics and has features such as multiple imputation, factor variables, GMM, competing-risks regression, state-space modeling, predictive margins, and more.

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Stata

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[SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) is a seamless interface between Haver and SAS data processing that enables SAS users to read economic and financial time series data that reside in a Haver Analytics DLX (Data Link Express) database. [SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) requires both SAS/ETS and Base SAS Software.

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[RATS (Regression Analysis of Time Series) Econometric Software](https://estima.com) by Estima is a leading econometrics and time-series analysis software package. It provides ability to do linear and non-linear least squares, forecasting, SUR and ARIMA models and in addition, supports advanced techniques such as GMM, ARCH and GARCH models, state space models, and more.

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RATS

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A popular open source option for statistical computing and graphics that is available on many UNIX platforms, W
indows and MacOS

Estimating, evaluating, and forecasting ARIMA models

Understanding the concept of non-stationarity and testing for unit roots

Estimating autoregressions, granger causality tests, and impulse response functions

Understanding the concept of cointegration and testing using the Enger-Granger test

Estimating and forecasting with vector error correction models

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Teaches econometrics and forecasting at the University of Colorado Denver. He has over 15 years of econometric experience in both the private and public sector.

Daniel L. Jerrett, Ph.D.

Abdel M. Zellou, Ph.D.

Bootcamp and Econometric Tools 1 & 2

Econometrics Training: Applied Time Series in R

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Haver partners with SmartMacro Labs to offer a two week immersive online course introducing participants to the power of the Python programming language. This applied hands-on training develops statistical economics skills with a concentration on economics and finance.

Gain proficiency in building modern time-series models in Python through real-world applications. Designed for professionals in both the public and private sector, the course does not require prior experience, assuming only that participants have a basic understanding of regression and statistical concepts.

Proficiency working in Jupyter notebooks and the Python environment

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Remote Training: Applied Time Series in Python

US and Japan ended 2024 on solid ground in contrast to Europe

Tian Yong Woon

This week, we focus on the steel and aluminium sector, following last week’s round of tariff measures from the US administration. President Trump’s 25% tariffs on steel and aluminium are aimed at addressing concerns over unfair trade practices and excess capacity, with China explicitly singled out as a major contributor to these issues. However, it remains to be seen whether these tariffs will effectively resolve the problems they are intended to address, especially since China’s share of US imports in these sectors is relatively small (chart 1). In fact, Canada is the largest supplier of these products to the US (chart 2), and may face cumulative tariffs of 50% if all of the US's announced measures against the country are implemented. That said, even with these steep tariffs, the immediate impact on Canada’s exports and broader economy may be limited, given that steel and aluminium exports account for a small portion of Canada’s overall exports (chart 3).

Delving deeper into China’s overcapacity issues, several indicators continue to signal persistent challenges, such as the ongoing deflation in producer prices for related metal products and broader export prices (chart 4). A closer look at China’s steel industry shows that local producers have been struggling long before the prospect of Trump’s tariffs re-emerged (chart 5), facing weak domestic demand and fierce competition that have driven prices down. Beyond tariffs, we also touch on political interventions driven by national security concerns, such as the US blocking Nippon Steel’s acquisition of US Steel, though President Trump has recently signalled some flexibility on this matter. While this transaction is small in the context of Japan’s broader foreign direct investment in the US (chart 6), it highlights the intersection of trade and national security policies.

**The US’ latest tariff actions**
On February 10th, US President Trump escalated his tariff actions by announcing a 25% tariff on all US steel and aluminium imports, set to take effect on March 12. According to the White House, this move is intended to protect the US steel and aluminium industries, which are said to have been negatively impacted by unfair trade practices and global excess capacity. Specifically, China has been identified as one of the key sources of this excess capacity.

However, according to official figures, China’s share of US steel imports is relatively small, accounting for less than 2% by the end of last year, as shown in chart 1. China’s share of aluminium imports to the US is higher but still not dominant, at around 10%. These statistics may not fully capture the situation, however, as some US steel and aluminium imports could have been rerouted from other countries, possibly to bypass previous tariffs, before ultimately entering the US market. This rerouting may be a key factor in President Trump's decision to impose blanket tariffs this time, rather than offering exemptions as in previous instances.

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This raises the question: Who, then, is the US economy’s largest supplier of steel and aluminium? A closer look reveals that Canada is not only the largest supplier of both steel and aluminium to the US but also one of its top trading partners, as shown in chart 2, alongside Mexico and China. Furthermore, Canada may face a more severe tariff situation than China, following the recent clarification by the White House that tariffs will be "stacked." This means the tariffs will be cumulative for Canada if the previously announced 25% tariff on Canadian goods, along with the new 25% steel and aluminium tariffs, are implemented. As a result, the Canadian steel and aluminium sector could face a stiff 50% tariff if imported into the US.

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Despite this, the overall impact of the steel and aluminium tariffs on Canada's total exports may be relatively minor. Canada's steel and aluminium exports to the US account for less than 4% of Canada’s overall exports as of December (chart 3). While Canada’s steel and aluminium industry is likely to face a significant blow, US importers who depend on Canada as a key supplier may also experience a considerable impact. This mirrors the situation with US imports of Canadian crude oil, a theme we explored in last week's letter. The ripple effects of higher steel and aluminium import prices (due to embedded tariffs) are likely to be widespread in the US, impacting costs and jobs across sectors such as construction, transportation, and many other areas of manufacturing.

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**Revisiting overcapacity**
Next, we explore the overcapacity concerns that the US, along with several other major economies, have frequently raised regarding China. Overcapacity occurs when producers manufacture more of a product than consumers can absorb, resulting in an oversupply in the market. When there is excess supply, prices tend to fall. As such, the persistent deflationary price trends of certain goods have often been used as an indicator of overcapacity, though such price changes alone are not enough to confirm it.

Chart 4 illustrates an indicator of China’s overcapacity, showing a decline in producer prices for smelting and pressing of ferrous metals, metal products, and overall export prices over the past few years. This consistent drop hints at ongoing overcapacity issues. Despite repeated concerns from China’s key trading partners, these problems have persisted. However, it is important to recognize that China’s overcapacity challenges are not easily resolved in the short term. They likely stem from deeper structural issues within China’s economic model, which has led to distortions concerning excess savings and overinvestment.

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A closer look at China’s steel industry reveals that the sector has been facing challenges long before Trump’s return to office earlier this year. As shown in chart 5, China’s steelmakers have struggled to sustain meaningful growth since 2019, as indicated by the sector’s PMI readings, which have rarely remained above the neutral 50 level for extended periods in recent years. Domestically, China’s steel producers continue to face difficult conditions, with weak domestic demand driven by a broader economic slowdown and ongoing overcapacity issues. These factors have resulted in intense competition among local producers, often triggering price wars that depress sales prices. Given that the US accounts for only a small portion of China’s steel exports, Trump’s tariff actions on Chinese steel are unlikely to hamper the industry significantly further, at least for now.

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**Beyond tariffs**
Beyond tariffs, another recent development in the US steel and aluminium sector involves Nippon Steel's attempt to acquire US Steel. While the previous administration under President Biden strongly opposed such a move, current President Trump now seems more open to exploring alternative possibilities. Trump has recently stated that, while he remains opposed to an outright acquisition, he is willing to consider Nippon Steel making a significant investment through a minority stake in US Steel.

What stands out in this situation is that political interventions like the one made by Biden, which blocked the deal, are rare in the US, given the generally open nature of the US economy. Taking a broader view, this potential transaction, while significant for Japan's commercial presence in the US, would still have a minimal impact on Japan's overall foreign direct investment (FDI) position in the US, as illustrated in chart 6. As the chart shows, Nippon Steel’s potential investment in US Steel would simply be one of many investments Japan has already made in the US.

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Asia

Economic Letter from Asia: Talking Steel (and Aluminium)

Tom Moeller

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Total retail sales weakened 0.9% (+4.2% y/y) during January after rising 0.7% in December, revised from 0.4% according to the U.S Census Bureau. November sales rose 0.7%, revised from 0.8%. The decline followed four consecutive months of increase. Expectations had been for a 0.1% easing in the Action Economics Forecast Survey. Excluding motor vehicles & parts, retail sales fell 0.4% (+3.7% y/y) in January after a 0.7% increase in December, revised from 0.4%. A 0.3% gain had been expected for January.

Sales of motor vehicles & parts fell 2.8% (+6.4% y/y) last month after four straight monthly increases. The decline compared to a 7.7% drop (+5.1% y/y) in unit light vehicle sales which followed a 2.1% December rise. Spending at gasoline stations rose 0.9% (2.0% y/y) after increasing 2.1% in December. The rise came as gasoline prices increased 3.2% m/m on average during January.

Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, fell 0.8% (+3.7% y/y) after rising 0.8% in December, revised from 0.7%. These sales are used in the construction of personal consumption expenditures in NIPA accounts.

By category, nonstore retail sales fell 1.9% (+4.7% y/y) in January following a 0.6% December rise. Furniture & home furnishings store sales declined 1.7% (+3.7% y/y) and reversed December’s 1.9% gain. Electronics & appliance store sales weakened 0.7% (unchanged y/y) after a 0.1% December uptick. Building materials & garden equipment store ales declined 1.3% (+0.7% y/y), down for the fourth straight month. Clothing & accessory store sales were off 1.2% (+1.4% y/y) after rising 1.1% in December. Sporting goods, hobby & book shop sales fell 4.6% (-4.1% y/y) after rising 3.2%. Working 0.5% higher (3.7% y/y) were sales at general merchandise stores after four straight months of modest increase. Within that category, department store sales improved 0.8% (-1.4% y/y) last month following a 0.2% rise.

In the nondiscretionary sales categories, health & personal care store sales fell 0.3% (+4.9% y/y) in January following a 0.2% increase in December. Food & beverage store sales eased 0.1% (+3.8% y/y) after strengthening 1.0% during December.

Despite poor weather around the country, restaurant & drinking place sales rose 0.9% (5.4% y/y) last month following a 0.1% December uptick and moderate increases in each of the prior five months.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economic Forecast Survey in **AS1REPNA**.

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- Decline is broad-based.
- Weakness is led by lower vehicle sales.
- Overall decline is muted by higher gasoline spending.

U.S. Retail Sales Retreat in January

Winnie Tapasanun

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Industrial production (IP) rose a larger-than-expected 0.5% m/m (2.0% y/y) in January following an upwardly revised 1.0% increase in December (+0.9% initially) and a downwardly revised 0.1% decline in November (+0.2% previously), data from the Federal Reserve Board showed. A 0.3% m/m January increase had been expected in the Action Economics Forecast Survey. The January IP index at 103.5 was the highest since September 2022; it was 4.5% above a low of 99.0 in September 2021 and 8.4% above a low of 95.5 in February 2021. The Federal Reserve estimated that increases in aircraft & parts output contributed 0.2 percentage point to January IP growth after the earlier resolution of the Boeing strike.

By **industry groups**, manufacturing production eased 0.1% (+1.0% y/y) in January following downwardly revised increases of 0.5% in December (+0.6% initially) and 0.2% in November (+0.4% previously). Durable goods production dipped 0.04% (+0.1% y/y) in January after rises of 0.6% in December and 0.8% in November. This reflected m/m output drops of 5.2% (-5.9% y/y) in motor vehicles & parts, 1.7% (+0.02% y/y) in primary metals, 0.2% (-1.3% y/y) in fabricated metal products, 0.1% (+2.2% y/y) in electrical equipment, appliances & components, and 0.1% (+1.3% y/y) in machinery. In contrast, the following durable goods categories rose m/m in January, including output increases of 6.0% (-0.1% y/y) in aerospace & miscellaneous transportation equipment, 1.9% (3.4% y/y) in nonmetallic mineral products, 1.5% (5.3% y/y) in computer & electronic products, 1.2% (4.7% y/y) in wood products, and 1.1% (-1.4% y/y) in furniture & related products. Notably, aircraft & parts production climbed 10.8% (-0.2% y/y), the third straight m/m increase, after an 11.5% December advance (the largest m/m gain since May 2020). Meanwhile, production for miscellaneous durables goods was essentially unchanged (-2.4% y/y) in January following two successive m/m rises.

Nondurable goods production fell 0.3% (+2.3% y/y) in January, down for the second month in three, after a 0.6% rise in December. The January fall reflected m/m output drops of 1.8% (+1.5% y/y) in printing & related support activities, 1.6% (-4.1% y/y) in plastics & rubber products, 0.2% (-0.1% y/y) in food, beverages & tobacco, and 0.1% (+4.3% y/y) in petroleum & coal products. To the upside, the following nondurable goods categories rose m/m in January, including output rises of 2.6% (-4.4% y/y) in apparel & leather goods, 0.7% (2.1% y/y) in textiles & product mills, and 0.1% (1.3% y/y) in paper. Meanwhile, production for chemicals was virtually unchanged (6.4% y/y) in January after a 0.2% decline in December.

Utilities output surged 7.2% (6.9% y/y) in January as cold weather boosted the demand for heating after an upwardly revised 2.9% rebound in December (+2.1% initially), registering the third m/m rise in four months and the largest since February 2021. Mining activity, however, decreased 1.2% (+3.4% y/y), down for the fourth month in five, following an upwardly revised 2.0% December increase (+1.8% initially).

By **market groups**, business equipment output advanced 2.1% (-0.5% y/y) in January, the largest of three consecutive m/m gains, on top of a 1.8% rise in December. Consumer goods output rose 0.8% (0.9% y/y) in January after a 0.3% rebound in December, reflecting a 3.0% decline (-5.5% y/y) in durable consumer goods and a 1.8% gain (2.7% y/y) in nondurable consumer goods. Materials production edged up 0.1% (2.9% y/y) following a 1.3% December rise and three straight m/m declines. Construction supplies production, however, fell 0.2% (+3.1% y/y) in January, the first m/m fall since September, following a 1.8% gain in December.

In **special classifications**, factory output of selected high-tech industries rose 0.2% (6.2% y/y) in January, the third m/m rise in four months, after a 0.3% increase in December (+1.1% initially). Manufacturing production excluding selected high-tech industries fell 0.2% (+0.9% y/y), the first m/m fall since October, following a 0.5% December rise, while manufacturing production excluding selected high-tech and motor vehicles & parts increased 0.2% (1.4% y/y) after a 0.7% December gain.

Capacity utilization rose to 77.8% in January, the highest since August, from a downwardly revised 77.5% in December (77.6% initially). The Action Economics Forecast Survey forecasted 77.7%. The January reading was 1.8 percentage points below its long-run (1972–2024) average. Manufacturing capacity utilization dipped to 76.3% in January from a downwardly revised 76.4% in December (76.6% initially); the January rate was 1.9 percentage points below its long-run average.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the **AS1REPNA** database.

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- Jan. IP +0.5% (+2.0% y/y) following +1.0% (+0.5% y/y) in Dec.; IP Index highest since Sept. ’22.
- Mfg. IP -0.1% m/m, led by a 5.2% decrease in auto production (w/ durable goods virtually unchanged and nondurable goods down 0.3%).
- Utilities output jumps 7.2%, the largest m/m rise since Feb. ’21, while mining activity falls 1.2%, the fourth m/m decline in five months.
- Key categories in market groups mostly increase.
- Capacity utilization rises to a 5-month-high 77.8%.

U.S. Industrial Production Exceeds Expectations Again in January

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Total business inventories fell 0.2% (+2.0% y/y) in December following little change during the prior three months. A 0.1% easing was expected in the Action Economics Forecast Survey.

Retail inventories fell 0.4% (+5.6% y/y) in December after a 0.1% November increase. Motor vehicle inventories fell 1.1% (+11.6% y/y) after falling 0.8% in November. General merchandise inventories rose 0.2% (2.4% y/y) after a 0.4% gain. Food and beverage store inventories edged 0.1% higher (2.3% y/y) following a 0.2% increase. Furniture & appliance inventories declined 0.8% (-2.9% y/y) after easing 0.1%. Clothing inventories fell 1.2% (+1.2% y/y) after the same decline in November while inventories of building materials rose 0.8% (5.2% y/y) after a 1.6% gain.

Manufacturing inventories moved 0.4% higher (0.8% y/y) in December the same as during November. Wholesale inventories fell 0.5% (-0.1% y/y) in December, the fourth consecutive month of decline.

Total business sales rose 0.8% (3.1% y/y) in December after a 0.6% November gain. Factory shipments rose 0.6% (1.9% y/y) after a 0.1% gain. Wholesale sales rose 1.0% (2.8% y/y) following a 0.9% increase. Retail sales increased 0.8% (4.5% y/y) following a 0.7% rise.

The inventory/sales (I/S) ratio eased to 1.35 in December, its lowest level since September 2013. The manufacturing I/S ratio slipped to 1.46 in December from 1.47 in November. The wholesale I/S fell to 1.31, down from a 1.40 high in June 2023. The retail I/S ratio fell to 1.30 from 1.32 in November.

The manufacturing and trade data are in Haver’s **USECON** database. The Informa Global Markets forecast is in the **MMSAMER** database.

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- Inventories slip, paced by retailer & wholesale sectors.
- Sales improvement is broad-based.
- Inventory/sales ratio falls.

U.S. Business Inventories Ease as Sales Increase in December

Michael J. Moran

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Import prices rose 0.3% in January, accenting the upward drift that began last year (an average monthly increase of 0.2% in 2024). The increase in prices in the past 13 months has not been alarming in an absolute sense, but the advance has ended the cooling seen from mid-2022 through 2023, leaving the level of prices well above pre-pandemic observations. The chart on the left, which plots the level of the index (view it as the price of a basket of imported goods), shows the partial offset to the surge during the pandemic.

The January increase of 0.3 percent was less troubling than it might appear at first glance. The increase was led by petroleum prices, which often move erratically. Prices of nonpetroleum products rose only marginally (0.1%). The modest increase outside of petroleum reflected a marked retreat in the prices of automobiles (-0.4%, which represented the third consecutive monthly decline). Prices of consumer goods also were contained (off 0.2% after no change in the prior two months).

The soft performances in the prices of imported autos and consumer goods perhaps signaled that inflation pressure from imports will not get out of hand. As shown on the right chart, prices of nonpetroleum imports rose at an annual rate of only 0.9% in January; the 12-month increase totaled only 1.8%. One might wonder about the effect of tariffs on import prices. The series in this monthly report will not be affected, as prices are recorded before goods proceed through customs, where tariffs are imposed. Conceivably, this series could soften because of Tariffs. If foreign producers were to decide to absorb the burden of the tariff, they could achieve this outcome by lowering the prices of their products, which would leave the US retail price (price plus tariff) little changed.

Export prices jumped 1.3% in January, the sharpest advance since the inflation burst during the pandemic. However, the change was narrowly based, fueled largely by an increase of 3.4% in industrial supplies and materials, most likely influenced by petroleum products. Results elsewhere were mixed, with prices of capital goods and consumer goods rising moderately, and prices of automobiles declining slightly.

In terms of long-term trends, the chart on the left (which plots the level of the index), shows that export prices have changed little since the post-pandemic cooling. The chart on the right (which plots the percent change in prices or inflation) shows that the post-pandemic reduction in prices is no longer a factor in annual inflation. The monthly ups and downs of the past year or so have left an annual inflation rate of 2.7 percent.

Each of these monthly trade price numbers are not seasonally adjusted. The import and export price series can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Import prices drift higher in January, as a jump in petroleum prices offset cooling in the auto sector.
- Oil prices also led the increase on the export side.

Oil Prices Leave High-Side Readings on Import and Export Prices

Andrew Cates

**The growth consensus for 2025**
The trends in chart 1 below highlight a world economy that is anything but synchronized. The US appears to be thriving in relative terms, while the euro area and the UK are caught in the doldrums. Japan remains a study in stagnation, offering stability but little dynamism. These divergent trajectories underscore a complex interplay of domestic factors—policy, demographics, and energy dependencies—against a backdrop of global challenges. For now, the US appears to be basking in the sun, but for others, the clouds may not just be lingering—they may be gathering.

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**The global growth consensus – the US versus the RoW**
Chart 2 below also underscores the global economy's uneven path, where US optimism contrasts starkly with widespread pessimism elsewhere. Notable downward revisions to growth forecasts for 2025 be seen across most major economies over the past 3 months, with the most significant adjustments hitting South Korea (SK), Hong Kong (HK), and Mexico (MXN). These sharp downgrades are indicative of broader challenges faced by trade-reliant economies, including slowing global demand and persistent inflationary pressures.

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**US inflation surprises and energy prices**
Persistent inflationary pressures were a key takeaway from January's US CPI report. Positive surprises in both headline and core CPI, alongside sticky service sector inflation and stronger-than-expected wage growth from last week’s employment report, present a challenging scenario for the Fed. One notable aspect, however, is energy prices. After six consecutive months of negative energy inflation—typically coinciding with downside inflation surprises—energy prices have risen in more recent weeks, pushing annual energy inflation to 1.0% y/y in January. Historically, rising energy inflation has aligned with positive inflation surprises. With global energy prices easing in February, this could influence future inflation trends and market expectations.

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**The global inflation consensus**
Still as chart 4 below underscores, inflation issues, while no longer out of control, still remain a persistent thorn in the side of many policymakers. The US and UK have seen forecasters’ inflation expectations for 2025 steadily climb in recent months and to levels that are well above their respective central banks’ target levels. Japan too has seen inflation expectations shift higher but that is arguably a more welcome development following several years in which deflationary pressures had been more in vogue.

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**China’s disinflation journey**
Deflationary pressures are in fact now far more of a thorn in the side of China’s policymakers compared with Japan. Chart 4 below illustrates a marked decline in consensus CPI forecasts for both 2024 and 2025 through the course of the past two years. What was once modest inflation is now edging perilously close to outright deflation in an economy clearly plagued by excess capacity and debt-related stress.

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**Monetary policy in Asia**
Moving back to global matters, Fed Chair Powell’s testimony this week signaling that the US central bank is in no hurry to cut rates suggests interest rate differentials remain a sensitive balancing act for a number of economies, including in Asia. For many, aggressively cutting rates risks putting downward pressure on their currencies, which could be perilous. That said, some exceptions have been emerging. For example, India, which had maintained steady rates for much of last year, moved early this month to cut rates, signaling a different set of priorities. Meanwhile, Australia now appears poised to follow suit, as it navigates a weakening domestic economy.

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Recent weeks have brought significant shifts in financial market sentiment, reflecting changes in consensus views about the global economy. The latest _Blue Chip Economic Indicators_ survey highlights the United States as a standout performer, with forecasters maintaining resilient growth forecasts compared to the rest of the world (chart 1). However, escalating concerns over US trade policy have led to sharp downward revisions in growth expectations for large open economies such as South Korea in recent months (chart 2). Inflation pressures also remain a key concern, which may have been amplified by the firmer-than-expected January US CPI data that were published this week (chart 3).  CPI forecasts for most major economies, for example, have generally been climbing in recent months (chart 4). A notable exception is China, where inflation forecasts have continued to decline, and to worryingly low levels. Meanwhile, with Fed Chair Powell also signalling this week that the US central bank is in no hurry to cut interest rates, interest rate differentials remain a delicate balancing act for policymakers in many economies, particularly in Asia (chart 6). Recent financial market volatility certainly underscores the fine line central banks must tread as they navigate global economic uncertainties, including protectionist US trade policies and the ripple effects of shifting US monetary policy.

Charts of the Week: Still Shining in the West 

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The Producer Price Index for final demand increased 0.4% (3.5% y/y) last month after increasing 0.5% in December, revised from 0.2%, following a 0.2% rise in November, revised from 0.4% according to the Bureau of Labor Statistics (BLS). The January gain compared to a 0.3% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.3% (3.4% y/y) after rising 0.4% in December, revised from 0.1%. The PPI excluding food & energy rose an expected 0.3% (3.6% y/y) after increasing 0.4% in December, revised from unchanged, and 0.1% in November, revised from 0.2%.

Energy prices increased 1.7% (0.0% y/y) during January, after rising 2.2% December. Gasoline costs rose 0.2% (-0.3% y/y) while home heating oil prices rose 10.2% (-2.5% y/y). Electric power prices fell 0.8% (+0.4% y/y) and natural gas costs jumped 3.2% (4.9% y/y). Diesel fuel prices surged 10.4% (-6.6% y/y).

Final demand food prices rose 1.1% (5.5% y/y) in January, following a 0.4% December gain. Prices for fresh and dry vegetables declined 22.3% (-14.0 y/y), while egg price surged 44.0% (186.4% y/y). Beef & veal prices increased 5.7% (14.8% y/y) while dairy product prices rose 0.4% (6.9% y/y).

Final demand goods prices excluding food & energy edged 0.1% higher (2.0% y/y) in January, the same as in December. Core finished consumer goods prices declined 0.3% (+1.9% y/y) after a rise of 0.1% in December. Core nondurable goods prices declined 0.5% (+2.2% y/y) last month after a 0.1% uptick in December. Durable consumer goods prices held steady (1.5% y/y) in January following a rise of 0.2% in December. Capital equipment prices rose 0.3% (2.6% y/y) last month following a 0.2% December gain. Core government-purchased goods prices rose 0.7% (2.6% y/y) in January, after a 0.3% December increase.

Final demand services prices rose 0.3% (4.1% y/y) last month after rising 0.5% in December. Trade services prices improved 0.1% (4.2% y/y) last month following a 0.7% gain. Trade of finished goods prices improved 0.1% (4.2% y/y), after rising 0.7% (2.8% y/y) in December. Prices for final demand transportation and warehousing services rose 0.6% (3.6% y/y) in January, after strengthening 2.5% in December. Services prices less these costs rose 0.4% (4.1% y/y) last month, after a rise of 0.3% in December.

Construction costs rose 0.4% (1.8% y/y) in January, after increasing 0.2% during December.

Prices for intermediate demand of processed goods rose 1.0% both m/m and y/y in January after rising 0.2% in December. Processed energy goods prices rose 3.5% last month after increasing 1.0% in December, while food prices rose 0.8% following a 0.4% advance in December.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

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- Energy costs drive overall price increase.
- Core goods price gains are minimal.
- Services price gains are solid.

U.S. PPI Total & Core Increases Remain Firm in January

Carol Stone, CBE

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Initial claims for unemployment insurance were 213,000 seasonally adjusted in the week ended February 8, down from 220,000 the week before; that was marginally revised from 219,000 initially reported by the Labor Department. The Action Economics forecast survey had expected initial claims to be 220,000, that is almost the same as the prior week’s initially reported 219,000. The four-week moving average of initial claims was 216,000, down marginally from 217,000 through the prior week.

The total number of unemployment insurance beneficiaries – also known as “continuing claims “– was 1.85 million in the week ended February 1, down from 1.886 million the previous week, which was unrevised. The four-week moving average of continuing claims was 1,871.5 million through the February 1 week, down from 1,872.25 through January 25.

The insured unemployment rate was still 1.2% seasonally adjusted; this is the number of beneficiaries as a percentage of covered employment.  Except for two separate weeks when this ratio was 1.3%, it has held at 1.2% since March 2013.

Economic conditions vary widely among individual states. So, in the week ended January 25, the highest unemployment rates were in New Jersey and Rhode Island (both 2.92%), Minnesota (2.56%), California (2.44%), Massachusetts (2.42%) and Illinois (2.41%). The lowest rates were in Florida (0.36%), Virginia (0.45%), Alabama (0.48%), Tennessee (0.57%), and North Carolina (0.60%). Rates in other notable states include Pennsylvania (2.15%), Connecticut (2.05%), New York (1.96%) and Texas (1.15%). These state rates are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Initial claims hold tight range.
- Total beneficiaries decreased in February 1 week.
- Insured unemployment rate remains at 1.2%.

U.S. Initial Claims for Unemployment Insurance Ease in February 8 Week

Sandy Batten

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Total housing starts plummeted 9.8% m/m (-0.7% y/y) to 1.37 million units at an annual rate in January after having surged an upwardly revised 16.1% m/m in December (previously +15.8% m/m), according to data from the U.S. Census Bureau. The Action Economics Forecast Survey had expected starts to fall 7.0% m/m to 1.394 million units in January. Single-family starts declined 8.4% m/m (-1.8% y/y) in January, the first monthly decline in three months. Multi-family starts slumped 13.5% m/m (+2.2% y/y) following a downwardly revised 51.8% monthly surge in December (previously 61.5% m/m). Total starts in January were 25% below their recent peak of 1.828 million units reached in April 2022.

Starts fell in three of the four major regions in January. They plummeted 27.6% m/m (-21.1% y/y in the Northeast; declined 10.4% m/m (+30.2% y/y) in the Midwest; and fell 23.3% m/m (-9.8% y/y) in the South. By contrast and despite the wildfires that engulfed southern California, starts soared 42.3% m/m (+14.3% y/y) in the West, their first monthly gain in three months.

Building permits were essentially unchanged in January, edging up 0.1% m/m (-1.7% y/y) after a 0.7% m/m decline in December. Single-family permits were unchanged in January from December (-3.4% y/y) while multi-family permits edged up 0.2% m/m (+2.1% y/y). Permits rose in both the Midwest (+1.8% m/m) and the West (+2.3% m/m) but fell in both the Northeast (-6.1% m/m) and the South (-0.1% m/m).

Housing starts are often volatile during the winter months due largely to wide swings in the weather. By contrast, permits are much less affected by weather gyrations. Permits have barely moved over the past three months, totaling 1.49 million units in November and 1.48 million in both December and January. By contrast, starts have swung wildly, falling 2.9% m/m in November, surging 16.1% m/m in December and plummeting 9.8% m/m in January. So, it would seem that the wide swings in starts in recent months have been due more to floods, hurricanes, fire, snow, among others, than to changes in underlying fundamentals.

The housing starts and permits figures can be found in Haver’s **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Starts slumped 9.8% m/m in January after outsized 16.1% monthly jump in December.
- Both single-family and multi-family starts fell significantly.
- Starts declined in three of the four major regions.
- Permits were essentially unchanged in January and have been relatively flat for the past three months.

U.S. Housing Starts Fell Markedly in January after December Surge

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