Tom Moeller

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The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, fell 10.6% to 42 (-12.5% y/y) in February from an unrevised 47 in January. It was well below the break-even point of 50, where it’s been since May. The index remains below a July 2023 high of 56 and a November 2020 peak of 90.

The rate on a 30-year fixed rate mortgage averaged 6.88% in the first two weeks of February versus 6.96% during all of January. It remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.

The single-family sales measure declined 8.0% to 46 (-11.5% y/y) from 50 in January. The prospective sales index in six months fell 22.0% (-23.3% y/y) to 46 from 59 in January. It was the lowest level since December 2023. The traffic of prospective buyers’ index fell 9.4% both m/m and y/y.

Housing performance weakened across the country during February. The Northeast index fell 26.2% (-22.6% y/y) to 48 from 65 in January. It was the lowest level in six months. In the South, the index weakened 10.6% (-16.0% y/y) to 42 in February from 47 in January. The index for the Midwest was off 2.3% (+13.2% y/y) to 	43. The index in the West declined 16.7% (-25.5% y/y) to 35 from 42 in January.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.

These data are included in Haver's **SURVEYS** database.

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- Overall reading is lowest since September.
- Component measures each fall.
- Regional indexes all weaken.

U.S. Home Builders Index Falls Sharply in February

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The General Business Conditions Index from the Federal Reserve Bank of New York rose to 5.7 this month from -12.6 in January, after falling from 2.1 in December. The Action Economics Forecast Survey expected a reading of -3.0 for February. The percentage of respondents reporting an improvement in business conditions rose to 26.9% in February from 24.2% in January while the percentage reporting a decrease backpedaled to 21.2% and more than retraced its increase to 36.8% in January. The survey responses were collected between February 3 and February 11.

The headline index reflects the answer to a single question concerning the state of economic activity. Haver Analytics calculates a composite index from the five major components, which is comparable to the ISM manufacturing index. The reading rose to 53.6 this month and more-than-reversed its January decline to 50.0. A level of 50 is the breakeven point between expansion and contraction. The index is the average of five diffusion indexes: new orders, shipments, employment, supplier deliveries and inventories with equal weights (20% each).

Increases in the new orders and shipments indexes led the component improvement in February. The new orders index rose to 11.4 after falling to -8.6, as a greater 31.8% of respondents reported increases in orders and a lessened 20.3% indicated declines. The shipments index rose to 14.2, its highest point in three months, after falling to -1.7 in January. A slightly lessened 29.2% of respondents reported increases as a halved 15.1% indicated shipments declines. Unfilled orders improved to 1.1, its first positive reading since September, after rising to -4.7 in January. The inventories index rose to 8.7 this month after falling to 5.8 in January. The delivery times index edged up to -5.4 after surging to 3.5 in January, suggesting the shortest delivery times in nearly three years.

The employment reading deteriorated in February, but the length of the workweek shortened. The jobs index declined to -3.6 this month after rising to 1.2 in January. A lessened 7.6% of respondents reported an increase in employment while a little-changed 11.3% reported a decline. The average workweek index improved to -1.2	 from -15.1 in January. It was the highest reading in three months.

Inflation indicators strengthened in February. The prices paid index surged to 40.2, its highest reading in just under two years, from 29.1 in January. Forty-one percent of respondents reported paying higher prices last month versus 31.4% in January while a lessened 1.1% reported paying lower prices. The prices received index jumped to 19.6, the highest level in nearly two years, from 9.3 in January. A greater 23.9% received higher prices while a lessened 4.3% paid lower prices.

Firms were significantly less optimistic that business conditions would continue to improve in the months ahead. The future business activity index plunged to the lowest level (22.2%) since May 2024 with a greatly reduced 43.2% of respondents expecting conditions to improve over the next six months, down from 53.3% in January. Expected growth in orders, shipments, inventories & order backlogs each fell versus January. The employment reading fell to its lowest point since July but hours worked reading remained strong. The expected prices paid index continued to rise, to its highest point in roughly three years, while prices received remained strong. Capital spending plans weakened moderately.

The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease with zero separating expansion from contraction.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

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- New orders & shipments readings rise, but employment declines.
- Pricing measures surge.
- Business expectations deteriorate.


U.S. Empire State Manufacturing Index Recovers in February

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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

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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

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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

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The U.S. Treasury Department reported a U.S. government budget deficit of $839.6 billion for the first four months of FY 2025 in contrast to a $531.9 billion deficit for the first four months of FY’24. For January alone, the government ran a budget deficit of $128.6 billion, which compared to a deficit of $21.9 billion twelve months earlier. The Action Economics Forecast Survey expected a $58.0 billion deficit in January.

Overall revenues so far this fiscal year increased 0.7% y/y as individual income tax receipts rose 1.9% y/y. The level of corporate tax receipts fell 21.0% y/y so far this year. Social insurance revenues increased 3.8% y/y and excise taxes gained 22.5% y/y in FY’25. Customs duties rose 10.8% y/y in the first four months of FY’25.

Federal government outlays increased 15.1% y/y early in FY’25 versus a 9.5% rise early in FY’24. Defense spending rose 12.1% y/y, about as it did early in FY’24. Social Security outlays rose 6.5% y/y in the first four months of FY’25 after rising 10.6% y/y early in FY’24. Interest payments rose 13.8% y/y so far in FY’25 after a 45.9% rise a year earlier. Health program spending rose 9.7% y/y after easing 0.4% early in FY’24 while Medicare payments surged 46.5% y/y versus a 13.3% rise last year. Income security outlays rose 18.8% y/y early this year compared to a 28.5% y/y decline in the first four months of FY’24.

Haver's data on Federal Government receipts & outlays are contained in **USECON**. The expectations figure is in the **AS1REPNA** database.

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- Personal income tax receipts pick up.
- Outlay growth remains strong.

U.S. Government Budget Deficit Continues to Deepen Through January

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The Consumer Price Index increased 0.5% in January after rising 0.4% in December, 0.3% in November and 0.2% in October. This steady acceleration left the y/y rise at 3.0%, the strongest gain since June and up from a low of 2.4% in September. A 0.3% January rise had been expected in the Action Economics Forecast Survey. The three-month increase in the headline CPI jumped to 4.5% (AR) from 3.5% in December. The CPI excluding food and energy rose 0.4% (3.3% y/y) following increases of 0.2% in December and 0.3% in each month from August through November. A 0.3% rise had been expected in the Action Economics Survey.

Energy prices strengthened 1.1% (1.0% y/y) last month after a 2.4% December rise. Monthly price increases were widespread. Gasoline prices increased 1.8% (-0.2% y/y) after a 4.0% December gain. Fuel oil prices surged 6.2% (-5.3% y/y) after rising 2.1% in December. Natural gas price jumped 1.8% (4.9% y/y) following a 2.8% gain in December and electricity prices held steady (+1.9% y/y) after a 0.2% rise.

Food prices rose 0.4% (2.5% y/y) after a 0.3% December increase as egg prices surged 15.2% (53.0% y/y) following a 0.7% gain. Meat, poultry & fish prices rose 0.5% (2.3% y/y) while dairy produce prices gained 0.3% (1.2% y/y). Offsetting these increases, cereal & bakery product costs fell 0.4% (+0.4% y/y) following a 1.0% increase and fruit & vegetable prices dropped 0.5% (+0.3% y/y) after improving 0.1% in December.

Services prices less energy increased 0.5% in January following three straight 0.3% gains. The y/y rate of increase slipped to 4.3%, down from 7.2% y/y two years earlier. Shelter prices rose 0.4% (4.4% y/y) last month after a 0.3% rise as owners equivalent rents increased 0.3% (4.6% y/y) for the third consecutive month. Lodging away prices from home rebounded 1.4% (2.2% y/y) after a 0.5% decline. Transportation service prices increased 1.8% (8.0% y/y) after a 0.5% increase reflecting a 2.0% rise (11.8% y/y) in the cost of motor vehicle insurance. Prices of medical services held steady (+2.7% y/y) after rising 0.2% in December and the cost of recreation services jumped 1.4% (3.8% y/y) after increasing 0.3% in December.

Goods prices less food and energy rose 0.3% (-0.1% y/y) in January after holding steady in December. Prices of used cars and trucks surged 2.2% (1.0% y/y) last month after rising 0.8% in December while new vehicle costs were unchanged (-0.3% y/y) following a 0.4% December increase. A 1.4% decline (+0.4% y/y) in apparel prices helped offset this rise while appliance prices fell 0.6% (-4.2% y/y). Home furnishings prices eased 0.2% (-0.9% y/y) for the second straight month. Recreation product costs rose 0.3% (-1.9% y/y) after falling 0.5% in December.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Monthly core price gain doubles December rise.
- Goods & services prices both strengthen. 
- Energy prices jump while food increase picks up.


U.S. Consumer Price Inflation Strengthens in January

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The NFIB Small Business Optimism Index declined 2.2% to 102.8 during January after rising 3.3% to an unrevised 105.1 in December and surging 8.5% to 101.7 in November, according to the Small Business Economic Trends survey conducted by the National Federation of Independent Business. The index rose 14.3% y/y, but seven of the 10 index components fell last month. The NFIB Small Business Uncertainty Index rebounded 16.3% (37.0% y/y) in January to 100 after falling sharply in each of the prior two months. It stood higher than its recent low of 65 in November 2023.

The outlook for business conditions deteriorated in the latest survey. The net balance of respondents expecting the economy to improve slipped to 47% last month from 52% in December, but remained up versus a record-low of -61% in June 2022. Expected higher real sales fell to a net 20% after surging to 22% in December from 14% in November. The latest reading has increased from a low of -29% in July 2022. A lessened 17% of respondents indicated that now was a good time to expand the business. The figure nevertheless remained up from 4% in September.

Plans to make capital outlays plummeted to 20% of firms, the lowest in nine months, after slipping to 27% in December. Plans to add to inventories declined to none of the survey respondents from an elevated six percent in December. The index of expected credit conditions fell to -4% last month, but remained up from a low of -11 in November 2023.

On the labor front, a lessened 47% of businesses reported few or no qualified workers to fill job openings in January, after rising to 56% in August of last year. These readings were below a high of 61% in May 2022. On balance, 18% respondents planned to increase employment in January after the 19% in December.

The net percent of firms reporting higher earnings continued to improve last month, after rising sharply in November. The figure rose to -25% from -26% in December, up from the August low of -37.

On the pricing front, the net percent raising their average selling prices eased to 22% last month from 24% in December, below the recent high of 28% in March of 2024. The percentage planning to raise prices declined to 26% in January from 28% in both of the prior two months.

Worker compensation rose, illustrated by a net 33% of respondents lifting compensation during the last three months versus 29% in the last survey. The net number of small businesses raising compensation remained below the 38% reported in the June survey. Compensation peaked at 50% of firms in January 2022. A greatly lessened net 20% of firms plan to raise worker compensation in the next three months, below November’s high of 28%.

Inflation continued to be the single most important issue facing small businesses, as reported by 18% of NFIB members in January. That was reduced from 25% six months earlier. The quality of labor also was reported by 18% of respondents as the most important concern. Other major concerns were taxes (17%), government requirements (10%), and the cost of labor (9%).

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

**Semiannual Monetary Policy Report to the Congress** by Federal Reserve Chair Jerome H. Powell is available [here](https://www.federalreserve.gov/newsevents/testimony/powell20250211a.htm).

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- Expectations for economy & sales diminish.
- Job openings are steady, but employment plans fall.
- Prices and price expectations decline.

U.S. NFIB Small Business Optimism Index Declines in January; Uncertainty Rebounds

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Retail gasoline prices for all grades rose to an average $3.25 per gallon (-1.7% y/y) in the week ending February 10 after easing to $3.21 in the prior week. It was the highest price since the third week of October, up from a low of $3.13 in the last week of December. The all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel increased to $3.67 per gallon (-10.8% y/y) in the week of February 10 from $3.66 in the prior week. The latest diesel price was down from a high of $4.63 in the week ending September 18, 2023 and a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil fell to $71.70 per barrel (-4.2% y/y) in the week ending February 7 after declining to $72.96 in the prior week. It remained well below the peak of $120.46 in the week of June 10, 2022. Yesterday, the price was $72.32 per barrel. The price of European Brent crude oil fell to $75.40 per barrel (-7.5% y/y) last week from $77.37 in the prior week. Prices remained below a peak of $127.40 in the week of June 10, 2022. Yesterday’s price was $76.23 per barrel.

Average natural gas prices fell to $3.28/mmbtu (+69.9% y/y) in the week of February 7 compared to $3.31 in the prior week. Prices had surged to a high of $5.47 in the week of January 17. They hit a low of $1.40/mmbtu in the week of March 15, 2024 and a peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $3.48/mmbtu.

Gasoline demand eased 0.2% y/y in the four weeks ending January 31 following a 1.8% y/y gain in the prior four weeks. Demand for all petroleum products increased 3.3% y/y after a 2.5% y/y rise. Crude oil input to refineries increased 1.8% y/y in the four weeks ending January 31 after a 1.5% y/y rise in the prior four weeks.

Gasoline inventories held steady y/y in the week ending January 31 after a 2.1% y/y decline in the prior week. Residual fuel oil inventories fell 14.4% y/y following a 12.4% y/y decrease in the prior week. Crude oil inventories rose 4.3% y/y in the week of January 31 after a 3.9% y/y rise during the prior week.

Measured in days’ supply, gasoline inventories rose to 30.4 days in the week of January 31 from 30.0 days in the prior week, registering the highest reading since the fourth week of January 2024. The recent low was 22.9 days in the week of November 8. The supply of crude oil rose to 30.4 days in the week of January 31, up from a low of 22.9 days in the week of November 8, 2024.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** & **USENERGY** database.

- Gasoline prices jump to four-month high.
- Crude oil prices decline.
- Natural gas prices are little changed.

U.S. Energy Prices Are Mixed in Latest Week

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In conjunction with the rise in factory output in November and December, the Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 1.7% (0.9% y/y) during the four weeks ended February 7, 2025, adding to gains in the prior three periods. The level of the index stood at its highest since mid-November.

Prices in the Miscellaneous group strengthened 4.4% during the last four weeks and rose 5.6% y/y. The cost of natural rubber increased 11.3% in four weeks and jumped 17.9% y/y. Framing lumber prices rose 1.8% over the last four weeks and increased 5.4% y/y.

Prices in the Metals group followed and increased 1.4% (4.5% y/y) over the most recent four weeks. Aluminum costs improved 5.2% in four weeks (18.9% y/y) while steel scrap costs rose 2.8% (-15.3% y/y). Tin prices increased 1.9% (19.2% y/y) while copper scrap costs rose 1.6% in four weeks (8.5% y/y). The cost of lead improved 1.1% (-9.0% y/y) but zinc prices were off 3.9% (+13.2% y/y) in four weeks.

Textile group prices held steady (-3.1% y/y) in the latest four weeks. Burlap costs rose 4.7% (16.3% y/y) in four weeks but the cost of cotton fell 2.8% (-26.1% y/y).

Crude Oil & Benzene group prices eased 0.8% (-7.6% y/y) in the latest four weeks. The cost of West Texas Intermediate crude oil slumped 2.4% to $72.01 per barrel and stood 2.3% lower y/y, though it was still above a $68.58 low in the first week of December. The cost of the petro-chemical benzene, used for making plastics & synthetic fibers, rose 0.5% (-30.3% y/y) in the last four weeks. Excluding crude oil, the industrial commodity price index moved 1.9% higher (1.1% y/y).

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

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- Rubber costs surge.
- Lumber & metals prices strengthen.
- Crude oil costs decline.

FIBER: Industrial Commodity Prices Move Higher in Latest Four Weeks

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Nonfarm payrolls increased 143,000 (1.3% y/y) in January after rising 307,000 in December, revised from 256,000, and 261,000 in November, revised from 212,000. Expectations had been for a 165,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 237,000 in January, up from 204,000 in December and the highest since March 2023.

Average hourly earnings increased 0.5% last month (4.1% y/y) following a 0.3% December rise and a 0.4% November gain. Earnings growth of 4.1% y/y remained up from 3.6% in July, but below the 5.9% high in March 2022. A 0.3% January increase had been expected.

The unemployment rate, measured in the household survey, eased to 4.0% in January from 4.1% in December. The Action Economics Forecast Survey expected 4.1%. It reached a low of 3.4% in April of 2023. Household employment rose 234,000 in January, when adjusted for population control effects. The population-adjusted labor force rose 91,000.

In the **payroll survey**, private-sector employment rose 111,000 in January (1.3% y/y) following a 223,000 December gain. Construction sector employment increased 4,000 (2.3% y/y) last month after rising 13,000 in December. Factory sector payrolls gained 3,000 (-0.7% y/y) after falling 12,000 in December.

Private service-producing employment increased 111,000 (1.5% y/y) last month after increasing 275,000 in December. Increases varied greatly amongst service sector categories. Private education & health service jobs rose 61,000 (3.8% y/y) while trade, transportation & utilities employment rose 38,000 (0.9% y/y). Financial activities jobs rose 7,000 (0.7% y/y) and information sector employment rose 2,000 last month (-0.4% y/y). Leisure & hospitality employment fell 3,000 (+1.8% y/y) while professional & business service jobs declined 11,000 (-0.2% y/y).

Government sector payrolls increased 32,000 in January (1.9% y/y) after rising 34,000 in December. Local government jobs improved 21,000 last month (1.8% y/y) while state government employment rose 2,000 (2.4% y/y). The number of federal government jobs rose 9,000 (1.5% y/y).

The 0.5% January rise in private-sector average hourly earnings reflected a 0.3% gain (4.0% y/y) in the goods-producing sector. Earnings in construction improved 0.3% last month (4.1% y/y) as did factory sector earnings (3.9% y/y). In the services sector, earnings rose 0.5% 4.1% y/y after rising 0.3% in December. Information sector earnings strengthened 1.2% (5.2% y/y) and professional & business service-sector earnings rose 0.3% (5.1% y/y). Trade, transportation and utilities pay jumped 0.5% (2.7% y/y). Leisure & hospitality earnings rose 0.4% (3.7% y/y). Financial sector earnings increased 0.9% (4.5% y/y) while private education & health services earnings increased 0.4% (4.4% y/y).

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The length of the average workweek in the private sector fell sharply to 34.1 hours last month from 34.2 hours in December. The workweek in the goods-producing sector eased to 39.6 hours, compared to 39.7 hours in the previous two months. The construction sector average workweek slipped to 38.7 hours from 38.8 hours. The factory sector workweek slipped to 40.0 hours from 40.1 hours while average weekly overtime hours edged up to 2.8. The average workweek in the private service sector fell to 33.0 hours from 33.2 hours. The aggregate weekly hours index in the private sector, a key indicator of production and income, fell 02% last month (+0.9% y/y) after a 0.1% December easing.

In the **household survey**, the decline in the jobless rate to 4.0% from 4.1% occurred as the rate for teenagers rose to 11.6%, while for individuals aged 20-24 the rate eased to 6.6%. The jobless rate for workers aged 25-54 slipped to 3.4% but for workers 55 and over, it was little changed at 3.1%.

The employment/population ratio for all workers rose to 60.1% in January. It remained below its high of 61.1% in February 2020, just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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- Job gain is less than half of December’s rise.
- Earnings growth improves.
- Jobless rate edges down to early-2024 low.

U.S. Payroll Employment Gain Slows but Jobless Rate Eases in January

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Consumer credit outstanding ballooned $40.8 billion during December after falling $5.4 billion in November, revised from a $7.5 billion drop. October’s rise was little changed at $17.4 billion. A $12.3 billion rise had been expected in the Action Economics Forecast Survey. During all of last year, consumer credit rose 2.4% y/y following a 2.6% rise in 2023.  As a percentage of disposable personal income, consumer credit was 23.3% in December, down from 23.9% in December 2023.

In December, revolving credit, which includes credit cards, surged $22.9 billion (4.8% y/y), following a $13.8 billion November decline. Revolving credit outstanding held by depository institutions rose 5.2% y/y. Revolving credit held by finance companies fell 12.2% y/y while that held by credit unions rose 4.4% y/y.

Nonrevolving credit outstanding rose $18.0 billion (1.6% y/y) in December after an $8.5 billion in November rise. Nonrevolving credit held by depository institutions eased 0.2% y/y in December. Finance company debt holdings rose 2.6% y/y. Credit union holdings eased 2.3% y/y in December.

Student loans totaled $1.8 trillion in Q4, up by 2.8% y/y. Motor vehicle loans grew 0.9% y/y to $1.6 trillion.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

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- Revolving credit posts record rise.
- Nonrevolving credit strengthens.

U.S. Consumer Credit Surges in December

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