Robert Brusca

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Germany's industrial production slowed to a gain of only 0.1% in September then dropped by 0.5% in October. The string of growth rates from 12-months to six-months to three-months also trace a legacy of losing as the 12-month gain is at a respectable 1.8%, but the six-month and three-month growth rates both are zero.

IP components show a smattering of negative growth rates, not some great syncopated wave of deceleration. Growth is uneven and the underpinning of deceleration is still unclear. Consumer goods output shows a steady deceleration, culminating in the three-month annualized growth rate of -7.8%. Capital goods output is surprisingly erratic, showing a 2.6% gain over 12 months and a 2.4% decline at an annual rate over six months then a rebound with a 3.9% gain annualized over three months. Intermediate goods output has been flying at a very low trajectory over all horizons; it has zero growth over three months with output lower by -0.3% year-over-year.

Year-to-date, IP is falling at a 1.7% annual rate in Q4, led by a 15.9% annual rate drop for the consumer sector, a 3.9% gain in capital goods output and a 0.2% drop in intermediate goods output. Construction output is up at a 0.9% pace in the quarter but shows decelerating gains over 12 months.

Manufacturing output is persistently weak and is flat over three months and lower over six months with a modest 1.4% rise over 12 months. In contrast, real manufacturing orders are moving steadily higher, logging an 11.1% annualized gain over three months. Real sales in manufacturing are also persistently weak. Sales and output trends are weaker than orders. Perhaps this lull in output is temporary and a ramp of order growth is yet to hit the bottom line for output. But even in the quarter-to-date, manufacturing IP is falling at a 1.9% annual rate as real orders rise at a 6.8% pace and real sales gain at a 2.5% pace. Moreover, the much more topical Markit PMI data show ongoing manufacturing weakness. There is no hint that order strength will shine through in the end.

Only a few countries have reported IP for October this early. Among those four, Ireland shows powerful growth although Ireland tends to run from hot to cold. Sweden and Norway both show growth that is solid to strong, but Portugal shows declining IP on all horizons with weakness gathering momentum.

The IP picture has good deal of dissonance present in the dataset. For Germany, the various sectors show that output is out of phase and IP as a whole is running counter to the strength in orders. For the few reporting European countries, their results are wholly idiocentric and seemingly ruled by their own internal circumstances with little reference to outside forces or implications for European growth.

Quite apart from this IP report, even more topical data from Markit globally increasingly show slowing is in progress. Data in the U.S. add to all dissonance as housing and interest-sensitive sectors are slowing while the ISM data show a strengthening in manufacturing and in nonmanufacturing. Yet, job growth did slow in November and there is no consistent picture yet to be assembled from the current fragments of U.S. economic data that are available. Asia has clearly been slowing and the trade is a worry. CEOs are losing come of their past confidence too.

While some want to focus on the declines in markets as an issue, I would prefer to point out that markets do not unravel on their own. They are not manipulated by traders with an ‘agenda'. These are not markets trying to force the Fed or some central bank to do something. These are markets reacting to the news of the economic environment and with concerns about the present and fears of the future. These things are real and more real than a simple decline in stock prices. If central banks change policy or pace, it will be because of the same fundamentals that markets are reacting to not because of markets themselves. So now all eyes are on the Fed and on its ‘planned' December rate hike. Has that been put to question? The Fed's future path is thought to be much less of a gradient.

Book-makers in the U.K. have putting up the odds of there being no Brexit at all. This means not only that there will be no approval of Theresa May's deal but that the book-makers see a strong possibility of a change in the decision to leave- a new referendum with a new outcome. So stay tuned as the world churns. It's not a soap opera; it's real life. And things change. It's the Bob Dylan economy!


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Germany's industrial production slowed to a gain of only 0.1% in September then dropped by 0.5% in October. The string of growth rates from 12-months to six-months to three-months also trace a legacy of losing as the 12-month gain is [...]

German IP Takes Surprising October Slip

Gerald D. Cohen

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Wholesale inventories increased 0.8% month-on-month (6.9% year-over-year) during October following an upwardly revised 0.7% gain in September. The advance report issued last week reported 0.7% growth in October, while the Informa Global Markets Survey expected a 0.3% rise.

Durable goods inventories increased 1.7% (9.3% y/y) in October after a 1.3% gain. Machinery inventories, the largest sector, grew 2.1% (11.7% y/y), while vehicles, the second largest, advanced 3.4% (8.1% y/y). Electrical equipment grew 0.9% (6.4% y/y). Inventories of nondurable goods declined 0.6% (+3.4% y/y) after edging down 0.2% in September. Drug inventories, which make up a quarter of nondurable inventories, rose 0.6% (4.0% y/y). Groceries, the second largest category, edged up 0.2% (-2.0% y/y). Miscellaneous nondurables increased 0.4 (2.2% y/y).

Wholesale sales declined 0.2% during October (+6.8% y/y) after inching up 0.1% (was 0.2%). The Action Economics Forecast Survey looked for 0.5% growth.

Durable goods sales inched down 0.1% (+6.8% y/y) after a 0.2% gain. Electrical equipment, the largest sector, declined 0.9% (+8.3% y/y). Professional and commercial equipment, which includes computers, advanced 1.5% (6.8% y/y), while vehicle sales fell 1.3% (unchanged y/y). Nondurable product sales decreased 0.3% (+6.8% y/y) after edging up 0.1%. Petroleum product sales, the largest category, increased just 0.5% (31.6% y/y) as oil price gains moderated in October. Drug sales grew 0.3% (5.5% y/y) while groceries gained 0.7% (-1.8% y/y).

The inventory-to-sales (I/S) ratio at the wholesale level rose to 1.28, the third increase in four months. The I/S ratio for durable goods jumped to 1.63 from 1.60, the highest level in over a year. The machinery ratio increased to 2.56 from 2.54, while motor vehicles surged to 1.69 from 1.62. The I/S ratio for nondurable goods was unchanged at 0.96. The petroleum industry I/S ratio fell to 0.35, a four-year low. The drug industry I/S remained at 1.06.

The wholesale trade figures and oil prices are available in Haver's USECON
database. The expectations figure for inventories is contained in the MMSAMER database.
Expectations for sales are in the AS1REPNA database.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Wholesale Sector - NAICS
 Classification (%)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Inventories</td>
 <td >0.8</td>
 <td >0.7</td>
 <td >0.9</td>
 <td >6.9</td>
 <td >3.6</td>
 <td >2.2</td>
 <td >1.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Sales</td>
 <td >-0.2</td>
 <td >0.1</td>
 <td >0.7</td>
 <td >6.8</td>
 <td >7.4</td>
 <td >-1.3</td>
 <td >-4.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >I/S Ratio</td>
 <td >1.28</td>
 <td >1.27</td>
 <td >1.26</td>
 <td >1.28 (Oct '17)</td>
 <td >1.30</td>
 <td >1.35</td>
 <td >1.33</td>
 </tr>
 </tbody>
 </table>
 
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Wholesale inventories increased 0.8% month-on-month (6.9% year-over-year) during October following an upwardly revised 0.7% gain in September. The advance report issued last week reported 0.7% growth in October, while the Informa [...]

Wholesale Inventories Grow While Sales Decline

Tom Moeller

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Labor market strength eased during November. Nonfarm payrolls
increased 155,000 (1.7% y/y) after a 237,000 rise during October, revised from
250,000. September's gain was raised to 119,000 from 118,000. The November
increase fell short of expectations for a 200,000 rise in the Action Economics
Forecast Survey. Average hourly earnings increased 0.2% (3.1% y/y) during
November after a 0.1% rise, revised from 0.2%. It left the y/y gain at 3.1%
which remained the strongest since April 2009. A 0.3% rise had been
expected. The unemployment rate held steady at an expected 3.7%. It was the
lowest rate since December 1969.

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.

The Fed's latest Beige Book covering regional economic
conditions is available <a href="https://www.federalreserve.gov/monetarypolicy/beigebook201812.htm">here</a>.

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Payroll Employment</td>
 <td >155</td>
 <td >237</td>
 <td >119</td>
 <td >1.7%</td>
 <td >1.6%</td>
 <td >1.8%</td>
 <td >2.1%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Previous Estimate</td>
 <td >--</td>
 <td >250</td>
 <td >118</td>
 <td >--</td>
 <td >--</td>
 <td >--</td>
 <td >--</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Manufacturing</td>
 <td >27</td>
 <td >26</td>
 <td >19</td>
 <td >2.3</td>
 <td >0.7</td>
 <td >0.1</td>
 <td >1.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Construction</td>
 <td >5</td>
 <td >24</td>
 <td >15</td>
 <td >4.0</td>
 <td >3.4</td>
 <td >4.1</td>
 <td >5.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Private Service-Producing</td>
 <td >132</td>
 <td >198</td>
 <td >80</td>
 <td >1.7</td>
 <td >1.8</td>
 <td >2.2</td>
 <td >2.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government</td>
 <td >-6</td>
 <td >-14</td>
 <td >2</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >0.9</td>
 <td >0.7</td>
 </tr>
 <tr>
 <td class="firstcol" >Average Weekly Hours - Private Sector</td>
 <td >34.4</td>
 <td >34.5</td>
 <td >34.4</td>
 <td >34.5</td>
 <td >34.4</td>
 <td >34.4</td>
 <td >34.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Private Sector Average Hourly Earnings
 (%)</td>
 <td >0.2</td>
 <td >0.1</td>
 <td >0.3</td>
 <td >3.1</td>
 <td >2.5</td>
 <td >2.6</td>
 <td >2.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Unemployment Rate (%)</td>
 <td >3.7</td>
 <td >3.7</td>
 <td >3.7</td>
 <td >4.1</td>
 <td >4.4</td>
 <td >4.9</td>
 <td >5.3</td>
 </tr>
 </tbody>
 </table>
 
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Labor market strength eased during November. Nonfarm payrolls increased 155,000 (1.7% y/y) after a 237,000 rise during October, revised from 250,000. September's gain was raised to 119,000 from 118,000. The November increase fell [...]

U.S. Employment and Earnings Gains Weaken Unexpectedly

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Labor market strength eased during November. Nonfarm payrolls
increased 155,000 (1.7% y/y) after a 237,000 rise during October, revised from
250,000. September's gain was raised to 119,000 from 118,000. The November
increase fell short of expectations for a 200,000 rise in the Action Economics
Forecast Survey. Average hourly earnings increased 0.2% (3.1% y/y) during
November after a 0.1% rise, revised from 0.2%. It left the y/y gain at 3.1%
which remained the strongest since April 2009. A 0.3% rise had been expected. The unemployment rate held
steady at an expected 3.7%. It remains the lowest rate since December 1969.
From the payroll survey, the 155,000 increase in jobs
was held back by a 5,000 increase (4.0% y/y) in construction which followed
seven months of much stronger gain. Mining &amp; logging jobs fell 3,000 (7.6%
y/y), the first decline in two years. Holding steady was factory sector
employment, which increased by 27,000 (2.3% y/y). Strength has been notable in
several durable goods industries.
The 132,000 increase (1.7% y/y) in private services jobs
followed a 198,000 gain. It reflected an improved 53,000 increase (1.1% y/y) in
trade, transportation &amp; utilities. Elsewhere, job growth softened.
Professional &amp; business service sector hiring increased 32,000 (2.7% y/y).
It was the smallest gain since December 2017. Temporary help employment rose a
diminished 8,300 (2.8% y/y). Health care &amp; social assistance employment
improved 40,100 (2.2% y/y), but the rise was held back by a 6,400 decline (+0.9%
y/y) in education jobs. Employment in the leisure &amp; hospitality sector also
moderated to 15,000 (1.7% y/y). The gain in financial activities employment
halved to 6,000 (1.4% y/y) and information services employment fell 8,000 (-0.8%
y/y).
The number of jobs in the public sector declined 6,000 (+0.2%
y/y) following a 14,000 fall. State government jobs eased 13,000 (-0.3% y/y).
Hiring increased at the local level by 4,000 (0.4% y/y) and at the federal level
by 3,000, but it was unchanged y/y.
The length of the average workweek eased to 34.4 hours. The
peak for the current expansion occurred in June at 34.6 hours. The mining
logging workweek held steady at 45.8 hours and the factory sector workweek also
was stable at 40.8 hours. The private service-producing workweek held steady at
33.3 hours. It reflected stability in financial activities hours at 37.8 and
stability in professional &amp; business services at 36.1 hours. The length of
the construction sector workweek eased to 38.8 hours.&nbsp;&nbsp;&nbsp;
The 0.2% gain (3.1% y/y) in average hourly earnings reflected
an improved 0.3% rise (2.3% y/y) in the mining &amp; logging sector. It followed
a 0.5% decline. The rise in factory sector earnings improved to 0.3% (1.8% y/y).
The gain in private service sector earnings was steady at 0.2% (3.2% y/y) while
construction sector pay rose an improved 0.2% (3.7% y/y).
From the household employment survey, the unchanged
3.7% unemployment rate reflected a 233,000 increase in employment and a 133,000
rise in the labor force. The total unemployment rate, including the marginally
attached and those working part-time for economic reasons, increased to 7.6%,
its highest level since June. The labor force participation rate held steady at
62.9%, about where it's been since early 2016. The labor force participation
rate for men aged 25-54 years it held at 89.0% and for women of that age, it
eased to 75.6%. The average duration of unemployment fell to 21.7 weeks and
nearly equaled the low for the economic expansion.&nbsp;
The unemployment rate for individuals with less than a high
school diploma fell to 5.6% and for high school graduates but no college, it
declined to 3.5%. For those with some college but no
degree, it rose to 3.1%. For college graduates, the jobless rate increased to
2.2%.
By age group, individuals aged 16-19
were 12.0% unemployed. The jobless rate for those 20-24 was 6.5%, and those aged
25-54 were 3.1% unemployed. Persons over age 55 were 2.9sssssssssssssssssssss%
unemployed.&nbsp;&nbsp;&nbsp;
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.
The Fed's latest Beige Book covering regional economic
conditions is available here <a href="https://www.federalreserve.gov/monetarypolicy/beigebook201812.htm">https://www.federalreserve.gov/monetarypolicy/beigebook201812.htm</a>
<table width="936" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="973">Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" width="127">Nov</th>
 <th scope="col" width="127">Oct</th>
 <th scope="col" width="128">Sep</th>
 <th scope="col" width="128">Nov Y/Y</th>
 <th scope="col" width="128">2017</th>
 <th scope="col" width="128">2016</th>
 <th scope="col" width="44">2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="973">Payroll Employment</td>
 <td align="center" width="127">155</td>
 <td align="center" width="127">237</td>
 <td align="center" width="128">119</td>
 <td align="center" width="128">1.7%</td>
 <td align="center" width="128">1.6%</td>
 <td align="center" width="128">1.8%</td>
 <td align="center" width="44">2.1%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="973">&nbsp;Previous Estimate</td>
 <td align="center" width="127">--</td>
 <td align="center" width="127">250</td>
 <td align="center" width="128">118</td>
 <td align="center" width="128">--</td>
 <td align="center" width="128">--</td>
 <td align="center" width="128">--</td>
 <td align="center" width="44">--</td>
 </tr>
 <tr>
 <td class="firstcol" width="973">&nbsp; Manufacturing</td>
 <td align="center" width="127">27</td>
 <td align="center" width="127">26</td>
 <td align="center" width="128">19</td>
 <td align="center" width="128">2.3</td>
 <td align="center" width="128">0.7</td>
 <td align="center" width="128">0.1</td>
 <td align="center" width="44">1.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="973">&nbsp; Construction</td>
 <td align="center" width="127">5</td>
 <td align="center" width="127">24</td>
 <td align="center" width="128">15</td>
 <td align="center" width="128">4.0</td>
 <td align="center" width="128">3.4</td>
 <td align="center" width="128">4.1</td>
 <td align="center" width="44">5.0</td>
 </tr>
 <tr>
 <td class="firstcol" width="973">&nbsp; Private Service-Producing</td>
 <td align="center" width="127">132</td>
 <td align="center" width="127">198</td>
 <td align="center" width="128">80</td>
 <td align="center" width="128">1.7</td>
 <td align="center" width="128">1.8</td>
 <td align="center" width="128">2.2</td>
 <td align="center" width="44">2.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="973">&nbsp; Government</td>
 <td align="center" width="127">-6</td>
 <td align="center" width="127">-14</td>
 <td align="center" width="128">2</td>
 <td align="center" width="128">0.2</td>
 <td align="center" width="128">0.4</td>
 <td align="center" width="128">0.9</td>
 <td align="center" width="44">0.7</td>
 </tr>
 <tr>
 <td class="firstcol" width="973">Average Weekly Hours - Private Sector</td>
 <td align="center" width="127">34.4</td>
 <td align="center" width="127">34.5</td>
 <td align="center" width="128">34.4</td>
 <td align="center" width="128">34.5</td>
 <td align="center" width="128">34.4</td>
 <td align="center" width="128">34.4</td>
 <td align="center" width="44">34.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="973">Private Sector Average Hourly Earnings
 (%)</td>
 <td align="center" width="127">0.2</td>
 <td align="center" width="127">0.1</td>
 <td align="center" width="128">0.3</td>
 <td align="center" width="128">3.1</td>
 <td align="center" width="128">2.5</td>
 <td align="center" width="128">2.6</td>
 <td align="center" width="44">2.3</td>
 </tr>
 <tr>
 <td class="firstcol" width="973">Unemployment Rate (%)</td>
 <td align="center" width="127">3.7</td>
 <td align="center" width="127">3.7</td>
 <td align="center" width="128">3.7</td>
 <td align="center" width="128">4.1</td>
 <td align="center" width="128">4.4</td>
 <td align="center" width="128">4.9</td>
 <td align="center" width="44">5.3</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Consumer Credit Usage Expands&nbsp; 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;December 7, 2018
Consumer credit outstanding increased $25.38 billion during
October following an $11.57 billion September rise, revised from $10.93 billion. A
$17.00 billion gain had been expected in the Action Economics
Forecast Survey. During the past ten years, there has been a 52% correlation
between the y/y gain in consumer credit and y/y growth in personal consumption
expenditures.
Nonrevolving credit usage increased $16.18 billion (5.4% y/y)
during October. Gains here have been trending upward this year. Federal government borrowing (42% of the total) rose a weaker
8.1% y/y. Borrowing from depository institutions (25% of the total) rose a
slightly improved 4.0% y/y but finance company balances (18% of the total) eased
0.7% y/y. Credit
union loans (13% of the total) rose a greatly strengthened 11.8% y/y.
Revolving consumer credit balances jumped $9.21 billion in
October (2.8% y/y). Balances at depository institutions (88% of the total)
rose a lessened 4.7% y/y. Borrowing from credit unions (6% of the total) rose
8.3% y/y. Finance company balances (2% of the total) fell 10.4%
y/y, while nonfinancial business borrowing (2% of the total) weakened 4.0% y/y.
These Federal Reserve Board figures are break-adjusted and
calculated by Haver Analytics. There is a break in the credit outstanding data
from November 2010 to December 2010 due to the Fed's benchmarking process.
Benchmark estimates are based on the Census of Finance Companies (CFC) and the
Survey of Finance Companies (SFC) conducted in 2010 and 2011, respectively.
The consumer credit data are available in Haver's USECON
database. The Action Economics figures are contained in the AS1REPNA
database.
Assessing Financial Stability over the Cycle from Fed
Governor Lael Brainard can be found here <a href="https://www.federalreserve.gov/newsevents/speech/brainard20181207a.htm">https://www.federalreserve.gov/newsevents/speech/brainard20181207a.htm</a>
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="976">Consumer Credit Outstanding (M/M Chg,
 SA)</th>
 <th scope="col" width="148">Oct</th>
 <th scope="col" width="148">Sep</th>
 <th scope="col" width="148">Aug</th>
 <th scope="col" width="148">Oct y/y</th>
 <th scope="col" width="149">2017</th>
 <th scope="col" width="149">2016</th>
 <th scope="col" width="149">2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="976">Total</td>
 <td align="center" width="148">$25.38 bil.</td>
 <td align="center" width="148">$11.57 bil.</td>
 <td align="center" width="148">$23.21 bil.</td>
 <td align="center" width="148">4.7%</td>
 <td align="center" width="149">5.0%</td>
 <td align="center" width="149">6.7%</td>
 <td align="center" width="149">3.0%</td>
 </tr>
 <tr>
 <td class="firstcol" width="976">&nbsp; &nbsp;Nonrevolving</td>
 <td align="center" width="148">16.18</td>
 <td align="center" width="148">11.88</td>
 <td align="center" width="148">18.59</td>
 <td align="center" width="148">5.4</td>
 <td align="center" width="149">4.8</td>
 <td align="center" width="149">6.7</td>
 <td align="center" width="149">3.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="976">&nbsp; &nbsp;Revolving</td>
 <td align="center" width="148">9.21</td>
 <td align="center" width="148">-0.31</td>
 <td align="center" width="148">4.62</td>
 <td align="center" width="148">2.8</td>
 <td align="center" width="149">5.6</td>
 <td align="center" width="149">6.8</td>
 <td align="center" width="149">2.1</td>
 </tr>
 </tbody>
</table>

&nbsp;

&nbsp;

</body>

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<a href="/comment/181206f.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206f.png"></a>
 <a href="/comment/181206g.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206g.png"></a>

Output per hour in the nonfarm business sector was revised up to a 2.3% gain at a seasonally adjusted annual rate in Q3'18 (1.3% year-over-year), from the previously reported 2.2% increase. In Q2 productivity growth remained at a 3.0% rate. The consensus from the Action Economics Forecast Survey looked for a Q3 gain of 2.3%. Third quarter output and hours worked were unrevised at 4.1% (3.7% y/y) and 1.8% (2.3% y/y) respectively.

Unit labor costs were revised substantially lower to 0.9% in Q3 from 1.2% and -2.8% in Q2 (was -1.0%). These changes decreased the third quarter year-on-year gain to 1.2% from 1.5%. A 1.0% quarterly pace in Q3 had been expected by the Action Economics survey. These revisions were predominantly the result of slower compensation growth for both quarters: 3.1% (2.2% y/y) in Q3 and flat in Q2.

In the manufacturing sector, productivity was revised meaningfully higher to a 1.0% annualized gain Q3 (was 0.5%) and 1.4% y/y. The Q2 reading was unchanged at 1.2%. Output increased at an upwardly revised 4.1% pace in Q3 (3.6% y/y), while hours worked grew a slightly faster 3.1% (2.1% y/y).

Unit labor costs in the factory sector declined at a 1.2% rate in Q3 (-1.2% y/y), following a 6.1% drop. Compensation per hour edged down 0.2% (+0.2% y/y) after falling 5.0%.

The productivity &amp; cost figures are available in Haver's USECON
database. The expectations figures are from the Action Economics Forecast Survey
and are found in the AS1REPNA database.

<a href="/comment/181206h.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206h.png"></a>
 <a href="/comment/181206i.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206i.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Productivity &amp; Costs
 (SAAR, %)</th>
 <th>Q3'18</th>
 <th>Q2'18</th>
 <th>Q1'18</th>
 <th>Q3'18 Y/Y</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 <tbody>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Nonfarm Business Sector</td>
 </tr>
 <tr>
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >2.3</td>
 <td >3.0</td>
 <td >0.3</td>
 <td >1.3</td>
 <td >1.1</td>
 <td >0.1</td>
 <td >1.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Compensation per Hour</td>
 <td >3.1</td>
 <td >0.0</td>
 <td >3.8</td>
 <td >2.2</td>
 <td >3.4</td>
 <td >1.1</td>
 <td >3.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Unit Labor Costs</td>
 <td >0.9</td>
 <td >-2.8</td>
 <td >3.4</td>
 <td >0.9</td>
 <td >2.2</td>
 <td >0.9</td>
 <td >1.8</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Manufacturing Sector</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >1.0</td>
 <td >1.2</td>
 <td >-0.8</td>
 <td >1.4</td>
 <td >0.7</td>
 <td >0.3</td>
 <td >-1.5</td>
 </tr>
 <tr>
 <td class="firstcol" >Compensation per Hour</td>
 <td >-0.2</td>
 <td >-5.0</td>
 <td >4.6</td>
 <td >0.2</td>
 <td >3.3</td>
 <td >0.6</td>
 <td >2.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Unit Labor Costs</td>
 <td >-1.2</td>
 <td >-6.1</td>
 <td >5.5</td>
 <td >-1.2</td>
 <td >2.6</td>
 <td >0.3</td>
 <td >4.1</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Output per hour in the nonfarm business sector was revised up to a 2.3% gain at a seasonally adjusted annual rate in Q3'18 (1.3% year-over-year), from the previously reported 2.2% increase. In Q2 productivity growth remained at a 3.0% [...]

U.S. Productivity Revised Slightly Higher in Q3; Unit Labor Costs Lower

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<a href="/comment/181206n.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206n.png"></a>
 <a href="/comment/181206o.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206o.png"></a>

The U.S. trade deficit in goods and services widened further to $54.02 billion in September from a slightly upwardly revised $53.31 billion in August.





The international trade data as well as oil prices can be found in Haver’s USECON
database. Detailed figures on international trade are available in the USINT database.
The expectations figures are from the Action Economics Forecast Survey, which is carried in AS1REPNA.

<a href="/comment/181206p.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206p.png"></a>
 <a href="/comment/181206q.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206q.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Foreign Trade in Goods &amp;
 Services (Current $)</th>
 <th>Oct</th>
 <th>Sep</th>
 <th>Aug</th>
 <th>Y/Y</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" scope="col" >U.S. Trade Deficit ($ bil.)</td>
 <td >55.49</td>
 <td >54.56</td>
 <td >53.69</td>
 <td >46.99 
 (10/17)</td>
 <td >552.28</td>
 <td >502.00</td>
 <td >498.53</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Exports of Goods &amp; Services (% Chg)</td>
 <td >-0.1</td>
 <td >1.5</td>
 <td >-0.7</td>
 <td >6.3</td>
 <td >6.1</td>
 <td >-2.2</td>
 <td >-4.6</td>
 </tr>
 <tr>
 <td class="firstcol" >Imports of Goods &amp; Services (% Chg)</td>
 <td >0.2</td>
 <td >1.5</td>
 <td >0.7</td>
 <td >8.5</td>
 <td >6.8</td>
 <td >-1.7</td>
 <td >-3.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Petroleum (% Chg)</td>
 <td >-2.6</td>
 <td >-1.6</td>
 <td >0.6</td>
 <td >26.9</td>
 <td >27.2</td>
 <td >-19.5</td>
 <td >-45.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Nonpetroleum Goods (% Chg)</td>
 <td >0.4</td>
 <td >2.1</td>
 <td >0.8</td>
 <td >8.6</td>
 <td >5.6</td>
 <td >-1.2</td>
 <td >2.2</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The U.S. trade deficit in goods and services widened further to $54.02 billion in September from a slightly upwardly revised $53.31 billion in August. The international trade data as well as oil prices can be found in Haver’s USECON [...]

PUT NEW TT U.S. Trade Deficit Increases for Fourth Consecutive Month in September

Sandy Batten

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<a href="/comment/181206j.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206j.png"></a>
 <a href="/comment/181206k.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206k.png"></a>

Manufacturers' orders increased 0.7% m/m (7.9% y/y) in September, on top of an upwardly revised 2.6% m/m jump in August......






The factory sector figures are available in Haver's USECON database.
The Action Economics Forecasts survey is in AS1REPNA.

<a href="/comment/181206l.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206l.png"></a>
 <a href="/comment/181206m.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206m.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Factory Sector (% chg) -
 NAICS Classification</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >New Orders</td>
 <td >????</td>
 <td >0.7</td>
 <td >2.6</td>
 <td >7.9</td>
 <td >5.7</td>
 <td >-2.9</td>
 <td >-8.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Shipments</td>
 <td >????</td>
 <td >0.9</td>
 <td >0.7</td>
 <td >7.9</td>
 <td >5.0</td>
 <td >-3.2</td>
 <td >-6.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Unfilled Orders</td>
 <td >????</td>
 <td >0.8</td>
 <td >0.9</td>
 <td >4.9</td>
 <td >2.0</td>
 <td >-1.2</td>
 <td >-2.7</td>
 </tr>
 <tr>
 <td class="firstcol" >Inventories</td>
 <td >????</td>
 <td >0.5</td>
 <td >0.1</td>
 <td >4.8</td>
 <td >4.5</td>
 <td >-0.7</td>
 <td >-0.8</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Manufacturers' orders increased 0.7% m/m (7.9% y/y) in September, on top of an upwardly revised 2.6% m/m jump in August...... The factory sector figures are available in Haver's USECON database. The Action Economics Forecasts survey [...]

PUT NEW TT U.S. Factory Orders in September Add to August Jump

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<a href="/comment/181206f.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206f.png"></a>
 <a href="/comment/181206g.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206g.png"></a>

PREVIOUS>>>>Output per hour in the nonfarm business sector grew 2.2%
(SAAR, 1.3% y/y) in Q3'18 following a 3.0% gain in Q2.
Unit labor costs rose 1.2% (1.5% y/y) last quarter and reversed a 1.0% Q2 decline............




The productivity &amp; cost figures are available in Haver's USECON
database. The expectations figures are from the Action Economics Forecast Survey
and are found in the AS1REPNA database.

<a href="/comment/181206h.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206h.png"></a>
 <a href="/comment/181206i.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181206i.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Productivity &amp; Costs
 (SAAR, %)</th>
 <th>Q4'18</th>
 <th>Q3'18</th>
 <th>Q2'18</th>
 <th>Q4'18 Y/Y</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 <tbody>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Nonfarm Business Sector</td>
 </tr>
 <tr>
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >???</td>
 <td >2.2</td>
 <td >3.0</td>
 <td >1.3</td>
 <td >1.1</td>
 <td >0.1</td>
 <td >1.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Compensation per Hour</td>
 <td >???</td>
 <td >3.5</td>
 <td >1.9</td>
 <td >2.8</td>
 <td >3.4</td>
 <td >1.1</td>
 <td >3.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Unit Labor Costs</td>
 <td >???</td>
 <td >1.2</td>
 <td >-1.0</td>
 <td >1.5</td>
 <td >2.2</td>
 <td >0.9</td>
 <td >1.8</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Manufacturing Sector</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >???</td>
 <td >0.5</td>
 <td >1.2</td>
 <td >1.3</td>
 <td >0.7</td>
 <td >0.3</td>
 <td >-1.5</td>
 </tr>
 <tr>
 <td class="firstcol" >Compensation per Hour</td>
 <td >???</td>
 <td >1.5</td>
 <td >1.3</td>
 <td >2.2</td>
 <td >3.3</td>
 <td >0.6</td>
 <td >2.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Unit Labor Costs</td>
 <td >???</td>
 <td >0.9</td>
 <td >0.1</td>
 <td >0.9</td>
 <td >2.6</td>
 <td >0.3</td>
 <td >4.1</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

PREVIOUS>>>>Output per hour in the nonfarm business sector grew 2.2% (SAAR, 1.3% y/y) in Q3'18 following a 3.0% gain in Q2. Unit labor costs rose 1.2% (1.5% y/y) last quarter and reversed a 1.0% Q2 decline............ The productivity [...]

PUT NEW TT U.S. Productivity Growth Slows, Lifting Unit Labor Costs

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Resilient US economy is pushing up longer-term inflation expectations and interest rates

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The Conference Board's Index of Consumer Confidence fell 8.4% (-11.8% y/y) to 86.0 after a 6.2% decline in March to 93.9, revised from down 7.2%. A reading of 87.2 had been expected in the Action Economics Forecast Survey. The April figure was 23.8% below its November 2024 high. Weakness in confidence is widespread amongst components in this latest report.

The Expectations Index plunged 18.7% (-20.9% y/y) to 54.4, after falling 10.6% in March, revised from a 12.8% decline. This latest figure was the weakest since October 2011. The Present Situation index fell 0.7% (-5.0% y/y) to 133.5, after declining 2.7% in March and 1.3% in February. The reading was the lowest in seven months.

The percentage of respondents assessing business conditions as “good” rose to 19.2% this month after declining to 18.3% in March. The index hit a high of 22.0% in October. The percentage assessing conditions as “bad” eased to 16.1% after rising to 16.5% in March. The appraisal of labor market conditions dipped m/m in April as 31.7% of respondents thought jobs were plentiful, down from 33.6% in March. Jobs were viewed as hard to get by 16.6% of respondents this month, up from 16.1% in March. This measure has risen from 11.0% in January 2024. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) fell to 15.1% compared to 17.5% in March and remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions deteriorated in April. A lessened 15.7% of respondents expect conditions to improve over the next six months, down from 20.8% in both February and January, while a higher 34.8% expect them to deteriorate, up from 25.5% in February. On employment, a lessened 13.7% expect the number of jobs to increase over the next six months. The percentage expecting the number of jobs to decline in the next six months rose to 32.1% after surging to 26.6% in February. A lessened 15.0% expect income to increase in six months. That remained down from a high of 20.7% in November and compares to a higher 18.2% who expect income to decrease, up from 11.8% in October.

The expected rate of price inflation over the next twelve months jumped to 7.0% in April after increasing to 6.0% in March. This compares to a low of 5.0% in November. Interest rates are expected to rise this year by a higher 56.1% of respondents, up from a 45.5% low in November 2024. The percentage of respondents expecting equity prices to increase over the next twelve months declined to 36.1% after dropping from 57.2% in November, while the percentage expecting a decline in stock prices jumped to 48.5% from a 21.7 low in November.

The percentage of respondents planning to buy a home fell in April to 4.5% from 5.6% in March. Plans to purchase an automobile eased to 10.5% this month, down from 10.7% in March and February.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Confidence weakens to lowest level since May 2020.
- Expectations reading plummets to 2011 low; present situation reading eases.
- Inflation and interest rate expectations rise further.

U.S. Consumer Confidence Slides Again in April; Inflation Expectations Strengthen

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Job openings fell 288,000 to 7.192 million in March from a downwardly revised 7.480 million in February (previously 7.568 million), according to the Job Openings and Labor Turnover Survey. This is the lowest level of openings since last September although openings have been relatively trendless for the past year. The number of openings continues to exceed the number unemployed, but by only 109,000, the smallest amount since the pandemic, and indicates a relatively balanced labor market. The job openings rate fell to 4.3% in March from 4.5% in February. The March figure was in line with those immediately prior to the pandemic and is well below a high of 7.4% reached in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

Private sector openings fell 229,000 to 6.359 million in March from 6.588 million in February. The March decline was widely spread with manufacturing (+4,000) and “other” (+20,000) the only major sectors experiencing an increase. Trade, transportation and utilities openings fell 62,000 on top of 198,000 plunge in February. Construction openings fell 38,000, their first monthly decline in three months. Private education and health services openings fell 61,000, their third monthly decline in the past four months. The private sector job openings rate edged down to 4.5% in March from 4.6% in February (revised down from 4.7%). It has fluctuated between 4.4% and 5.0% over the past 13 months without a noticeable trend.

Total hiring edged up 41,000 to 5.411 million in March. This was the second monthly gain in the past six months. Over the past year, hiring has fallen 61,000. Private hiring rose 30,000 to 5.050 million, its fourth consecutive monthly gain although it has fallen 41,000 over the past year. Hiring in leisure and hospitality increased 48,000, the first increase in three months. Private educational and health services hiring rose 36,000, also its first increase in three months. Finance hiring increased 28,000. In contrast, construction hiring fell 45,000, the first monthly decline in three months. And professional and business services hiring fell 43,000. Total government hiring rose 11,000 which included a 1,000 decline in federal government hiring. The total hiring rate was unchanged at 3.4%, where it has been for five of the past six months. The private hiring rate was also unchanged at 3.7% in March for the sixth consecutive month.

Total job separations fell 179,000 to 5.137 million in March. They have been little changed over the past year. Quits increased 82,000 to 3.332 million; layoffs fell 222,000, the largest monthly decline since February 2023; other separations fell 39,000 to 247,000. Quits are voluntary separations initiated by the employee and are often viewed as an indicator of workers’ willingness to leave jobs for other opportunities. Private quits (+91,000 in March to 3.145 million) have been on a modest uptrend since late last year, possibly pointing to a slight firming of the labor market. Private layoffs (separations initiated by the employer) appear to be reversing their uptrend from last year. They fell 229,000 to 1.451 million in March, also their largest monthly decline since Febuary2023, led by a 79,000 monthly decline in leisure and hospitality layoffs and a 56,000 drop in trade, transportation and utilities layoffs.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings fell to 7.192 million from downwardly revised 7.480 million in February.
- The job opening rate slid to 4.3% from 4.5%.
- Hiring was little changed in March.
- Layoffs fell to lowest level since last June.

JOLTS: Openings and Layoffs Fall in March; Hiring Little Changed

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The advance estimate of the U.S. international trade deficit in goods deepened to $162.0 billion in March after narrowing to $147.8 billion in February, as reported by the U.S. Census Bureau showed. A deficit of $143.0 billion for March had been expected by the Action Economics Forecast Survey. In Q1'25, the goods trade deficit widened to $463.2 billion after rising to $324.0 billion in Q4'24 from $305.1 billion in Q3'24. In real terms, the Q1’25 trade deficit is likely to have subtracted from real GDP growth, after having added 0.26 percentage point to growth in Q4'24.

Total goods imports jumped 5.0% (31.3% y/y) to $342.7 billion in March after a 0.3% February gain. Consumer goods imports surged 27.7% (54.1% y/y) following a 2.9% increase. Auto imports strengthened 6.6% (9.5% y/y) after a 1.2% rise while capital goods imports increased 4.0% in March (23.2% y/y) following a 1.7% February gain. Offsetting these increases, imports of industrial supplies & materials declined 13.3% (+39.9% y/y) after falling 3.7% in February. Foods, feeds & beverage imports eased 0.4% (+10.9% y/y) following a 2.1% decline and imports of “other” goods were off 5.6% (+13.7% y/y) after a 4.7% February increase.

Total goods exports rose 1.2% (6.9% y/y) to $180.8 billion in March, the fourth rise in five months, after increasing 3.7% in February. The rise reflected a 6.9% surge (-0.5% y/y) in foods, feeds & beverages after a decline of 2.5% In February. Industrial supplies & materials exports gained 3.2% (4.5% y/y) after increasing 4.6% in February. Exports of autos surged 7.9% (10.8% y/y) following a 2.7% increase. Exports of other goods edged 0.3% higher (2.4% y/y) after four straight months of decline. Offsetting these gains, consumer goods exports declined 1.6% (+1.9% y/y) following a 0.6% rise. Capital goods exports were off 2.6% (+13.3% y/y) after rising 4.8% in February.  

The advance international trade data can be found in Haver's **USECON** database. The expectation figure is from the Action Economics Forecast Survey, which is in **AS1REPNA**.

- Advance reading reflects higher consumer goods & auto imports.
- Other imports also are strong, while exports rise modestly.
- Exports growth held back by fall in nonauto consumer & capital goods.

U.S. Goods Trade Deficit Deepens to Another Record in March as Imports Surge

Winnie Tapasanun

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U.S. house prices edged up 0.1% m/m in February after rises of 0.3% in January (+0.2% initially) and 0.4% in December (+0.5% previously), according to the Federal Housing Finance Agency (FHFA) House Price Index. The February HPI at 437.32 was 13.3% above a low of 386.15 in August 2022. The February m/m reading was the 11th straight monthly gain but the smallest since May 2024. The year-on-year rate of increase decelerated to 3.9% in February, the lowest since June 2023, from 5.0% in January; thus, having remained lower than 7.3% in February 2024 and well below a high of 18.7% in February 2022.

House prices rose m/m in February (vs. January) in six of the nine census divisions. These included New England (1.3% vs. 0.1%), East North Central (0.8% vs. 0.5%), Middle Atlantic (0.6% vs. 1.0%), South Atlantic (0.3% vs. -0.6%), West North Central (0.2% vs. 0.8%), and East South Central (0.1% vs. -0.03%). To the downside, house prices fell m/m in three census divisions in February (vs. January): Pacific (-0.8% vs. 0.6%), Mountain (-0.7% vs. -0.02%), and West South Central (-0.1% vs. 0.9%).

Year-on-year house prices continued to gain in February. However, the pace of increase decelerated y/y in February (vs. January) in all of the nine census divisions. These were Pacific (0.9% vs. 3.6%), West South Central (2.1% vs. 2.8%), South Atlantic (3.2% vs. 4.1%), Mountain (3.5% vs. 4.3%), East South Central (3.7% vs. 4.4%), West North Central (4.2% vs. 5.0%), New England (6.1% vs. 7.5%), East North Central (6.5% vs. 7.0%), and Middle Atlantic (7.0% vs. 8.5%).

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

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- Feb. FHFA HPI +0.1% m/m (+3.9% y/y, lowest since June ’23); +0.3% m/m (+5.0% y/y) in Jan.
- House prices up m/m in six of nine census divisions but down in Pacific, Mountain, and West South Central.
- House prices up y/y in all of the nine regions, w/ the highest rate in Middle Atlantic (7.0%) and the lowest rate in Pacific (0.9%).


U.S. FHFA House Price Growth Continues to Decelerate in February

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Retail gasoline prices for all grades slipped to an average $3.26 per gallon (-13.7% y/y) in the week ended April 28 after falling to $3.27 in the prior week. Prices were $3.37 per gallon to begin the month but remained above their low of $3.13 in the week of December 9. An earlier high was $3.79 in the week ending April 22, 2024. The all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel fell to $3.51 per gallon (-11.0% y/y) in the week of April 28 from $3.53 in the prior week. The latest diesel price stood well below 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 rose to $63.09 per barrel (-24.8% y/y) in the week ended April 25, after rising to $62.50 per barrel in the prior week. Prices remained below a high of $91.45 in the week of September 29, 2023. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $62.05 per barrel. The price of European Brent crude oil edged up to $67.92 per barrel (-23.3% y/y) in the week of April 25 from $67.76 in the previous week. Prices remained well below a recent high of $95.61 in the week of September 29, 2023 and compared to a peak of $127.40 in the week of June 10, 2022. Yesterday the price was $66.13 per barrel.

Natural gas prices declined last week to an average $2.97 per mmbtu (+92.9% y/y) in the week ended April 25, after falling to $3.26/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday’s price was $2.96/mmbtu.

Gasoline demand slipped 0.4% y/y in the four weeks ending April 18 following a 3.4% y/y decline in the prior four weeks. Demand for all petroleum products improved 0.4% y/y in the four weeks ending April 18 after a 1.7% y/y decline in the previous four-week period. Crude oil input to refineries fell 1.3% y/y in the four weeks ending April 18 after a 1.6% y/y decline in the prior four weeks.

Gasoline inventories rose 1.2% y/y in the week ending April 18 after a 2.9% y/y rise in the week ending April 11. Residual fuel oil inventories fell 19.0% y/y in the week of April 18, after a 14.0% y/y fall in the prior week. Crude oil inventories rose 2.6% y/y in the week of April 18 after a 1.8% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories fell w/w to 26.4 days in the week of April 18 from 27.5 days in the prior. The recent low was 22.9 days in the week of November 8. The supply of crude oil also was unchanged w/w at 28.3 days in the week of April 18 for the third straight week, up from 24.6 days in the week of January 10 but remained below a high of 31.9 days in the week of March 3, 2023.

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 ease.
- Crude oil prices rise.
- Natural gas costs decline further.

Economy in Brief

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