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Economy in Brief
U.S. Retail Sales Continue to Fall During December as COVID-19 Cases Increase
Total retail sales declined 0.7% (+2.9% y/y) during December...
Empire State Manufacturing Index Declines in January
The Empire State Manufacturing Index of General Business Conditions decreased to 3.5 in January...
U.S. Industrial Production Continues Recovery
Industrial production advanced 1.6% in December...
U.S. PPI Rose 0.3% in December
The Producer Price Index for final demand rose 0.3% (0.8% y/y) in December...
U.S. Business Inventories Accumulate during November as Sales Weaken
Total business inventories increased 0.5% during November (-3.2% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller January 6, 2020
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 2.6% during the four weeks ended Friday and 3.6% over the last three months. The price index increased 1.4% y/y. The 1.1% rise last year made up just a piece of the 12.0% drop in 2018.
Prices in the crude oil & benzene group rose 4.8% during the last four weeks as WTI crude oil prices strengthened to $61.92 per barrel on Friday. Prices were roughly one-third higher y/y. Prices of the petro-chemical benzene also strengthened 7.9% in the last four weeks (45.7% y/y). Metals prices increased 2.8% over four weeks as the cost of copper scrap rose 5.8% and steel scrap gained 5.6%. Zinc prices rose 1.5% in four weeks (-7.9% y/y) and lead prices improved 0.5% m/m (-3.6% y/y). Aluminum prices edged 0.4% higher in the last four weeks. Prices in the miscellaneous group improved 2.2% over four weeks as the cost of natural rubber gained 2.3%. The price of framing lumber rose 0.5% but plywood costs held steady in four weeks (-10.5% y/y). Prices in the textile group increased 1.6% during the last month. Cotton prices rose 7.8% and burlap prices improved 3.3% (-4.1% y/y).
The recent improvement in industrial commodity prices followed a 1.1% rise (-0.9% y/y) in U.S. factory output during November, which had declined in three of the prior four months. The consensus forecast from the National Association for Business Economics (NABE) calls for a modest 0.9% rise in factory sector output this year. During the last ten years, there has been a 71% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
All Items | 2.6 | 3.6 | -0.2 | 1.4 | 1.1 | -12.0 | 6.7 |
Textiles | 1.6 | 2.3 | 0.6 | -1.0 | -1.6 | -2.8 | 3.0 |
Cotton (cents per pound) | 7.8 | 10.8 | 7.0 | -3.5 | -6.6 | -9.2 | 9.8 |
Metals | 2.8 | 5.2 | -2.0 | -3.2 | -4.3 | -12.2 | 18.6 |
Aluminum ($ per metric ton) | 0.4 | 5.0 | 1.0 | -3.8 | -6.5 | -12.7 | 26.0 |
Copper Scrap (cents per pound) | 5.8 | 9.2 | 4.0 | 4.6 | 3.5 | -16.1 | 29.3 |
Steel Scrap ($ per ton) | 5.6 | 24.7 | -2.6 | 2.1 | -0.8 | 2.3 | 16.8 |
Crude Oil & Benzene | 4.8 | 6.4 | 3.3 | 20.3 | 20.2 | -20.0 | 8.1 |
Crude Oil (WTI, $ per Barrel) | 8.9 | 14.6 | 7.3 | 34.7 | 35.5 | -24.4 | 10.9 |
Miscellaneous | 2.2 | 2.0 | -0.9 | -0.6 | -0.0 | -14.8 | -0.5 |
Framing Lumber ($ per 1000 board ft.) | 0.5 | 10.1 | 16.5 | 21.1 | 22.6 | -23.1 | 20.0 |
Natural Rubber (cents per pound) | 2.3 | 9.2 | -18.1 | 8.2 | 10.7 | -4.1 | -29.6 |