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Economy in Brief
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
U.S. Home Builder Sentiment Slips in January
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Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
Euro Area Inflation Persists in Negative Territory
Euro area inflation is negative on a year-over-year basis for five months in a row...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller February 10, 2020
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) declined 2.0% during the four weeks ended Friday and 4.0% over the last year. The price index had been increasing as recently as the prior week. Last week's decline wiped away all of the gains logged since early-December.
Prices in the crude oil & benzene group declined 7.1% during the last four weeks as WTI crude oil prices weakened to $51.23 per barrel on Friday from a high of $61.92 four weeks earlier. Prices of the petro-chemical benzene also fell 1.3% in the last four weeks (+33.2% y/y) and reversed increases since late last year. Excluding crude oil, industrial commodity prices declined 1.0% during the last four weeks. Metals prices were off 6.2% over four weeks as steel scrap prices weakened 12.1% to the lowest level since late-November. The price of copper scrap also fell 7.7% in four weeks to a four-month low. Zinc prices were off 6.1% over four weeks (-19.4% y/y) and the cost of aluminum fell 4.6% m/m to the lowest level since late in 2016. Lead prices eased 2.2% m/m (-10.8% y/y). Prices in the textile group eased 0.3% during the last month. Cotton prices declined 3.8% to the lowest level since late-December and burlap prices improved 3.4% in four weeks (-2.3% y/y) to a seven month high. Working the other way, prices in the miscellaneous group improved 3.0% over four weeks as the cost of framing lumber gained 6.3%, but plywood prices held steady over that period (-11.9% y/y). Natural rubber prices declined 6.6% during the last month.
The recent weakness in industrial commodity prices may reflect weakness in demand from China. In the U.S., factory output improved 0.2% during December but remained down 1.3% y/y. During the last ten years, there has been a 65% correlation between the y/y change in industrial commodity prices and the y/y change in factory sector production.
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 | -2.0 | -0.4 | 1.2 | -4.0 | 1.1 | -12.0 | 6.7 |
Excluding Crude Oil | -1.0 | 0.2 | 1.6 | -3.9 | -0.6 | -11.1 | 4.9 |
Textiles | -0.3 | 1.5 | 3.0 | -1.6 | -1.6 | -2.8 | 3.0 |
Cotton (cents per pound) | -3.8 | 3.1 | 17.8 | -8.3 | -6.6 | -9.2 | 9.8 |
Metals | -6.2 | -6.5 | -4.5 | -14.7 | -4.3 | -12.2 | 18.6 |
Aluminum ($ per metric ton) | -4.6 | -5.8 | -2.5 | -9.4 | -6.5 | -12.7 | 26.0 |
Copper Scrap (cents per pound) | -7.7 | -3.8 | -0.8 | -8.2 | 3.5 | -16.1 | 29.3 |
Steel Scrap ($ per ton) | -12.1 | -0.7 | -9.3 | -20.3 | -0.8 | 2.3 | 16.8 |
Crude Oil & Benzene | -7.1 | -1.0 | -0.1 | 3.7 | 20.2 | -20.0 | 8.1 |
Crude Oil (WTI, $ per Barrel) | -17.2 | -9.5 | -5.1 | -5.1 | 35.5 | -24.4 | 10.9 |
Miscellaneous | 3.0 | 4.0 | 5.4 | 0.6 | -0.0 | -14.8 | -0.5 |
Framing Lumber ($ per 1000 board ft.) | 6.3 | 6.9 | 21.4 | 25.0 | 22.6 | -23.1 | 20.0 |
Natural Rubber (cents per pound) | -6.6 | 2.3 | 3.1 | -4.8 | 10.7 | -4.1 | -29.6 |