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Economy in Brief
EMU IP Drops Month-to-Month and Year-over-Year
Industrial output among EMU members fell by 1.8% month-to-month in March...
U.S. Producer Price Inflation Moderates in April
The Producer Price Index for Final Demand increased 0.5% during April...
U.S. Housing Affordability Plunges in March
Affordable homes are in short supply...
U.S. Unemployment Claims Edge Upward
Initial claims for unemployment insurance filed in the week ended May 7 rose to 203,000 (-58.9% y/y)...
U.K. Shows Scatter-Shot IP Trends
Industrial output in the United Kingdom is mixed and convoluted...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 19, 2020
• Prices post broad-based increases.
• Crude oil prices lead the upturn.
• Metals prices firm.
The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 2.8% during the four weeks ended today. The price index has rebounded to the highest level since the second week of March. Nevertheless, prices remained 9.7% lower than twelve months ago.
Strength in the crude oil & benzene group led the price increase in the last four weeks with a 15.4% rise. WTI crude oil prices improved to $37.42 per barrel, up from $25.28 in the middle of May. Prices remained down, however, from a high of $61.92 in the first week of January. Prices of the petro-chemical benzene rose 24.2% in the last four weeks but remained down by roughly one-half y/y. Excluding crude oil, industrial commodity prices rose 2.0% during the last four weeks but fell 8.2% during the last year.
Prices in the metals group improved 6.8% during the last four weeks as the cost of copper scrap rose 8.6% and lead prices increased 7.9% (-7.0% y/y). Aluminum prices strengthened 7.7% while steel scrap prices gained 5.3%. The price of zinc edged 0.2% higher in four weeks but fell 22.4% y/y. Prices in the textile group posted a modest 0.8% increase but cotton prices strengthened 3.0%. This gain was accompanied by a 2.6% rise (3.7% y/y) in the cost of burlap which is used for sacks, bags and gardening.
Working lower were prices in the miscellaneous group which were off 2.3% in the last month. The cost of tallow (used for food preparation) fell 29.1% in four weeks (-17.3% y/y) and reversed its earlier increases. Framing lumber prices rose 4.0% in four weeks but the cost of plywood held steady (-2.4% y/y). Natural rubber prices increased 9.8% over the last month.
Improved activity in the factory sector is an underpinning of the rise in industrial materials prices. Industrial output increased 3.8% in May (-16.5% y/y) following a 15.5% April decline. During the last ten years, there has been a 54% 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.
COVID-19 Stuns U.S. and Tenth District Economies, but Both Show Signs of Stabilization from the Federal Reserve Bank of Kansas City is available here.
FIBER Industrial Materials Price Index (%) | 1-Mth | 3-Mth | 6-Mth | 12-Mth | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
All Items | 2.8 | 0.9 | -9.4 | -9.7 | 1.1 | -12.0 | 6.7 |
Excluding Crude Oil | 2.0 | -0.9 | -7.2 | -8.2 | -0.6 | -11.1 | 4.9 |
Textiles | 0.8 | 1.4 | -0.6 | -1.0 | -1.6 | -2.8 | 3.0 |
Cotton (cents per pound) | 3.0 | 5.5 | -11.2 | -8.7 | -6.6 | -9.2 | 9.8 |
Metals | 6.8 | 4.8 | -8.2 | -10.0 | -4.3 | -12.2 | 18.6 |
Aluminum ($ per metric ton) | 7.7 | -3.8 | -10.9 | -10.0 | -6.5 | -12.7 | 26.0 |
Copper Scrap (cents per pound) | 8.6 | 11.2 | -6.6 | -1.8 | 3.5 | -16.1 | 29.3 |
Steel Scrap ($ per ton) | 5.3 | -1.4 | -11.3 | -9.8 | -0.8 | 2.3 | 16.8 |
Crude Oil & Benzene | 10.1 | 4.8 | -27.3 | -25.3 | 20.2 | -20.0 | 8.1 |
Crude Oil (WTI, $ per Barrel) | 15.4 | 36.8 | -38.2 | -30.6 | 35.5 | -24.4 | 10.9 |
Miscellaneous | -2.3 | -4.4 | -7.7 | -8.0 | -0.0 | -14.8 | -0.5 |
Framing Lumber ($ per 1000 board ft.) | 4.0 | 16.0 | -9.5 | 11.3 | 22.6 | -23.1 | 20.0 |
Natural Rubber (cents per pound) | 9.8 | 3.2 | -0.3 | -18.6 | 10.7 | -4.1 | -29.6 |