Carol Stone, CBE

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<p align="justify">The Conference Board's Consumer Confidence Index for November
eased 0.5% (-8.0% y/y)...........

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</p><p align="justify">The Consumer Confidence data are available in Haver's <b>CBDB</b>
database. The total indexes appear in <b>USECON</b>, and the market expectations
are in <b>AS1REPNA</b>.</p>

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      <th class="firstcol" scope="col" >Conference Board (SA,
        1985=100)</th>
      <th>Dec</th>
      <th>Nov</th>
      <th>Oct</th>
      <th>Dec Y/Y %</th>
      <th>2018</th>
      <th>2017</th>
      <th>2016</th>
    </tr>
  </thead>
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    <tr class="odd">
      <td class="firstcol" >Consumer Confidence Index</td>
      <td>125.5</td>
      <td>126.1</td>
      <td>126.3</td>
      <td>-8.0</td>
      <td>130.1</td>
      <td>120.5</td>
      <td>99.8</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp; Present Situation</td>
      <td>166.9</td>
      <td>173.5</td>
      <td>170.6</td>
      <td>-3.4</td>
      <td>164.8</td>
      <td>144.8</td>
      <td>120.3</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;&nbsp; Expectations</td>
      <td>97.9</td>
      <td>94.5</td>
      <td>96.8</td>
      <td>-12.8</td>
      <td>107.0</td>
      <td>104.3</td>
      <td>86.1</td>
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      <td class="firstcol" >Consumer Confidence By Age Group</td>
      <td></td>
      <td></td>
      <td></td>
      <td></td>
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      <td></td>
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      <td class="firstcol" >&nbsp;&nbsp; Under 35 Years</td>
      <td>115.3</td>
      <td>129.4</td>
      <td>150.0</td>
      <td>-19.5</td>
      <td>133.7</td>
      <td>130.2</td>
      <td>122.4</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp; Aged 35-54 Years</td>
      <td>124.9</td>
      <td>130.7</td>
      <td>127.3</td>
      <td>-4.0</td>
      <td>132.2</td>
      <td>123.5</td>
      <td>106.2</td>
    </tr>
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      <td class="firstcol" >&nbsp;&nbsp; Over 55 Years</td>
      <td>131.3</td>
      <td>120.8</td>
      <td>115.4</td>
      <td>-4.6</td>
      <td>126.3</td>
      <td>112.9</td>
      <td>84.6</td>
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The Conference Board's Consumer Confidence Index for November eased 0.5% (-8.0% y/y)........... The Consumer Confidence data are available in Haver's CBDB database. The total indexes appear in USECON, and the market expectations are [...]

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The Consumer Price Index increased 0.3% in September after rising 0.4% in August and 0.2% in July. The increase fell short of the 0.4% gain expected in the Action Economics Forecast Survey. Nevertheless, the 3.0% y/y increase in the headline CPI was the strongest since January and up from 2.3% in April. The CPI excluding food & energy increased 0.2% in September after 0.3% gains in both August and July. A 0.3% increase had been expected. The 3.0% y/y rise compared to 3.1% in August, up from 2.8% gains from March through May.

Energy prices rose 1.5% (2.8% y/y) last month after increasing 0.7% in August. Gasoline prices strengthened 4.1% (-0.5% y/y) after rising 1.9% in August. Fuel oil prices improved 0.6% (4.1% y/y) after easing 0.3% in August. Natural gas prices fell 1.2% (+11.7% y/y) following a 1.6% decline, and electricity prices eased 0.5% (+5.1% y/y) after a 0.2% August gain.

Food prices rose 0.2% (3.1% y/y) last month increasing 0.5% in August. Egg prices declined 4.7% (-1.3% y/y), after holding steady. Meat, poultry & fish prices strengthened 0.8% (6.0% y/y) after strengthening 1.1%, while dairy product prices fell 0.5% (+0.7% y/y), after edging 0.1% higher in August. Cereal & bakery product costs increased 0.7% (1.6% y/y) following a 0.1% gain while fruit & vegetable prices held steady (+1.3% y/y), after rising 1.6% in August. Nonalcoholic beverage prices increased 0.7% (5.3% y/y) in September after rising 0.6% in August.

Goods prices less food and energy rose 0.2% in September after a 0.3% increase. The 1.5% y/y price rise compared to a 1.9% y/y decline in both July and August of 2024. Appliance prices rose 0.8% (1.3% y/y), after gaining 0.4%. Home furnishings prices rose 0.2% (3.0% y/y) after a 0.1% improvement in August. Recreation product costs increased 0.4% (0.8% y/y) in last month, after holding steady. Apparel prices increased 0.7% (-0.1% y/y) in September after rising 0.5%. Education & communication product costs declined 0.8% (-4.0% y/y), the third straight month of decline. Medical care goods prices eased 0.1% (NSA, +0.7% y/y) after falling 0.3% in August. Prices of used cars and trucks fell 0.4% (+5.1% y/y) last month, after rising 1.0% in August, while new vehicle costs rose 0.2% (0.8% y/y) after a 0.3% increase.

Services prices less energy increased 0.2% in September (3.5% y/y) after rising 0.3% in August. Shelter prices (35.5% of the CPI) rose 0.2% (3.6% y/y) for the third month in the last four, as owners’ equivalent rent of primary residences edged 0.1% higher (3.8% y/y) after a 0.4% gain. The cost of lodging away from home strengthened 1.3% in September (-0.1% y/y), after a 2.3% increase. Rents of primary residences gained 0.2% (3.4% y/y) in September after two months of 0.3% gain. Transportation service prices rose 0.3% (2.5% y/y) after jumping 1.0% and the cost of motor vehicle insurance fell 0.4% (+3.1% y/y) in September, after holding steady. Public transportation costs surged 1.6% (1.8% y/y) after rising 3.6% during August. The cost of medical services rose 0.3% (3.9% y/y) after slipping 0.1%, and the cost of recreation services rose 0.4% (4.4% y/y) after falling 0.2% in August. Education & communication services prices edged up 0.1% (1.1% y/y) as they did in August.

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 gains in total & core price indexes ease.
- Year-to-year comparisons edge higher.
- Core goods prices remain firm, but core services inflation eases.


U.S. Consumer Price Inflation Moderates in September

Andrew Cates

**AI bubble concerns**
Valuation concerns around AI-related stocks have intensified in recent weeks, and this chart provides some clear context for why. The Technology sector is trading at a price-to-sales ratio of nearly 10 — far higher than any other sector in the S&P 500 — and well above its own historical averages. By contrast, sectors such as Energy, Health, and Consumer Staples are clustered around a far more modest ratio of 1–2. This extreme dispersion highlights how much investor optimism — or speculation — has concentrated in technology and AI-linked companies. For many in financial markets, this pattern echoes previous episodes of overvaluation, raising fears that the current AI enthusiasm may be starting to resemble bubble dynamics rather than simply reflecting future earnings potential.


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**Non-US equity markets and macro data surprises** 
By contrast, outside the US the picture looks more old-fashioned: equity swings have hugged the macro tape. The Dow Jones Global ex-US index’s 90-day moves track closely with the G10 “growth surprise minus inflation surprise” gauge. When growth data beat expectations, ex-US markets tend to rise; when inflation surprises on the upside, they falter. That pattern implies fundamentals—not narrative—have been doing the heavy lifting abroad, with macro impulses (real activity up, inflation pressure down) explaining far more of the equity gyrations than theme-driven factors.


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**Oil prices and interest rates**
One often overlooked reason for why the global economy has out-performed expectations in recent months concerns oil prices. Brent crude has drifted lower for much of the past year, and the chart below shows it moving broadly in step with the decline in US 2-year yield. Cheaper crude acts like a tax cut for consumers and energy-intensive firms, easing headline inflation and cushioning real incomes just as tariff noise has picked up. The softer energy bill has also reduced second-round cost pressures, helping inflation cool without a collapse in demand. In short, calmer oil prices have quietly underwritten the “soft-landing” mix: steadier growth with disinflation, and a bit more room for central banks to ease.


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**China’s credit growth** 
Another overlooked prop for global growth has been China’s quiet turn in credit. The next chart shows a modest but clear positive credit impulse (the change in the flow of China’s social financing), which—alongside this week’s Q3 GDP upside surprise—has arguably given a lift to sentiment on global growth. As Beijing eased financing constraints and nudged bank lending and bond issuance higher, Citigroup’s EM-weighted economic surprise index has also moved back into positive territory. That said, the impact has been uneven. The credit surge has done little so far to revive China’s ailing property market, which remains a key drag on domestic demand and a key source of uncertainty for the global economic outlook.


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**US wage inflation**
With official government data delayed by the shutdown, investors have been paying closer attention to private-sector sources to gauge inflation and labor market trends. These wage inflation figures in the chart below from the Indeed Hiring Lab are a case in point. Posted wage growth has continued to ease steadily, slipping from its post-pandemic highs above 8% to just over 2% y/y. This softening in wage pressures reinforces the message from the previous oil-price chart: inflation concerns are ebbing.


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**UK inflation** 
Turning to the UK, this week’s CPI inflation data for September came in softer than expected, helped by weaker food and energy inflation. That’s welcome—but the mix was less comforting beneath the surface. As the chart below shows, services CPI inflation remains stubbornly elevated. At the same time, PPI output price inflation has turned higher again, hinting at a rebuild in upstream cost momentum. Together, sticky services inflation and a re-firming producer-price pulse temper the headline good news and argue for caution about how quickly UK inflation can glide back to the BoE’s 2% target.


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Financial markets have been caught between conflicting crosscurrents in recent days. On the one hand, risk sentiment has been weighed down by mounting concerns over US lenders and broader credit conditions, renewed tariff worries, the ongoing government shutdown, and growing unease about a potential AI-driven valuation bubble (chart 1). On the other, expectations have strengthened that major central banks will continue to ease policy in the face of softer growth and moderating inflation, fueling hopes of a soft landing (chart 2). Supporting that view, oil prices have declined off easing geopolitical tensions in the Middle East (chart 3), and China’s credit impulse—together with stronger-than-expected GDP—has provided a quiet but important lift to global growth momentum (chart 4), even if property market weakness persists. US wage growth also continues to cool according to some private sector surveys (chart 5), helping to ease inflation concerns, while in the UK, softer headline inflation has been welcomed, though sticky services CPI and rising producer prices have tempered the good news (chart 6). Taken together, the macro narrative is one of lingering risks offset by moderating inflation pressures and easing hopes—an uneasy equilibrium that has left financial markets more volatile but still resilient.

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Charts of the Week: Risks and Relief

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Initial claims for unemployment insurance, calculated by Haver Analytics by summing state claims, declined 14,839 to 220,271 in the week ended October 11. The decline reversed earlier week’s increase of 10,841 and left claims at the lowest level since late-July. Nevertheless, initial claims have trended higher this year after weakening late in 2024, suggesting some softening in the job market since the beginning of the year.

Continuing claims for unemployment insurance, also calculated by Haver Analytics by summing state claims, fell to 1.928 million in the week ended October 4 after rising to 1.929 million in the prior week. Their trend tells the same story as initial claims; that is, labor market conditions are uneven. Still, continuing claims have risen 3.1% y/y, which is less than half the peak rate of 7.7% this past April. 

The insured unemployment rate varied greatly across individual states and territories. In the week ended October 4, the highest unemployment rates were in New Jersey (2.415%), Washington (1.96%) and Connecticut (1.71%). The lowest were in South Dakota (0.23%), Florida (0.36%), and North Carolina (0.41%).  Rates in other notable states include New York (1.45%), Illinois (1.48%), Pennsylvania (1.37%), and Texas (1.05%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.



- Initial claims decline, reversing earlier increase.
- Continuing claims move lower.
- State unemployment rates vary.


U.S. Unemployment Insurance Claims Ease in Latest Week

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Existing home sales rose 1.5% (4.1% y/y) to 4.06 million (SAAR) in September after easing 0.2% in August to an unrevised 4.00 million and rising 2.0% to 4.01 million in July, according to the National Association of Realtors (NAR). It was the highest level of sales since February and matched expectations in the Action Economics Forecast Survey. Last month’s sales rise accompanied a decline in the effective 30-year mortgage interest rate to an average 6.35% from 6.59% in August. The sales figures are based on closings of sales signed over the past couple of months.

Existing single-family home sales rose 1.7% (4.5% y/y) during September to 3.69 million units after a 0.3% decline to 3.63 million in August and a 2.0% July rise to 3.64 million. Sales of condos & co-ops held steady m/m at 370,000, and were unchanged y/y, for the second consecutive month.

Sales were mixed across the country last month. Sales in the West rose 5.5% (unchanged y/y) to 770,000 after a 1.4% August gain. In the Northeast, sales increased 2.1% (4.3% y/y) to 490,000 following a 4.0% August decline. Sales in the South improved 1.6% (6.9% y/y) to 1.86 million, after falling 1.1% in August. Falling by 2.1% (+2.2% y/y) to 940,000 were sales in the Midwest after rising 2.1% in August.

The median price of all existing homes (NSA) in September declined 1.7% (+2.1% y/y) to $415,200. The median price of an existing single-family home fell 1.6% (+2.3% y/y) to $420,700 in September, and the median price of condos & co-ops declined 1.6% (-0.6% y/y) to $360,300 last month. Prices for homes in the West eased 0.2% (+0.4% y/y) to $619,100 while prices in the Northeast fell 6.3% (+4.1% y/y) to $500,300. In the South, prices edged 0.1% higher (+1.2% y/y) to $364,500 while in the Midwest, home prices fell 2.6% (+4.7% y/y) to $320,800.

The number of existing homes for sale (NSA) rose 1.3% (14.0% y/y) to 1.55 million units in September. The supply of homes on the market at the current selling rate (NSA) held steady at 4.6 months, still nearly the highest level in nine years, up from a low of 1.6 months in January 2022.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- Home sales reach their highest level in seven months.
- Sales are slightly higher m/m in most of country.
- Median sales price falls in most of country.


TT

Summary

Carol Stone, CBE

More Economy in Brief

U.S. Consumer Price Inflation Moderates in September

Charts of the Week: Risks and Relief

U.S. Unemployment Insurance Claims Ease in Latest Week

U.S. Existing Home Sales Rise in September; Prices Decline

Conference Board (SA, 1985=100)	Dec	Nov	Oct	Dec Y/Y %	2018	2017	2016
Consumer Confidence Index	125.5	126.1	126.3	-8.0	130.1	120.5	99.8
Present Situation	166.9	173.5	170.6	-3.4	164.8	144.8	120.3
Expectations	97.9	94.5	96.8	-12.8	107.0	104.3	86.1
Consumer Confidence By Age Group
Under 35 Years	115.3	129.4	150.0	-19.5	133.7	130.2	122.4
Aged 35-54 Years	124.9	130.7	127.3	-4.0	132.2	123.5	106.2
Over 55 Years	131.3	120.8	115.4	-4.6	126.3	112.9	84.6