Global| Feb 05 2013

U.S. Gasoline and Crude Oil Prices Jump

Summary

The pump price for a gallon of regular gasoline surged 18 cents last week to $3.54 per gallon (1.6% y/y). That followed a 4 cent rise during the prior week. Prices remain down 34 cents per gallon since their September peak. The norm [...]

The pump price for a gallon of regular gasoline surged 18 cents last week to $3.54 per gallon (1.6% y/y). That followed a 4 cent rise during the prior week. Prices remain down 34 cents per gallon since their September peak. The norm for this time of year, when driving is reduced, is for prices to decline. Haver Analytics constructs seasonal factors to account for seasonal volatility and the adjusted price jumped 17 cents w/w to $3.77 per gallon. Since their October peak, prices are down 6 cents per gallon.

The price for a barrel of light sweet crude oil also rose another $1.61 last week to $97.44 per barrel (-0.4% y/y) but yesterday prices slipped back to $96.14. Brent crude oil prices rose to $115.69 per barrel last week (4.0% y/y) and increased further to $116.84 yesterday.

Natural gas prices retreated last week to $3.27 per mmbtu (+32.5% y/y) but rose to $3.29 yesterday.

The demand for gasoline increased 3.0% y/y last week. Residual fuel oil needs, used for heating, fell by roughly one-third y/y while distillate demand was off 6.3% y/y. Inventories of crude oil & petroleum products rose 2.7% y/y.

The energy price data are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY database. The daily figures are in DAILY and the gasoline demand figures are in OILWKLY.

Weekly Price	02/02/13	01/28/13	01/21/13	Y/Y%	2012	2011	2010
Retail Regular Gasoline ($ per Gallon, Regular)	3.54	3.36	3.32	1.6	3.62	3.52	2.78
Light Sweet Crude Oil, WTI ($ per bbl.)	97.44	95.83	94.54	-0.4	94.20	95.14	79.51
Natural Gas ($/mmbtu)	3.27	3.52	3.43	32.5	2.75	3.99	4.

U.S. Chain Store Sales Rise W/W But Remain Well Below Holiday Peak
by Tom Moeller February 5, 2013

The latest report from the International Council of Shopping Centers and Goldman Sachs indicated that consumers continue to spend cautiously. Chain store sales rose 2.4% last week (2.6% y/y) following a 3.2% pullback during all of January. During the last ten years there has been a 72% correlation between the y/y change in chain store sales and the change in retail sales at general merchandise stores. That correlation recently has increased.

General merchandise store sales account for 15% of total retail sales. The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

Prospects for sales also deteriorated slightly. The leading indicator of chain store sales fell 0.8% (+4.7% y/y) after two weeks of increase. The composite leading economic indicator is compiled from four series: (1) The MBA's volume index of mortgage applications for home purchase, (2) the ABC News/Money magazine's survey of consumer buying conditions, (3) new filings for jobless benefits, and (4) the 30-year government bond yield.

The chain store figures can be found in Haver's WEEKLY database.

ICSC-Goldman Sachs (SA, 1977=100)	02/02/13	01/26/13	01/19/13	Y/Y	2012	2011	2010
Total Weekly Chain Store Sales	530.0	517.8	523.2	2.6%	3.0%	3.2%	2.9%
W/W %	2.4	-1.0	-1.5	--	--	--	--

U.S. ISM Nonmanufacturing Index Improvement Stalls
by Tom Moeller February 5, 2013

The Composite Index for the service and construction sectors from the Institute for Supply Management (ISM) matched expectations and slipped to 55.2 last month from a revised 55.7 during December. (Earlier figures were revised due to updated seasonal factors.) Since the series' inception in 1997 there has been a 75% correlation between the level of the nonmanufacturing composite index and the q/q change in real GDP for the service and the construction sectors. Haver Analytics calculates an index using the ISM nonmanufacturing and the ISM manufacturing sector index released last Friday. The figure was roughly unchanged m/m at 55.0. During the last ten years there has been a 74% correlation between the composite and the quarterly change in real GDP.

Last month's nonmanufacturing index was supported by the employment component, which rose to 57.5, its highest level since February 2006. Since the series' inception in 1997 there has been an 88% correlation between the level of the ISM nonmanufacturing employment index and the m/m change in payroll employment in the service-producing plus the construction industries. The supplier delivery index also recovered to 52.5, its highest level since May, indicating slower delivery speeds. Offsetting these improvements were declines in the business activity and new orders components.

The prices index improved m/m to 58.0 but remained near its lowest level since July. An increased 23% of respondents reported higher prices while just 5% reported them lower. Since inception ten years ago, there has been a 65% correlation between the price index and the Q/Q change in the GDP services chain price index.

Beginning with the January 2008 Nonmanufacturing Report On Business, the composite index is calculated as an indication of overall economic conditions for the non-manufacturing sector. It is a composite index based on the diffusion indices of four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights.

The ISM data are available in Haver's USECON database. The expectations figure from ACTION ECONOMICS is in the AS1REPNA database.

ISM Nonmanufacturing Survey (SA)	Jan	Dec	Nov	Jan'12	2012	2011	2010
Composite Diffusion Index	55.2	55.7	54.8	56.0	54.6	54.5	54.1
Business Activity	56.4	60.8	60.9	58.7	57.7	57.2	57.6
New Orders	54.4	58.3	58.0	57.8	56.6	56.3	57.0
Employment	57.5	56.3	51.4	46.5	53.5	52.4	49.8
Supplier Deliveries (NSA)	52.5	48.5	49.0	51.0	50.6	51.9	52.2
Prices Index	58.0	56.1	56.9	62.3	59.3	65.1	61.4

Tom Moeller
Author
Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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