Weekly Gasoline Prices SlideSideways

Gasoline prices haven't moved much during the last four weeks. The pump price for regular gasoline of $2.63 per gallon last week was down two cents from the November average but remained in the tight range between $2.47 and $2.69 since June. Nevertheless, gasoline prices remain up from the December low of $1.61. Yesterday, wholesale gasoline prices remained down slightly from last week's average. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.

The price for a barrel of light sweet crude (WTI) oil rose slightly last week to $76.84 but that still was near the lowest level since mid-October. Prices remained up from the December low of $32.37. Yesterday, the spot market price for light sweet crude oil fell to $72.62 per barrel.

Natural gas prices moved higher last week to an average $4.50 per mmbtu (-30.2% y/y), the highest level since late-October. Nevertheless, they remained down by two-thirds from the high reached in early-July of last year of $13.19/mmbtu.

Last week, the demand for gasoline posted a 0.4% increase versus one year ago, down from the 3.9% increase at the beginning of last month. Breaking away from earlier y/y strength, the demand for residual fuel oil fell 22.0% y/y while distillate demand also fell by 9.9% y/y. These demand figures are in OILWKLY.

Low interest rates continue to support the housing market. The Mortgage Bankers Association reported that mortgage applications rose 8.5% last week, the second week of firm gain that continued what has been a 50% rise since the late-June low.

The effective fixed interest rate on conventional 15-year mortgages fell slightly last week to 4.59%. That equaled the November low and was down from the June average of 5.21%. For 30-year mortgages the rate ticked up last week to 5.12% from a November average of  5.06%. Rates reached a high of 5.79% in early-June. Interest rates on fixed 15-year and 30-year mortgages are closely correlated (near-90%) with the rate on 10-year Treasury securities. Rates on adjustable one-year mortgages fell to 6.64% last week from a November average of 6.81%.

During the last twelve months, the number of fixed-rate mortgage applications has fallen by 21.5% and adjustable-rate mortgage applications have risen by two and one-half times.

Despite faster export than import growth in October, the UK trade deficit widened in October as the larger sterling size of imports translated a smaller percentage gain in imports into a larger gain in sterling terms than for exports. The UK trade position has deteriorated for two months in a row following a brief drop in the deficit three months ago.

But in terms of trends, exports and imports are on substantially the same sort of trends using growth rates over three months, six-months and 12-mponths as benchmarks (see table). Yr/Yr trends peg exports as just a bit stronger (see chart).

Various incentive programs across Europe have given a sharp prod to exports and imports of vehicles in the UK. Three-month annualized growth rates are over 120% for both exports and imports of vehicles. Rising oil prices have boosted the value of basic materials. Foods and capital goods values are rising strongly for both exports and imports.

The strength in imports bodes well for the belief that UK domestic demand is recovering. Some of the improvement is on special factors such as rising oil prices or a reaction to vehicle sales incentives. But the strength in capital goods and in foods, feeds, beverages and tobacco seems to be an authentic signal. It is present in both UK exports and in imports. This tends to affirm the notion that both the UK and its export markets are in recovery. German exports were reported stronger today as well. In the German case, import values fell. Germany’s domestic demand is a well-known sore spot of weakness in EMU. Still the German export rise is a somewhat reassuring figure after seeing weakness in German IP and in industrial orders especially for foreign orders that were tilted to weakness for EMU members.

Obviously there still are some mixed signals out there. But for now the actual export data are still hitting a positive note. We continue to recommend looking at all signals for evidence of ongoing growth. The global economy has had a nice strong lift from its weakest levels. But the run of growth needs to continue to pull the global economy into a real sustainable expansion. As of this moment the evidence is still too mixed to be reliable.

The labor market remains soft. The Bureau of Labor Statistics reported in its Job Openings & Labor Turnover Survey (JOLTS) that job availability during October gave back half of the September increase with a 3.1% decline. Openings were off 26.1% from October of last year. The series dates back to December 2000.

The job openings rate held steady m/m at 1.9%. These rates were down from more than 3.0% in 2007. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.

Factory sector job openings rose for the third consecutive month but they remained down 41.3% y/y. Construction sector job openings gave back all of their September increase and were down 27.8% y/y. Nevertheless, openings here were nearly double the series low reached in April. The level of professional & business services job openings gave back half of the September increase (-23.1% y/y) while education & health sector job openings (-17.6% y/y) also reversed half the prior month's gain. Openings in retail trade rose slightly m/m (-24.2% y/y) and remained up sharply from the April low while government sector job openings rose m/m from slightly from the series low (-23.4% y/y).

The hires rate dipped m/m to 3.0% and returned to the series record low. The hires rate is the number of hires during the month divided by employment. The actual number of hires also fell 2.3% m/m and was down 11.6% year-to-year. Factory sector hiring recently gave back most of its September increase and was off 13.4% y/y while construction sector hiring also dipped m/m (-10.0% y/y). Leisure & hospitality industry jobs fell 1.3% to a new series low (-16.0% y/y) and retail sector hiring (-15.5% y/y) remained quite weak. In the professional & business services industry, hires fell 2.1% (-10.0% y/y) after three months of increase. In the education & health services industries, past jobs figures were revised sharply and in October they fell moderately, down 5.9% y/y.

The job separations rate fell to a new series low of 3.2% with the actual number of separations off 14.4% year-to-year. Separations include quits, layoffs, discharges, and other separations as well as retirements. Layoffs and discharges alone dipped 0.3% (+0.5% y/y) during October  but are down 17.4% from the January peak.

The JOLTS survey dates only to December 2000 but has followed the movement in nonfarm payrolls, though the actual correlation between the two series is low.

A description of the Jolts survey and the latest release from the U.S. Department of Labor is available here . and the figures are available in Haver's USECON database.