Tom Moeller

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The U.S. trade deficit in goods and services deepened to $859.13 billion during 2021 from $676.69 billion in 2020. The increase occurred as an 18.5% rise in exports lagged a 20.5% increase in imports. During December, the deficit deepened to $80.73 billion from $79.33 billion in November, revised from $80.17 billion. A deficit of $83.0 billion had been expected in the Action Economics Forecast Survey. Exports rose 1.5% (19.5% y/y) in December following a 0.3% November gain. Imports rose 1.6% (20.3% y/y) after increasing 4.6% in November.

The trade deficit in goods deepened to a record $100.47 billion in December after expanding to $97.32 billion in November. It compared to a $100.96 billion deficit in the advance report issued two weeks ago. Exports of goods rose 1.4% (20.2% y/y) after falling 1.8% in November. Auto exports surged 6.5% (-1.7% y/y) following a 2.1% decline. Nonauto consumer goods exports increased 6.0% (32.6% y/y) in December after declining 3.0% in November. Capital goods exports rose 2.0% (13.4% y/y) in December after falling 2.7% in November. Industrial supplies & materials exports improved 0.8% in December (34.0% y/y) after falling 1.5% in the prior month. Working lower were exports of foods, feeds & beverages by 7.1% (+3.9% y/y) after strong gains in the prior two months.

Imports of goods increased 2.1% in December (20.0% y/y) after rising 5.0% in November. Auto imports surged 8.4% (-6.4% y/y) after two months of strong increase. Nonauto consumer goods imports strengthened 7.8% (21.1% y/y) after rising 4.7% in November. Capital goods imports improved 3.6% in December (16.1% y/y) after edging 0.4% higher in November. To the downside, industrial supplies & materials imports fell 5.1% (+44.1% y/y) after rising 10.3% in November. Foods, feeds & beverage imports weakened 4.6% (+19.8% y/y) following a 3.4% November gain.

Petroleum imports fell 8.7% in December but increased 86.9% y/y. The monthly fall occurred with a decline in the price of crude oil to an average $69.60 per barrel from $72.33 in November. The price has risen by roughly three-quarters y/y. Nonpetroleum imports rose 3.1% in December (16.7% y/y) after a 4.7% November rise.

The real (adjusted for price changes) trade deficit in goods deepened to a record $111.2 billion (chained 2012 dollars) in December from $109.9 billion in November. Real exports of goods rose 3.2% (5.9% y/y) in December after a 2.2% November decline. Real imports of goods rose 2.3% (9.6% y/y) after a 4.0% November weakening.

The surplus of trade in services increased to $20.7 billion in December, the largest surplus since May. The surplus remained down from a high of $26.7 billion in January 2018. The value of services exports rose 2.0% in December (17.7% y/y) after a 5.3% November gain as travel exports rose 5.9% (95.1% y/y) after roughly a one-third gain in November. Service imports eased 0.7% in December (+21.7% y/y) including a 7.5% decline (+121.4% y/y) in travel imports.

The trade deficit with China widened to a seasonally adjusted $34.1 billion in December, its deepest in nine months. Exports fell 15.5% (-8.7% y/y) while imports rose 9.1% (16.6% y/y). The trade deficit with Japan deepened to $5.0 billion in December as exports fell 9.9% (+14.4% y/y) and imports rose 6.7% (0.9% y/y). The goods trade deficit with the European Union in December eased to $16.3 billion. Exports improved 2.8% (26.1% y/y) and imports fell 5.4% (+7.7% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's **USECON** database. Detailed figures on international trade are available in the **USINT** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Petroleum imports surge last year with higher prices.
- December exports & imports increase strongly.

U.S. Trade Deficit Hits Record in 2021

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Consumer credit outstanding increased $18.9 billion during December following a record $38.8 billion November surge, revised from $40.0 billion. Last year's 5.9% gain was the strongest since 2016. A $21.4 billion December rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income rose to 24.3% in December, the highest level since March 2020.

Nonrevolving credit usage grew $16.8 billion (5.7% y/y) in December following a $19.5 billion November increase. During all of last year nonrevolving credit balances rose 5.7%, the quickest increase since 2016. Federal government borrowing, which issues over 40% of nonrevolving credit, grew a steady 4.1% y/y. Depository institution loans (26% of credit) grew an accelerated 8.8% y/y, up from 2.7% in 2020. Finance company borrowing (17% of loans) rose 5.8% y/y, quicker than the 3.6% growth in 2020. Credit union loans (14% of the total) increased 5.7% y/y, the quickest since 2018.

Revolving consumer credit balances increased $2.1 billion in December after surging $19.3 billion in November. During all of last year, revolving credit rose 6.6% after falling 11.1% in 2020. Credit provided by depository institutions (90% of the total and mostly credit card debt) rose 7.3% y/y after an 11.0% decline in 2020. Credit union borrowing (6% of the total) rose 5.5% y/y after falling 6.4% in 2020. Nonfinancial business loans (2% of the total) held steady y/y. The value of finance company loans (2% of loans) declined 21.4% y/y following a 21.9% shortfall in 2020.

These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver's **USECON** database. The Action Economics figures are contained in the **AS1REPNA** database.

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- Nonrevolving credit remains robust.
- Revolving credit growth slows.

U.S. Consumer Credit Usage Continues Strong in December

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 0.5% during the four weeks ended February 4 and increased 17.0% y/y. The level of the price index remained near its record high.

**Crude oil & benzene** costs rose 5.2% in the last four weeks and 29.1% y/y. The cost of crude oil rose to $88.45 per barrel last week, up nearly two-thirds y/y. The price of the petro-chemical benzene eased 0.6% during the last four weeks but rose 47.3% y/y. Excluding crude oil, industrial commodity prices slipped 0.3% in the last four weeks but gained 14.7% in the last year.

Prices in the **metals** group strengthened 3.1% in the last four weeks and 34.7% last year. Aluminum costs improved 8.1% in the recent four weeks and roughly one-half during the last year. The cost of steel scrap rose 5.0% in the last four weeks and 18.5% y/y while zinc prices improved 0.6% in the last four weeks and 41.9% y/y. Copper scrap prices also edged 0.6% higher in four weeks and increased roughly one-quarter y/y.

Prices in the **textile** group rose 1.7% during the last four weeks and 10.3% y/y. Cotton prices strengthened 10.2% in four weeks and 58.6% y/y. The cost of burlap, used for sacks, bags and gardening, improved 1.5% in the last four weeks and rose by one-quarter y/y.

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Working lower was the **miscellaneous** price index which declined 4.9% during the last four weeks (+3.2% y/y). Framing lumber prices weakened 14.7% (+1.5% y/y). Natural rubber prices rose 3.6% in four weeks but fell 3.0% y/y.

Industrial commodity prices should remain strong. The National Association for Business Economics calls for a 4.0% rise in industrial output in 2022.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY, WEEKLY, USECON** and **CMDTY** databases.

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- Crude oil prices strengthen.
- Metals prices continue to rise.
- Lumber costs decline.

FIBER: Industrial Commodity Prices Edge Higher

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The job market remains hot. Nonfarm payroll employment increased 467,000 in January (4.6% y/y) following a 510,000 December rise, revised from 199,000 reported last month. The increase in November payrolls was similarly strengthened to 647,000 from 249,000. Despite these gains, the level of payroll jobs remained 1.9% below its peak in February 2020. A 175,000 rise in January payrolls had been expected in the Action Economics Forecast Survey. Benchmark revisions to payroll numbers suggest that the job market is holding up despite the Omicron surge.

Average hourly earnings increased 0.7% in January following a 0.5% December increase, revised from 0.6%. The 5.7% y/y rise is approaching the most recent high of 6.7% in May 2020. A 0.5% monthly gain had been expected for January.

The unemployment rate rose to 4.0% in January from 3.9% in December. A 3.9% rate had been expected. Employment in the household survey increased 1.199 million last month following a 651,000 December rise. The labor force rose 1.393 million after increasing 168,000 in December. The overall unemployment rate, including those who were marginally attached or working part-time for economic reasons, fell to 7.1% last month from 7.3% in December. It was the lowest level since February of 2020 and compared to a recession high of 22.9% in April 2020.

The strength in **payroll** employment last month was led by private service sector hiring which increased 440,000 following a 441,000 December gain, revised from 157,000. November's rise was lifted to 528,000 from 198,000. Leisure & hospitality sector jobs rose 151,000 (19.4% y/y). The level of hiring in professional & business sector employment improved 86,000 (5.4% y/y) while temporary help employment improved 26,300 (10.6% y/y). Trade, transportation & public utilities employment rose 132,000 last month (3.9% y/y) as hiring in retail trade increased 61,400 (3.2% y/y). Education & health services employment rose 29,000 (2.2% y/y). The number of information services jobs increased 18,000 (6.4% y/y) and financial sector employment gained 9,000 (1.6% y/y).

Government sector payrolls rose 23,000 in January (1.5% y/y) following a 7,000 December increase, revised from a 12,000 decline. Local government employment rose 33,000 (2.2% y/y) but the number of state government jobs weakened 9,000 (+0.6% y/y), off for the sixth month in the last seven. Federal government payrolls eased 1,000 (-0.2% y/y) following a 9,000 decline.

Factory sector employment rose a lessened 13,000 last month (3.1% y/y), the weakest increase since a decline in April 2021. Construction sector payrolls fell 5,000 (+2.1% y/y) in January following strong gains in each of the prior four months. Employment in the mining & logging sector weakened 4,000 last month (+6.1% y/y), down for the first month since February 2021.

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Average hourly earnings in the private sector increased 0.7% in January, the strongest increase since December 2020. Information sector earnings surged 1.3% (2.7% y/y) while earnings in education & health services increased 0.8% (6.8% y/y). Financial sector pay also rose 0.8% (4.8% y/y) and professional & business service sector earnings gained 0.8% as well (6.9% y/y). Earnings in the leisure & hospitality sector improved 0.1% (13.0% y/y). Construction sector earnings firmed 0.6% (5.1% y/y) while factory sector pay improved 0.6% (5.1% y/y).

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The length of the private sector average workweek fell sharply to 34.5 hours in January. The financial sector workweek weakened to 37.3 hours from 37.7 hours early last year. The information sector workweek held steady at 36.9 hours in January. Hours-worked in the professional & business service sector held at 36.7 hours for the fifth straight month and the education & health services workweek was stable at 33.4 hours. The leisure & hospitality workweek fell sharply to 25.8 hours from 26.3 in October. The factory sector workweek slipped to 40.2 hours from 40.3 hours. The construction workweek declined sharply to 38.7 hours, the lowest level since June 2021.

From the **household** employment survey, the higher 4.0% unemployment rate in January occurred as the labor force participation rate surged to 62.2% from 61.9%, though it remained below the 63.4% high in January and February of 2020. The participation rate for teenagers rose to 36.6%, but for individuals aged 20-24, it slipped to 71.1%. For workers aged 25-54, the rate edged higher to 82.0% but remained below the January 2020 high of 83.1%. For men aged 25-54, the rate rose to 88.2%. For women of that age, the participation rate increased to 76.0%. It has been trending higher since April 2020 when it was 73.5 hours. For workers aged 55 & over, the participation rate rose sharply to 39.1%, the highest level since August 2020.

The employment/population ratio for all workers rose to 59.7% in January and has been trending higher since early 2020. It nevertheless remained well below the February 2020 high of 61.2%. A greatly increased 23.938 million persons worked at home last month because of the coronavirus, although that was down 30.6% y/y.

The average duration of unemployment fell sharply to 24.6 weeks in January and stood below the high of 31.6 weeks in June of last year. The median unemployment duration also fell sharply to 10.1 weeks and remained below a recent high of 19.6 weeks in June of last year.

The teenage unemployment rate held at 10.9% last month, well below the record 32.6% in April of 2020. The rate for workers aged 20-24 rose slightly to 7.3% in January. For workers aged 25-54, the rate held at 3.5%, significantly below the April 2020 high of 12.8%. For those over 55, the jobless rate rose slightly to 3.1%.

By educational attainment, the rate of unemployment of workers without a high school diploma rose sharply in January to 6.3% but remained below the 9.0% rate one year earlier. High school graduates without any college were steady 4.6% unemployed last month, well below the April 2020 high of 17.6%. Those with some college but no degree were 3.6% unemployed, down sharply from the April 2020 peak of 15.3%. College graduates saw their unemployment rate rise slightly to 2.3% last month, just above the 1.9% low in February of 2020.

The employment & earnings data are collected from surveys taken each month during the week containing the 12th of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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* **Annual payroll employment revisions substantially lift recent job gains.**
* **Earnings growth continues to strengthen.**
* **Jobless rate edges higher from two-year low.**

U.S. Payrolls Show Unexpected Strength in January; Earnings Improve but Jobless Rate Edges Higher

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The ISM Index of Services Activity weakened significantly during January to 59.9 from 62.3 in December, revised from 62.0. Earlier figures also were revised. The series peaked at 68.4 in November. The Action Economics Forecast Survey expected 60.0 for January. Haver Analytics constructs a composite index combining the services index and the manufacturing reading released on Tuesday. This index fell to 59.6 in January from 61.9 in December. These series date back to July 1997.

In the latest services survey, the business activity reading weakened to 59.9 from 68.3 in December. It was the lowest point since May 2020. The new orders index also fell to 61.7 from 62.1 in December. A greatly lessened 27.9% (NSA) of respondents reported more orders while a reduced 13.5% reported a decline. The employment measure fell to 52.3, the lowest level since June 2021. A greatly reduced 18.5% of respondents indicated higher employment and a moderately reduced 18.5% reported it lower. The percentage indicating that employment held steady rose sharply to 63.0% of respondents. The supplier delivery index (NSA) rose to 65.7 last month after falling sharply to 63.9 in December from 75.7 in November. A greatly increased 4.6% of respondents reported faster delivery speeds while a fairly steady 36.1% reported slower speeds.

The prices index eased to 82.3 after improving to a record 83.9 in December. An increased 63.1% (NSA) of respondents reported price increases versus 57.4% in December, while 1.7% reported price declines. A lessened 35.2% reported stable prices.

The export orders series fell sharply to 45.9, its lowest point since May 2020. The imports index weakened to 51.1 in January and reversed most of its December increase to 55.5. The order backlog measure plummeted to 57.4, a nine-month low, while the inventory change index rose sharply to 47.5 from 38.3. These series are not seasonally adjusted and are not included in the nonmanufacturing composite total.

**3,2,1...Liftoff. What Does "Liftoff" Really Mean in Fed Policy?** from the Federal Reserve Bank of St. Louis is available [here](https://www.stlouisfed.org/open-vault/2022/feb/what-liftoff-means-in-fed-policy).

The ISM figures are available in Haver's **USECON** database, with additional detail in the **SURVEYS** database. The expectations figure from Action Economics is in the **AS1REPNA** database.

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- Component declines are widespread.
- Price index weakens.
- Composite factory & services series declines.

U.S. ISM Services Index Continues Lower in January

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Initial unemployment insurance claims fell to 238,000 in the week ended January 29 (-71.6% y/y) from 261,000 in the prior week, revised from 260,000. The Action Economics Forecast Survey expected 245,000 claims for the latest week. The 4-week moving average of claims rose to 255,000, the highest level since the second week of November.

Initial claims for the federal Pandemic Unemployment Assistance (PUA) program, which expired on September 6, 2020, are no longer included in this report. This program provided benefits to individuals who were not eligible for regular state unemployment insurance benefits, such as the self-employed.

In the week ended January 22, seasonally adjusted continued weeks claimed for regular state unemployment insurance fell to 1.628 million (-66.0% y/y) from 1.672 million in the prior week. The latest is the smallest since April 1973.

The insured unemployment rate held steady at 1.2% in the week ended January 22. The record low for the series of 1.1% occurred in April 2019.

Continued claims for both the PUA program and for Pandemic Emergency Unemployment Compensation (a program for those unemployed who had exhausted their state benefits) are no longer included in this report as both programs have expired.

In the week ended January 15, the not seasonally adjusted total number of continuing weeks claimed in all programs declined to 2.068 million from 2.141 million in the previous week.

The state insured rates of unemployment in regular programs vary widely. In the week ending January 15, the highest insured unemployment rates were in Alaska (2.96%), New Jersey (2.58%), California (2.54%), Minnesota (2.51%) and Illinois (2.25%). The lowest rates were in Virginia (0.21%), Alabama (0.29%), North Carolina (0.36%), Arizona (0.47%) and New Hampshire (0.51%). Other state insured rates of unemployment in regular programs include Pennsylvania (1.77%), Ohio (1.19%), Texas (0.94%) and Florida (0.56%). These state rates are not seasonally adjusted.

Data on weekly unemployment claims going back to 1967 are contained in Haver's **WEEKLY** database, and they are summarized monthly in **USECON**. Data for individual states are in **REGIONW**. The expectations figure is from the Action Economics Forecast Survey and is in the **AS1REPNA** database.

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- Initial claims fall to four-week low.
- Continued claims decline again.
- Insured unemployment rate holds steady.

U.S. Initial Claims for Unemployment Insurance Decline

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The ADP National Employment Report indicated that nonfarm private sector payrolls declined 301,000 during January (+4.7% y/y) following a 776,000 December increase, revised from 807,000. It was the first monthly decline since December 2020. A 210,000 January rise had been expected in the Action Economics Forecast Survey. The three-month average gain fell to 324,000. November payrolls increased 496,000, revised from 505,000.

ADP indicated "The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth."

Small-sized payrolls were severely impacted last month, falling 144,000 (+4.5% y/y) after rising 192,000 in December. Large-sized payrolls declined 98,000 (+4.1% y/y) after increasing 378,000 in December. Medium-sized payrolls declined 59,000 last month (+6.3% y/y) following a 206,000 December gain.

Within industry sectors, private services employment led the decline last month with a 274,000 drop (+4.9% y/y) after rising 645,000 in December. Leisure & hospitality jobs weakened 154,000 in January (+16.7% y/y) which reversed most of the 239,000 December increase. The number of trade, transportation & utilities jobs fell 62,000 (+3.0% y/y) and reversed half of December's rise. The number of education & health services jobs fell 15,000 (+3.2% y/y) after rising 81,000 in December. Employment in financial services eased 9,000 (+1.5% y/y) after a 23,000 December increase. The number of information sector jobs fell in January by 8,000 (+1.7% y/y), the first decline in six months. Professional & business services jobs slipped 3,000 (+3.7% y/y) after triple-digit gains in both November and December.

Employment amongst goods-producing firms eased 27,000 (+3.8% y/y) last month following a 131,000 December rise. The number of factory sector jobs fell 21,000 last month (+2.9% y/y) after increasing 69,000 in December. Construction sector payrolls fell 10,000 in January (+4.8% y/y) after sharp increases in each of the prior four months. Employment in the natural resource & mining sector rose 4,000 last month (9.8% y/y) after rising 2,000 in December.

The Automatic Data Processing Research Institute survey covers 411,000 companies and includes about one-fifth of U.S. private payroll employment. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment only.

The ADP National Employment Report data can be found in Haver's **USECON** database. Historical figures date back to 2001 for private employment and the industry breakdown, and 2005 for the business size breakout. The expectation figure is available in Haver's **AS1REPNA** database.

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* **Omicron-related job loss is widespread.**
* **Leisure & hospitality sector is notably hard hit.**
* **Construction & factory sectors suffer significantly.**

U.S. ADP Nonfarm Private Payrolls Unexpectedly Decline in January

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The value of construction put-in-place rose 0.2% (9.0% y/y) during December following a 0.6% November gain, revised from 0.4%. A 0.7% December rise had been expected in the Action Economics Forecast Survey. During all of 2021, the value of construction rose 8.2%, the strongest increase since 2015.

Private construction increased 0.7% (12.7% y/y) in December after a 0.8% November gain. Residential construction strengthened 1.1% (15.0% y/y) after a 0.7% November rise. Single-family building increased 2.1% (16.3% y/y), about the same as in November. Multi-family building rose 0.4% (9.1% y/y) and reversed November's 0.3% decline. Home improvement expenditures eased 0.1% (+15.2% y/y) in December after declining 0.8% in November.

Nonresidential private construction eased slightly (+9.1% y/y) in December after firm gains in each of the prior five months. Educational construction rose 0.8% (1.7% y/y) following four consecutive months of strong increase. Office building rose 0.7% (4.6% y/y) about the same as in November. Power building improved 0.1% (4.9% y/y) after holding steady in November. Transportation spending was little changed (-1.9% y/y) following a 5.4% surge. To the downside, communication construction fell 0.4% (-0.2% y/y) after a 0.1% rise and heath care construction fell 0.5% (+6.6% y/y) after a 0.2% increase. Manufacturing construction weakened 1.9% (+30.4% y/y) following four months of strong increase.

The value of public construction fell 1.6% (-2.9% y/y) in December after holding steady in November. Health care building declined 4.7% (+7.9% y/y) following a 2.3% increase. Power construction fell 0.7% (+47.7% y/y) following two months of strong increase. Residential construction declined 1.2% (-3.4% y/y) and added to November's 3.2% decline. Spending on educational buildings weakened 1.4% (-8.5% y/y) after rising 0.4% in November. Transportation building fell 3.0% (-6.3% y/y) after weakening 0.5% in November. Spending on highways and streets edged 0.1% higher (0.9% y/y) after falling 0.6% in November.

The construction spending figures, some of which date back to 1946, can be found in Haver's **USECON** database. The expectations reading is in the **AS1REPNA** database.

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- Private construction increases steadily.
- Residential building strengthens, but nonresidential is little changed.
- Public sector construction weakens.

U.S. Construction Spending Inches Up in December

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The Institute for Supply Management (ISM) reported that its Composite Index of Manufacturing Sector Activity declined to 57.6 during January from 58.8 in December, revised from 58.7. Earlier figures were slightly revised. A level of 57.9 had been expected in the Action Economics Forecast Survey. During the last 15 years, there has been a 42% correlation between the composite index and the quarterly change in real GDP.

The new orders index weakened to 57.9 in January from 61.0 in December. The level was down from a high of 67.4 in December 2020. Twenty-five percent (NSA) of respondents reported higher new orders versus 37.0% a year ago. The production index fell to 57.8 from 59.4 in December. It was the lowest level since June 2020. The supplier delivery series slipped to 64.6 last month from 64.9, indicating quicker product delivery speeds. The inventories index eased to 53.2 from 54.6 in December.

The employment index rose to 54.5 in January from 53.9 in December. It was the highest level since March 2021. An increased 19.2% (NSA) of respondents reported more hiring versus 13.9% in January of last year while 15.1% reported a decline in jobs, up from 13.8% twelve months earlier.

The prices paid index improved to 76.1 in January after falling sharply during the prior two months. The index remained well below the June 2021 high of 92.1. Fifty-nine percent (NSA) of respondents reported higher prices versus 64.3% last year while 6.5% reported price declines after none did last January.

In other ISM series not included in the composite, the order backlog figure fell sharply to 56.4 (NSA) in January and remained well below the high of 70.6 in May of last year. The new export measure was stable at 53.7 but remained down from a November 2020 high of 57.8. The imports index rose to 55.1 in January from 53.8 in December.

The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver's **AS1REPNA** database.

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- Index falls to lowest level since November 2020.
- New orders & production decline sharply.
- Prices paid strengthen.

ISM Manufacturing Index Declines in January

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The Autodata Corporation reported that light vehicle sales during January increased 19.3% (-10.0% y/y) to 15.16 million units (SAAR). Sales were at the highest level since June of last year but remained 18.1% below the April '21 peak of 18.50 million units.

Sales of light trucks rose 21.6% (-7.1% y/y) last month to 12.05 million units, the highest level since last May. Purchases of domestically-made light trucks rose 20.8% in January (-7.4% y/y) to 9.40 million units. Adding to this increase was a 24.4% rise (-6.0% y/y) in sales of imported light trucks to 2.65 million units, though they remained below the April '21 record of 3.30 million unit sales.

Trucks' share of the light vehicle market increased to 79.5% last month but remained below an 80.4% share in October. For all of last year, the share was 77.5%, up from a low of 48.1% during all of 2009.

Passenger car sales rose 11.1% (-19.6% y/y) in January to 3.11 million units, the highest level since last August. Purchases of domestically-produced cars rose 10.1% last month (-21.8% y/y) to 2.08 million units following a 1.1% December increase. Sales of imported autos rose 13.2% in last month (-14.9% y/y) to 1.03 million units, the highest level since August.

Imports' share of the U.S. vehicle market rose in January to 24.3%, though that remained down from a 27.9% September high. Imports' share of the passenger car market rose to 33.1% last month but remained below the September high of 38.1%. Imports' share of the light truck market increased to 22.0%, the highest level since September.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Light truck sales rebound to eight month high.
- Auto sales rise for third straight month.
- Imports' share improves.

U.S. Light Vehicle Sales Strengthen in January

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**Retail gasoline prices** rose to $3.37 per gallon (39.8% y/y) in the week ended January 31 from $3.32 per gallon in the previous week. Prices have risen from a low of $3.28 at the end of December. Haver Analytics adjusts the gasoline price series for normal seasonal variation. The seasonally adjusted price increased to $3.49 per gallon.

The price of **West Texas Intermediate crude oil** improved to $86.37 per barrel (64.4% y/y) in the week of January 28 from $86.11 in the prior week. It was the highest price since the second week of October, 2014. Yesterday, the price rose to $88.15 per barrel. The average price of **Brent crude oil** rose to $88.60 (59.3% y/y). The price increased to $89.15 per barrel yesterday.

The price of **natural gas** rose to $4.60/mmbtu (69.7% y/y) in the week of January 28 after improving to $4.50 in the previous week. Yesterday, the price surged to $5.56/mmbtu.

In the four weeks ended January 21, growth in **gasoline demand** rose 6.1% y/y, down from 17.1% y/y late in December. Growth in demand for **all petroleum products** has been steady around 11.6% y/y. **Crude oil input to refineries** rose 6.6% y/y, half the growth in late October. **Gasoline inventories** edged up 0.1% y/y, but **crude oil inventories** declined 9.7% y/y.

The **supply of gasoline** inventories in the week ending January 21 rose to 30.2 days, its highest level since February 2021. The supply of crude oil was little changed at 26.7 days.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price data can be found in Haver's **WEEKLY** and **DAILY** databases. Greater detail on prices, as well as the demand, production and inventory data are in **USENERGY**.

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- Gasoline prices continue to rise.
- The cost of crude oil increases slightly.
- Natural gas prices strengthen.

U.S. Energy Prices Rise

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Consumer spending & income were disappointing last month. Personal consumption expenditures during December fell 0.6% (+13.3% y/y) following a 0.4% November increase, revised from 0.6%. A 0.5% decline had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, spending fell 1.0% last month (+7.1% y/y) after easing 0.2% in November.

Real spending on durable goods plummeted 4.9% in December (+4.6% y/y) after November's 1.7% decline. The decline was led by a 6.2% fall (+4.4% y/y) in real outlays on furniture & appliances, off for the third month in the last four. Motor vehicle & parts buying weakened 3.3% in real terms (-7.4% y/y), about as it did in November. Real purchases of recreational goods & vehicles weakened 4.9% (+14.7% y/y) after falling 1.2% in November. Real nondurable goods buying fell 2.1% (+7.8% y/y) after a 0.7% November easing. Real clothing outlays weakened 6.2% (+15.3% y/y) after a 2.2% decline. Food & beverage expenditures declined 1.3% (+4.6% y/y) after falling 0.8% in November but spending on gasoline & other energy products rose 0.8% (15.4% y/y), about as they did in November. Real outlays on services ticked 0.1% higher last month (7.5% y/y) after rising 0.2% in November. Real recreation services outlays surged 1.0% and by one-third y/y. The rise followed three consecutive months of strong increase. Real transportation outlays rose 1.5% (31.7% y/y) following a 0.5% rise. Real health care outlays improved a steady 0.6% in December (5.1% y/y) while housing & utilities spending weakened 0.2% (+0.6% y/y) after rising 0.4% in November. Real spending at hotels & restaurants eased 0.4% last month (+30.9% y/y) after a 0.2% November gain.

The PCE chain price index rose 0.4% last month (5.8% y/y) following two months of 0.6% gain. The price index excluding food and energy rose 0.5%, the same as in November. The 4.9% y/y increase was the strongest since September 1983. Durable goods prices rose 0.9% (10.5% y/y) owing to a second straight 1.8% surge (22.8% y/y) in motor vehicle prices. Home furnishings & appliance prices improved 1.0% (8.8% y/y) in December. Recreational goods & vehicle prices eased 0.6% (+1.3% y/y). Nondurable goods prices gained 0.3% (7.7% y/y) after two straight months of 1.2% increase. The services price index rose 0.4% (4.2% y/y) after a 0.5% gain. Gasoline prices eased 0.5% (+47.9% y/y). Energy prices overall eased 0.4% (+29.9% y/y) while food & beverage prices rose 0.3% (5.7% y/y).

Personal income rose 0.3% (7.3% y/y) in December after increasing 0.5% in November, revised from 0.4%. A 0.5% rise had been expected. Wages & salaries rose 0.7% last month (9.2% y/y) after a 0.6% rise while rental income rose 0.8% (7.5% y/y). Earnings on assets improved 0.6% ( 1.3% y/y) as dividend income increased 0.8% (-0.8% y/y) and interest income rose 0.5% (3.0% y/y). Proprietors earnings declined 1.4% (+13.5% y/y). Transfer payments were stable last month (6.5% y/y) following a 0.6% November gain. Disposable personal income increased 0.2% in December (5.6% y/y) after two months of stronger increase. Adjusted for price inflation, disposable income declined 0.2% (-0.2% y/y) for the third straight month.

The personal savings rate rose to 7.9% in December from 7.2% in November. It remained down from a high of 33.8% in April of last year. The level of personal savings rose 10.2% last month but has fallen 40.8% during the last twelve months.

The personal income and consumption figures are available in Haver's **USECON** database with detail in the **USNA** database. The Action Economics figures are in the **AS1REPNA** database.

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- Outlays on goods decline as services spending slows.
- Core price inflation is steady & strong.
- Wage & salary growth firms.

U.S. Personal Spending Declines as Income Growth Weakens in December

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