Tom Moeller

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The ISM Index of Services Activity fell sharply during December to 62.0 from the record 69.1 in November. During all of 2021, the index advanced to a record 62.5 from 54.3 in 2020. The Action Economics Forecast Survey had expected 67.0 for December. Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index strengthened to 61.6 in December from 68.2 in November and also was a record 62.3 for all of last year. These series date back to July 1997.

In the latest services survey, the business activity reading weakened to 67.6 from the record 74.6 in November. The new orders index also fell sharply to 61.5 from 69.7. A lessened 30.8% of respondents reported more orders while an increased 14.7% reported a decline. The employment measure fell to 54.9 from 56.5. A raised 30.1% of respondents indicated higher employment and an increased 22.0% reported it lower. The percentage indicating that employment held steady fell sharply to 47.9% of respondents. The supplier delivery index (NSA) dropped sharply to 63.9 in December from 75.7 in November. A greatly increased 8.6% of respondents reported faster delivery speeds while a reduced reported slower, the least since April.

The prices index was fairly steady at 82.5 after falling from a near-record 82.9 in October. A lessened 57.4% of respondents reported price increases versus 63.0% in November, while 1.5% reported price declines. A higher 41.1% reported stable prices.

The export orders series rose to 61.5 and reversed most of its decline to 57.9 in November. The record 65.8 was reached in July. The imports index rose to 55.5 in December from 50.5 in November. The order backlog measure declined sharply to 62.3, a three-month low, while the inventory change index eased to 46.7 from 48.2. These series are not seasonally adjusted and are not included in the nonmanufacturing composite total.

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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- Total services index sets new record in 2021.
- Business activity, new orders and delivery speeds post sharp monthly declines.
- Price index remains strong.

U.S. ISM Services Index Falls Sharply in December

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 807,000 (5.2% y/y during December following a 505,000 November increase, revised from 534,000. A 360,000 December rise had been expected in the Action Economics Forecast Survey. The three-month average gain rose to 625,000. That was the strongest since July and up from 386,000 as of September. October payrolls increased 563,000, revised from 570,000.

Large-sized payrolls led last month's increase with a 389,000 increase (4.4% y/y) after increasing 244,000 in November. It was the strongest advance since June 2020. Medium-sized payrolls increased 214,000 last month (6.9% y/y) following a 147,000 November rise. It was the largest increase since June of this year. Small-sized payrolls added 204,000 persons in December (5.2% y/y) following a 114,000 November gain. It was the largest increase also since June 2021.

Within industry sectors, private services employment continued to lead the month's increase with a 669,000 surge (5.4% y/y) in December after rising 401,000 in November. It was the largest increase since June. Leisure & hospitality jobs grew by 246,000 (18.4% y/y) which doubled the November increase. The number of trade, transportation & utilities jobs rose 138,000 (3.3% y/y), the largest increase since September of last year. Professional & business services jobs followed with a 130,000 gain (4.0% y/y), improved from the 24,000 increase in December 2020. The number of education & health services jobs rose 85,000 (3.6% y/y), the strongest increase in six months and up from a 20,000 low in December of last year. Employment in financial services improved 24,000 (1.6% y/y) after increasing 13,000 in November. The number of information sector jobs rose 12,000 (2.0% y/y) following a 9,000 November increase.

Employment amongst goods-producing firms increased 138,000 (4.0% y/y) last month following a 104,000 November rise. The three-month average monthly increase of 117,000 was the largest since August of last year. The number of factory sector jobs rose 74,000 last month (3.1% y/y) after increasing 47,000 in November. The size of construction sector payrolls rose an improved 62,000 (5.0% y/y), the largest increase since June of last year. Employment in the natural resource & mining sector rose 2,000 (9.2% y/y) but monthly increases have slowed consistently since May.

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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* **Robust gains are exhibited across payroll size.**
* **Construction & factory sectors firm.**
* **Leisure & hospitality again lead service-sector growth.**

U.S. ADP Nonfarm Private Payrolls Show Surprising Strength in December

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The Bureau of Labor Statistics reported that on the last business day of November, the total job openings rate fell to 6.6% from a record 7.0% in October, revised from 6.9%. It was the lowest rate since June. The job openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. The level of job openings fell 4.8% (+56.1% y/y) to 10.562 million from 11.091 million. November was the lowest level since June. The hiring rate increased to 4.5% from 4.4% in each of the prior three months. It was well above the 3.8% low this past January. The level of hiring rose 2.9% (11.3% y/y) to 6.697 million. The overall layoff & discharge rate remained at the record low of 0.9% for the fourth consecutive month. The level of layoffs & discharges rose 1.4% m/m but fell 35.5% y/y. The quits rate returned in November to the record high of 3.0% and compared to the most recent low of 1.6% in April 2020. The level of quits rose 37.3% y/y to a record 4.527 million. The JOLTS figures date back to December 2000.

The private-sector job openings rate fell to 7.0% from the record 7.4% October. It was up from a 3.6% low in April 2020. The highest rates were in leisure & hospitality (8.7%) and professional & business services (7.8%). The government sector job openings rate rose to 4.2% from 4.0% in October. It was 3.1% in November 2020. The level of private sector job openings fell 5.6% (+58.0% y/y) to 9.601 million, the lowest level since June. The number of government job openings rose 4.8% (39.8% y/y).

The private sector hiring rate edged higher to 5.0% in November but remained below the June high of 5.2%. A hiring rate of 8.1% in leisure & hospitality compared to 5.6% in construction. In the government sector, the hiring rate improved to 1.8%. The level of private sector hiring rose 2.7% in November (11.6% y/y) to 6.305 million. Government sector hiring rose 7.1% (5.9% y/y) in November, about the same m/m increase as in October.

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Data on job separations reflect a combination of layoffs and quits. The total separations rate edged up to 4.2% in November but remained below the record 10.8% in March of last year. The private sector separations rate increased to 4.7% in November, the highest rate since April 2020. The government sector separation rate held steady at 1.6% in November, down from 2.0% one year earlier. The level of all separations rose 9.2% y/y. Private sector separations increased 11.7% y/y but government sector separations declined 21.0% y/y.

The layoff & discharge rate in the private sector remained at the record low of 1.0%. The 0.6% layoff & discharge rate in education & health services compared to a lessened 1.4% in professional & business services. In the government sector, the layoff & discharge rate was 0.3% for the third straight month.

The strength of the job market has generated more job-hopping. The private sector quits rate reached a record 3.4% in November, up from 1.8% in the spring of 2020. The leisure & hospitality quits rate of 6.4% compared to 2.8% in education & health services. The quits rate in the government sector remained low at 1.0% but it still was higher than 0.7% from this past May to July. The November level of job quits in the private sector increased 9.3% (38.5% y/y) versus October. In the government sector the level of quits rose 1.9% (18.0% y/y), the fourth straight month of strong increase.

The Job Openings and Labor Turnover Survey (JOLTS) are available in Haver's **USECON** database.

**Make-up Strategies for Monetary Policy** from the Federal Reserve Bank of Philadelphia is available [here](https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/economic-insights/2021/q4/eiq421-make-up-strategies-for-monetary-policy.pdf).

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- Job openings reverse earlier improvement.
- Hiring increases to four-month high.
- Quits surge to record.

U.S. JOLTS: Job Openings Rate Weakens in November

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**Retail gasoline prices** held at $3.28 per gallon (+45.9% y/y) in the week ended January 3 after falling to that level in the previous week. Haver Analytics adjusts the gasoline price series for normal seasonal variation. The seasonally adjusted price edged higher to $3.41 per gallon from $3.40 per gallon in the previous week.

The price of **West Texas Intermediate crude oil** rose 6.2% last week (58.2% y/y) to $76.05 per barrel in the week ended December 31. It was the highest price in five weeks after falling to $66.90 in the first week of December. Yesterday, the price was $76.08 per barrel. The average price of **Brent crude oil** rose 5.3% (53.4% y/y) to $78.73 per barrel from $74.80 per barrel in the prior week. The price was $78.97 per barrel yesterday.

The price of **natural gas** fell 11.9% to $3.39/mmbtu (+42.4% y/y) in the week ended December 31 from $3.85/mmbtu in the previous week. The price remained down from its recent high of $5.87/mmbtu reached in the second week of October. Yesterday, the price increased to $3.74/mmbtu.

In the four weeks ended December 24, **gasoline demand** increased 17.1% y/y. Demand for **all petroleum products** grew 12.4% y/y. **Crude oil input to refineries** rose 10.6% y/y. **Gasoline inventories** fell 5.9% y/y, while **crude oil inventories** declined 10.3% y/y.

The **supply of gasoline** inventories in the week ending December 24 fell to 24.0 days from 24.8 days in the previous week and remained well below the recent high of 32.9 days in the third week of February. The supply of crude oil fell to 26.7 days, the lowest level since late August.

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 hold steady.
- Crude oil prices continue to strengthen.
- Natural gas prices reverse two weekly increases.

U.S. Energy Prices Are Mixed

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The Census Bureau reported that the value of construction put-in-place rose 0.4% (9.3% y/y) during November following a 0.4% October increase, revised from 0.2%. A 0.7% November gain had been expected in the Action Economics Forecast Survey. September's change was revised to +1.0% from -0.1%.

Private construction rose 0.6% (12.5% y/y) in November after a 0.1% uptick. Residential private construction improved 0.9% (+16.3% y/y) after slipping 0.2% in October. Single-family building rose 1.2% (19.4% y/y) after easing in two of the prior three months. Multi-family building slipped 0.3% (+9.6% y/y) after holding steady in October. Home improvement expenditures rose 0.9% (14.4% y/y) in November after little change in the prior month.

Nonresidential private construction improved 0.1% (6.7% y/y) in November after firm gains in each of the prior four months. Transportation spending surged 4.4% (0.3% y/y), the strongest increase in six months. Office building was little-changed (2.9% y/y) after a 0.4% rise and communication construction grew 0.3% (1.5% y/y) after strengthening 1.1% in October. To the downside, heath care construction fell 1.2% (+5.2% y/y) after two consecutive 0.7% increases. Educational construction fell 0.6% (-5.2% y/y) and fully reversed the prior month's gain. Manufacturing construction grew 0.9% (22.4% y/y) following even stronger increases in each of the prior three months. Power building improved 0.1% (7.5% y/y) after rising 0.4% in October.

The value of public construction weakened 0.2% (-0.9% y/y) in November after surging 1.5% in the prior month. Power construction rose 1.3% (50.1% y/y) following a 5.6% surge. Spending on highways and streets weakened 0.8% (+0.2% y/y) after strengthening 1.7% in October. Residential construction declined 2.8% (-3.0% y/y) and reversed the prior month's increase. Health care building fell 1.2% (+13.8% y/y) following a 2.9% surge. Spending on educational buildings improved 0.3% (-6.3% y/y) following no change in October. Transportation building fell 0.5% (+0.7% y/y) after strengthening 2.8% in October.

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.

**What's Holding Back Employment in the Recovery from the COVID-19 Pandemic?** from the Federal Reserve Bank of Cleveland can be found [here](https://www.clevelandfed.org/en/newsroom-and-events/publications/economic-commentary/2021-economic-commentaries/ec-202123-whats-holding-back-employment-in-the-recovery-from-the-covid19-pandemic.aspx).

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- Gain is slightly less-than-expected.
- Residential building strengthens but business outlays ease.
- Public sector construction slips following earlier strength.

U.S. Construction Spending Remains Solid in November

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Personal consumption expenditures rose 0.6% (13.5% y/y) during November after surging 1.4% in October, revised from 1.3%. A 0.6% rise had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, spending held steady (7.4% y/y) after rising 0.7% in October.

Real spending on durable goods declined 1.0% in November (+7.7% y/y) led by a 2.4% fall (-2.3% y/y) in spending on autos, while furniture & appliance purchases eased 0.7% (+7.5% y/y). Real purchases of recreational goods & vehicles weakened 0.6% (+13.8% y/y). Real nondurable goods fell 0.6% (+8.1% y/y), reflecting a 2.3% decline (+17.8% y/y) in clothing outlays. Real gasoline & oil spending weakened 1.2% (+12.9% y/y), while food & beverage expenditures held steady (+4.8% y/y). Real outlays on services posted a 0.5% November gain (7.1% y/y) after two months of 0.4% increase. Real recreation services outlays surged 1.2% (27.4% y/y) while spending at hotels and restaurants rose 0.6% (27.2% y/y). Real health care outlays edged 0.3% higher (3.3% y/y) while housing & utilities spending rose 0.6% (1.7% y/y) in November. Real transportation service outlays held steady (29.1% y/y) after rising 0.5% in October.

The PCE chain price index rose 0.6% last month (5.7% y/y) following a 0.7% gain. The price index excluding food and energy rose 0.5% in November raising the y/y increase to 4.7%, the strongest gain since February 1989. Durable goods prices rose 0.4% (9.7% y/y) owing to a 1.7% surge (20.6% y/y) in motor vehicle prices. Nondurable goods prices gained 1.2% (7.9% y/y) for the second straight month reflecting a 5.8% rise in gasoline prices (56.7% y/y). The services price index rose 0.5% (4.3% y/y), the quickest increase since March of this year. Energy prices overall jumped 3.6% (34.0% y/y), the sixth straight month of strong increase. Food & beverage prices rose 0.7% (5.6% y/y).

Personal income rose 0.4% (7.4% y/y) in November. A 0.4% rise had been expected. Wages & salaries rose 0.5% last month (8.9% y/y) and rental income strengthened 1.0% (5.9% y/y). Earnings on assets improved 0.3% (2.6% y/y) as dividend income increased 0.2% (3.1% y/y) and interest income rose 0.3% (2.3% y/y). Proprietors earnings declined 0.3% (+9.7% y/y). Disposable personal income increased 0.4% (5.8% y/y) in November for the second straight month. Adjusted for price inflation, disposable income declined 0.2% (0.0% y/y), down for the fourth straight month.

The personal savings rate fell to 6.9% in November from 7.1% in October. It was down from a high of 33.8% in April of last year. The level of personal savings fell 2.8% last month and has fallen 44.2% 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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- Spending slowdown includes fewer durable goods outlays.
- Core price inflation remains strong.
- Wage & salary growth moderates.

U.S. Personal Spending & Income Growth Slow

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New single-family home sales rose 12.4% in November (-14.0% y/y) to 744,000 (SAAR) from 662,000 in October, revised from 745,000. Sales remained below the January peak of 993,000. The Action Economics Forecast Survey expected 775,000 sales in November.

By region, November sales in the West rose 53.2% (14.2% y/y) to 242,000. Rising by 15.6% (8.8% y/y) to 37,000 were sales in the Northeast. Sales in the South gained 2.7% (-21.2% y/y) to 412,000. Offsetting these increases, sales in the Midwest fell 25.4% (-44.8% y/y) to 53,000.

The median price of a new home rose 2.0% (18.8% y/y) in November to a record $416,900. The average sales price of a new home edged 0.7% higher (21.6% y/y) to a record $481,700. These sales price data are not seasonally adjusted.

The supply of new homes for sale fell to 6.5 months in November from 7.1 months in October. This compares with a low of 3.5 months averaged from August through October of last year. The median number of months a new home stayed on the market rose slightly to 2.7 from the record low of 2.5 months in October. These figures date back to January 1975.

New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

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- Sales are highest since April.
- Strengthening is pronounced in West.
- Median sales price increases to record.

U.S. New Home Sales Surge in November

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The Chicago Fed National Activity Index (CFNAI) fell to 0.37 during November from 0.75 in October, revised from 0.76. The index is constructed by the Federal Reserve Bank of Chicago.

The index's three-month moving average of 0.37 was the highest since July. During the last 10 years, there has been a 75% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

The Production & Income component led last month's decline with a weakening to 0.21 from 0.42 in October. The Personal Consumption & Housing reading weakened to -0.05 last month from 0.04 in October. The Employment, Unemployment & Hours component moved down to 0.18 from 0.23. The Sales, Orders & Inventories index slipped to 0.03 from 0.06.

The CFNAI diffusion index, which measures the breadth of movement in the component series, improved to 0.35 in November from 0.18 in October. Fifty-three of the 85 component series contributed positively to the overall index and 32 made negative contributions.

The CFNAI is a weighted average of 85 monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend. The CFNAI was constructed using data available as of October 25, 2021. Fifty of the 85 indicators had been published at that time. For all missing data, estimates were used in constructing the index.

These figures are available in Haver's **SURVEYS** database.

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- Index reverses half of prior month's gain.
- Production & personal consumption lead downturn.
- Trend continues to improve.

Chicago Fed National Activity Index Declines in November

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The Mortgage Bankers Association's Loan Applications Index slipped 0.6% (-33.9% y/y) in the week ended December 17 following a 4.0% decline in the prior week. Applications for loans to purchase a house fell 3.3% (-8.6% y/y) after a 0.7% rise. Applications for loans to refinance gained 2.2% (-42.4% y/y) following a 6.4% decline in the prior week.

The share of applications for refinancing rose to 65.2% last week, the most in three months. The adjustable-rate mortgage (ARM) share of activity held w/w at 4.3%.

The effective interest rate on a 30-year mortgage eased to 3.39% last week from 3.41% in the prior week. The effective rate on a 15-year rate mortgage edged up to 2.67%. The effective rate for a 30-year Jumbo mortgage loan eased to 3.39% last week, while the rate on a 5-year adjustable-rate loan increased to 2.90%. The last two series date back only to January 2011, while the others begin in January 1990.

Applications for fixed-rate loans slipped 0.6% (-34.9% y/y) last week, after a 4.4% decline in the prior week. Applications for adjustable-rate mortgages eased 0.2% (+18.2% y/y) following a 7.6% rise in the previous week.

The average size of a mortgage loans was $348,200 in the week ending December 17 compared to $342,100 in the week prior. The average size of loans for purchase was $416,200 in the latest week versus $406,800 one week earlier. The average size of refinanced loans rose to $311,900, up from $3000 in the prior week.

This survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's **SURVEYW** database.

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- Purchase applications decline as refinancings increase.
- 30-year mortgage rate slips.
- Purchase loan size increases.

U.S. Mortgage Applications Edge Lower As Rates Ease

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The Conference Board Consumer Confidence Index increased 3.5% (33.0% y/y) to 115.8 during December from 111.9 in November, revised from 109.5. It was the highest level since July. A December reading of 110.6 had been expected in the Action Economics Forecast Survey. During all of 2021, the confidence index improved to 112.8, its highest level since 2019.

The Consumer Expectations reading rose 7.4% (11.4% y/y) to 96.9 this month from 90.2 in November, revised from 87.6. The Present Situation index eased 0.2% (+65.3% y/y) to 144.1 from 144.4 in November, revised from 142.5.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, fell to 42.6% of respondents this month from 44.7% in November, revised from 46.9%. This series has had a 75% correlation with the unemployment rate over the last ten years. The jobs plentiful measure fell to 55.1% of respondents this month. The series dates back to February 1967. The jobs hard-to-get measure rose to 12.5% of redpondents, the highest level since September. The jobs-not-so-plentiful reading fell to 32.4% of respondents. The figure is down from 51.1% averaged in 2020.

Current business conditions were perceived as good by 19.9% of respondents in December, the highest level in four months. Expectations that business conditions would improve in six months rose modestly to 26.7% of respondents but remained well below the 2020 highs. More jobs were expected in six months by a greatly improved 25.1% of respondents, the most since July. The percentage expecting rising income fell slightly in December to 18.0% of respondents and remained well below the 2019 highs.

The expected inflation rate in twelve months fell sharply to 6.9% in December from an elevated 7.3% in November, but remained up from a 4.4% low in January of last year. The share of respondents planning to buy a new home within six months rose to 0.9%, the highest level in nine months but remained below a June 2020 high of 2.0%. Those planning to buy a major appliance also rose sharply to 50.8% of respondents, an eight-month high.

Confidence of individuals under 35 years rose moderately this month to a five-month high. Confidence amongst those between 35 & 54 also surged (32.0% y/y) to an eight-month high. Confidence amongst individuals 55 and over has been relatively stable for five months, but is up 35.5% y/y.

The Consumer Confidence data are available in Haver's **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Expectations improve.
- Jobs are seen as harder to find.
- Price inflation expectations ease.

U.S. Consumer Confidence Strengthens in December

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The U.S. current account deficit widened to $214.8 billion in Q3'21 from $198.3 billion in Q2'21, revised from $190.3 billion. It was the deepest deficit since Q3 2006. The Action Economics Forecast Survey anticipated a $203.7 billion deficit. As a percent of GDP, the deficit rose to 3.71%, the deepest since Q4 2005 when it was 6.29% of GDP.

The deficit in goods trade rose to a record $274.8 billion as exports grew 1.1% (23.8% y/y) in Q3. Industrial supplies & materials exports increased 3.9% (46.1% y/y) and nonauto consumer goods rose 9.0% (28.5% y/y). Food, feeds and beverages exports declined 8.5% (+6.5% y/y), autos, parts and engines exports fell 1.4% (-5.7% y/y) and capital goods exports eased 0.7% (+16.8% y/y). Imports of goods rose 1.4% (19.0% y/y) in Q3. Imports of industrial supplies and materials increased 8.0% (63.3% y/y) as oil prices rose. Foods, feeds and beverage imports rose 2.7% (19.6% y/y) while capital goods imports strengthened 1.2% (16.7% y/y). Auto and parts imports fell 4.1% (-1.8% y/y) while nonauto consumer goods declined 1.8% (+11.5% y/y).

The surplus on services trade deteriorated sharply to $49.9 billion in Q3, the smallest surplus since Q4'11 and down from the peak $78.9 billion surplus in Q1'18. Services exports eased slightly (+14.7% y/y). Travel exports increased 1.6% (54.8% y/y) but export charges for the use of intellectual property declined 5.8% (+2.7% y/y). Imports of services improved 9.8% (30.3% y/y), reflecting a 47.3% rise (379.3% y/y) in travel imports. Import charges for the use of intellectual property increased 8.2% (6.6% y/y).

The surplus on primary income rose to $48.2 billion in Q3. Investment income receipts rose 6.8% (17.4% y/y) while investment income payments increased 3.7% (21.8% y/y). The deficit on secondary income deepened to $38.0 billion.

Balance of Payments data are in Haver's **USINT** database, with summaries available in **USECON**. The expectations figure is in the **AS1REPNA** database.

**A Hopeless and Imperative Endeavor: Lessons from the Pandemic for Economic Forecasters** by Fed Governor Christopher J. Waller is available [here](https://www.federalreserve.gov/newsevents/speech/waller20211217a.htm).

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- Deficit is largest in 15 years.
- Goods & services balances both deteriorate.

U.S. Current Account Deficit Deepens Further in Q3

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**Retail gasoline prices** fell to $3.30 per gallon (+48.2% y/y) in the week ended December 20 after declining to $3.32 per gallon in the previous week. Prices were at the lowest level since the second week of October. Haver Analytics adjusts the gasoline price series for normal seasonal variation. The seasonally adjusted price rose to $3.56 per gallon. Typically, gasoline prices decline this time of year.

The price of **West Texas Intermediate crude oil** edged 0.2% lower w/w (+48.4% y/y) to $71.17 per barrel in the week ended December 17 from $71.31 per barrel in the previous week. Yesterday, the price declined to $68.23 per barrel. The average price of **Brent crude oil** eased 1.1% w/w (+44.6% y/y) to $73.94 per barrel last week from $74.80 per barrel in the prior week. The price was $71.76 per barrel yesterday.

**Natural gas** prices rose 3.3% w/w to $3.79/mmbtu (+40.4% y/y) in the week ended December 17 after declining to $3.67/mmbtu in the prior week. Prices remained down from the $5.87/mmbtu high in the second week of October. Yesterday, the price improved to $3.91/mmbtu.

In the four weeks ended December 10, **gasoline demand** increased 15.4% y/y, up from 6.4% y/y growth early in October. Demand for **all petroleum products** rose an improved 12.6% y/y in the latest week. **Crude oil input to refineries** rose 10.2% y/y. **Gasoline inventories** fell 8.5% y/y, while **crude oil inventories** declined 9.8% y/y.

The **supply of gasoline** inventories in the week ending December 10 of 23.9 days remained down sharply from the recent high of 32.9 days in the third week of February. The supply of crude oil fell to 27.3 days, the lowest level in seven weeks. It stood well below the recent high of 41.8 days in the second week of March.

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 slip.
- Crude oil prices ease.
- Natural gas prices improve.

U.S. Energy Product Prices Are Little-Changed

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