Tom Moeller

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**Retail gasoline prices** rose to $4.11 gallon in the week ended April 25 (43.0% y/y) from $4.07 per gallon the prior week. The gain followed five straight weeks of decline. Prices set a record $4.32 per gallon in the second week of March. Haver Analytics adjusts the gasoline price series for normal seasonal variation, and the seasonally adjusted price was $4.18 per gallon from $4.14 in the prior week.

The price of **West Texas Intermediate crude oil** increased to $103.88 per barrel (67.1% y/y) in the week ended April 22 after rising to $101.44 per barrel in the prior week. These compare to a high of $113.33 averaged in the fourth week of March. Yesterday, the price fell to $98.44 per barrel. The average price of **Brent crude** oil was $108.40 per barrel ($64.1%), up from $106.27 the prior week. The price was $100.98 per barrel yesterday.

The price of **natural gas** fell in the week ended April 22 to $7.10/mmbtu (157.3% y/y) after rising to $6.64 in the previous week. The price has risen from a low of $1.52/mmbtu averaged in the third week of June 2020. Yesterday, the price declined to $6.42/mmbtu.

In the four weeks ended April 15, **gasoline demand** declined 3.0% y/y. Growth in demand for **all petroleum products** weakened 1.5% y/y. Growth in **crude oil input to refineries** eased to 5.5% y/y. **Gasoline inventories** decreased 1.1% y/y while **crude oil inventories** declined 11.6% y/y.

The **supply of gasoline** inventories in the week ended April 15 was1 26.8 days, down slightly from 27.1 days in the previous week. The supply of crude oil fell to 26.2 days from 26.7 days in the prior week.

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.**

- Gasoline prices rebound.
- Crude oil prices continue to strengthen.
- Natural gas prices ease.

U.S. Energy Prices Increase

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The Conference Board Consumer Confidence Index during April weakened 0.3% (-8.7% y/y) to 107.3 from 107.6, revised from 107.2. A reading of 107.5 had been expected in the Action Economics Forecast Survey.

The Present Situation Index fell 0.8% this month (+15.7% y/y) to 152.6 after rising 7.6% in March to 153.8. The Consumer Expectations index improved 0.7% in April (-28.5% y/y) to 77.2, following three straight months of sharp decline.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, slipped to a 44.6% from the record 47.1% in March. Calculated by Haver Analytics, this series has had a 69% correlation with the unemployment rate over the last ten years. The jobs plentiful measure fell this month to 55.2% from the record 56.7% in March. The jobs hard-to-get measure rose to 10.6% of respondents.

Current business conditions were perceived as good by an increased 20.8% of respondents in April. Expectations that business conditions would improve in six months fell to 18.1% of respondents, down from 42.5% in April 2020. More jobs were expected in six months by a lessened 17.4% of respondents, half the percentage twelve months ago. The percentage expecting rising income improved to 16.5% of respondents.

The expected inflation rate in twelve months slipped to 7.5% from 7.9% in March. It remained up from a 4.4% low in January of 2020. Roughly two-thirds of respondents expected that interest rates would rise over the next twelve months, the most in three years. The share of respondents planning to buy a home within six months held fairly steady m/m at 5.9% and remained below a June 2020 high of 6.8%. Those planning to buy a major appliance rose sharply m/m to 49.8% of respondents, but remained below 53.9% registered in July 2021.

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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- Present situation & expectations are little changed m/m.
- Expectations for employment deteriorates.
- Expectations for inflation dip.

U.S. Consumer Confidence Slips in April

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Manufacturing activity in Texas weakened during April, according to the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas. The general business activity index fell to 1.1 this month, the lowest level since July 2020. An improved 19.5% of respondents reported improved business activity in April, but a greatly increased 18.4% reported a deterioration. The company outlook index weakened to -5.5 this month from -0.7 in March. These figures are the lowest since the spring of 2020. Data were collected between April 12-20 from 94 manufacturers.

The production index fell to 10.8 in April from 13.2 in March. It was down from a high of 48.6 in March 2021. The unfilled orders reading eased to 10.5 and reversed half of its March rise to 12.4 in the prior month.

Labor market activity eased. The employment reading weakened to 24.6 from 25.5. A slightly higher 34.3% of respondents planned to raise employment while a greatly increased 9.7% planned to lower it. The wages & reading slipped to 50.9 from 55.2.

The index for prices received for finished goods rose fell to 43.5 in April and reversed all of the prior month's rise to 47.8, which was the highest level since October of last year. The latest reading reflected a lessened 46.9% of respondents reporting price gains and an increased 3.4% reported price declines. The index of prices paid for raw materials fell sharply to 61.5, which was the lowest level since February of last year.

The future general business activity index fell sharply to 1.8 in April from 8.2 in March. It was the lowest reading since May 2020. Expected production, shipments and wages & benefits each fell. The expected growth rate for new orders fell sharply to the lowest level in two years.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase. When all firms report rising activity, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase equals the number reporting a decrease. Data for the Texas Manufacturing Outlook can be found in Haver's **SURVEYS** database.

- Production & employment fall.
- New orders growth and shipments improve.
- Prices received & wages ease.

Texas Manufacturing Activity & Outlook Deteriorate in April

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The Federal Reserve Bank of Chicago reported that the Chicago Fed National Activity Index (CFNAI) declined to 0.44 during March from 0.54 in February, revised from 0.51.

The index's three-month moving average improved to 0.57 in March from 0.43 in February because of a strong January. During the last 10 years, there has been 76% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

The Employment, Unemployment & Hours component fell to 0.16 in March and reversed its February gain. The Production & Income index slipped to 0.27 from 0.30 in February, but it remained up from -0.13 in December. Working the other way, the Sales, Orders & Inventories reading rose to 0.06 last month after declining to -0.03 in February. The Personal Consumption & Housing index held steady last month at -0.04.

The CFNAI diffusion index, which measures the breadth of movement in the component series, rose to 0.45 in March from 0.31. Fifty-nine of the 85 component series contributed positively to the overall index and 26 contributed negatively.

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 March 17, 2022. February data for 50 of the 85 indicators had been published at that time. For all missing data, estimates were used in constructing the index.

The index is constructed by the Federal Reserve Bank of Chicago. These figures are available in Haver's **SURVEYS** database.

- Two of four major components ease.
- Three-month moving average improves.

Chicago Fed National Activity Index Weakens in March

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 0.1% during the four weeks ended April 22 and rose 14.7% over the last year.

Prices in the **metals** group increased 1.9% in the last four weeks, up 35.1% during the last year. The gain was led by a 13.2% increase (59.1% y/y) in the price of zinc which is used in batteries. Tin and lead prices also rose. These increases were offset by a 7.8% decline (+34.9% y/y) in aluminum prices. The price of steel scrap fell 1.6% (+47.3% y/y). Copper scrap prices eased 0.2% in four weeks but were up 9.4% y/y.

**Textile** group prices improved 0.8% (10.2% y/y) during the last four weeks, led by cotton prices which increased 6.2%, up by two-thirds y/y. The cost of burlap, used for sacks, bags and gardening, eased 1.5% in the last four weeks but rose 15.8% during the last year.

Offsetting the increases was a 1.9% decline (+17.4% y/y) in the **crude oil & benzene** group prices. Crude oil costs alone fell 5.6% in four weeks yet were up roughly two-thirds y/y. The per barrel price of crude oil of $105.06 was 9.1% below the $115.64 per barrel high in the second week of March. The price of the petro-chemical benzene rose 1.1% during the last four weeks, but was 16.6% lower y/y. Excluding crude oil, industrial commodity prices rose 0.5% during the last four week and gained 12.1% in the last year.

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In the **miscellaneous** group, prices fell 1.1% during the last four weeks (+1.1% y/y). Framing lumber prices weakened 13.2% in four weeks and by 26.9% y/y. This decline was countered by a 5.8% increase (11.4% y/y) in natural rubber prices.

Industrial commodity prices should remain firm. The National Association for Business Economics expects a 4.1% rise in industrial output in 2022 and a 2.6% increase in 2023.

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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- Metal & textile costs rise further.
- Prices decline elsewhere.
- Lumber prices post another big decline.

FIBER: Industrial Commodity Prices Are Little Changed

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The Federal Reserve Bank of Philadelphia's Manufacturing Business Conditions Index declined to 17.6 during April from 27.4 in March. The decline mostly reversed the March rise from 16.0. The Action Economics Forecast Survey expected a decline to 20.6. The percentage of firms reporting improved conditions fell to 34.2% from 40.2% in March. The share reporting weaker conditions increased 16.6% from 12.7%. Responses to this month's survey were collected from April 11 through April 18.

Haver Analytics calculates an ISM-Adjusted General Business Conditions Index from five key components using the same methodology as the national ISM index. The index fell to 59.7 this month from 61.4 in March.

Performance of the subindexes was mixed. The new orders index weakened to 17.8 from 25.8. The shipments series fell to 19.1 from 30.2, while the unfilled orders measure dropped to 5.7 from 21.0. The delivery times reading slid to 17.9 from 39.7. The average workweek measure eased to 20.8 from 21.4.

To the upside, the inventory series increased to 11.9 from 0.5 in March. Also rising was the employment measure to a record 41.4 from 38.9. A slightly lessened 42.2% of respondents raised employment versus 43.7% in March who did so, but a minimal 0.7% cut payroll sizes after 4.8% did in March.

Inflation pressures increased. The prices paid reading strengthened to a near-record 84.6 in April from 81.0 in March. A slightly lessened 85.1% of respondents reported paying higher prices while only 0.5% reported paying lower prices. The prices received index increased to 55.0 in April, but remained below the 62.9% reading in November.

The Philadelphia Fed also surveys expectations for business activity in the coming six months. The expectations index for future activity collapsed to 8.2 in April, the lowest reading since December 2008 when the economy was in recession. The decline in April was led by expected weaker new orders, delivery times and employment. Expected prices paid eased slightly from a near-record level in March.

The survey panel consists of 150 manufacturing companies in the third Federal Reserve District (which consists of southeastern Pennsylvania, southern New Jersey and Delaware). The diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease in activity. The ISM-adjusted figure, calculated by Haver Analytics, is the average of five diffusion indexes: new orders, shipments, employment, delivery times and inventories with equal weights. Each ISM-adjusted index is the sum of the percent responding "higher" and one-half of the percent responding "no change."

The figures from the Philadelphia Federal Reserve dating back to 1968 can be found in Haver's **SURVEYS** database. The expectation from the Action Economics Forecast Survey is available in **AS1REPNA**.

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- Component movement is mixed.
- Jobs rise but hours-worked fall.
- Prices paid continue to strengthen.

U.S. Philadelphia Fed Index Declines & Expectations Collapse in April

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The Conference Board's Composite Leading Economic Indicators index increased 0.3% during March (6.4% y/y) after rising 0.6% in February, revised from 0.3%. The gain matched expectations in the Action Economics Forecast Survey. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity.

Seven of the index components contributed positively to the March increase including the length of the average workweek, initial unemployment insurance claims, factory orders for consumer goods, nondefense capital goods orders, building permits, the spread between the 10-year Treasury bond & Fed funds rate and the leading credit index. Consumer expectations for business & economic conditions, the ISM orders index and stock prices contributed negatively to the index change.

The Index of Coincident Economic Indicators rose 0.4% during March (3.1% y/y), the same as in February, which was unrevised. Each of the four components contributed positively to the index change including nonagricultural employment, personal income less transfers, real manufacturing & trade sales and industrial production.

The Index of Lagging Economic Indicators increased 0.6% last month (6.4% y/y) after rising 0.2% in February, revised from no change. The average duration of unemployment, the business inventory-to-sales ratio, the change in factory sector unit labor costs, banks' prime rate, C&I loans, and the services CPI contributed positively to the index change. The consumer installment/personal income ratio was slightly negative.

The Conference Board figures are available in Haver's **BCI** database; the components are available there, and most are also in **USECON**. The expectations are in the **AS1REPNA** database. Visit the Conference Board's [site](http://www.conference-board.org/) for coverage of leading indicator series from around the world.

**Steering Toward Sustainable Growth** from Mary C. Daly, President & CEO, Federal Reserve Bank of San Francisco is available [here](https://www.frbsf.org/wp-content/uploads/Steering-Toward-Sustainable-Growth%5FUNLV%5F20Apr22%5FFINAL%5F2.pdf).

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- Component increases are mixed.
- Coincident indicators continue to rise.
- Lagging indicators strengthen.

U.S. Leading Economic Indicators Rise Moderately in March

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The Mortgage Bankers Association's Loan Applications Index declined 5.0% (-48.4% y/y) in the week ended April 15, the sixth consecutive weekly decline. The decline was to the lowest level since the week ended February 8, 2019. Applications for refinancing declined 7.7% (-68.2% y/y) last week following a 4.9% weakening in the previous week. Applications for purchase fell 3.0% (-14.0% y/y) following a 1.4% gain in the prior week.

The share of applications for refinancing fell sharply to 35.7%, down from 76.5% early in March 2020. The adjustable-rate mortgage (ARM) share of activity rose to 10.6% from 9.2% in the previous week.

The effective rate on 30-year fixed-rate loans increased to 5.39%, the highest level since April 2010. The effective rate on 15-year fixed-rate loans rose to 4.63%. The rate on a Jumbo 30-year loan increased to 4.89% and the rate on a 5-year ARM was little-changed at 4.29%.

Applications for fixed-rate loans declined 6.1% (-51.0% y/y) in the week ended April 15 after falling 1.9% in the previous week. Applications for adjustable-rate mortgages increased 9.1% (+21.2% y/y) following an 8.3% rise in the previous week.

The average size of a mortgage loan rose 1.0% (19.9% y/y) to a record $396,000. The average size of a loan for purchase edged up 0.2% (11.7% y/y) to $453,800. The average size of a refinanced loan gained 1.1% (4.3% y/y) to $291,500.

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 **SURVEYS** database.

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- Refinancing falloff is pronounced.
- Purchase applications reverse earlier increase.
- Mortgage interest rates increase modestly w/w.

U.S. Mortgage Applications Continue to Decline as Rates Rise

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Existing home sales declined 2.7% (-4.5% y/y) during March to 5.770 million (SAAR) from 5.930 million in February, revised from 6.020 million. It was the lowest level of sales since June 2020 according to the National Association of Realtors (NAR). The Action Economics Forecast Survey expected sales of 5.80 million units in March. These data are compiled when existing home sales close.

The fall in existing home sales included a 2.7% decline (-3.8% y/y) in single-family home sales to 5.130 million, a 21-month low, from 5.270 million in February. Sales of condos and co-ops weakened 3.0% (-9.9% y/y) to 640,000, the lowest level since August 2020.

Sales declined in most of the country last month. Sales in the Midwest were off 4.5% (-3.1% y/y) to 1.270 million. In the South, sales fell 3.0% both m/m and y/y in March to 2.620 million. Existing home sales in the Northeast fell 2.9% (-11.8% y/y) to 670,000. Sales in the West held steady (-4.7% y/y) at 1.210 million.

The number of existing homes on the market rose 11.8% (-9.5% y/y) to 950,000 (NSA). The supply of homes on the market improved to 2.0 months in March from 1.7 months in February. It was the highest level in four months but remained well below the high of 4.6 months in May 2020. These figures date back to January 1999.

The median price of an existing home increased 4.5% (15.0% y/y) to a record $375,300 last month. In the West, prices gained 1.4% last month (5.4% y/y) to $519,900. In March, home prices in the Northeast rose 1.7% (6.8% y/y) to $390,200. Prices in the South rose 4.5% in March (21.2% y/y) to $339,000. In the Midwest, prices surged 9.0% last month (10.4% y/y) to $271,000. The average price of an existing home rose 3.4% (9.6% y/y) to $387,100 in March. The price data are not seasonally adjusted.

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. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

The Fed's latest **Beige Book** covering regional economic conditions can be found [here](https://www.federalreserve.gov/monetarypolicy/files/BeigeBook%5F20220420.pdf).

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- Sales decline is third in last four months.
- Declines are spread through most of country.
- Median price hits record level.

U.S. Existing Home Sales Fall as Prices Increase in March

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Housing starts rose 0.3% (3.9% y/y) during March to 1.793 million from 1.788 million in February, revised from 1.769 million. It remained the highest level of starts since June 2006. January starts were revised to 1.679 million from 1.657 million. The Action Economics Forecast Survey expected 1.741 million starts during March.

Starts of single-family units fell 1.7% (-4.4% y/y) last month to 1.200 million after rising to 1.221 million in February. Multi-family housing starts improved 4.6% (26.2% y/y) to 593,000 from 567,000 in February.

By region, housing starts in the Northeast more-than-doubled m/m (77.6% y/y) in March to 293,000. Starts in the West increased 7.7% (13.9% y/y) to 434,000. In the South, housing starts declined 17.2% (-6.4% y/y) to 834,000 units. Starts in the Midwest eased 2.9% (-19.4% y/y) to 232,000 in March.

Building permits rose 0.4% (6.7% y/y) to 1.873 million from 1.865 million in February. Permits to build single-family homes declined 4.8% (-3.9% y/y) in March to 1.147 million units. Permits to build multi-family homes rose 10.0% (29.4% y/y) to 726,000.

The housing starts and permits figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Single-family starts ease while multi-family improves.
- Regional changes remain mixed.
- Building permits rise slightly.

U.S. Housing Starts Unexpectedly Edge Higher in March

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The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 2.5% (-7.2% y/y) to 77 in April from an unrevised 79 in March. It was the fourth straight monthly decline, pushing the index 14.4% below its peak in November 2020. The decline matched expectations in the INFORMA Global Markets survey.

The current sales reading fell 2.3% (-3.4% y/y) to 85 and stood at its lowest level since September 2021. Moving upward by 4.3% (-8.8% y/y) to 73 was the index of expected sales in the next six months. The index peaked at 89 in November 2020. The index measuring traffic of prospective buyers fell 9.1% (-18.9% y/y) to 60. The index stood at the lowest level since last August and was 22.1% lower than the November 2020 peak.

Regional activity varied in April. The index for the Midwest fell 17.6% (-18.7% y/y) to 61, its lowest level since June 2020. The index for the West declined 7.7%, both m/m and y/y, to 84. Moving 13.8% higher (-11.9% y/y) to 74 was the index for the Northeast. In the South, the home builder index rose 1.2% (-2.4% y/y) to 82. These regional series begin in December 2004.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. These data are included in Haver's **SURVEYS** database. The Informa Global Markets survey is in Haver's **MMSAMER** database.

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- Decline is to lowest level since September 2021.
- Current sales & traffic decline.
- Regional readings remain mixed.

U.S. Home Builder Index Continues to Weaken in April

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Industrial production increased 0.9% (5.5% y/y) during March following a 0.9% February gain, revised from 0.5%. January's 1.0% rise was revised from 1.4%. A 0.4% increase had been expected in the Action Economics Forecast Survey. Manufacturing output rose 0.9% (4.9% y/y) in March after increasing an unrevised 1.2% in February. January's 0.2% gain compared to 0.1% reported last month. Utilities output rose 0.4% (7.5% y/y) following February's 1.0% decline. Mining output strengthened 1.7% (7.0% y/y) after a 1.2% February increase.

The March production increase was led by a 7.8% rise (3.9% y/y) in motor vehicle output which followed a 4.6% decline. Output of computers & electronic products improved 0.6% (7.5% y/y) following a 2.1% jump. Machinery production rose 0.8% (6.1% y/y) after increasing 0.5% and electrical equipment & appliance production rose 1.0% (5.5% y/y), half the February increase. In the nondurable goods sector, the lessened 0.4% rise reflected a 0.5% gain (-0.3% y/) in apparel production as it came after February's 2.1% surge. Chemical production rose a fairly steady 0.7% (9.8% y/y) while food & beverage output increased 0.3% (0.8% y/y), half the prior month's increase. Petroleum output rose 0.7% (2.4% y/y) after February's 2.4% surge.

In the special classifications, factory output of high technology industries rose 1.4% in March (8.9% y/y) after a 2.6% gain. Less the high technology sector, factory output rose 0.8% (4.8% y/y) following a 1.4% rise. Maufacturing production excluding both high tech and autos rose 0.4% (4.9% y/y) after surging 1.5% in February.

Capacity utilization rose to 78.3% last month from 77.7% in February. A 77.8% rate had been expected. Utilization in the factory sector rose to 78.7%, the highest rate since July 2007. Factory sector capacity rose 0.3% y/y.

Industrial production and capacity are located in Haver's **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

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- Overall production growth is steady but factory sector slows.
- Slowdown is broad-based.
- Capacity utilization strengthens.

U.S. Industrial Production Remains Strong in March

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