Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080108c.jpg" width="353">
In the opening week of the New Year, chain store sales rose a modest 0.4% according to the International Council of Shopping Centers (ICSC)-UBS.
The small w/w gain was enough to recoup all of the prior week&#39;s decline, lift sales to a record high and raise the latest level 1.9% above December after that month&#39;s 1.0% m/m rise.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Still working the other way, the leading indicator of chain store sales from ICSC-UBS fell for the third consecutive week was down for all of December for the fourth month in the last five.
The Economy in 2008 is yesterday&#39;s speech by Dennis P. Lockhart, President and Chief Executive Officer Federal Reserve Bank of Atlanta and it is available <a href="http://www.frbatlanta.org/invoke.cfm?objectid=55128437-5056-9F12-1245D6E0C2BFFB66&amp;method=display"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/05/08</th>
<th scope="col">12/29/07</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>489.6</td>
<td>487.7</td>
<td>1.9%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


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In the opening week of the New Year, chain store sales rose a modest 0.4% according to the International Council of Shopping Centers (ICSC)-UBS.

U.S. Chain Store Sales Touch a New High

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080108a.jpg" width="353">
The National Association of Realtors reported that pending home sales in November fell 2.6% m/m and reversed most of the October gain. The level of sales remained down 22.7% year to date.
The latest monthly figure is about one third below the peak level during the Summer of 2005. The data date back only to 2001.
These figures are analogous to the new home sales data from the Commerce Dept. They measure existing home sales when the sales contract is signed, not at the time the sale is closed.
The Realtors also indicated in an earlier report that the number of homes on the market and available for sale fell slightly for the third month in the last four. Nevertheless, the level of 427,300 units was double the level at the low in early 2005.
In the Northeast, pending home sales fell 13.0% m/m and reversed all of the prior month&#39;s gain. Sales remained 20% lower than at the start of the year. Sales in the Western part of the nation fell 2.1% m/m. In the Midwest sales fell 4.1% for the second consecutive monthly decline.
Sales in the South posted the only m/m gain with a 2.3% increase but it was only the second rise in the last five months.
The pending home sales data are available in Haver&#39;s PREALTOR database and the number of homes on the market are in the REALTOR database.
Housing Woes Weigh Heavily on the Economy from the Federal Reserve Bank of St. Louis can be found <a href="http://stlouisfed.org/publications/re/2007/d/pdf/housing-woes.pdf">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>87.6</td>
<td>&nbsp;89.9</td>
<td>&nbsp;&nbsp; -19.2%</td>
<td>112.1&nbsp;</td>
<td>124.2</td>
<td>120.5&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>70.1</td>
<td>80.6</td>
<td>-19.1</td>
<td>98.0</td>
<td>108.0</td>
<td>109.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>82.1</td>
<td>85.6</td>
<td>-18.6</td>
<td>102.0</td>
<td>116.4</td>
<td>118.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>100.7</td>
<td>98.4</td>
<td>-19.8</td>
<td>127.4</td>
<td>134.8</td>
<td>126.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>86.6</td>
<td>88.5</td>
<td>-18.5</td>
<td>109.6</td>
<td>128.7</td>
<td>122.7</td>
</tr>
</tbody>
</table>
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The National Association of Realtors reported that pending home sales in November fell 2.6% m/m and reversed most of the October gain. The level of sales remained down 22.7% year to date. The latest monthly figure is about one third [...]

U.S. Pending Home Sales Down Slightly in November

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080108b.jpg" width="353">
In December, small business optimism ticked up a slight 0.2% following sharp declines during most of the year according to the National Federation of Independent Business (NFIB). The latest was near the lowest level since September 1993.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.
Virtually all of last month&#39;s slight increase seemed to come as the percentage of firms planning to raise capital expenditures rose off of this cycle&#39;s low.
Also, the percent with one or more job openings rose slightly from the lowest level since 2003. During the last ten years there has been a 72% correlation between the NFIB percentage and the y/y change in nonfarm payrolls. The percentage of firms planning to raise employment remained depressed.
The percentage of firms indicating that credit was more difficult to get remained stable after steady increases through 2007.
Now was a good time the business remained near the low of the last three years.
The percentage of firms expecting higher real sales in six months again fell sharply to the lowest since 2003.
Respondents expecting the economy to improve remained near the low of the last two years..The percentage of firms actually raising prices rose m/m. During the last ten years there has been a 60% correlation between the change in the producer price index and the level of the NFIB price index. The percentage of firms planning to raise prices was stable at its highest level in a year.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
The Economic Outlook and the Fed&#39;s Roles in Monetary Policy and Financial Stability is today&#39;s speech by Charles I Plosser, President of the Federal Reserve Bank of Philadelphia and it can be found <a href="http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2008/01-08-08_main-line-chamber-commerce.cfm"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat&#39;l Federation of Independent Business</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y</th>
<th scope="col">20007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>94.6</td>
<td>94.4</td>
<td>-2.0%</td>
<td>96.7</td>
<td>98.9</td>
<td>101.6</td>
</tr>
</tbody>
</table>


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In December, small business optimism ticked up a slight 0.2% following sharp declines during most of the year according to the National Federation of Independent Business (NFIB). The latest was near the lowest level since September [...]

Small Business Optimism Remained Low

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107d.jpg" align="left" border="0" height="265" width="353">
The Euro Area&#8217;s past two month&#8217;s headline gains for the PPI
excluding construction were a sizeable +0.8% and +0.7%, respectively.
These are huge increases. On the same period the ex-energy PPI rose by
0.1% and 0.4% a much better pairing - but still not satisfactory for
the ECB. While the ECB&#8217;s inflation ceiling of 2% applies to the HICP
clearly having other indices rising faster than that creates problems
for price stability.

At the moment energy prices are pushing headline prices off
the map. The 3-mo headline inflation gain of the E-zone PPI is 7.7% up
from 4.8% over six months and 4.1% Yr/Yr. All of these figures are
excessive. The core rate flattened out at 2.6% over 3-mo and 6-mo lower
than the 3.2% it is up Yr/Yr. That is some encouragement but the pace
of ex-energy inflation is still excessive.

Still, across countries problems linger. Excl energy inflation
in Germany is decelerating, true. But in Italy and in the UK excl
energy inflation is higher over three months than it was over six
months. It is no wonder that the ECB continues to rattle its saber over
inflation.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> Euro
Area and UK PPI Trends</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Ezone-13</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Total excl Construction</td>
<td>0.8%</td>
<td>0.7%</td>
<td style="color: red;">7.7%</td>
<td style="color: red;">4.8%</td>
<td>4.1%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Excl Energy</td>
<td>0.1%</td>
<td>0.4%</td>
<td>2.6%</td>
<td>2.6%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.0%</td>
<td>0.1%</td>
<td style="color: red;">1.0%</td>
<td>0.9%</td>
<td>1.5%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>0.3%</td>
<td>0.5%</td>
<td style="color: red;">5.2%</td>
<td style="color: red;">5.0%</td>
<td style="color: red;">3.6%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Intermediate &amp; Capital
Goods</td>
<td>0.0%</td>
<td>0.3%</td>
<td>1.3%</td>
<td>1.3%</td>
<td>2.8%</td>
<td>4.5%</td>
</tr>
<tr>
<td class="firstcol">Energy</td>
<td>3.2%</td>
<td>1.8%</td>
<td style="color: red;">26.9%</td>
<td style="color: red;">12.3%</td>
<td style="color: red;">7.8%</td>
<td>6.8%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.7%</td>
<td>0.5%</td>
<td style="color: red;">6.9%</td>
<td>4.7%</td>
<td style="color: red;">4.8%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>0.8%</td>
<td>0.4%</td>
<td style="color: red;">5.8%</td>
<td style="color: red;">3.2%</td>
<td>2.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>-0.1%</td>
<td>0.4%</td>
<td>1.4%</td>
<td>1.8%</td>
<td>2.3%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.9%</td>
<td>0.5%</td>
<td style="color: red;">7.8%</td>
<td style="color: red;">5.2%</td>
<td>4.6%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>0.2%</td>
<td>0.3%</td>
<td style="color: red;">2.4%</td>
<td>2.2%</td>
<td>3.2%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>2.2%</td>
<td>1.9%</td>
<td style="color: red;">22.6%</td>
<td style="color: red;">13.2%</td>
<td style="color: red;">3.1%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>0.1%</td>
<td>0.4%</td>
<td style="color: red;">3.2%</td>
<td>2.9%</td>
<td>3.2%</td>
<td>3.3%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">E-zone 13 Harmonized PPI excluding
Construction</td>
</tr>
<tr>
<td colspan="7" class="firstcol">The EA 13 countries are Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Slovenia</td>
</tr>
</tbody>
</table>
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The Euro Area’s past two month’s headline gains for the PPI excluding construction were a sizeable +0.8% and +0.7%, respectively. These are huge increases. On the same period the ex-energy PPI rose by 0.1% and 0.4% a much better [...]

PPI Headline Inflation Soars While ex Energy Prices Hold at a Too-High Pace

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107b.jpg" width="353">
The value of construction put in place rose slightly in November by 0.1%. That followed a 0.4% October decline which was softer than the 0.8% drop reported initially. The revision was due to a rise in nonresidential building instead of the decline indicated last month. The three month growth in total construction activity remained at a stable at -0.1% (AR), an improvement from the 2.3% rate of decline last Autumn.
In November, residential building continued lower. The 2.4% m/m decline was the largest of the current down cycle and it dropped the three month change to -24.4% (AR). Building of new single family units fell 5.0% m/m (-41.2%, three month, AR) and spending on improvements gained 0.7% (6.7%, three month, AR).
During the last twenty years there has been an 84% correlation between the q/q change in the value of residential building and its contribution to growth in real GDP.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107c.jpg" width="353">
Nonresidential building continued strong and produced a 1.7% rise after a increase 1.2% during the month prior. Three month growth remained quite firm at 24.4% (AR) due to a 37.2% three month rise in office construction and a 21.7% rise in multi-retail building. Commercial construction got back in the upside act with a 12.1% three month gain and educational facility building rose 34.2%.
A 2.5% November rise in public construction spending raised the three month growth rate to 22.2%. Construction on highways &amp; streets rose 32.1% (AR) on a three month basis. The value of construction on highways &amp; streets is nearly one third of the value of total public construction spending. Construction spending on educational facilities again was strong with a 19.1% three month rise.
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.
Recent and Prospective Developments in Monetary Policy Transparency and Communications: A Global Perspective is today&#39;s speech by Fed Vice ChairmanDonald L. Kohn at the National Association for Business Economics Annual Meeting in New Orleans, Louisiana and is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20080105a.htm"> here</a>. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>-0.1%</td>
<td>5.6%</td>
<td>10.7%</td>
<td>11.0%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>-0.7%</td>
<td>-0.9%</td>
<td>-4.8%</td>
<td>4.7%</td>
<td>12.0%</td>
<td>13.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-2.4%</td>
<td>-2.3%</td>
<td>-17.8%</td>
<td>0.5%</td>
<td>13.7%</td>
<td>18.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>1.7%</td>
<td>1.2%</td>
<td>19.5%</td>
<td>15.2%</td>
<td>7.8%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>2.5%</td>
<td>0.9%</td>
<td>16.2%</td>
<td>9.2%</td>
<td>6.2%</td>
<td>1.7%</td>
</tr>
</tbody>
</table>
</body>
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The value of construction put in place rose slightly in November by 0.1%. That followed a 0.4% October decline which was softer than the 0.8% drop reported initially. The revision was due to a rise in nonresidential building instead [...]

U.S. Construction Spending Up Slightly in November

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107b.jpg" align="left" border="0" height="265" width="353">
The value of construction put in place rose slightly in
November by 0.1%. That followed a 0.4% October decline which was softer
than the 0.8% drop reported initially. The revision was due to a rise
in nonresidential building instead of the decline indicated last month.
The three month growth in total construction activity remained at a
stable at -0.1% (AR), an improvement from the 2.3% rate of decline last
Autumn.
In November, residential building continued lower. The 2.4%
m/m decline was the largest of the current down cycle and it dropped
the three month change to -24.4% (AR). Building of new single family
units fell 5.0% m/m (-41.2%, three month, AR) and spending on
improvements gained 0.7% (6.7%, three month, AR).
During the last twenty years there has been an 84% correlation
between the q/q change in the value of residential building and its
contribution to growth in real GDP.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107c.jpg" align="right" border="0" height="265" width="353">
Nonresidential building continued strong and produced a 1.7%
rise after a increase 1.2% during the month prior. Three month growth
remained quite firm at 24.4% (AR) due to a 37.2% three month rise in
office construction and a 21.7% rise in multi-retail building.
Commercial construction got back in the upside act with a 12.1% three
month gain and educational facility building rose 34.2%.
A 2.5% November rise in public construction spending raised
the three month growth rate to 22.2%. Construction on highways
&amp; streets rose 32.1% (AR) on a three month basis. The value of
construction on highways &amp; streets is nearly one third of the
value of total public construction spending. Construction spending on
educational facilities again was strong with a 19.1% three month rise.
These more detailed categories represent the Census Bureau&#8217;s
reclassification of construction activity into end-use groups. Finer
detail is available for many of the categories; for instance,
commercial construction is shown for Automotive sales and parking
facilities, drugstores, building supply stores, and both commercial
warehouses and mini-storage facilities. Note that start dates vary for
some seasonally adjusted line items in 2000 and 2002 and that
constant-dollar data are no longer computed.
Recent and Prospective Developments in Monetary
Policy Transparency and Communications: A Global Perspective is
today's speech by Fed Vice ChairmanDonald L. Kohn at the National
Association for Business Economics Annual Meeting in New Orleans,
Louisiana and is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20080105a.htm">here</a>. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>-0.1%</td>
<td>5.6%</td>
<td>10.7%</td>
<td>11.0%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>-0.7%</td>
<td>-0.9%</td>
<td>-4.8%</td>
<td>4.7%</td>
<td>12.0%</td>
<td>13.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-2.4%</td>
<td>-2.3%</td>
<td>-17.8%</td>
<td>0.5%</td>
<td>13.7%</td>
<td>18.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>1.7%</td>
<td>1.2%</td>
<td>19.5%</td>
<td>15.2%</td>
<td>7.8%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>2.5%</td>
<td>0.9%</td>
<td>16.2%</td>
<td>9.2%</td>
<td>6.2%</td>
<td>1.7%</td>
</tr>
</tbody>
</table>
 PPI Headline Inflation SoarsWhile
ex Energy Prices
Hold at a Too-High Pace 
by <a href="/comment/Brusca.html">Robert
Brusca</a> January 7, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107d.jpg" align="left" border="0" height="265" width="353">
The Euro Area&#8217;s past two month&#8217;s headline gains for the PPI
excluding construction were a sizeable +0.8% and +0.7%, respectively.
These are huge increases. On the same period the ex-energy PPI rose by
0.1% and 0.4% a much better pairing - but still not satisfactory for
the ECB. While the ECB&#8217;s inflation ceiling of 2% applies to the HICP
clearly having other indices rising faster than that creates problems
for price stability.

At the moment energy prices are pushing headline prices off
the map. The 3-mo headline inflation gain of the E-zone PPI is 7.7% up
from 4.8% over six months and 4.1% Yr/Yr. All of these figures are
excessive. The core rate flattened out at 2.6% over 3-mo and 6-mo lower
than the 3.2% it is up Yr/Yr. That is some encouragement but the pace
of ex-energy inflation is still excessive.

Still, across countries problems linger. Excl energy inflation
in Germany is decelerating, true. But in Italy and in the UK excl
energy inflation is higher over three months than it was over six
months. It is no wonder that the ECB continues to rattle its saber over
inflation.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> Euro
Area and UK PPI Trends</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Ezone-13</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Total excl Construction</td>
<td>0.8%</td>
<td>0.7%</td>
<td style="color: red;">7.7%</td>
<td style="color: red;">4.8%</td>
<td>4.1%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Excl Energy</td>
<td>0.1%</td>
<td>0.4%</td>
<td>2.6%</td>
<td>2.6%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.0%</td>
<td>0.1%</td>
<td style="color: red;">1.0%</td>
<td>0.9%</td>
<td>1.5%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>0.3%</td>
<td>0.5%</td>
<td style="color: red;">5.2%</td>
<td style="color: red;">5.0%</td>
<td style="color: red;">3.6%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Intermediate &amp; Capital
Goods</td>
<td>0.0%</td>
<td>0.3%</td>
<td>1.3%</td>
<td>1.3%</td>
<td>2.8%</td>
<td>4.5%</td>
</tr>
<tr>
<td class="firstcol">Energy</td>
<td>3.2%</td>
<td>1.8%</td>
<td style="color: red;">26.9%</td>
<td style="color: red;">12.3%</td>
<td style="color: red;">7.8%</td>
<td>6.8%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.7%</td>
<td>0.5%</td>
<td style="color: red;">6.9%</td>
<td>4.7%</td>
<td style="color: red;">4.8%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>0.8%</td>
<td>0.4%</td>
<td style="color: red;">5.8%</td>
<td style="color: red;">3.2%</td>
<td>2.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>-0.1%</td>
<td>0.4%</td>
<td>1.4%</td>
<td>1.8%</td>
<td>2.3%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.9%</td>
<td>0.5%</td>
<td style="color: red;">7.8%</td>
<td style="color: red;">5.2%</td>
<td>4.6%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>0.2%</td>
<td>0.3%</td>
<td style="color: red;">2.4%</td>
<td>2.2%</td>
<td>3.2%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>2.2%</td>
<td>1.9%</td>
<td style="color: red;">22.6%</td>
<td style="color: red;">13.2%</td>
<td style="color: red;">3.1%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">Total excl Energy</td>
<td>0.1%</td>
<td>0.4%</td>
<td style="color: red;">3.2%</td>
<td>2.9%</td>
<td>3.2%</td>
<td>3.3%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">E-zone 13
Harmonized PPI excluding
Construction</td>
</tr>
<tr>
<td colspan="7" class="firstcol">The EA 13
countries are Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Slovenia</td>
</tr>
</tbody>
</table>
Economic Sentiment
Continues to Falter in Europe 
by <a href="/comment/Curley.html">Louise
Curley</a> January 7, 2087


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107e.jpg" align="left" border="0" height="265" width="353">
With the price of oil and the euro continuing to climb and
financial markets continuing to be unsettled, it is not surprising that
economic sentiment among Europeans continues to weaken. For the 27
countries in the European Union, the Economic Sentiment Indicator (ESI)
fell 0.4% from 107.5 in November to 107.1 in December and was 4.7%
below December, 2006. For the 13 countries in the Euro Area, the ESI
fell only 0.1% in December to 104.7 from 104.8 in November (actually
less than the consensus estimate) and was 4.6% below December 2006.
Although there are measures of economic sentiment for the EU
27 and the EA13, it is not possible to derive measures for the non EA
as whole. However since sentiment in the EU 27 has generally been
higher than that in the EA13, (as can be seen in the first chart) it
can be inferred that sentiment in, at least, some of the non EA
countries has been higher than those in the EA. The second chart
showing selected countries in the EA--France, Germany and Italy--and
the third chart, selected countries in the non EA--Sweden, United
Kingdom, Poland and Latvia illustrate the point.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107f.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080107g.jpg" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;Economic
Sentiment Indicators&nbsp; (Long Term Average =100)</th>
<th scope="col">Dec 07</th>
<th scope="col">Nov 07&nbsp;</th>
<th scope="col">Dec 06&nbsp;</th>
<th scope="col">M/M %Chg&nbsp;</th>
<th scope="col">Y/Y %Chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">EU 27</td>
<td>107.1</td>
<td>107.5</td>
<td>112.4</td>
<td>-0.37</td>
<td>-4.72</td>
<td>111.8</td>
<td>108.3</td>
<td>99.4</td>
</tr>
<tr>
<td class="firstcol">EA 13</td>
<td>104.7</td>
<td>104.8</td>
<td>109.8</td>
<td>-0.10</td>
<td>-4.62</td>
<td>109.0</td>
<td>106.9</td>
<td>97.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>105.9</td>
<td>106.2</td>
<td>108.8</td>
<td>-0.28</td>
<td>-2.67</td>
<td>109.2</td>
<td>105.9</td>
<td>95.1</td>
</tr>
<tr>
<td class="firstcol"> France</td>
<td>109.3</td>
<td>110.2</td>
<td>108.6</td>
<td>-0.82</td>
<td>0.64</td>
<td>110.6</td>
<td>106.9</td>
<td>103.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>100.2</td>
<td>97.9</td>
<td>108.9</td>
<td>2.35</td>
<td>-8.79</td>
<td>105.6</td>
<td>108.6</td>
<td>97.9</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>106.6</td>
<td>107.8</td>
<td>110.8</td>
<td>-1.11</td>
<td>-3.79</td>
<td>110.7</td>
<td>107.0</td>
<td>99.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Sweden</td>
<td>114.8</td>
<td>114.6</td>
<td>116.8</td>
<td>0.17</td>
<td>-1.71</td>
<td>119.3</td>
<td>114.2</td>
<td>105.3</td>
</tr>
<tr>
<td class="firstcol">Poland</td>
<td>133.4</td>
<td>134.0</td>
<td>126.2</td>
<td>-0.45</td>
<td>5.71</td>
<td>133.3</td>
<td>116.0</td>
<td>105.0</td>
</tr>
<tr class="odd">
<td class="firstcol"> Latvia</td>
<td>108.1</td>
<td>109.2</td>
<td>118.9</td>
<td>-1.01</td>
<td>-9.08</td>
<td>114.8</td>
<td>114.7</td>
<td>109.7</td>
</tr>
</tbody>
</table>
</body></html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
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.grey4{
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.grey5{
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</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090106i.jpg" width="353">
Regular gasoline prices moved seven cents higher last week and nearly recouped the declines of the prior three periods, according to the U.S. Department of Energy survey. Nevertheless, at $1.68 per gallon the price was about even with the December average and down from $2.75 for all of November. Yesterday, the spot market price for a gallon of regular gasoline rose another seven cents to $1.14 per gallon.
Weekly gasoline prices can be found in Haver&#39;s WEEKLY database. Daily prices are in the DAILY database.
Product demand continues to fall despite lower prices, pulled down by the developing economic recession. The U.S. Department of Energy reported that the demand for gasoline fell by 3.2% y/y, nearly the fastest rate of decline since late-1995 (the latest four weeks versus the same four weeks last year). The demand for all petroleum products also fell 3.7% y/y.
These DOE figures are available in Haver&#39;s OILWKLY database.
The price for a barrel of West Texas Intermediate crude oil also moved higher last week to $42.50 per barrel, the highest level in three weeks and up from the $40.56 averaged last week. Prices reached their high of $145.66 last July. In futures trading yesterday, the one-month price for crude oil was $48.81.
Last week, prices for natural gas recouped the prior week&#39;s decline and rose to $5.66 per mmbtu (-26.2% y/y). The latest average price was 50% below natural gas prices in early-July of $13.19/mmbtu.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">01/05/09</th>
<th scope="col">12/29/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per Gallon)</td>
<td>1.68</td>
<td>1.61</td>
<td>-45.8%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>42.50</td>
<td>32.37</td>
<td>-56.7%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
</body>
</html>

Regular gasoline prices moved seven cents higher last week and nearly recouped the declines of the prior three periods, according to the U.S. Department of Energy survey. Nevertheless, at $1.68 per gallon the price was about even with [...]

U.S. Gasoline Prices Moved Higher

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

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Andrew Cates

**Upbeat investors**
Despite a year marked by major headwinds — from renewed US tariffs and persistent geopolitical strains to shifting interest-rate expectations — incoming global economic data have consistently outperformed forecasters’ expectations. The Citigroup Economic Surprise Index has remained in positive territory for most of 2025, indicating that growth, labour, and spending indicators have been “less bad” or outright stronger than consensus predicted. That resilience has helped to underpin market sentiment: while bouts of concern have occasionally lifted the Cboe Volatility Index (VIX), volatility has stayed relatively subdued, and equity markets have remained buoyant. In effect, 2025 has been a year in which the real economy has quietly outpaced the gloom, keeping risk appetite supported even as the macro narrative remained fraught with shocks and uncertainty.

251113Z1.jpg

**Less restriction from monetary policy**
Another key source of support for investors through 2025 has been the steady easing in both inflation and monetary policy across the major advanced economies. Core CPI has continued to trend lower from its 2022–23 highs, reflecting softer goods prices, moderating wage growth, and the lagged effects of tighter policy. With inflation now back within sight of central bank targets, policy rates have been edging down for the first time in several years. That shift has eased financial conditions, lowered real borrowing costs, and helped sustain asset valuations even as growth expectations have moderated. In effect, 2025 has marked the transition from a phase of inflation anxiety and policy restraint to one of gentle disinflation and tentative monetary normalisation—an environment that has kept liquidity abundant and risk assets well supported.

251113Z2.jpg

**A thrust from fiscal policy**
A further policy tailwind in 2025 has come from the fiscal side, where governments in the major advanced economies have largely resisted meaningful consolidation despite earlier pledges to rebuild buffers. Across the US, Europe, and Japan, the cyclically adjusted primary balance remains firmly expansionary, helping to sustain demand at a time when private investment and trade have softened. In the United States, spending linked to industrial policy, energy transition, and defence has continued to underpin activity; in Europe, fiscal policy has remained loose as governments balance social pressures and investment needs; and in Japan, the new prime minister has signalled further stimulus to support household income and productivity growth. Yet this persistent fiscal support has also had a side effect: it has kept longer-term real yields unusually elevated, reflecting both heavy sovereign issuance and investor recognition that governments are still running structural deficits even in a low-growth environment. In other words, fiscal policy has been a crucial prop for near-term growth—but also one reason why the “new normal” for real yields now looks higher than in the pre-pandemic decade.

251113Z3.jpg

**The AI Boom**
One of the defining features of 2025 has been the AI investment boom, centred on the extraordinary surge in spending on US data centres and digital infrastructure. Real private investment in this sector has soared to record highs as firms race to expand computing capacity, driven by optimism about artificial intelligence and its potential to transform productivity. The pickup in utilisation-adjusted total factor productivity suggests that some efficiency gains may already be materialising, though it remains too early to tell whether these effects will endure. Investors have largely welcomed this capital deepening as a sign of renewed US dynamism, but it also carries familiar late-cycle risks — from valuation bubbles in AI-related equities to mounting energy demands and strain on power grids. The key question for 2026 and beyond is whether this unprecedented capex wave will deliver the sustained productivity lift needed to justify its scale, or whether it proves another costly technological exuberance.

251113Z4.jpg

**Global trade fragmentation** 
Global trade came under renewed strain in 2025 as President Trump moved quickly in his second term to escalate tariff actions against China and several key trading partners. The US effective tariff rate has surged from below 8% at the end of 2024 to around 21% by mid-2025, marking the most aggressive trade tightening since the late 2010s. The back-and-forth imposition of tariff and non-tariff barriers between Washington and Beijing has led to a sharp pullback in bilateral trade flows, with US imports from China falling markedly and Chinese imports from the US also sliding. The broader ripple effects have been significant: global supply chains are once again being re-routed, firms are diversifying production toward third-country hubs, and world trade growth has slowed. This latest round of protectionism has reinforced the trend toward strategic fragmentation — a more regional, politically filtered form of globalisation — that continues to reshape the post-pandemic trading landscape.

251113Z5.jpg

**Lingering uncertainties**
If there has been one constant through 2025, it has been uncertainty itself. Both global economic policy uncertainty and geopolitical risk indices have remained at historically high levels, underscoring an environment shaped by unpredictable policy shifts, heightened conflict risks, and volatile leadership transitions. Trade tensions between the US and China, renewed instability in the Middle East, and political fragmentation across Europe have all contributed to a pervasive sense of unease. For businesses and investors, this has meant navigating a world where the policy outlook can change overnight — from tariffs and fiscal surprises to shifting regulatory regimes. Yet despite this turbulence, financial markets have shown remarkable resilience, helped by disinflation, easier monetary policy, and continued technological investment. In short, 2025 has been a year in which uncertainty has become the new normal — less an episodic shock, more a defining structural feature of the global economic landscape.


251113Z6.jpg

The global economic story of 2025 has been one of resilience amid disruption. Despite a succession of shocks — from a renewed U.S.–China trade confrontation and elevated geopolitical risks, to a sharp rise in fiscal activism and the energy-intensive AI investment boom — the world economy has held up better than many feared. Activity data have consistently surprised on the upside, supporting buoyant equity markets and keeping volatility contained. Meanwhile, inflation has continued to ease and central banks have cautiously shifted toward easier policy, even as large government deficits have kept longer-term real yields elevated. At the same time, US tariff policies have re-emerged as a defining force in global trade, with steep new duties on Chinese, Canadian, and Mexican goods disrupting supply chains and prompting renewed fragmentation in world commerce. These measures have cooled bilateral trade flows and added another layer of uncertainty to an already unsettled policy environment. Yet uncertainty itself remains the dominant feature of 2025 — geopolitical tension, technological exuberance, and diverging fiscal and monetary paths have left investors navigating a world where optimism and fragility coexist.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/2maIAQuAmTWSmhhZOnQDq3?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: The Year in Review

251113F5.jpg

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The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) increased 3.9% (-0.3% y/y) during September to 104.5 after rising 2.8% in August and 2.9% in July. The index roughly equaled the recent high of 104.8 in September of 2024. The level of home affordability was 16.2% higher than its low of 89.9 in October 2023, but remained 41.6% below the high of 179.0 in April 2020.

The rise in September affordability occurred as the median price of an existing single-family home fell 1.6% (+2.3% y/y) to $420,700. The price compared to the record $438,600 in June 2025. Mortgage rates fell to 6.43% after declining to 6.67% in August. The fall in mortgage rates left them above their low of 6.26% in September of last year, though below a 7.70% high in October of 2023. They remained well above a December 2020 low of 2.73%.

In September, the principal plus interest payment fell 4.0% (+4.1% y/y) to $2,112 per month, down 8.6% from June’s record high of $2,311, but still well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a lessened 23.9% of income during September, down from 24.9% in August, but increased from a low of 14.0% of income in April 2020.

The decline in housing costs in September was accompanied by a 0.3% decline (+3.8% y/y) in median family income to $105,946 after rising 0.3% in both August and July. Qualifying income declined 4.0% (+4.1% y/y) to $101,376, the third straight month of sharp decline.

Housing affordability improved m/m across the country in September. The index rose in the Midwest, the country’s most affordable region, by 5.1% (-2.8% y/y) to 131.9. In the South, the index increased 2.2% (0.6% y/y) to 109.9, while the affordability index in the Northeast jumped 9.4% (-2.8% y/y) to 92.7. In the West, where homes are the least affordable, the index improved 2.3% (1.1% y/y) to 75.0 in September.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990. It reached an all-time high of 213.3 in January 2013.

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

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- Home prices & mortgage rates continue to decline.
- Median income edges lower.
- Affordability increases across country.

U.S. Housing Affordability Increases in September

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Industrial output in the European Monetary Union in September advanced by 0.2% after falling by 1.1% in August and rising by 0.7% in July. Output of consumer goods fell in the month with overall consumer goods output falling by 2.5% and a 0.5% reduction in consumer durables output and a 2.6% reduction in the output of consumer nondurable goods. However, intermediate goods output grew by 0.3% and capital goods output rose by 0.3% in September. Output fell broadly across each of these sectors and subsectors in August but then it rose in all of them in July. Output metrics have been through a bit of turbulence over the last three months.

**Sequential Growth Performance**
Sequential calculations showing annual rates of growth over 12 months, six months and three months reveal some weakening in output and then some diminishing of that trend. Overall output rises by 1.4% over 12 months. Then output falls at a 4.9% annual rate over six months and that reduction in its cut to -0.8% over three months. Manufacturing follows that same pattern. Consumer goods output also follows that pattern, but durables and nondurables output of consumer goods are on the same wavelength with the only difference that consumer durables output also falls over 12 months. Intermediate goods output rises by 0.3% over 12 months, falls at a 3.3% rate over six months, and then rises at a 2.3% annual rate over three months. Capital goods output is up by 1.5% over 12 months, falls at a 2.9% annual rate for six months, and then is flat over three months. The sector results show a good deal of chaos in terms of trying to pin down a trend.

**Quarter-to-Date**
Quarter-to-date that now show results for the full third quarter on this preliminary note, reveal output eroding by 0.1% at an annual rate; manufacturing output falling at a 0.4% annual rate, with an increase in consumer goods at a 1% annual rate, created totally by an increase of 1.5% consumer nondurable goods output. Intermediate goods and capital goods both show output declines in the just-ended quarter.

**Rankings/Standings**
The percentile standings show that consumer durable goods output is below its median at a 39.9 percentile standing. Intermediate and capital goods output also are both below their medians (below 50%) but a 45-percentile standing for intermediate goods and a 46.8 percentile standing for capital goods prevail. However, these are not tremendously weak values; they're just slightly below their median rates of increase since the median rate of increase occurs at a ranking of 50%.

**Country Performance for Manufacturing**
We're revisiting the country data much of which has already been released. Out of 13 monetary union members in the table only 5 show output declines in September and none of the four largest economies log a decline in output in September. However, seven countries had logged declines in August, and six had logged declines in July.

**Countries Sequentially**
Turning to sequential data annual growth rates over 12 months, six months, and three months, there are declines in six countries over three months, in seven countries over six months but in only four countries over 12 months. The country's logging output declines over 12 months include Germany, Finland, Luxembourg, and Malta.

**Quarter-to-Date**
On a quarter-to-date to date basis, there are five countries that log output declines in the third quarter. They are Germany, Finland, Portugal, Luxembourg, and Malta.

**Country Standings**
The queue percentile standings show five countries with output increasing at a pace below its median pace since 2007. The average of the median standings across countries is a reading of 63.8% and that's the same as the standing for output in the whole euro area. While the performance of output is still somewhat irregular, conditions appear to be solidifying and risks to the downside appear to be diminishing. Conditions remain somewhat touch and go. The European Central Bank is in a waiting mode; it has not turned off its easing cycle. In the United States, it's unclear whether the Fed is going to continue the easing cycle or not. The government shutdown in the U.S. makes U.S. policy options more complicated although the outlook for growth in the United States in 2026 with new fiscal provisions in force and a rebound out of the government shutdown appear to be quite good. However, globally inflation is still largely excessive and central banks are definitely running out of room to become more stimulative.

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Europe

EMU Industrial Output Advances in September

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Retail gasoline prices for all grades rose to an average $3.19 per gallon (0.3% y/y) in the week ended November 10 after easing to $3.15 in the previous week. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. Haver Analytics seasonally adjusts the retail price of regular grade gasoline. That price rose to $3.10 last week from $3.05 in the previous week. Diesel fuel prices rose to $3.84 per gallon last week (9.0% y/y) after increasing to $3.75 per gallon in the prior week.

The price of West Texas Intermediate crude oil fell to an average $60.08 per barrel (-16.1% y/y) in the week ended November 7 after improving to $60.70 per barrel in the prior week. Prices remained below a recent high of $74.17 during the third week of June. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $61.04 per barrel. The price of European Brent crude declined to $64.30 per barrel (-15.0% y/y) in the week of November 7 after rising to $65.02 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. Yesterday, the price was $63.86 per barrel.

Natural gas prices strengthened to an average $3.54/mmbtu (137.6% y/y) in the week ended November 7 after rising to $3.43/mmbtu in the prior week. The rise left prices at the highest level since the second week of April and well above the low of $1.40/mmbtu in the week of March 15, 2024. Yesterday, the price was $3.80 per mmbtu.

Gasoline demand declined 2.1% y/y in the four weeks ending October 31, following a 4.2% y/y decline in the prior four weeks. Demand for all petroleum products weakened 1.2% y/y in the four weeks ending October 31, after falling 0.9% y/y in the previous four-week period. Crude oil input to refineries declined 4.5% y/y in the four weeks ending October 31, after falling 1.7% y/y in the prior four weeks.

Gasoline inventories fell 2.5% y/y in the week ending October 31 following a 0.1% y/y slip in the prior week. Residual fuel oil inventories fell 7.1% y/y in the October 31 week after falling 10.0% y/y in the prior week. Working higher, crude oil inventories rose 1.9% y/y in the week of October 31 after increasing 1.7% y/y in the previous week.

Measured in days’ supply, gasoline inventories fell to 23.7 days in the week of October 31 from 24.3 days in the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil rose to 27.5 days in the week of October 31 from 26.7 days in the prior week. The supply remained below a recent high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** and **USENERGY** databases.

- Gasoline prices rise to four-week high.
- Crude oil prices decline.
- Natural gas prices move to highest level since April.
- Demand for gasoline & all petroleum products falls.

U.S. Energy Prices Remain Mixed in Latest Week

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The number of weekly mortgage loan edged 0.6% higher (73.7% y/y) during the week ended November 7 after falling 1.9% during the prior week and rising 7.1% one week earlier.

The effective interest rate on a 30-year fixed-rate mortgage rose to 6.52% after rough stability at 6.48% during the prior week. These rates stand below their January average of 7.20%. Rates on a 15-year fixed rate loan were 5.86% while interest rates on a 30-year JUMBO loan averaged 6.57%. Rates on a 5-year ARM eased to 5.82%.

Purchase loan applications last week increased 5.8% (29.6% y/y) after falling 0.6% in the prior week and rising 4.5% one week earlier. Applications to refinance an existing loan declined 3.4% (+146.5% y/y) following a 2.8% decline in the prior week and rising 9.3% one week earlier.

Loans to refinance an existing mortgage fell to 55.6% of total applications from 57.0% in the prior week. The percentage of total loans that were ARMs declined to 7.8% from 8.7% one week earlier.

The average loan size declined to $396,500 last week from $414,900. The size of conventional purchase loans declined to $431,400 from $435,100 while the size of refinanced loans declined to $368,700 from $399,700 one week earlier.

The Mortgage Bankers Association Survey covers 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.

- Mortgage interest rates rise to three-week high.
- Purchase loans surge but refinancing declines.

Economy in Brief: 2008

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U.S. Chain Store Sales Touch a New High

U.S. Pending Home Sales Down Slightly in November

Small Business Optimism Remained Low

Small Business Optimism Remained Low

PPI Headline Inflation Soars While ex Energy Prices Hold at a Too-High Pace

U.S. Construction Spending Up Slightly in November

U.S. Construction Spending Up Slightly in November

U.S. Gasoline Prices Moved Higher