Tom Moeller

Retail gasoline prices declined last week to $3.12 per gallon (-5.3% y/y) after falling to $3.24 per gallon during the previous week. Prices have been declining since the mid-June peak of $5.01 per gallon. The retail cost of diesel fuel fell to $4.60 per gallon (+26.8% y/y) last week from $4.75 in the prior week . The price reached a peak of $5.81 per gallon in the third week of June.

West Texas Intermediate crude oil prices rose to an average $75.21 per barrel (5.6% y/y) in the week ended December 16 from $73.11 per barrel in the prior week. Prices remained down from a high of $120.46 in the second week of June. Yesterday, the price was $75.19 per barrel. The average price of Brent crude oil rose to $80.18 per barrel last week (8.7% y/y) from $79.56 in the prior week. The price peaked at $127.40 in mid-June. Yesterday, the price was $81.66 per barrel.

The price of natural gas strengthened to $6.84/mmbtu (80.5% y/y) in the week ended December 16 after falling to $4.60/mmbtu in the previous week. Prices peaked at $9.56/mmbtu in the last week of August and were up from a low of $3.56/mmbtu in the last week of December, 2021. Yesterday, the price was $6.00/mmbtu.

In the four weeks ended December 9, gasoline demand declined 9.0% from a year earlier after falling 7.1% y/y during the prior four weeks. These declines compare to 15.2% y/y growth at the end of last year. Demand for all petroleum products weakened 6.9% y/y in the latest four weeks in contrast to the 14.4% growth at the end of 2021. Crude oil input to refineries increased 4.8% y/y.

Gasoline inventories eased 2.3% y/y in the week ended December 9, while crude oil inventories declined 21.5% y/y.

Measured in days' supply, gasoline inventories in the week ended December 9 rose w/w to 26.9 days and are still lower than the 29.2 days in early-February. The supply of crude oil fell to 25.8 days and remained down from 41.8 days in early-March of last year.

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**.

- Gas prices are lowest since July 2021.

- Crude oil costs edge higher.

- Natural gas prices recover after recent weakness.

U.S. Gasoline Prices Decline Sharply

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 6.1% (-63.1% y/y) during December to 31 from an unrevised 33 in November. It was the twelfth straight monthly decline. The index stood at the lowest index level since April 2020, which was near the lowest level since June 2012. The average level of the index in 2022 fell 27.3% from 2021. A December reading of 36 had been expected in the Informa Global Markets survey.

Performance amongst the components of the index was mixed this month. The index of present sales conditions fell 7.7% (-60.0% y/y) to 36. It was the eleventh decline in twelve months. The December level was 62.5% below the record-high of 96 in November 2020. The index of expected sales over the next six months improved 12.9% in December (-58.8% y/y). Nevertheless, the December level was 60.7% below the November 2020 peak. The index measuring traffic of prospective buyers held steady m/m (-71.8% y/y) at the lowest level since April 2020.

Among the regions of the country, the Housing Market Index in the South improved 6.1% (-60.7% y/y) to 35 following a 19.5% November fall. In the Northeast, the index held steady m/m (-60.0% y/y). In other regions, the index in the Midwest declined 14.3% (-60.5% y/y) to 30, the lowest level since April 2020. In the West, the index declined 10.7% (-71.3% y/y) and equaled the lowest level since January 2012.

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.

- Current sales decline but prospects pick up.

- Traffic of prospective buyers stabilizes.

- Index improves only in the South.

U.S. Home Builder Index Weakens Again in December

The Industrial Materials Price Index from the Foundation for International Business & Economic Research held steady (-11.8% y/y) in the week ended December 16 and has been moving sideways since late-September.

Moving higher over the last five weeks (-14.0% y/y) were Metals prices, led by strength in zinc (-2.2% y/y) and steel scrap (-16.6% y/y) prices. Copper scrap prices also recently firmed (-11.1% y/y), while aluminum prices gained (-8.8% y/y).

This increase was offset by continued price declines in the Miscellaneous group (-19.3% y/y), where lumber prices moved lower (-63.4% y/y). To the upside was the cost of natural rubber (-7.0% y/y).

Prices in the Crude Oil & Benzene group also fell recently (-0.5% y/y) as the cost of crude oil fell to $74.59 per barrel (+4.5% y/y), down from $120.31 per barrel in the second week of June. Benzene prices have trended sideways since early-September (-10.4% y/y).

The FIBER price index excluding crude oil moved slightly higher in recent weeks but remained down 12.6% y/y.

Prices in the Textile group moved sideways recently (-5.2% y/y) with little change in cotton prices (-23.3% y/y). Burlap prices continue to weaken (-10.3% y/y).

The industrial commodity price data can be found in Haver's **WEEKLY** database.

- Prices have trended sideways since late-summer.

- Rise in metals prices offsets decline in lumber costs.

- Oil prices weaken.

U.S. Industrial Commodity Prices Hold Steady

Sandy Batten

Industrial production unexpectedly fell 0.2% m/m (+2.5% y/y) in November following an unrevised 0.1% monthly decline in October. There was, however, a meaningful upward revision to September (+0.4% m/m versus +0.1% previously). The consensus forecast had looked for a 0.1% m/m increase in November. This was the third monthly decline in the past four months, pointing to an industrial sector stressed by a slowing global economy and an aggressive tightening of U.S. monetary policy.

Manufacturing output slumped 0.6% m/m (+1.2% y/y) after an upwardly revised 0.3% m/m gain in October (previously 0.1% m/m). This was the first monthly decline in manufacturing output in the past five months. Mining output declined 0.7% m/m (+6.3% y/y), its third monthly decline in the past four months and the same monthly decrease as in October. By contrast, utilities production rebounded 3.6% m/m (4.6% y/y) in November, its first increase in four months, following a 1.3% monthly decline in October (revised from -1.5% m/m).

Reflecting the decline in output, the rate of capacity utilization fell to 79.7% in November from an unrevised 79.9% in October. This was the lowest reading since February. The rate of capacity utilization in manufacturing declined to 78.9%, its lowest reading since June, from an unrevised at 79.5% in October. Its expansion peak was 80.0% in April.

By industry groups, the decline in manufacturing output reflected a 0.6% m/m decrease (+2.7% y/y) in durable goods production and also a 0.6% m/m fall (unchanged y/y) in the production of nondurable goods. The monthly decline in durable goods production was led by a 2.8% m/m drop in motor vehicle output, a 2.4% m/m decline in the production of electrical equipment and appliances, and a 2.0% monthly decrease in furniture production. By contrast, production of wood products rebounded 3.6% m/m and production of aerospace and miscellaneous transportation equipment increased 1.1% m/m. The decline in nondurables production was widely spread with printing output (up 1.6% m/m) the only major sector posting a monthly gain.

By market groups, the production of consumer goods fell 0.4% m/m in November after a 0.7% m/m increase in October (revised up from +0.1% m/m). Output of business equipment dropped 0.8% m/m following a 0.5% monthly gain in October (revised down from +0.8% m/m). Construction supplies fell 0.2% m/m in November on top of a 0.4% monthly decline in October. This was the third decline in the past four months/

In special classifications, energy output rose 0.6% m/m in November after a 1.1% m/m decline in October (revised down from -0.9% m/m). Output of selected high-tech industries increased 0.6% m/m in November, reversing the 0.6% m/m decline in October. Manufacturing output excluding selected high-tech industries declined 0.6% m/m following an upwardly revised 0.3% monthly gain in October (previously 0.2% m/m).

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.

- Significant declines in manufacturing and mining production.

- Utilities output rebounded.

- Capacity utilization slipped for second consecutive month.

U.S. Industrial Production Posts another Decline in November

The FRB New York Empire State Manufacturing Index of general business conditions slumped nearly 16 points to -11.2 in December from 4.5 in November, indicating that general business conditions had deteriorated significantly since November. Twenty-three percent of respondents reported that general conditions had improved in December (down from 33.2% in November) while 34% indicated that conditions had worsened (up from 28.7% in November). The market consensus had expected the index to fall but only to about zero. The December survey responses were collected between December 2 and December 9.

The headline index reflects the answer to a single question concerning general business conditions. It is not calculated from its components as is the ISM Purchasing Managers' Index. Haver Analytics uses the information in this survey to calculate an index along the lines of the ISM PMI. That calculated index fell in December, to 52.1 from 53.6 in November, but remained above the critical 50 level that separates expansion from contraction. In other words, the components of the index were stronger in December than what was reflected in the headline index and indeed pointed to continued expansion. Still, by either measure, the manufacturing sector in the FRB New York district is coming under increased stress.

For the components, the new orders index was little changed at -3.6 in December versus -3.3 in November, still indicating contraction. By contrast, the shipments index remained positive at 5.3, though it fell in December from 8.0 in November, indicating that shipments were still rising in December but at a slower pace than in November. The delivery times index slipped to 1.9 in December from 2.9 in December, well off its spring-time highs when broken supply chains were prominent.

Despite the overall decline in business conditions, the index for number of employees edged up to 14.0 in December from 12.2 in November, marking another month of employment gains. The average workweek index, however, fell markedly to -4.5 from 6.9 in November, signaling a small decline in hours worked. The pace of price increases was little changed, with the prices paid index holding steady at 50.5 and the prices received index down only slightly to 25.2 from 27.2 last month. Both price indexes are well off their recent highs.

The index for future business conditions climbed 12 points out of negative territory in December, but remained subdued at 6.3, suggesting that firms expect little improvement over the next six months. The indexes for future new orders and shipments rose above zero, indicating that small increases are anticipated, and employment is expected to continue to increase, at a slightly faster pace. The capital spending index rose nine points to 23.4, its highest reading since June.

The Empire State Manufacturing Index and its components are in Haver's **SURVEYS** database. The survey is conducted by the Federal Reserve Bank of New York and is sent monthly to about 200 manufacturing executives across New York State.

- Headline index re-enters contraction territory after brief emergence in November.

- Orders continued to slip while shipments slowed.

- Delivery times little changed, remain near normal.

- Employment continued to increase.

Empire State Manufacturing Index Falls in December

The Federal Reserve Bank of Philadelphia reported that its Composite Index of Business Conditions edged higher to -13.8 during December from -19.4 in November. The index has been negative for six of the last seven months and remained below its peak of 50.2 in April of 2021. A reading of -10.0 had been expected in the Action Economics Forecast Survey.

Declines in the component series were broad-based. The new orders series fell to -25.8, its lowest level since April 2020. A lessened 17.2% of respondents reported orders improvement while an increased 43.0% reported orders deterioration. The shipments index fell to -6.2 this month from +7.0 in November. It was the first negative reading since May 2020. A greatly lessened 23.5% of respondents reported shipments improvement while an increased 29.7% reported a decline. The unfilled orders index rose -14.7 from -22.9, but was negative for the seventh straight month. The inventories index rose to -2.7 but the delivery times index fell to -11.9.

On the labor front, there was weakness. The employment index fell to -1.8 from +27.1. It stood below its April 2022 peak of 41.4 as 17.1% of respondents reported more hiring but 19.0% reported less. The hours-worked index declined to -8.9 and was down from a high of 36.4 in March of 2021.

The prices paid index fell sharply to 26.4 from 35.3 in November. It has fallen from a high of 84.6 this past April. A greatly lessened 29.2% of respondents reported higher prices while a fewer 2.9% reported price declines. The prices received index fell to 24.3 from 34.6 in November. It was a four-month low.

The future activity index increased to 3.8 this month from -7.1 in November. Expected new orders, shipments & employment each rose. The expected prices paid index rose to a three-month high.

The Philadelphia Fed data can be found in Haver's **SURVEYS** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

- Index remains near recent low.

- New orders, shipments & employment deteriorate.

- Price indexes fall.

Philadelphia Fed Factory Index Improves Slightly in December

Retail sales declined 0.6% (+6.5% y/y) during November following a 1.3% October gain. A 0.3% decline had been expected in the Action Economics Forecast Survey. Excluding autos, sales slipped 0.2% (+7.7% y/y) after increasing 1.2% in October. A 0.1% increase had been expected.

Motor vehicle sales declined 2.3% (+1.3% y/y) after a 1.6% October gain. The decline compared to a 6.1% fall in unit vehicle sales.

Sales amongst other stores were weak. Furniture sales fell 2.6% (-3.2% y/y) and electronics & appliance sales were off 1.5% (-4.4% y/y). Sales of nonstore retailers fell 0.9% (+7.7% y/y) while apparel sales eased 0.2% (+0.7% y/y). General merchandise sales slipped 0.1% (+2.9% y/y).

Gasoline sales eased 0.1% (+16.2% y/y), but food & beverage sales rose 0.8% (8.1% y/y).

The Retail Sales data can be found in Haver's **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

• Auto sales fall sharply.

• Discretionary spending weakens.

U.S. Retail Sales Decline in November

Carol Stone, CBE

Initial claims for unemployment insurance were 211,000 in the week ended December 10, down 20,000 from the prior week's 231,000, which was revised slightly from the original 230,000. The four-week moving average is 227,250, down from 230,250 in the December 3 week. These data are seasonally adjusted by the Labor Department.

In the December 3 week, the number of continued weeks claimed was 1.671 million, up just 1,000 from the prior week's 1.670 million; that was revised from 1.671 million. The four-week moving average was 1.625 million, up noticeably from the prior week's 1.582 million.

The insured rate of unemployment remained at 1.2% in the December 3 week. This compares with 1.1% in mid-November and is up from the record-low range of 0.9%-1.0% that prevailed during the middle months of 2022.

In the week ended November 26, the total number of continued weeks claimed for all unemployment insurance programs was 1.586 million, not seasonally adjusted, up 23.5% from the prior week but down 35.5% from a year ago. This total includes federal employees, newly discharged veterans, extended benefits and other specialized programs. Claims in the Pandemic Unemployment Assistance program and Pandemic Emergency Unemployment Compensation are no longer included in the main Labor Department press release, as both programs have expired.

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

- Initial claims down 20,000.

- Continued weeks claimed up just slightly.

- Insured unemployment rate steady, remains near record low.

U.S. Initial Unemployment Insurance Claims Fall

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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The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, rose 2.7% (-17.4% y/y) to 38 in November after surging 15.6% in October and holding steady in September. The latest reading was the highest since April, but remained below the break-even point of 50 where it’s been since May of last year. The index also remains under a July 2023 high of 56 and a November 2020 peak of 90.

The rate on a 30-year fixed rate mortgage averaged 6.23% in the first two weeks of November versus 6.25% during all of October. It was 6.24% last week and remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.

The single-family home sales measure rose 5.1% (-14.6% y/y) this month to 41, a seven-month high, after rising 14.7% in October. The prospective sales in six months measure fell 5.6% (-19.0% y/y) to 51, after rising 20.0% in October. The traffic of prospective buyers’ index rose 4.0% (-18.8% y/y) to 26 in November, after rising 19.0% in October.

Housing activity was uneven this month across the country. The sales index in the South rose 5.7% (-11.9 y/y) to 37 after increasing 20.7% in October. In the West, the index increased 6.5% (-15.4% y/y) to 33 after rising 19.2% in October. The sales index in the Northeast fell 18.2% (-21.1% y/y) to 45 after rising 25.0% in October. In the Midwest, the sales index declined 4.8% (-16.7% y/y) to 40 after rising 2.4% in October. 

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 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. The regional indexes run back to December 2004.

These data are included in Haver's **SURVEYS** database.

The Case for Continuing Rate Cuts from Fed Governor Christopher J. Waller can be found [here](https://www.federalreserve.gov/newsevents/speech/waller20251117a.htm).


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- Overall reading is highest in six months.
- Current sales traffic improves; prospective sales backpedal.
- Index is mixed throughout the country.


U.S. Home Builders Index Edges Higher in November

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Retail gasoline prices for all grades remained at an average $3.19 per gallon (+0.7% y/y) in the week ended November 17 after rising from $3.15 in the first week of November. 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 $3.15 last week from $3.10 in the previous week. Diesel fuel prices rose to $3.87 per gallon last week (10.8% y/y) after increasing to $3.84 per gallon in the prior week.

The price of West Texas Intermediate crude oil fell to an average $59.69 per barrel (-12.3% y/y) in the week ended November 14 after easing to $60.08 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 $59.91 per barrel. The price of European Brent crude declined to $62.87 per barrel (-13.7% y/y) in the week of November 14 after falling to $64.30 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 $63.16	 per barrel.

Natural gas prices edged higher to an average $3.62/mmbtu (102.2% y/y) in the week ended November 14 after rising to $3.54/mmbtu in the prior week. The increase 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 $3.71 per mmbtu.

Gasoline demand declined 2.6% y/y in the four weeks ending November 7, after falling 2.1% y/y in the prior four weeks. Demand for all petroleum products weakened 0.9% y/y in the four weeks ending November 7, after falling 1.2% y/y in the previous four-week period. Crude oil input to refineries declined 4.3% y/y in the four weeks ending November 7, after falling 4.5% y/y in the prior four weeks.

Gasoline inventories fell 0.9% y/y in the week ending November 7 following a 2.5% y/y decline in the prior week. Residual fuel oil inventories fell 2.6% y/y in the November 7 week after falling 7.1% y/y in the prior week. Working higher, crude oil inventories rose 2.5% y/y in the week of November 7 after increasing 1.9% y/y in the previous week.

Measured in days’ supply, gasoline inventories fell to 23.3 days in the week of November 7 from 23.7 days in the prior week. The recent low was 22.9 days in the week of November 7, 2024. The supply of crude oil held w/w at 27.5 days in the week of November 7. 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 hold steady week-to-week.
- Crude oil prices decline.
- Natural gas prices move to highest level since April.
- Demand for gasoline & all petroleum products declines.


U.S. Energy Prices Remain Mixed in Latest Week

Robert Brusca

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Inflation around the world appears to be rather similarly behaved  Canada is a very close trading partner of the United States and so we might expect that there would be a little more connection between the prices in Canada and in the US and possibly we can learn something about the upcoming US CPI report by looking at the just-released Canadian CPI report.  

Canadian inflation is highly correlated with inflation in the US. The US and Canadian CPI's have a correlation of 0.97 on annual percentage changes. Canada's CPIx measure has a correlation with the US headline CPI of 0.94 and the Canadian core inflation rate has the correlation with US core inflation rate of 0.94. All of these measured against year over year inflation.  Clearly with a good deal of trade and a long common border prices in the US and Canada have a chance to mix it up and affect one another and create some degree of homogeneity. However, none of that is really perfect. Despite the strong correlation between headline inflation and core inflation between the US and Canada, Canada's core CPI and the US core CPI have a correlation based on month-to-month changes of less than 0.2 Using an R-squared metric. 

Well, it might be somewhat comforting to look at Canadian inflation, and I think it's giving some guidance for the US. That would only be true over a long period of time, but it probably doesn't provide much guidance for us in terms of what we can expect from the month-to-month changes.

While Canada's correlation with US inflation is high it's correlation with inflation in Japan it's only 0.33: only 1/3 of the variants in these two indicators is in common. In terms of the Euro-Area the correlation is less than -0.1, which tells us the correlation is negative and extremely small and of course not statistically significant. 

The Canadian CPIx measure shows inflation pretty flat at around 2.6% over 3 months and over 12 months. Canada's 6-mo CPI measure accelerates from 2.2% over 12-months to a 2.6% annual rate over 6-months to a 3% pace over three months. US inflation on these horizons essentially replicates what's presented by Canada's CPI X based on existing data. However, the R-squared association between the three month annualized percent change in the Canadian CPI versus the US CPI shows that they share about half of the same variation with an R-squared of about 0.5. And on this comparison Canada’s and US’ recent inflation trends appear to be highly similar.

The Bank of Canada looks at inflation using several different metrics and it also looks at inflation relative to a range unlike the US, leading to a much more measured discussion of what inflation is and how it's performing. 

The decision by the Fed in the US to stick with a simple point forecast at this point is something that probably cannot be changed, at least not until the central bank is able to show that it can hit that target consistently. Even so, the Fed has not showed a great appetite for trying to express inflation in terms of a target band. However, when the Fed changed its framework agreement it did adopt something called flexible average inflation targeting (FAIT) which never really described for us or explained what it was and it has a set that approach aside I think to the pleasure of most economists. 

There continues to be buzzing and differences of opinion over what the inflation target should be in the US. However, the international standard has been set at 2 per cent and at this point adopting a number different than that doesn't seem to make a lot of sense. Adopting 2% with some flexibility might make some sense but, of course, the Fed is already doing that as it's allowed a 4 1/2-year overshoot of its inflation target as it continues to cut rates. This decision, however, does not amount to a change in the Fed’s inflation targeting but rather to a set of decisions that appears to be losing the Federal Reserve credibility. Meanwhile, the Bank of Canada, operating with the range and having had much the same kind of access that the Fed has had in hitting and missing its inflation target midpoint, has emerged from this period with its credibility largely intact.







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Canada

Canadian CPI Trends Show Little Change 

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The Empire State Manufacturing Index of General Business Conditions Index increased to 18.7 in November after rising to 10.7 in October and falling to -8.7 during September, according to the Empire State Manufacturing Survey released by the Federal Reserve Bank of New York. The latest was the highest reading in twelve months, holding above the break-even level of zero for four of the past five months. The Action Economics Forecast Survey expected a reading of 6.0 for November. The percentage of respondents reporting an increase in general business conditions rose to 38.7% in November after increasing to 36.6% in October. The percentage reporting a decline in activity fell to 20.0% after weakening to 26.0% in October. The latest survey was conducted between November 3 and November 10. The headline reflects the answer to a single question concerning the state of economic activity and is not calculated from the components.

Haver Analytics calculates a composite index from the five major components, which is comparable to the ISM manufacturing index. It rose to a nearly three-year high of 55.4 from 52.7 in October. The index is an average of five diffusion indexes: new orders, shipments, employment, supplier deliveries and inventories, each with equal weights of 20% each.

The increase in the Empire State readings this month was paced by a surge in the new orders index to 15.9 from 3.7 in October. A higher thirty-eight percent of respondents reported an increase in order, while the percentage reporting a decline in orders fell to 22.1%. The shipments index strengthened to 16.8, a twelve month-high. Inventories jumped to 6.7 after three straight negative readings. The delivery times measure increased to 7.7 from 3.9. On the labor front, the employment reading strengthened to 6.6, a four-month high. Fourteen percent of survey respondents reported higher employment while 7.2% reported less. The average workweek reading surged to 7.7, after two straight negative readings, climbing to the highest level since May 2022. Moving lower, the unfilled orders index in November fell to -5.8, after improving to -3.9 in October. 

Inflation readings weakened in 	November. The prices paid index fell to 49.0 after rising to 52.4 in October. A lessened 51.9% of respondents reported higher prices while an increased 2.9% indicated a decline. The prices received index eased to 24.0 after rising to 27.2 October. Both prices paid & prices received indexes, however, remain significantly higher than early last year.

Optimism amongst survey respondents about business during the next six months weakened in November. The index for future general business conditions fell to 19.1 from 30.3 in October. Expected new orders, shipments, unfilled orders and delivery time declined. The future workweek reading also declined but the expected employment reading rose to the highest level since January. The future prices paid declined after rising to the highest level since May while prices received in six months fell to a three-month low. The expected capital spending plans reading surged this month to the highest level since January.

The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease with zero separating expansion from contraction.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.



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- New orders, shipments, employment & hours rise.
- Prices paid & received decline.
- Six-month outlook deteriorates.


Empire State Manufacturing Index Continues to Strengthen in November

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 0.9% during the four weeks ended November 14, 2025 after easing 0.1% in the prior four-week period. The index increased 1.5% y/y last week following a 0.5% y/y gain in the first week of the month.

**Textile** group prices increased 2.3% during the last four weeks, about the same as they did in the prior four weeks, and rose 3.1% y/y. The cost of burlap surged 23.4% in the last four weeks while rising a steady 48.1% over the last year. Showing a second week of modest improvement, cotton prices rose 0.4% in four weeks but declined 7.1% y/y.

**Metals** sector prices increased 2.7% (9.9% y/y) in the last four weeks after a 1.5% rise in the prior four weeks, as the cost of aluminum rose 3.2% (12.4% y/y). Zinc prices strengthened 3.1% (9.0% y/y) and the cost of steel scrap rose 1.2% (-3.1% y/y). Lead prices increased 4.7% (3.5% y/y) in four weeks and the cost of copper scrap rose 1.7% (19.3% y/y). Reversing earlier declines, tin prices rose 2.7% (20.5% y/y) in four weeks.

**Crude oil & benzene** prices improved 0.9% (-8.7% y/y) in the last four weeks, following a 1.6% decline in the previous four weeks. The cost of West Texas Intermediate crude oil rose 2.0% in four weeks to $59.63 per barrel but declined 13.3% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene rose 0.9% (-17.8% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index increased 0.8% (2.4% y/y) over the last four weeks, after holding steady during the prior four weeks.

**Miscellaneous** sector prices declined 2.0% in the last four weeks and fell 1.9% y/y, after falling 2.9% in the prior four weeks. Framing lumber prices fell 7.0% (-5.2% y/y). The cost of tallow, used for frying & baking, declined 6.9% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 3.1% in four weeks, but declined 9.3% y/y.

The Foundation for International Business and Economic Research 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.

**Why Inflation Expectations Are Important to Policymakers** from the Federal Reserve Bank of St. Louis can be found [here](https://www.stlouisfed.org/open-vault/2025/nov/why-inflation-expectations-are-important-to-policymakers).

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- Textile and metals prices continue to strengthen. 
- Crude oil prices increase.
- Framing lumber costs decline again.