Tom Moeller

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 The Mortgage Bankers Association reported that its
 total Mortgage Market Volume Index increased 7.1% (41.9% y/y) last week
 following three consecutive weeks of decline. Refinancing applications
 gained 9.6% and increased by two-thirds y/y. Purchase applications
 improved 2.6% (12.8% y/y) after three weeks of decline.

 The effective interest rate on a 15-year mortgage was
 steady at 3.01%, and remained near the lowest level since May 2013. Rates
 were down from the 3.50% highs of November and December. The effective
 rate on a 30-year fixed-rate loan also was steady at 3.75%, down from
 4.28% near year-end. The rate on a Jumbo 30-year loan held at 3.73%. For
 adjustable 5-year mortgages, the effective interest rate fell to 2.93%,
 the lowest level in four weeks.

 The average mortgage loan size eased to $279,500 (+5.4%
 y/y). For purchases, it dipped to $297,000 (+3.1% y/y); for refinancings,
 it increased to $268,900 (9.8% y/y).

 Applications for fixed interest rate loans increased
 45.1% y/y, while adjustable-rate loan applications eased 1.7% y/y.

 The survey covers over 75 percent of all U.S. retail
 residential mortgage applications, and has been conducted weekly since
 1990. Respondents include mortgage bankers, commercial banks and thrifts.
 The base period and value for all indexes is March 16, 1990=100. The
 figures for weekly mortgage applications and interest rates are available
 in Haver's SURVEYW database.

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 <table class="centered" width="100%" border="0" cellspacing="0">
	 <colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >MBA Mortgage
 Applications (%, SA)</th>
 <th scope="col" >08/05/16</th>
 <th scope="col" >07/29/16</th>
 <th scope="col" >07/22/16</th>
 <th scope="col" >Y/Y</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Total Market Index</td>
 <td >7.1</td>
 <td >-3.5</td>
 <td >-11.2</td>
 <td >41.9</td>
 <td >17.9</td>
 <td >-41.4</td>
 <td >-24.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Purchase</td>
 <td >2.6</td>
 <td >-2.4</td>
 <td >-3.3</td>
 <td >12.8</td>
 <td >15.5</td>
 <td >-12.9</td>
 <td >5.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Refinancing</td>
 <td >9.6</td>
 <td >-4.2</td>
 <td >-15.1</td>
 <td >65.4</td>
 <td >19.7</td>
 <td >-52.8</td>
 <td >-31.9</td>
 </tr>
 <tr>
 <td class="firstcol" >15-Year Mortgage Effective Interest
 Rate (%)</td>
 <td >3.01</td>
 <td >3.02</td>
 <td >3.02</td>
 <td >3.49</td>
 <td >3.37</td>
 <td >3.54</td>
 <td >3.42</td>
 </tr>
 </tbody>
 </table>
 
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The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 7.1% (41.9% y/y) last week following three consecutive weeks of decline. Refinancing applications gained 9.6% and increased by two-thirds [...]

U.S. Mortgage Loan Applications Rebound

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Regular gasoline prices averaged $2.15 per gallon last
week (-18.2% y/y), down a penny from the week earlier. Prices were 25 cents
lower than early last month, according to the U.S. Department of Energy. Prices
were down versus a 2014 high of $3.71 per gallon. Haver Analytics constructs
factors adjusting for the seasonal variation in pump prices, and the adjusted
price was little-changed at $2.02 per gallon, nearly the lowest level since mid-March.

WTI crude oil prices declined $40.82 last week (-9.2%
y/y) from $41.83 averaged in the prior week. They remained up, however, from
February's daily low of $26.21 per barrel. Yesterday, prices nudged higher to $43.02
per barrel. Brent crude oil prices declined w/w to $40.88 per barrel and were $43.24
yesterday.

Prices for natural gas strengthened to $2.86 per mmbtu
(2.1% y/y) last week, then were $2.83 yesterday.

Last week, gasoline demand increased 2.2% y/y, while
demand for all petroleum products edged 0.6% higher y/y. Gasoline inventories
rose 9.9% y/y and inventories of all petroleum products increased a diminished
5.9% y/y. Crude oil production (input to refineries) eased 0.6% y/y in the last
four weeks.

The energy price data are reported by the U.S. Department of
Energy. The petroleum demand and inventory figures are from the Oil &amp; Gas
Journal Weekly. These data can be found in Haver's WEEKLY database. The
daily figures are in DAILY and greater detail on prices, demand and
production, along with regional breakdowns, are in OILWKLY.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Weekly Energy Prices</th>
 <th scope="col" >08/08/16</th>
 <th scope="col" >08/01/16</th>
 <th scope="col" >07/25/16</th>
 <th scope="col" >Y/Y %</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Retail Gasoline ($ per Gallon, Regular)</td>
 <td >2.15</td>
 <td >2.16</td>
 <td >2.18</td>
 <td >-18.2</td>
 <td >2.03</td>
 <td >2.30</td>
 <td >3.33</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Light Sweet Crude Oil, WTI ($ per bbl.,
 WSJ)</td>
 <td >40.82</td>
 <td >41.83</td>
 <td >44.59</td>
 <td >-9.2</td>
 <td >48.90</td>
 <td >93.64</td>
 <td >97.96</td>
 </tr>
 <tr>
 <td class="firstcol" >Natural Gas ($/mmbtu, LA, WSJ)</td>
 <td >2.86</td>
 <td >2.81</td>
 <td >2.76</td>
 <td >2.1</td>
 <td >2.62</td>
 <td >4.37</td>
 <td >3.73</td>
 </tr>
 </tbody>
 </table>
 
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Regular gasoline prices averaged $2.15 per gallon last week (-18.2% y/y), down a penny from the week earlier. Prices were 25 cents lower than early last month, according to the U.S. Department of Energy. Prices were down versus a 2014 [...]

U.S. Petroleum Prices Decline While Natural Gas Prices Increase

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The National Federation of Independent Business reported that its Small
Business Optimism Index increased 0.1% during July to 94.6 following an
unrevised 0.7% June rise. Despite the gain, optimism remained down 1.1% versus last July.

An improved -5% of firms were expecting the economy to improve, the best
reading in twelve months. A lessened 1% were expecting higher real sales in six
months. A reduced 25% were planning to raise capital expenditures. A steady
eight percent reported that now was a good time to expand the business, but that
was down from 15% in December 2014.

Employment prospects were mixed. Twelve percent of firms expected to increase
employment, up slightly m/m. A lessened 46% of respondents found few or no
qualified candidates to fill job openings while a reduced 26% of firms had
positions they were not able to fill right now, equaling the most of the
economic expansion. Twenty-four percent of firms raised worker compensation over
the last three months, steady with the first half, while 15% were expecting to
raise it in the next three months, steady with Q1.

Small businesses' pricing ability declined as 2% of firms were lowering
prices, a reversal after increases in the last two months. Expectations about
the future ability to raise prices also eased as 14 percent of firms planned to
raise prices, the least since February.

Credit became slightly easier to get as a lessened 4% reported trouble, the
least in six months. A lessened 30% of firms felt satisfied that their borrowing
needs had been filled in the last three months.

An increased 22% reported that government requirements were the largest
single problem. A lower 20% of firms indicated that taxes were the single most
important problem, the least since November. A lower 14% felt challenged by the
quality of labor, and an increased 12% of firms indicated that poor sales were
the largest single problem. A higher eight percent reported insurance cost &amp;
availability as the largest hurdle, and a lower seven percent reported
competition from large businesses as the largest problem, the least this year. A
stable six percent reported the cost of labor was the biggest problem. Inflation
was indicated by two percent of respondents as the largest problem, down from
four percent in four percent in May.

Roughly 24 million small businesses exist in the U.S. and they create 80% of
all new jobs. The typical NFIB member employs 10 people and reports gross sales
of about $500,000 a year. The NFIB figures can be found in Haver's SURVEYS
database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >National Federation of
 Independent Business (SA, Net %)</th>
 <th scope="col" >Jul</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Jul'15</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Small Business Optimism Index (1986=100)</td>
 <td >94.6</td>
 <td >94.5</td>
 <td >93.8</td>
 <td >95.7</td>
 <td >96.1</td>
 <td >95.6</td>
 <td >92.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Reporting Now is a Good Time To
 Expand the Business</td>
 <td >8</td>
 <td >8</td>
 <td >9</td>
 <td >12</td>
 <td >11</td>
 <td >10</td>
 <td >7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Expecting Higher Real Sales In Six
 Months</td>
 <td >1</td>
 <td >2</td>
 <td >1</td>
 <td >7</td>
 <td >8</td>
 <td >11</td>
 <td >4</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Expecting Economy To Improve</td>
 <td >-5</td>
 <td >-9</td>
 <td >-13</td>
 <td >-3</td>
 <td >-5</td>
 <td >-5</td>
 <td >-15</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Planning to Increase Employment</td>
 <td >12</td>
 <td >11</td>
 <td >12</td>
 <td >12</td>
 <td >12</td>
 <td >10</td>
 <td >6</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms With Few or No Qualified
 Applicants For Job Openings</td>
 <td >46</td>
 <td >48</td>
 <td >48</td>
 <td >48</td>
 <td >46</td>
 <td >43</td>
 <td >39</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Reporting That Credit Was Harder
 To Get</td>
 <td >4</td>
 <td >5</td>
 <td >4</td>
 <td >4</td>
 <td >4</td>
 <td >6</td>
 <td >6</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Raising Average Selling Prices</td>
 <td >-2</td>
 <td >2</td>
 <td >1</td>
 <td >3</td>
 <td >2</td>
 <td >8</td>
 <td >2</td>
 </tr>
 </tbody>
 </table>
 
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The National Federation of Independent Business reported that its Small Business Optimism Index increased 0.1% during July to 94.6 following an unrevised 0.7% June rise. Despite the gain, optimism remained down 1.1% versus last July. [...]

U.S. Small Business Optimism Strengthens

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Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4%
y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive
quarterly decline and compared to expectations for a 0.5 rise in the Action
Economics Forecast Survey. Revisions raised growth last year to 0.9% from 0.7%.
Growth in 2014 was left at 0.8%, but the 2013 increase was raised to 0.3% from
no change. The latest decline occurred as output increased 1.2% (1.1% y/y) and
hours worked rose 1.8% (1.5% y/y). Compensation per hour increased 1.5% (1.7%
y/y) after a 0.8% decline, revised from a 3.9% increase. The combination of
faster compensation growth and declining productivity raised unit labor costs
2.0% (2.1 y/y) following a 0.2% dip, previously reported as a 4.5%
increase. A 1.8% increase had been expected.

In the manufacturing sector, productivity eased 0.2% (+0.9% y/y) after a 1.5%
increase, revised from 1.3%. Output fell 0.8 (+0.3% y/y), while hours-worked
declined 0.7% (-0.6% y/y). Compensation growth rebounded 2.9% (2.6% y/y) after a
4.6% decline, revised from a 2.5% rise. The rise pushed unit labor costs up 3.1%
(1.7% y/y) following a 5.9% drop, revised from a 1.1% rise.

The productivity &amp; cost figures are available in Haver's USECON
database. The expectations figures are from the Action Economics Forecast Survey
and are found in the AS1REPNA database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Productivity &amp; Costs
 (SAAR, %)</th>
 <th>Q2'16</th>
 <th>Q1'16</th>
 <th>Q4'15</th>
 <th>Q2'16 Y/Y</th>
 <th>2015</th>
 <th>2014</th>
 <th>2013</th>
 </tr>
 </thead>
 <tbody>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Nonfarm Business Sector</td>
 </tr>
 <tr>
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >-0.5</td>
 <td >-0.6</td>
 <td >-2.4</td>
 <td >-0.4</td>
 <td >0.9</td>
 <td >0.8</td>
 <td >0.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Compensation per Hour</td>
 <td >1.5</td>
 <td >-0.8</td>
 <td >3.1</td>
 <td >1.7</td>
 <td >2.9</td>
 <td >2.8</td>
 <td >1.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Unit Labor Costs</td>
 <td >2.0</td>
 <td >-0.2</td>
 <td >5.7</td>
 <td >2.1</td>
 <td >2.0</td>
 <td >2.0</td>
 <td >0.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Manufacturing Sector</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >-0.2</td>
 <td >1.5</td>
 <td >-1.1</td>
 <td >0.9</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Compensation per Hour</td>
 <td >2.9</td>
 <td >-4.6</td>
 <td >8.2</td>
 <td >2.6</td>
 <td >2.5</td>
 <td >2.8</td>
 <td >0.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Unit Labor Costs</td>
 <td >3.1</td>
 <td >-5.9</td>
 <td >9.5</td>
 <td >1.7</td>
 <td >2.2</td>
 <td >2.7</td>
 <td >0.0</td>
 </tr>
 </tbody>
 </table>
 
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Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4% y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive quarterly decline and compared to expectations for a 0.5 rise in the Action [...]

U.S. Productivity Declines for Third Straight Quarter

Robert Brusca

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The German trade surpluses remain large. While Germany's surplus ticked lower in June, the last four months show surpluses much higher than over the previous seven months. Goods export did tick higher month-to-month in June as imports rose by 1%. But over three months exports are falling at a 5.2% pace and over 12 months they are falling at a 0.7% annual rate.

Imports in comparison showed some life in June, but not much life as they rose for only one month in a row but did make a gain of 1%. Imports are up at a tepid 2.7% annual rate over three months but are net lower over both six months and 12 months.

There is not much here on which to build an optimistic outlook either for German domestic demand or for German exports and the prospects for demand overseas. Real export orders fell in June and are falling at a 14.1% annualized rate over three months as well as falling by 6.4% over 12 months.

More detailed data show that German exports are up by 2.3% over 12 months to EU members but only by 0.1% to EMU members. German exports to EU members (a group that has an important contribution from the U.K. where future flows may be challenged) are up by a strong 6%. German exports to countries outside the EU area fell by 0.4%. Germany's exports are strongest where they are apt to encounter the biggest challenge in the next 12 months as the Brexit reset could alter trade dynamics between the U.K. and EU/EMU members. On top of that, the pound sterling has been declining sharply and that will alter the German-U.K. competiveness balance. At the same time, German imports from EMU nations are up by 3.0% over 12 months, a bit weaker than the 3.9% for non-EMU members of the EU. Imports from outside the EU are off by 5.4%. That reflects weaker oil import prices to some degree.

These trade data are consistent with the weak picture that continues to emerge from the global PMI indices that are now up-to-date through July. Global weakness remains in force and export and import flows continue to show the effect of that ongoing weakness. In July, weakness in emerging markets let up just a bit, but the overall conditions of weakness lingers.


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The German trade surpluses remain large. While Germany's surplus ticked lower in June, the last four months show surpluses much higher than over the previous seven months. Goods export did tick higher month-to-month in June as imports [...]

German Trade Flows Languish

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The Labor Market Conditions Index from the Federal Reserve Board includes 19
indicators of labor market activity, covering the broad categories of
unemployment and underemployment. These include jobs, workweeks, wages,
vacancies, hiring, layoffs, quits and other surveys of consumers and businesses.
Because the trends in the index are slow-moving, Haver presents only the changes
in the index. All are measured monthly and have been seasonally adjusted.

During July, the index was positive for the first time since December. Nonfarm
payroll employment growth over three months strengthened; the gain in average
hourly earnings increased; and the number of initial unemployment claims fell.
Also improving weres the labor force participation rate, aggregate hours worked
and the number of temporary help jobs. Other labor market indicators were
weaker, however, including a lower ISM jobs figure, higher unemployment for 27
weeks and fewer small businesses with positions they were unable to fill right
now. The LMCI data are available in Haver's SURVEYS database.

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Labor Market Conditions
 Index (SA)</th>
 <th scope="col" >Jul</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Jul'15</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Monthly Index Change</td>
 <td >1.0</td>
 <td >-0.1</td>
 <td >-3.4</td>
 <td >1.8</td>
 <td >1.9</td>
 <td >5.1</td>
 <td >3.9</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Labor Market Conditions Index from the Federal Reserve Board includes 19 indicators of labor market activity, covering the broad categories of unemployment and underemployment. These include jobs, workweeks, wages, vacancies, [...]

U.S. Labor Market Conditions Index Turns Positive

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The chart and table offer a pretty good perspective on German industrial trends. Overall German industrial production is still struggling. Despite a strong gain in June, it still leaves industrial output net lower over two months and falling in the just-completed second quarter. Year-on-year trends (see Chart) show deteriorating trends for intermediate and consumer goods output but with capital goods reviving. Capital goods remain the brightest spot in IP with consistent gains in place even over one year. Intermediate goods show declines in output on all horizons and with overall deepening drops. Consumer goods output has built momentum, but it is still weak over 12 months with a gain of less than 1%.

Construction has picked up with a very strong 1.4% rise in June, but in the wake of a 3.7% plunge in April, construction output is still collapsing over three months and down at nearly a 20% annual rate in Q2.

Manufacturing orders do not brighten the picture for German prospects either. Orders are lower in two of the most recent three months and are falling at a 1.9% pace in Q2 and at an 8.3% annual rate pace over the last three months. It's hard to tell too bright of a story from this set of data. Germany appears to be growing but not prospering and taking nothing for granted.

Other European countries reporting IP through June are Italy, the Netherlands, Spain, Portugal and Norway. Only the Dutch and Portuguese have output rising in June although over three months Spain joins them with output rising as well.

The Dutch and Portuguese show steady and accelerating growth progressing from 12-month to six- month to three-month. Spain's output on this sequence of dates is moderate and oscillating between up and down. Italy shows a year-on-year drop as well as a current month drop and drop over three months as well as in the second quarter as a whole. Norway shows output declines on all horizons with a worsening trend to boot. Not all Europeans are on the same page when it comes to the industrial sector.

These data seem to make the case that the ECB has been arguing, that global growth risks remain. In a weekend exchange, Jens Weidmann held that there is no reason for any change in ECB policy because the Brexit risk has been so well handled by markets. But in an ECB statement, the point is made that Brexit aside there is still weak global growth and risk. The Bundesbank seems again to be flexing its muscle to oppose any more ECB easing. Meanwhile, recent stress tests have highlighted the problems at Italian banks and with the new `bail-in' rules that is certainly a policy conundrum for Italy and for the ECB and policy in general.

Germany seems ready to pack up the stimulus game and prepared for the onset of normalcy despite its own uneven progress. Is that really the road we are on? Or is the Bundesbank being a bit pre-mature with its drive to invoke normalcy? This will bear watching.


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The chart and table offer a pretty good perspective on German industrial trends. Overall German industrial production is still struggling. Despite a strong gain in June, it still leaves industrial output net lower over two months and [...]

German IP Rebounds But Drops in Quarter

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<title>Chicago Purchasing Managers Index Recovers Sharply by Tom Moeller&nbsp;
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The job market remained on firm footing during July. Nonfarm payroll
employment grew 255,000 (1.7% y/y) following upwardly revised gains of 292,000
and 24,000 during the prior two months. A 180,000 increase had been expected in
the Action Economics Forecast Survey. The three-month average change in payrolls
of 190,000 was the strongest since March, but was below the peak 259,000
three-month change averaged last July. The unemployment rate remained at 4.9%. A
4.8% rate was expected. The unemployment rate including marginally attached
workers and those working part-time for economic reasons ticked up to 9.7%.
Average hourly earnings gained 0.3% (2.6% y/y) versus expectations for a 0.2%
rise.
Payroll employment improvement was broad-based. It included a 14,000
rise (3.3% y/y) in construction employment which followed three straight months
of decline. Factory sector employment increased 9,000 (-0.3% y/y), though that
was below June's 15,000 increase. Mining sector employment declined 6,100
(-16.8% y/y), moderate versus the 17,600 jobs lost in February.
In the private service-producing sector, payrolls increased 201,000 (2.2%
y/y) following a 254,000 increase. Three-month average growth of 166,000 was
improved versus the prior two months, but well below December's cycle high of
238,000. Professional &amp; business&nbsp; services employment grew 70,000 (2.6%
y/y), the firmest gain in nine months. The increase included a 17,000 rise (0.9%
y/y) in temporary help jobs. Employment in leisure &amp; hospitality grew 45,000
(2.7% y/y) after a similarly strong 52,000 June rise. The two gains together
were at the high end of increases averaged during the recovery. Education &amp;
health services employment improved 36,000 (2.8% y/y), the weakest gain in six
months. Trade, transportation &amp; utilities employment improved 29,000 (1.4%
y/y), though retail jobs rose just 14,700 (1.9% y/y), well off the 66,500 pace
six months earlier. Employment in financial activities improved 18,000 (2.0%
y/y), one of the stronger gains this cycle. Information sector employment
remained unchanged (1.1% y/y). Government sector payrolls increased 28,000 (0.7%
y/y) as local government jobs rose 30,000 (0.8% y/y). State government jobs
increased 5,000 (0.5% y/y) and federal government employment rose 3,000 (1.2%
y/y).&nbsp; 
The length of the average workweek improved to 34.5 hours, up from 34.4 hours
in each of the prior five months. It remained down, however, from the 34.6 hour
peak for this cycle. Hours worked in the goods producing sector was steady at
40.3 hours, but down from the 2014 peak of 40.6 hours. Private service sector
hours were steady at 33.3. Within that total, however, there were sharp
divergences. Hours worked in financial activities returned to the cycle peak of
37.7, while hours in the information sector of 36.1 were down from the 2014 high
of 36.9 hours. Hours worked in the leisure &amp; hospitality sector eased to
26.1 hours. 
The 0.3% gain in average hourly earnings was the strongest rise in three
months. It raised y/y growth to 2.6% which equaled the strongest increase for
this cycle, and was up from 1.9% during all of 2012. Earnings in service
industries improved 0.3% (2.6% y/y), paced by a 1.0% increase (3.0% y/y) amongst
financial activities. Leisure &amp; hospitality earnings rose 0.4%, but y/y
growth jumped to 4.0%, the largest increase since 4.6% early in 2008. This
strength was offset by a 0.1% rise (2.5% y/y) in trade, transportation &amp;
utilities which included a 0.3% decline (+2.1% y/y) in retail trade.
The household survey revealed a stable 4.9% unemployment rate which
reflected a 420,000 rise (1.8% y/y) in employment and a 407,000 (1.4% y/y)
increase in the labor force. The labor force participation rate improved to
62.8% versus the cycle low of 62.4% in September, but remained well below the
67.1% averaged from 1997 to 2000. 
The teenage unemployment rate eased to 15.6%, its low for the economic
recovery. For those aged 25 and over, the rate was stable at 4.0%; for
individuals aged 35-44, it fell to 3.5%.
By educational attainment, the unemployment rate for those with less than a
high school diploma fell sharply to a cycle low of 6.3%. High school graduates
with no college encountered a stable 5.0% unemployment rate, while those with
some college but no degree were 4.3% unemployed. College graduates met with the
lowest unemployment rate at 2.5%.
The labor market data are contained in Haver's USECON database.
Detailed figures are in the EMPL and LABOR databases. The
expectations figure is in the AS1REPNA database.
<table width="1782" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="987">Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" align="center" width="113">Jul</th>
 <th scope="col" align="center" width="113">Jun</th>
 <th scope="col" align="center" width="113">May</th>
 <th scope="col" align="center" width="113">Jul Y/Y</th>
 <th scope="col" align="center" width="113">2015</th>
 <th scope="col" align="center" width="113">2014</th>
 <th scope="col" align="center" width="113">2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="987">Payroll Employment</td>
 <td align="center" width="113">255</td>
 <td align="center" width="113">292</td>
 <td align="center" width="113">24</td>
 <td align="center" width="113">1.7</td>
 <td align="center" width="113">2.1%</td>
 <td align="center" width="113">1.9%</td>
 <td align="center" width="113">1.6%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Previous</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">287</td>
 <td align="center" width="113">11</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">&nbsp;Manufacturing</td>
 <td align="center" width="113">9</td>
 <td align="center" width="113">15</td>
 <td align="center" width="113">-17</td>
 <td align="center" width="113">-0.3</td>
 <td align="center" width="113">1.1</td>
 <td align="center" width="113">1.4</td>
 <td align="center" width="113">0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Construction</td>
 <td align="center" width="113">14</td>
 <td align="center" width="113">-3</td>
 <td align="center" width="113">-18</td>
 <td align="center" width="113">3.3</td>
 <td align="center" width="113">4.8</td>
 <td align="center" width="113">5.0</td>
 <td align="center" width="113">3.7</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">&nbsp;Private Service-Producing</td>
 <td align="center" width="113">201</td>
 <td align="center" width="113">254</td>
 <td align="center" width="113">44</td>
 <td align="center" width="113">2.2 </td>
 <td align="center" width="113">2.5</td>
 <td align="center" width="113">2.1</td>
 <td align="center" width="113">2.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Government</td>
 <td align="center" width="113">38</td>
 <td align="center" width="113">33</td>
 <td align="center" width="113">25</td>
 <td align="center" width="113">0.7</td>
 <td align="center" width="113">0.5</td>
 <td align="center" width="113">0.0</td>
 <td align="center" width="113">-0.3</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">Average Weekly Hours - Private Sector</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.4</td>
 <td align="center" width="113">34.4</td>
 <td align="center" width="113">34.6</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">Private Sector Average Hourly Earnings
 (%)</td>
 <td align="center" width="113">0.3</td>
 <td align="center" width="113">0.1</td>
 <td align="center" width="113">0.2</td>
 <td align="center" width="113">2.6</td>
 <td align="center" width="113">2.3</td>
 <td align="center" width="113">2.1</td>
 <td align="center" width="113">2.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">Unemployment Rate (%)</td>
 <td align="center" width="113">4.9</td>
 <td align="center" width="113">4.9</td>
 <td align="center" width="113">4.7</td>
 <td align="center" width="113">5.3</td>
 <td align="center" width="113">5.3</td>
 <td align="center" width="113">6.2</td>
 <td align="center" width="113">7.4</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Consumer Credit Usage Softens to Four Year Low 
by <a href="http://haver.com/comment/Moeller.html">Tom Moeller</a>&nbsp;&nbsp;August
5, 2016
Consumer credit outstanding increased $12.3 billion during June following a
$17.9 billion May gain, revised from $18.6 billion. The 4.1% m/m increase was
the smallest since July 2012. A $15.0 billion increase had been expected in the
Action Economics Forecast Survey. During the last ten years, there has been a
46% correlation between the y/y growth in consumer credit and y/y growth in
personal consumption expenditures.
Nonrevolving credit borrowing grew $4.6 billion (5.9% y/y) after a
little-revised $16.1 billion gain. It was the smallest dollar increase since
December as trend growth has been softening. The 2.1% rise, however, was the
smallest since a decline in August 2011. Federal government loans (36% of the
total) increased 11.0% y/y. Finance company balances (24% of the total) eased 1.8%
y/y. Borrowing at depository institutions (25% of the total) improved 5.7% y/y,
and borrowing at credit unions (11% of the total) jumped 11.4% y/y. Nonprofit
&amp; educational institution loans (2% of the total) declined 10.2% y/y, and
nonfinancial business loans (1% of the total) remained unchanged y/y.
Revolving consumer credit increased $7.7 billion after a $1.8 billion rise,
revised from $2.4 billion. It was the largest increase in three months and left
y/y growth strong at 5.4%. Balances at depository institutions (84% of the
total) grew 8.2% y/y. Finance company holdings (6% of the total) fell 10.2% y/y,
while borrowing from credit unions (5% of the total) advanced 7.8% y/y.
Nonfinancial business credit (2% of the total) fell 11.7% y/y, and securitized
credit card balances (3% of the total) declined 16.2% y/y.
Student loans during Q2 increased 6.6% y/y while motor vehicle loans rose 7.0%
y/y.
These Federal Reserve Board figures are break-adjusted and calculated by
Haver Analytics. There is a break in the credit outstanding data from November
2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates
are based on the Census of Finance Companies (CFC) and the Survey of Finance
Companies (SFC) conducted in 2010 and 2011, respectively.
The consumer credit data are available in Haver's USECON database. The
Action Economics figures are contained in the AS1REPNA database.
<table width="1782" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="900">Consumer Credit
 Outstanding (M/M Chg, SA)</th>
 <th scope="col" width="125">Jun</th>
 <th scope="col" width="125">May</th>
 <th scope="col" width="125">Apr</th>
 <th scope="col" width="125">Y/Y</th>
 <th scope="col" width="126">2015</th>
 <th scope="col" width="126">2014</th>
 <th scope="col" width="126">2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="900">Total</td>
 <td align="center" width="125">$12.3 bil.</td>
 <td align="center" width="125">$17.9 bil.</td>
 <td align="center" width="125">$17.0 bil.</td>
 <td align="center" width="125">5.8%</td>
 <td align="center" width="126">6.6%</td>
 <td align="center" width="126">7.2%</td>
 <td align="center" width="126">6.0%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="900">&nbsp; &nbsp;Revolving</td>
 <td align="center" width="125">7.7</td>
 <td align="center" width="125">&nbsp;1.8</td>
 <td align="center" width="125">1.0</td>
 <td align="center" width="125">5.4</td>
 <td align="center" width="126">5.2</td>
 <td align="center" width="126">3.9</td>
 <td align="center" width="126">1.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="900">&nbsp; &nbsp;Nonrevolving</td>
 <td align="center" width="125">4.6</td>
 <td align="center" width="125">16.1</td>
 <td align="center" width="125">15.9</td>
 <td align="center" width="125">5.9</td>
 <td align="center" width="126">7.1</td>
 <td align="center" width="126">8.4</td>
 <td align="center" width="126">7.9</td>
 </tr>
 </tbody>
</table>


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The job market remained on firm footing during July. Nonfarm payroll employment grew 255,000 (1.7% y/y) following upwardly revised gains of 292,000 and 24,000 during the prior two months. A 180,000 increase had been expected in the [...]

U.S. Payroll Growth is Surprisingly Strong

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

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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Retail gasoline prices for all grades slipped to $3.15 per gallon (-1.3% y/y), on average, in the week ended November 3 after rising to $3.16 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 prices of regular grade gasoline. That price held at $3.05 last week versus $3.05 in the previous week.

The price of West Texas Intermediate crude oil rose to $60.70 per barrel (-11.2% y/y) in the week ended October 31 after improving to $59.43 per barrel in the prior week. It was the highest price in three weeks but 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 $61.05 per barrel. The price of European Brent crude increased to $65.02 per barrel (-10.5% y/y) in the week of October 31 after rising to $63.22 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 $65.79 per barrel.

Natural gas prices rose to an average $3.43/mmbtu (88.5% y/y) in the week ended October 31 after rising to $3.25/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 $3.37 per mmbtu.

Gasoline demand declined 4.2% y/y in the four weeks ending October 24, following a 3.6% y/y decline in the prior four weeks. Demand for all petroleum products weakened 0.9% y/y in the four weeks ending October 24, after slipping 0.1% y/y in the previous four-week period. Crude oil input to refineries declined 1.7% y/y in the four weeks ending October 24, after a 0.3% y/y gain in the prior four weeks.

Gasoline inventories ease 0.1% y/y in the week ending October 24 following a 1.5% y/y gain in the prior week. Residual fuel oil inventories fell 10.0% y/y in the October 24 week after falling 13.0% y/y in the prior week. Working higher, crude oil inventories rose 1.7% y/y in the week of October 24 after rising 2.6% y/y in the previous week.

Measured in days’ supply, gasoline inventories fell to 24.3 days in the week of October 24. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil held steady at 26.7 days in the week of October 24. 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 are minimally changed.
- Crude oil costs rise further.
- Natural gas prices strengthen.

U.S. Energy Prices Are Mixed in Latest Week

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U.S. light vehicle sales dove 6.9% (-4.5% y/y) in October to 15.48 million units (SAAR) after holding steady at 16.62 million units in September. Sales fell broadly. 

Light truck sales slid 6.9% (-1.4% y/y) in October to 12.90 million units, after rising 0.9% in September. Purchases of domestically-made light trucks fell 7.9% (+1.4% y/y) to 10.10 million units, the lowest level since February, after rising 3.4% in September. Sales of imported light trucks fell 2.8% (-10.3% y/y) to 2.80 million units, following a 7.4% September decline.

Trucks’ 83.3% share of the light vehicle market last month was steady with September and compared to 82.6% in August, and to 80.7% in October of last year. The share has averaged 82.4% so far this year versus 56.5% ten years earlier.

Passenger car sales declined 6.9% (-17.6% y/y) last month to 2.58 million, after falling 4.8% in September. Purchases of domestically-produced cars fell 7.2% (-16.5% y/y) last month to 1.93 million units, after weakening 7.1% in September. Imported auto sales declined 4.5% (-22.0% y/y) to 0.64 million units after holding steady in September.

Imports' 22.2% share of the U.S. light vehicle market rose from 21.4% in September. These compared to a high of 26.3% in November of 2023. Imports' share of the passenger car market edged up to 24.8% last month from 24.2% in September. It reached a high of 38.1% in September 2021. Imports' share of the light truck market increased to 21.7% last month from 20.8% in September.

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

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- Light truck sales and auto purchases decline m/m.
- Total sales decline sharply y/y.
- Imports' market share declines.

U.S. Light Vehicle Sales Fall Sharply in October

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Factory sector activity remains under pressure. The ISM U.S. manufacturing PMI declined to 48.7 in October after rising to 49.1 during September from 48.7 in August, according to the Institute for Supply Management. These figures are below the 50 expansion-contraction dividing line. As a result, they continue to indicate that the U.S. manufacturing sector weakened for the eighth consecutive month. The reading remained remain above, however, a low of 46.9 in October of last year. A November index of 49.4 had been expected in the Action Economics Forecast Survey.

The production component declined to 48.2 last month after rising to 51.0 in September. It remained increased from an April low of 44.0. A lessened 27.3% (NSA) of respondents reported higher production while an increased 22.0% reported lower output levels. The inventory reading fell to a 12-month low of 45.8 from 47.7 in September. A lessened 13.2% (NSA) of respondents raised inventories while a higher 21.7% shed them.

Working higher, the new orders index rose to 49.4 during October from 48.9 in September. An increased 20.4% (NSA) of respondents reported new orders improvement while 26.0% reported a decline. The employment index increased to a five-month high of 46.0 last month after rising to 45.3 in September. An increased 13.1% (NSA) of respondents more hiring while 22.3% reported less. The supplier delivery index rose to 54.2 in October from 52.6 in September. Twelve percent (NSA) of respondents reported slower product delivery speeds while 3.2% reported a quickening.

The prices index weakened to 58.0 (NSA) during October from 61.9 in September. It was below a high of 69.8 in April, and well above its low of 39.4 in December 2022. A lessened 27.3% of respondents reported higher prices, a nine month low, while an increased 8.7% reported lower.

In other series, the export orders index rose to a seasonally adjusted 44.5 in October after falling sharply to 43.0 in September. It remained up from 40.1 May low. The imports index edged up to 45.2 last month from 44.7 in September. The index is below a high of 52.6 in February.

The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- Decline reverses all of September increase.					
- Lower production offsets new orders rise.
- Price index falls to nine-month low.

U.S. ISM Manufacturing PMI Eases in October; Price Index Declines Sharply

Tian Yong Woon

This week, we review a wave of key developments across Asia following US President Trump’s tour of the region last week. A central theme concerned countries courting closer ties with the US to avoid harsher actions, while also boosting regional cooperation amid trade barriers and scrutiny of China. This push for closer ties has manifested through new and updated trade agreements—ironically driven by ongoing uncertainty in global trade and supply chains, with US–China relations at the core. A major outcome of Trump’s trip was the new US–China trade agreement, which included the US halving tariffs on Chinese fentanyl-related products to 10%, while China suspended rare earth export controls and resumed soybean purchases vital to the US (chart 1). Perhaps more importantly, the deal signalled a small conciliatory shift and avoided a potentially worse outcome. Beyond the US–China agreement at the APEC Summit in South Korea, the US–South Korea trade deal also gained more clarity. Under the deal, US auto tariffs on South Korea has fallen to 15%, matching the rate applied to Japan and likely providing relief for South Korean automakers (chart 2).

Trump’s visit to Japan was another highlight. Relations with new Prime Minister Takaichi got off to a strong start, and further details emerged on Japan’s previously cited $550 billion investment commitment in the US—substantial even relative to Japan’s existing direct investment there (chart 3). However, specifics on the timing and implementation of the investment remain limited. Meanwhile, at the ASEAN Summit earlier in the week, aside from Trump’s engagements, the bloc officially welcomed its 11th member—Timor-Leste—the first new member in decades—granting it access to the bloc’s mechanisms and potentially supporting a catch-up in economic development (chart 5). Looking ahead, the focus on China and Japan is likely to continue, with China set to release its October trade (chart 6) and CPI data, and Japan scheduled to report employee wages and household spending.

**The APEC summit**
The US and China made a modest but meaningful step forward on trade following the Trump–Xi meeting at the APEC Summit in South Korea. The US lowered tariffs on Chinese fentanyl-related products to 10% from 20% and suspended enforcement of rules targeting subsidiaries of blacklisted firms—previous points of contention for Beijing. In return, China pledged stronger efforts to curb fentanyl flows, paused rare earth export controls for a year, and resumed purchases of US soybeans—significant given its historically large share of US export demand (chart 1). While not a comprehensive reset, these moves eased immediate tensions and helped avert more severe outcomes, including Trump’s previously threatened 100% tariff hike. The tone of the meeting also suggests a more conciliatory shift, though relations remain fragile and the risk of renewed escalation is still material.

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Beyond the headline-grabbing US–China trade deal, the APEC Summit in South Korea also saw the US reach a trade agreement with South Korea. Under the deal, US tariffs on South Korean autos and auto parts have fallen to 15% from 25%, matching the US tariff rate on Japanese autos and providing relief to South Korea’s sizable automotive export sector (chart 2). The agreement also clarified South Korea’s supposed $350 billion investment in the US: $200 billion in cash, capped at $20 billion per year to avoid currency market distortions, with the remaining $150 billion directed toward shipbuilding cooperation. While also not a major breakthrough, the deal represents incremental progress, addressing prior uncertainties and signalling steps toward a more favourable trade framework.

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**US President Trump’s Japan Visit**
Turning to US President Trump’s visit to Japan last week, new Prime Minister Takaichi appears to have gotten off to a strong start, with Trump hailing US–Japan relations as entering a “NEW GOLDEN AGE.” The two countries signed several agreements, including a Technology Prosperity Deal, and deepened cooperation on critical minerals and rare earths. Japan’s previously vague $550 billion investment commitment in the US is now somewhat clearer: up to $332 billion will support critical US infrastructure, $30 billion will target AI, and $15 billion will go toward electronics and supply chains, among other areas. While the headline figure is substantial—even relative to Japan’s already significant direct investment assets in the US (chart 3)—the open-ended nature of the commitment and the lack of a clear timeline leave its actual impact uncertain.

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**The ASEAN summits**
Whilst US President Trump’s attendance at the ASEAN–US Summit in Malaysia dominated headlines, there were also several other notable developments at last week’s ASEAN meetings in Kuala Lumpur. Most prominently, Timor-Leste was officially admitted as ASEAN’s eleventh member, following a two-decade accession process during which the country actively aligned its political and economic frameworks with ASEAN standards. Membership grants Timor-Leste access to the bloc’s broader security and economic mechanisms and could open further avenues for trade, investment, and development cooperation. Nonetheless, the country still has considerable ground to make up relative to its new ASEAN peers, particularly in terms of both GDP and GDP per capita (chart 4).

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The accession of Timor-Leste into ASEAN aside, last week’s summits also brought a number of economic developments for the bloc. More concretely, ASEAN and China signed an upgrade to their free trade agreement last week, bringing the deal to so-called version 3.0. The upgraded deal (ACFTA 3.0) introduces commitments in new areas such as Digital Economy, Green Economy, and Supply Chain Connectivity, among other themes. And notably, just as the US and ASEAN have found common ground to collaborate in fields such as those relating to rare earths, given how the US has seen vulnerabilities arising from this space given China’s dominance in the field, China has taken the year’s US-China frictions to foster closer ties with its neighbours in the region, including the collectively sizable ASEAN bloc. Just by the trade dimension alone, China-ASEAN-11 trade has growth significantly this year (chart 2), although the economies’ total trade with the US also rose, and at a more significant pace, despite tariff measures.

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Looking ahead, investors will focus on a series of China-related releases this week, notably the Caixin PMI readings, as well as October trade and CPI inflation data. These indicators will help gauge the economy’s performance under ongoing US tariffs and assess domestic demand and supply conditions, all in the broader context of recent US–China interactions during Trump’s Asia tour. In Japan, attention will turn to updated data on employee wages and household spending, which—together with developments in the external environment—will shape expectations for the Bank of Japan’s future policy stance. Elsewhere in the region, investors will watch interest rate decisions from Australia and Malaysia, where rates are expected to remain unchanged, as well as GDP readings from Indonesia and the Philippines.

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Asia

Economic Letter from Asia: Come Together

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) improved 0.3% during the four weeks ended October 31, 2025 after holding steady in the prior four week period. The index increased 0.8% y/y.

**Metals** group prices increased 4.3% (6.1% y/y) in the last four weeks as the cost of aluminum rose 7.0% (9.5% y/y). Copper scrap prices improved 6.5% (16.4% y/y) while zinc prices strengthened 6.8% in four weeks (3.0% y/y). Steel scrap prices rose 2.3% (-6.6% y/y) and tin prices increased 2.2% (16.1% y/y). Lead prices improved 1.1% (unchanged y/y) in four weeks.

Prices in the **Textile** group increased 1.2% during the last four weeks, and rose 2.4% y/y. The cost of burlap strengthened 14.5% in the last four weeks while surging 37.6% over the last year. Offsetting this rise, cotton prices fell 1.2% and declined 5.8% y/y.

**Miscellaneous** group prices weakened 3.0% in the last four weeks, unchanged y/y, as framing lumber prices fell 6.5% (+4.1% y/y). The cost of tallow, used for frying & baking, declined 13.1% (+11.2% y/y) in four weeks. Offsetting this weakness, natural rubber prices held steady (-10.1% y/y).

Prices in the **crude oil & benzene** group declined 1.7% (-9.3% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 3.1% in four weeks to $60.80 per barrel and declined 11.7% y/y. The price was increased from a low of $58.47 in the third week of the month. The price of the petro-chemical benzene fell 2.9% (-23.3% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index rose 0.5% (1.6% y/y) over the last four weeks, the same as during the prior four weeks.

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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- Metals and textile prices strengthen.
- Framing lumber costs backpedal.
- Crude oil prices weaken.

Economy in Brief: 2016

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