Leading economic index
MACROECONOMICS & END USE MARKETS
Running tab of macro indicators: 13 out of 20
The number of new unemployment claims declined by 12,000 to 214,000 in the week ended October 15. Continuing claims increased by 21,000 to 1.385 million for the week ended October 8 and the insured unemployment rate was 1.0%, virtually unchanged from last week’s revised rate.
In total living begins fell 8.1% to 1.44 million in September after a brief jump in August. The level remains below the cycle high in December 2021 and 7.7% below the September 2021 level. Most regions recorded declines this month, with the exception of the western region, where housing starts increased. foresighted building permithowever, rose a seasonally adjusted annualized 1.4% to 1.56 million units, with all regions except the Northeast posting gains. Single-family homes saw a decline that was more than offset by multi-family homes. Rising mortgage interest rates will continue to put pressure on construction activity in the future.
Sale of existing homes fell 1.5% in September to a seasonally adjusted annual pace of 4.71 million, a rate that was 23.8% lower than a year ago. At the end of August, inventories stood at 1.25 million homes for sale or under contract. That’s down 2.3% from July and 0.8% from a year earlier. The level of inventories corresponds to a meager 3.2 month supply. With inventories at historically low levels, the median selling price has softened slightly but is still up 8.4% year-on-year to $384,800.
Those of the Conference Board Leading Economic Index® (LEI) fell 0.4% in September. The LEI has steadily declined over the past few months. The drop to 115.9 was the seventh straight drop. The index fell 2.8% in the previous six months, a reversal of growth of 1.4% in the previous six months. The LEI declined 1.4% Y/Y, the second annual decline since early 2021. The Conference Board thinks a recession is likely by the end of the year.
industrial production rose 0.4% in September. This is the fourth straight month of positive results since June. Supply performance was lower, but both mining and manufacturing performance increased. Within manufacturing, gains were recorded in non-metallic mineral products, processed metal products, computer and electronic products, automobiles and parts, food, beverage and tobacco products, clothing and leather, chemicals and petroleum and coal products. The only two segments that saw a decline were printing and other manufacturing. Year-on-year, manufacturing output remained up 4.7%, while total industrial production increased 5.3% year-on-year. Capacity utilization rose to 80.3% from 80.1% in August. A year ago, capacity utilization was 77.4%. Total industrial capacity grew 1.5% year-on-year.
Oil prices fell slightly over the week and US natural gas prices also fell. As a result, the oil-gas price ratio rose to 14.3. The ratio of Brent oil prices to Henry Hub natural gas prices is an indicator of the US Gulf Coast’s petrochemical competitiveness. As a rough rule of thumb, if the ratio is above 7, the US has a comparative advantage. If it is below 7, the opposite is true. The combined number of oil and rigs increased in the week ended 10/14. at seven to 767.
For the chemical industry, the indicators are still reminiscent of a yellow banner for basic and specialty chemicals
According to the Association of American Railroads Loading of chemical wagons up 3.6% to 31,288 in the week ended October 15. Charges were down 1.0% Y/Y (13 week MA), up 2.7% YTD/YTD and are up for six of the last 13 weeks.
chemical production remained stable in September, up 0% mom. Performance was mixed with gains in consumer goods, coatings, adhesives, fertilizer and crop protection manufacturing. Compared to the previous year, production was ahead by 6.2% Y/Y. Chemical capacity utilization rose to 82.6% from 8.1% last month, versus 80.2% recorded in the same month last year.
Note on the color codes
The banner colors represent observations on the current state of the overall economy and business chemistry. For the economy as a whole, we keep 20 indicators on an ongoing basis. The banner color for the macroeconomic part is set as follows:
Green – 13 or more positive results
Yellow – between 8 and 12 positives
Red – 7 or fewer positive results
Fewer indicators are available for the chemical industry. As a result, we rely on assessing whether production in the industry (defined as non-pharmaceutical chemicals) has increased or decreased for three consecutive months.
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