MACROECONOMY & END-USE MARKETS
Running tab of macro indicators: 10 out of 20
The number of new jobless claims fell by 11,000 to 211,000 during the week ending April 6. Continuing claims increased by 28,000 to 1.817 million, and the insured unemployment rate for the week ending March 30 was unchanged at 1.2%.
Headline consumer prices rose 0.4% in March, following a similar gain in February. Higher prices for shelter (including the somewhat controversial price for owners’ equivalent rent) and gasoline accounted for half the increase. Growth in the price of services continued to outpace goods. Core consumer prices (excluding food and energy) also prices were up 3.8% Y/Y (the same as last month). The March CPI report came in slightly ahead of expectations, raising doubts that the Fed will be able to cut interest rates mid-year as expected.
Following a 0.6% gain in February, headline producer prices rose by 0.2% in March, a better-than-expected reading. While food prices continued to grow, energy prices eased. Excluding those components, core producer prices edged slightly higher by 0.1%. Compared to a year ago, headline producer prices were up 2.1% Y/Y, the fastest growth since April 2023. The annual comparison in core producer prices also ticked higher to 2.8% Y/Y.
Import prices rose 0.4% over March and were up 0.4% Y/Y. The March gain was driven by a 4.7% gain in fuel imports prices, which were up 4.8% Y/Y. Export prices also rose over March (up 0.3%) but were down 1.4% Y/Y. Agricultural export prices fell over March while prices across other exports rose.
U.S. consumer credit growth decelerated in February to a 3.4% annual rate (up from a revised 4.2% rate in January). Total consumer credit outstanding fell by $11.9 billion in February. Revolving credit (credit cards, etc.) increased at a 10.2% pace while non-revolving credit (auto loans, student loans, etc.) increased at a 0.9% pace.
Wholesale inventories rose 0.5% in February with gains across durable segments offset by lower inventories across many nondurable segments. Sales at the wholesale level also rose, by 2.3%, with the strongest gains in farm products, lumber, and petroleum products. The inventories-to-sales ratio fell from 1.36 in January to 1.34 in February. A year ago, the ratio was 1.37. Compared to a year ago, wholesale inventories were off 1.5% Y/Y while sales were up 0.8% Y/Y.
ENERGY
Despite Israeli troop withdrawals from southern Gaza, oil prices continued to move higher on concerns that Iran could attack Israel. U.S. natural gas remained subdued as milder April temperatures allowed the second inventory build of the year. In Europe, gas prices were trending higher on reports that Russia has attacked Ukrainian natural gas storage facilities. Milder April temperatures allowed U.S. natural gas inventories to build last week, by 24 BCF, the second build of the year. The combined oil and gas rig count was flat at 618.
CHEMICALS
Indicators for the business of chemistry bring to mind a yellow banner.
According to data released by the Association of American Railroads, chemical railcar loadings were down to 31,907 for the week ending April 6. Loadings were up 2.2% Y/Y (13-week MA), up (4.6%) YTD/YTD and have been on the rise for 7 of the last 13 weeks.
U.S. exports of chemicals were up 4.8% in February to a level 2.1% higher Y/Y. Growth was strongest in bulk petrochemicals and intermediates. Plastics resin exports were up 1.6% on a USD$ basis and up 2.8% in volume terms to 2.1 million metric tons in February. Compared to levels last year, plastic resin exports were 0.9% higher on a USD$ basis and up 10.5% in volume terms. Chemical imports were down 7.2% in February to a level down 8.2% Y/Y. Declines in February were led by petrochemicals, inorganics, and other specialties. The U.S. surplus in chemicals trade expanded to $2.8 billion in February.
U.S. production of major plastic resins totaled 8.4 billion pounds during February, up 4.4% compared to the prior month, and up 11.5% Y/Y. Sales and captive (internal) use of major plastic resins totaled 8.4 billion pounds, down 0.4% M/M and up 12.4% Y/Y.
Following a gain in February, chemical producer prices moved lower in March, down 0.2%. Higher prices for manufactured fibers, synthetic rubber, agricultural chemicals, and other specialty chemicals were more than offset by lower prices for petrochemicals & organics, plastic resins, and coatings. Prices for consumer products were flat in March. Compared to a year ago, chemical producer prices were off 5.8%. Chemical import prices moderated 0.2% over March and were down 3.5% Y/Y. Export prices rose for the second month in a row, up 0.7% in March but down 3.1% Y/Y.
Chemical wholesale sales were flat in February, following a 1.9% decline in January. Wholesale inventories of chemicals rose 1.3% (following a 3.0% decline the previous month). The inventories-to-sales ratio for chemicals edged slightly higher from 1.11 in January to 1.12 in February. The ratio remained well below last February’s 1.23.
Note On the Color Codes
Banner colors reflect an assessment of the current conditions in the overall economy and the business chemistry of chemistry. For the overall economy we keep a running tab of 20 indicators. The banner color for the macroeconomic section is determined as follows:
Green – 13 or more positives
Yellow – between 8 and 12 positives
Red – 7 or fewer positives
There are fewer indicators available for the chemical industry. Our assessment on banner color largely relies upon how chemical industry production has changed over the most recent three months.
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