Note: Due to the upcoming holiday, the Weekly Chemistry and Economic Trends Report will not be published next week.
Nonfarm payrolls rebounded in November (up by 64,000), following a 105,000 decline in October. October’s decline in payrolls reflected a contraction in the federal workforce; private sector payrolls expanded by 52,000 in October. Manufacturing employment continued to move lower. Since the beginning of the year, manufacturers have lost 63,000 jobs. Annual growth in average hourly wages ticked slightly higher to 3.9%. The unemployment rate rose to a five-year high of 4.6% in November as growth in the number of unemployed exceeded growth in the number of employed. The unemployment rate for October will not be released due to the government shutdown.
Annual growth in consumer prices moderated in November, down to 2.7% Y/Y, the lowest since July. Data for October were never collected due to the government shutdown, thus month-to-month comparisons are not possible. Excluding the volatile food and energy components, core consumer prices rose at a 2.6% pace.
According to the NY Fed’s Empire State Manufacturing Survey, manufacturing activity declined slightly in New York State in December, with the general business conditions index falling 23 points to -3.9. New orders were flat as shipments and unfulfilled orders declined. inventories and employment increased. Capital spending plans increased moderately as firms expect business conditions to improve in the next few months. Price indexes decelerated but remained elevated.
Further south, the Philadelphia Fed’s Manufacturing Business Outlook Survey also indicated that manufacturing activity was weak in December. The current general activity index fell 8.5 points to -10.2. There was improvement in the shipments and new orders components. Unfilled inventories continued to contract and inventories rose. Looking ahead, manufacturers in the region were only slightly less optimistic compared to November, with gains expected across a number of indicators.
Homebuilder confidence improved slightly in December as the NAHB/Wells Fargo Housing Market Index increased one point to 39. Current sales activity and sales expectations for the next six months posted small gains while buyer traffic was flat. The survey revealed that 40% of builders cut prices in December, with the average price reduction coming in at 5% and the use of sales incentives hitting its highest level in the post-covid era.
Existing home sales inched up 0.5% in November, remaining at 4.1 million annual pace. Unsold inventory fell, off 5.9% and represented a 4.2-month supply, slightly down from October but higher than 3.8-month supply a year earlier. The median selling price was up 1.2% Y/Y to $409,200. The 30-year mortgage rate was mostly unchanged over the week, hovering around 6.2% and down from around 7.0% at the beginning of the year.
A leading indicator for nonresidential building activity, AIA’s Architectural Billings Index fell 2.3 points to 45.3 in November, suggesting that firm billings for architectural services remain stagnant. It was the 13th consecutive month of declining billings at architect firms. Upstream inquiries into new projects was modestly higher and the value of new design contracts continued to soften.
Retail sales were flat in October after inching up 0.1% the prior month. Sales of motor vehicles & parts and building materials & garden equipment declined, as did sales at gas stations. On the other hand, sales at online platforms rose along with sales of sporting goods and furniture & home furnishings. Compared to a year ago, retail sales were up 3.5% Y/Y.
Combined business inventories rose 0.2% in September after being flat in August. The small increase was driven by gains in retail and wholesale inventories, with manufacturing stocks declining slightly. Combined business sales were flat as manufacturing sales were unchanged, retail sales were up a bit, and wholesale sales declined slightly. Compared to a year ago, business inventories were up 1.2% Y/Y. The inventories-to-sales ratio was unchanged in September at 1.37. A year ago, the ratio was 1.40.
According to data released by the Association of American Railroads, chemical railcar loadings were down to 32,013 for the week ending December 13th. Loadings were essentially flat (down 0.1% Y/Y) on a 13-week moving average basis, up 1.1% YTD/YTD and have been on the rise for seven of the last 13 weeks.
U.S. production of major plastic resins totaled 8.2 billion pounds in October, a decrease of 1.2% compared to the prior month, and down 2.4% compared to the same month in 2024, according to ACC. Year-to-date production was 84.3 billion pounds, 0.2% higher compared to the same period in 2024.
Sales and captive (internal) use of major plastic resins totaled 8.9 billion pounds during October, an increase of 1.7% compared to the prior month, and an 8.5% increase from the same month one year earlier. Year-to-date sales and captive use were 85.1 billion pounds; a 1.9% decline compared to the same period in 2024.
Chemical exports continued to decline in September, falling 1.8%. However, an 18% increase in agricultural chemical exports and a 20% gain in inorganic chemical exports helped offset declines in other categories. Imports fell even more sharply, down 8.5%, with all major categories losing ground; agricultural chemical imports posted the largest drop. Compared with a year earlier, exports decreased by 4.8% and imports by 16.6%, indicating that exports were relatively more resilient than imports. The trade surplus widened from $3.1 billion in August to $3.7 billion in September.
Energy Wrap-Up
• Oil prices were lower than a week ago on optimism of a peace deal in the Russia/Ukraine war
• U.S. natural gas prices remained elevated despite a weaker-than-expected draw in inventories last week.
• The combined oil & gas rig count fell by one to 541 during the most recent week.
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