09/27/2024 | Press release | Distributed by Public on 09/27/2024 11:15
Running tab of macro indicators: 10 out of 20
The number of new jobless claims fell by 4,000 to 218,000 during the week ending September 21. Continuing claims increased by 13,000 to 1.834 million, and the insured unemployment rate for the week ending September 14 was unchanged at 1.2%.
Consumer spending continued to expand in August, up 0.2%. The gain was driven entirely by higher spending on services. Consumer outlays on both durable and nondurable goods fell. Disposable personal income (the ability to spend) also rose by 0.2%. The aggregate savings rate edged lower to 4.8%. Compared to a year ago, inflation-adjusted consumer spending was up 2.9% Y/Y while real disposable income was up by 3.1% Y/Y. Income and spending remain relatively balanced. The headline price index for personal consumption expenditures was up 2.2% Y/Y, the smallest annual gain since early-2021. Growth in the Fed's preferred inflation measure, the core PCE price index (excluding the volatile food and energy components) ticked higher to 2.7% in August compared to 2.6% in July.
Consumers were more pessimistic in September, as the Conference Board's Consumer Confidence Index® fell sharply, down 6.9 points to 98.7, the largest decline in three years. Consumers' assessment of current business conditions turned negative, and they were more pessimistic about future labor market conditions. Consumer buying plans for large appliances were mixed and plans to buy a smartphone or laptop/PC in the next six months eased. Purchasing plans for homes and new cars improved slightly.
Sales of new single-family homes were at a seasonally adjusted annual rate (SAAR) of 716,000 in August. That pace is down 4.7% from July but up 9.8% compared to August 2023. Sales declined in all regions except the South. Inventories of unsold homes at the end of August were 6.8% higher compared to July, but 1.3% lower than levels a year ago. Months' supply (at the current sales pace) rose from 7.3 months in July to 7.8 months in August. At $420,600, the median sales price was 4.6% lower than a year ago.
The Conference Board's Leading Economic Index® continued to slide in August, down by 0.2% to 100.2. Over the past six months, the index has fallen by 2.3%, slower than the six-month decline recorded in July. New orders, which fell to its lowest level in more than a year in July, led the decline. There were also negative contributions from the interest rate spread, poor consumer expectations for future business conditions, and lower equity prices in August. The Conference Board is projecting slower growth through the end of the year.
In its third estimate for the quarter, BEA estimated that real GDP rose at a 3.0% seasonally adjusted annual rate in Q2. This is unchanged from the second estimate. Compared to the same quarter last year, GDP was 3.0% higher. Growth in the price index for GDP rose from 2.4% Y/Y in Q1 to 2.6% Y/Y in Q2. Excluding food and energy, the core GDP price index rose from 2.7% Y/Y in Q1 to 2.8% Y/Y in Q2.
Durable goods orders held steady in August following a 9.9% advance in July which was driven by a strong recovery in new orders for civilian aircraft. Core business orders (nondefense capital goods excluding aircraft) rose 0.2% in August following a 0.2% decline in July. Over August, orders rose in primary metals, fabricated metal products, machinery, computers and electronic products, electrical equipment, appliances, and components, autos and parts, defense aircraft and parts, and in other durable goods. These gains were offset by lower civilian aircraft orders. Headline durable orders were down 1.3% YTD/YTD while core business orders were up 0.3%.
Indicators for the business of chemistry suggest a yellow banner.
According to data released by the Association of American Railroads, chemical railcar loadings were up to 33,139 for the week ending September 21. Loadings were up 5.4% Y/Y (13-week MA), up (4.3%) YTD/YTD and have been on the rise for 8 of the last 13 weeks.
Following a 0.5% gain in July, ACC's Global Chemical Production Regional Index (Global CPRI) edged up by 0.1% in August. Growth was observed in Asia-Pacific, South America, Africa, and the Middle East. The most significant contributions came from China, where exports remained strong. Germany, Korea, and Taiwan also contributed. While output in all segments grew, the other specialties segment gained the most. Global chemicals production was up 4.4% Y/Y.
Following a 0.4% gain in July, the U.S. CPRI stalled in August (0%). The U.S. CPRI measures chemical production trends on a three-month moving average (3MMA) to smooth month-to-month volatility. Chemical production declined in all regions except the Gulf region, where production increased. The U.S. CPRI remained off by 0.3% compared to a year ago.
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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