MACROECONOMY & END-USE MARKETS
Running tab of macro indicators: 14 out of 20
The number of new jobless claims fell by 10,000 to 230,000 during the week ending August 19. Continuing claims fell by 9,000 to 1.70 million, and the insured unemployment rate for the week ending August 12 was down at 1.1%.
Existing home sales fell 2.2% in July to 4.07 million SAAR, the slowest pace since January and down 16.6% Y/Y. It was the fourth decline in the past five months. Existing home sales have been choked by historically lean inventories which were off 14.6% Y/Y. At the end of July, the inventory of unsold homes edged higher, representing a 3.3-month supply at the current sales pace. As supplies remain tight, the median sales price rose 1.9% Y/Y. Homeowners locked into low mortgage rates are reluctant to move.
With historically low inventories of existing homes, new home sales rose 4.4% in July, with the largest gains in the Midwest and West. The inventory of new homes also rose, up 1.1%. At the current sales pace, that represents a 7.3-month supply, slightly lower than in June and considerably lower than the 10.1 month supply last July. The median sales price fell 8.7% Y/Y.
Following a 4.4% gain in June, new orders for durable goods fell 5.2% in July. The decline was led by sharply lower orders for aircraft, which tend to be choppy. Declines in orders for computers and related products were only partially offset by gains in other categories including, motor vehicles, metals, machinery, and communications equipment. Core business orders edged 0.1% higher following a 0.4% decline in June. Headline orders were up 3.2% Y/Y while core business orders were up just 0.6% Y/Y.
ENERGY
Oil prices edged lower this week on weak economic news from several major economies. U.S. natural gas prices were down from a week ago despite a lower-than-expected inventory build. The gas storage surplus has narrowed to the single digits (9.5% above the five-year average). The combined oil and gas rig count fell by 11 to 637, the lowest level since March 2022.
CHEMICALS
Indicators for the business of chemistry bring to mind a red banner.
According to data released by the Association of American Railroads, chemical railcar loadings were up 5.5% to 31,602 for the week ending 19 August. Loadings were down 5.0% Y/Y (13-week MA), down 3.7% YTD/YTD and have been on the rise for 8 of the last 13 weeks.
The U.S. Geological Survey reported production of soda ash was down 5.8% to 944 thousand tons in June, a level up 4.4% Y/Y. Stocks rose 10.4% over May to 328 thousand tons by the end of the month, an 11-day supply. Ending stocks were up 44.5% Y/Y.
Note On the Color Codes
The banner colors represent observations about the current conditions in the overall economy and the business 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
For the chemical industry there are fewer indicators available. As a result, we rely upon judgment whether production in the industry (defined as chemicals excluding pharmaceuticals) has increased or decreased three consecutive months.
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