Weekly Chemistry & Economic Trends

April 10, 2023
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Following similar increases in September and October, producer prices continued to move higher in November, up by 0.3%, higher than expected. A decline in prices for energy goods and transportation & warehousing services was offset by higher prices for foods, trade margins and other goods and services. Excluding the volatile food and energy components, core producer prices also rose by 0.3% during the month, suggesting that underlying price pressures are continuing to build. Headline producer prices were up by 7.4% Y/Y while core prices were up 4.9% Y/Y, still too high, but both measures indicate a deceleration of price increases. The report comes as the Fed gets ready to meet again next week to determine the next rate increase.

The U.S. goods and services trade deficit rose 5.4% in October to $78.2 billion as exports fell and imports rose. Exports dropped by 0.7%, while imports increased by 0.6% in October. Export weakness was broad-based in goods across industrial supplies and materials and consumer goods. Increases in exports of crude oil, animal feeds and travel and transport services were not enough to offset decreases in natural gas and pharmaceutical products. Imports of goods increased as travel and transport services fell. Much of the growth in imports was from industrial supplies and automotive vehicles and parts.

According to the Institute for Supply Management (ISM), the Services PMI® for November registered 56.5%, 2.1 percentage points higher than in October. Most (13 out of 18) U.S. non-manufacturing industries reported growth due to increases in business activity and employment. Supplier deliveries, despite being at a slower pace, continued their upward momentum. Based on comments from Business Survey Committee respondents, increased capacity and shorter lead times have resulted in further improvement in supply chain and logistics performance.

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