After sliding in the previous three months, U.S. consumer confidence rebounded slightly in November. The Conference Board's Consumer Confidence Index increased to 102.0, up from the downwardly revised 99.1 reading in October. The biggest issues that continue to weigh on consumers are inflation, geopolitical issues at home and abroad, and higher interest rates.
N.A. (Canada and US) tractor and combine shipments increased for the second consecutive month in October. Shipments totaled 30,162 units, up 24.1% from September but down 7.0% from 32,420 in October 2022. Shipments, on a year-over-year basis, have now declined for five consecutive months and in twenty of the last twenty-one months. Looking on a year-over-year basis, to smooth seasonality, shipments of both tractors and combines declined, sliding 4.3% and 43.9%, respectively.
Now up for the second consecutive month, the October DMI came in at 181.7, up from the revised 180.3 reading in September. Despite the recent recovery, the current DMI is still 8.0% below last October’s level. The DMI is a leading indicator for non-residential spending a year out.
After last week’s tentative agreement with Ford, the UAW has now reached tentative agreements with all three major auto producers, including Stellantis and GM. The agreement with Stellantis was reached over the weekend, and the agreement with GM was reached at the beginning of this week. With tentative agreements in place at all the Big 3 producers, full auto production is expected to ramp up.
After sliding in August, new home sales rebounded sharply in September and are now up in two of the last three months. New home sales came in at a 759,000 unit rate in September, up 12.3% from August and up 33.9% from the 567,000 unit rate in September 2022. September had the highest sales rate since February 2022. This is now the sixth consecutive month in which sales increased on a year-over-year basis.
Manufacturing output increased 0.4% after slipping slightly in August but was still 0.8% below the level of a year ago. Within manufacturing, motor vehicles and parts were up only 0.3% due to the ongoing strike at the Big Three. Elsewhere, wood products, primary metals and plastic and rubber production manufacturing all increased 1.0%.
After initially expecting a $20-$30/gt decline in October, stronger mill buys and a potential supply disruption from the auto strike helped keep prime scrap flat. Key regions have already settled October scrap flat and the unsettled regions are expected to follow suit within the next day or two.
September light vehicle sales totaled 1.332 million units, up slightly from August and up 18.5% from 1.124 million units in September 2022. U.S. sales totaled 44,398 units/day, the highest level in two months. Sales in September were boosted by higher fleet sales, better new-vehicle availability, improved incentive programs, and pent-up demand.
New home sales came in at a 675,000 unit rate, down 8.7% from July but up 5.8% from the 638,000 unit rate in August 2022. This is the fifth consecutive month in which sales increased on a year-over-year basis. The year-to-date actual new home sales is now up 1.7% compared to the same timeframe last year.
The Cass shipment index increased in August, climbing 1.9% from July but was down 10.6% from last August. The current downtrend for shipments is at the 20-month mark, which compares to a range of 21-25 months the previous three downcycles. The Cass expenditure index, which measures total spend for freight, increased as well climbing 1.1% compared to July.