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Factory Automation Getty Images 83817318 1024

Electrical Marketing's Key Economic Indicators - November 20, 2020 Update

Nov. 20, 2020

Building permits flat in October. Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,545,000, virtually unchanged from the revised September rate of 1,545,000, but +2.8% above the October 2019 rate of 1,503,000. Single-family authorizations in October were at a rate of 1,120,000, +0.6% above the revised September figure of 1,113,000. Authorizations of units in buildings with five units or more were at a rate of 365,000 in October.

Oil market showing some small signs of improvement. While the Baker-Hughes Rig Count, which logs a weekly count of the number of oil and gas rigs operating in North America, is still showing a drastic decline in business from 2019, the slope of the decline is not as bad. Over the past two weeks, the Baker-Hughes’ U.S. Total Oil Rig Count gained 10 rigs and the percentage rate of year-over-year decline improved from -65% to -62%. However, the numbers are still really awful — the total number of oil rigs is down 487 over last year.

AAR freight rail traffic starting to perk up, but YOY data is still disappointing. For the week ending Nov. 7, total freight rail traffic showed a +1.9% weekly increase to 520,452 carloads, according to the American Association of Railroads (AAR) Total combined U.S. traffic for the first 41 weeks of 2020 was 19,122,615 carloads and intermodal units, a decrease of -10.1% compared to last year. Grain was the only commodity posting a year-to-date increase over 2019 with a +1.3% increase to 982,534 carloads.

Conference Board’s Leading Indicators gives mixed signals. The Conference Board Leading Economic Index (LEI) for the U.S. increased +0.7% in September to 107.2, following a +1.4% increase in August and a +2% increase in July. “The U.S. LEI increased in September, driven primarily by declining unemployment claims and rising housing permits,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “However, the decelerating pace of improvement suggests the U.S. economy could be losing momentum heading into the final quarter of 2020.”