Weekly Chemistry and Economic Trends (10-24-25)

Note: New Home Sales (Census Bureau) and Leading Economic Indicators were scheduled for release this week but are unavailable due to the federal government shutdown. Where available, we will include alternative private-sector data in order to continue monitoring the U.S. economy.

Consumer prices rose 0.3% in September, decelerating slightly from a 0.4% increase in August. Gasoline prices, which jumped 4.1%, were the primary driver of the overall monthly rise, causing the energy index to leap 1.5%. Food prices rose 0.2%. Excluding food and energy, core prices gained 0.2%, on top of a 0.3% rise in both July and August. September core prices were propelled by shelter, airfare, recreation, home goods, and apparel. On the flip side, prices decreased for motor vehicle insurance, used cars and trucks, and communication. Compared to a year ago, headline consumer prices increased 3.0% Y/Y, up from a 2.9% rise in August, with core consumer prices also advancing 3.0% Y/Y in September.

A leading indicator of nonresidential construction, the Architectural Billings Index (ABI) dropped 3.9 points in September to 43.3, the lowest level since April. An index reading below 50 indicates a majority of firms witnessed a decline in billings. September marked the 11th consecutive months of contractions. The value of newly signed design contracts at firms fell for the 19th straight month while inquiries into new work remained flat.

New home sales (as measured by Zonda, a housing market data and analytics firm) increased in September for the third month in a row, reaching 716,406 at a seasonally adjusted annual rate. With September marking the highest level since December 2024, sales were up 3.1% from the previous month while remaining virtually unchanged from a year ago. Zonda's new home sales data represents the number of new home contract sales net of cancellations.

Existing home sales edged 1.5% higher in September to a 4.06 million annual pace, the fastest pace since February. Inventories also moved higher, up 1.3% and represent a 4.6-month supply, the same as a month ago. The median selling price was up 2.1% Y/Y to $415,200. With mortgage rates continuing to move lower in September, buyers may be starting to come off the sidelines.

Survey of Economic Forecasters

Despite delayed Federal data releases, forecast indicators continued to improve for 2025 and into 2026.
• U.S. GDP is expected to grow by 1.9% in 2025 and 2026, both higher than last month's survey.
• Compared to a 2.8% gain in 2024, growth in consumer spending is expected to moderate to a 2.5% pace in 2025 (which was higher than last month's survey) before easing further to a 1.7% gain in 2026 (also higher than last month's survey).
• Business investment growth is expected to slow to 3.6% in 2025 before easing further to 2.0% in 2026, both higher compared to the September survey.
• Following two years of weak growth, we look for industrial production grow by 1.1% in 2025 (a bit higher than last month) and 0.3% in 2026 (lower than in the September survey). Despite ongoing struggles with affordability, vehicle sales are expected to rise to a 16.1 million pace in 2025 (highest since 2019) before retreating to a 15.8 million pace in 2026 (both higher than last month's survey).
• Also struggling with affordability, housing starts fell to 1.37 million in 2024 and are expected to ease further to 1.35 million in 2025. Housing starts are expected to remain comparatively weak in 2026 at around 1.36 million, unchanged from last month's survey.
• The unemployment rate is expected increase slightly from 4.0% in 2024, averaging 4.2% in 2025 and rising to 4.5% in 2026, both expectations steady from last month's survey.
• Growth in consumer prices is expected to ease slightly to 2.8% in 2025 (reflecting lower growth in services prices that are expected to offset higher prices for goods). In 2026, consumer prices are also expected to grow by 2.8%.
• Expectations for the 10-year Treasury remained essentially steady for 2025 and 2026.

According to data released by the Association of American Railroads, chemical railcar loadings rose to 32,046 for the week ending October 18th. Loadings were up 1.1% Y/Y (13-week MA), up 1.7% YTD/YTD and have been on the rise for six of the last 13 weeks.

Energy Wrap-Up
• Oil prices moved higher on new US sanctions on Russia's largest oil producers - Lukoil and Rosneft.
• U.S. natural gas prices moved higher this week as the shoulder season handoff gets under way when heating demand ramps up and power sector demand eases.
• The combined oil & gas rig count rose by one to 539.

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