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In October, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 3.6% annual gain, down from 3.9% in September. The 10-City Composite saw an annual increase of 4.8% in October, a decrease from 5.2% in September, while the 20-City Composite rose 4.2% year-over-year, down from 4.6%. Among the 20 cities, New York again posted the highest annual gain at 7.3%, followed by Chicago at 6.2% and Las Vegas at 5.9%. Tampa exhibited the lowest annual increase at 0.4%.

On a month-over-month basis, the U.S. National Index dropped 0.2% before seasonal adjustment but increased 0.3% after adjustment. The 20-City and 10-City Composites saw 0.2% and 0.1% decreases pre-adjustment, while both rose 0.3% post-adjustment.

The National Index is at a 17th consecutive all-time high, and only Tampa and Cleveland fell during the past month. Moreover, the National Index continued to improve following the election, indicating that less political uncertainty has led to an equity market rally.

In December, U.S. manufacturing remained in contraction, with output decreasing at the fastest pace in 18 months. The S&P Global U.S. Manufacturing PMI fell to 49.4 in December from 49.7 in November, slightly below the 50 threshold that indicates a contraction in the sector. This suggests manufacturing conditions deteriorated to a greater extent than the previous month but still only at a modest rate overall.

After nearly stabilizing in November, the rate of decline in new orders increased sharply in December, with customers reluctant to commit to new projects. Production levels falling for a fifth consecutive month at an increased rate generally reflected the drop in new orders. New export orders also declined and to a greater extent than overall new business, as Europe and Australia reported weaker demand.

In addition, business confidence pared back some in December after jumping in November. Nonetheless, employment continued to rise modestly as firms anticipate the incoming administration will improve demand conditions, providing a boost to business in 2025.

Although respondents felt more optimistic due to the election result, firms expressed increased worries about inflation as input costs increased sharply. As a result, manufacturers were prompted to increase their output prices again. Meanwhile, suppliers’ delivery times lengthened to the greatest extent since October 2022, linked to staff shortages at suppliers and freight delays.

In December, the global manufacturing sector fell back into contraction to 49.6 after activity had stabilized in November. Four of the five PMI components were at levels consistent with deterioration, as output and new orders registered declines after meager growth the month prior, and supplier delivery times lengthened. Manufacturing output declined modestly in December, and with marginal gains in October and November, production stagnated in Q4.

The shift from stabilization back to contraction is reflective of downturns in the U.S. and U.K., hitting 18- and 11-month records, respectively. On the other hand, Greece and Spain posted solid performances, contrasting the deep downturn in the rest of the Eurozone, France and Germany in particular. The fastest growth occurred in India and the Philippines compared to other surveyed countries.

Data broken down by sector exhibited lower output in the intermediate and investment goods industries. However, the consumer goods sector rose for the 17th consecutive month. In the same vein, new orders also increased for intermediate and investment goods, which was only partly offset by growth in new orders for consumer goods.

In December, manufacturing employment declined for the fifth consecutive month but at a slightly slower rate than the prior month. Job cuts were reported in the Eurozone and China, while the U.S. and Japan registered employment growth. Input inflationary pressures picked up to a four-month high, while output cost inflation eased to a nine-month low. As a result, confidence remained subdued, with optimism dropping to a three-month low.

In December, Texas factory activity increased, but industry indicators were mixed. The production index rose from -0.9 to 3.9 but was still far below the last positive reading of 14.6 in October. The new orders index increased from -11.9 to -0.9, indicating demand was relatively unchanged from November. Meanwhile, the capacity utilization and shipments indexes both rose slightly but remained in negative territory at -2.5 and -2.0, respectively.

Perceptions of manufacturing business conditions improved in December, with the general business activity index rising six points to 3.4, the first positive reading since April 2022. Meanwhile, the company outlook index continued to grow for the second consecutive month, improving to 8.0. The outlook uncertainty index, which has been volatile lately, fell for the second month in a row, from 5.9 to 1.2.

Labor market indicators suggested employment and workweeks steadied in December. The employment index fell 4.6 points to 0.3, while the hours worked index also decreased from 0.3 to -0.9. More than 16% of firms reported hiring, while nearly the same percentage noted layoffs. Moderate upward pressure on prices and wages seen in the past few months eased. The wages and benefits index fell slightly from 18.6 to 17.7. Meanwhile, the raw materials prices index dropped 18 points to 10.5, the lowest reading in 17 months. The finished goods prices index fell into the negative for the first time since 2023, decreasing more than 12 points to -3.4.

The outlook for future manufacturing activity remained optimistic, but the future production index fell from 44.0 to 32.7, with 44% of firms expecting increases in output in the next six months. Similarly, the future general business activity index remained positive but fell from 31.2 to 20.6.

In December, the U.S. manufacturing sector contracted for the ninth consecutive month, with the ISM Manufacturing^® PMI rising to 49.3% from 48.4% the prior month, indicating activity contracted at a slower pace. The New Orders Index continued in expansion territory, strengthening to 52.5%. In addition, production returned to expansion after six months of contraction, registering 50.3%. Meanwhile, inventories (48.4%), employment (45.3%) and backlog of orders (45.9%) remained in contraction. The Inventories Index, although still low, ticked up from its November reading of 48.1, suggesting a desire by companies being more willing to advance order deliveries to avoid potential tariffs.

The New Orders Index increased for the second consecutive month and rose 2.1 percentage points from November. While the index hasn’t shown consistent growth since a 24-month streak of expansion ended in May 2022, respondents noted an improvement in demand, with two major sectors—computer and electronic products and food, beverage and tobacco products—reporting an increase in new orders.

The Production Index rose 3.5 percentage points in December to expansion after contracting in November. Despite expanding overall, only one of the six largest manufacturing sectors (computer and electronic products) reported increased production. Meanwhile, an expansion of new orders coupled with relatively stable production levels slowed the rate of declining backlog levels.

The Employment Index dropped 2.8 percentage points in December, contracting for the seventh consecutive month and at a faster pace. Of the six largest manufacturing sectors, none reported increased employment. Furthermore, companies continued to reduce headcounts through layoffs, attrition and hiring freezes.

The Prices Index rose 2.2 percentage points to 52.5%, indicating raw materials prices increased for the third straight month in December. Aluminum, basic chemicals, copper and natural gas registered increases, offset partly by steel, plastic resins and diesel fuel falling in price. Slightly more than 14% of companies reported paying higher prices, up barely from the percentage reported in November but down from nearly 20% in October.

Existing home sales increased 4.8% in November and jumped 6.1% from November 2023. Housing inventory declined to 1.33 million units, reflecting a 2.9% decrease from October but up 17.7% from last year. The median existing home price was $406,100, up 4.7% from last year, with all four U.S. regions reporting price increases.

Single-family home sales rose 5.0% from October, with the median price increasing 4.8% from November 2023 to $410,900. Condo and co-op sales grew 2.6% in November but declined 4.9% from the previous year, with the median price up 2.8% from the prior year to $359,800.

Homes were typically on the market for 32 days in November, up from 29 days in October and 25 days in November 2023. First-time buyers made up 30% of sales in November, up slightly from 27% in October but down from 31% in November 2023. All-cash sales accounted for 25% of transactions in November, down from 27% both in October and November 2023. Meanwhile, investors or second-home buyers represented 13% of homes purchased in November, down from 17% in October and 18% a year ago. Distressed sales, including foreclosures and short sales, represented 2% of purchases in November, unchanged from October and last year.

Building permits increased 6.1% in November but fell 0.2% over the year. Permits for single-family homes rose 0.1% in November but declined 2.7% over the year. Permits for buildings with five or more units grew 22.1% from October and 4.8% over the year.

In November, housing starts decreased 1.8% over the month and 14.6% over the year. Additionally, starts for single-family homes increased 6.4% from October but fell 10.2% from November 2023. Meanwhile, starts for buildings with five or more units plummeted 24.1% from October and 28.8% over the year.

Housing completions decreased 1.9% from October but jumped 9.2% from November 2023. Single-family home completions increased 3.3% from October and 7.0% over the year. Completions for buildings with five or more units dropped 11.1% over the month but rose 13.6% from November 2023.

Manufacturing activity fell slightly in the Tenth District in December, while expectations for future activity rose. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. The month-over-month decline in activity was driven primarily by durable goods falling modestly, particularly wood, mineral and primary metal manufacturing, while nondurable goods activity was flat. Most month-over-month indexes were negative.

Both production and new orders fell slightly, while employment ticked up. The backlog of orders continued to decline to -22. The year-over-year composite index for factory activity ticked up slightly but was still negative. Capital expenditures, prices received and prices for raw materials all increased year-over-year while other indexes declined. The future composite index rose from 11 to 18, driven by high expectations for future production, shipments and new orders. Manufacturers also expected employment and capital expenditures to grow in the next six months.

This month, survey respondents were asked about worker productivity. More than half of firms (57%) reported that productivity has not changed in the past year, while 19% reported less productive workers and 15% reported more productivity. Firms were also asked about their reliance on immigrant workers. Nearly 70% said they were not reliant on immigrant workers, while 12% said they were slightly reliant, 13% were somewhat reliant and 6% were very reliant.

In December, Philadelphia’s regional manufacturing activity declined overall. The index for current general business activity remained negative and fell further from -5.5 to -16.4. Just 16% of firms reported increased activity this month, while nearly 33% saw decreases and nearly 47% experienced no change. The indexes for new orders and shipments turned negative and declined to -4.3 and -1.9, respectively. On the other hand, firms continued to report an increase in employment after steady job gains last month, with the employment index edging down slightly from 8.6 to 6.6. The average workweek index reversed last month’s surge, falling from 17.4 to -8.2.

Price indexes diverged, with the prices paid index increasing and the prices received index decreasing, indicating an overall rise in prices. The prices paid index moved up from 26.6 to 31.2. The prices received index remained significantly lower than the prices paid index at 7.3, exhibiting how manufacturers are eating a sizable portion of those higher costs paid.

Looking ahead, most future indicators decreased but remain elevated after two months of significant increases. The index for future general business activity fell 26 points from 56.6 to 30.7, indicating a leveling off of optimism among firms. A higher proportion of firms still expected increases in activity. Additionally, the future new orders and shipments indexes fell but were above their historical averages. While firms still expect employment to grow, the index for future employment ticked down from 34.2 to 32.1. The capital expenditures index also fell from 24.9 to 18.8. The future prices paid index declined 7 points to 56.4, while future prices received rose 10 points to 58.4.

Manufacturing activity in New York state held steady in December, with the headline general business activity index retreating 31 points to 0.2 after rising sharpy in November. In December, the new orders index decreased to 6.1, falling 21.9 points, while the shipments index fell 23.1 points to 9.4, reflecting modest gains in both orders and shipments. Unfilled orders improved slightly to -8.4 from -10.3, while inventories grew from 1.0 to 10.5. Delivery times shortened, falling 10.5 points to -7.4, while supply availability was little changed, rising to 1.1.

Employment decreased slightly in December, with the index for the number of employees falling from 0.9 to -5.8. The average employee workweek also fell, from 6.1 to -3.9, signaling a decline in both employment and hours worked. Input and selling price increases moderated, as reflected in the prices paid index falling 6.7 points to 21.1 and the prices received index decreasing 8.2 points to 4.2.

Manufacturers felt fairly optimistic about the months ahead, but less positive than the prior month. The index for future business activity decreased to 24.6, with nearly 42% of respondents expecting conditions to improve over the next six months. Although inventories are expected to continue growing, the anticipated increase in new orders dropped from the prior month, falling 9.6 points to 21.8 in December.