Retail Sales Decline

November 19, 2002

· Chain store sales fell sharply last week, according to the BTM-UBSW survey. Sales fell 1.2% and erased virtually all the gains in the prior two weeks.

· So far in November, sales were down 0.3% from the average sales level a month earlier. October sales fell 1.5% from September.

· The October decline in chain store sales was not mirrored by declines in the BLS figures on general merchandise store sales (+1.1%) or apparel store sales (+4.0%).

· During the last ten years there has been a 38% correlation between the year-to-year percent change in monthly chain store sales and the change in nonauto retail sales.

BTM-UBSW (SA, 1977=100)	11/16/02	11/09/02	Y/Y	2001	2000	1999
Total Weekly Retail Chain Store Sales	397.1	402.0	2.0%	2.1%	3.4%	6.7%

U.S. Trade Deficit Remained Quite Deep in September

November 19, 2002

By Tom Moeller

· The U.S. foreign trade deficit remained deeper than expected in September following the record deficit of the month earlier. The previously reported August deficit was lessened slightly due to a lessened decline in exports. Consensus expectations had been for a September deficit of $37.2B

· Exports fell for the second consecutive month. The y/y comparison improved due to a sharp 7.3% m/m decline in exports last September. Capital goods exports rose a moderate 0.8% (9.6% AR, YTD) but nonauto consumer goods exports fell for the second consecutive month (-0.5% AR, YTD).

· Imports rose moderately, held back by the third consecutive monthly decline in capital goods imports. Imports of nonauto consumer goods fell 1.4% following the 5.2% August spurt.

·The refiner's acquisition cost of imported crude oil rose to $26.64 in September versus $15.95 in December. Crude oil prices rose further in October but have fallen sharply in November.

Foreign Trade	Sept	Aug	Y/Y	2001	2000	1999
Trade Deficit	$38.0B	$38.3B	$19.5B(9/01)	$358.3B	$378.7B	$262.2B
Exports - Goods & Services	-0.4%	-0.5%	6.7%	-6.2%	11.2%	2.6%
Imports - Goods & Services	-0.5%	2.4%	24.5%	-6.0%	18.3%	10.9%

CPI Rose As Expected

November 19, 2002

By Tom Moeller

· The Consumer Price Index (CPI-U) rose 0.3% last month, slightly above the YTD average of 0.2%. The gain was as expected. Excluding food and energy, prices also rose as expected, about equal to the YTD average.

· Lower tobacco prices (-3.1%) helped restrain inflation last month, though the core CPI less tobacco rose the same 0.2% as the overall core due to rounding.

· Amongst other goods, some prices firmed. Household furnishings and operation prices rose 0.3%, the first gain in five months. New vehicle prices rose 0.4% following a 0.5% September gain. On the downside were used car prices (-1.6%). Apparel prices were flat.

· Services prices were mixed. Shelter prices rose just 0.2% following the 0.1% gain in the prior month. Public transportation prices fell 1.6% for the fourth decline in five months. Education prices were flat following a 0.2% decline the month prior. Recreation prices were up 0.3%, however, and medical care services prices surged 0.7%, nearly double the elevated September gain.

· Energy prices were again strong last month led by a 3.4% (33.1% AR, YTD) rise in gasoline prices. Fuel oil prices also were strong, up 1.7%. Piped gas & electricity prices were up 0.4% for the third month.

Consumer Price Index	Oct	Sept	Y/Y	2001	2000	1999
Total	0.3%	0.2%	2.1%	2.8%	3.4%	2.2%
Total less Food & Energy	0.2%	0.1%	2.2%	2.7%	2.4%	2.1%
Goods less Food & Energy	-0.1%	0.0%	-1.1%	0.3%	0.5%	0.7%
Services less Energy	0.3%	0.1%	3.7%	3.7%	3.3%	2.7%
Energy	1.9%	0.7%	3.0%	3.7%	16.9%	3.6%
Food & Beverages	0.1%	0.2%	0.9%	3.1%	2.3%	2.1%

Chained CPI: Total (NSA)	0.2%	0.2%	1.7%	2.1%	2.0%	NA
Total less Food & Energy	0.2%	0.2%	1.7%	1.9%	1.4%	NA

NAHB Housing Index Surged

November 19, 2002

By Tom Moeller

· The National Association of Home Builders index of new home sales rose sharply last month and during the recent several months following a period of relative stability early this year. The latest rise was to the highest level in two years.

· Surveys of market conditions both currently and prospectively in the next six month improved. The current sales index improved sharply.

· During the last fifteen years there has been a 70% correlation between the annual percent change in the NAHB Index and the change in new home sales.

· For a description of the housing market index from the National Association of Home Builders, visit the NAHB website.

Nat'l Association of Home Builders	Nov	Oct	Y/Y	2001	2000	1999
Composite Housing Market Index	65	63	49	56	62	73

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