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Economy in Brief
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
U.S. CPI Unchanged in July with Drop in Energy Prices
Consumer prices were unchanged in July after an outsized 1.3% m/m jump in June...
U.S. Federal Government Budget Deficit Shrinks in July
The U.S. Treasury Department reported a federal budget deficit of $211.1 billion in July...
U.S. Mortgage Applications Rose Slightly in the Latest Week
Mortgage applications increased 0.2% (-62.9% y/y) from one week earlier...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Robert Brusca October 10, 2007
Survey backs off and points to weaker conditions ahead
The German chamber of commerce survey (DIHK) is still strong, make no bones about that. But the survey is now off peak and clearly pointing to softer conditions ahead.Business expectations now sit at the lowest level among the respective percentiles of the components and that reading is still in the 83rdpercentile. The overall for economics conditions is in the 91stpercentile. The remaining indexes are all in their respective low 90s.
The chart on the left also looks at changes over one two and three years. (Survey reports three observations per year; plot on the chart is quarterly.) Economic conditions are up by 35 points over three years and 31 points over two years, so most of the rise has been in the last two years. In the current year the index is up by seven points compared to 31 points over two years. This is clear evidence that the rate of optimism is slowing down. The four point drop in the current quarter has not taken the year/year rise out of the series yet. The investment and hiring intention series show a similar slowing in the optimism in the past year after an outsized gain of the year before.
DIHK shows that while readings remain elevated, a slowing of some degree is in prospect.
DIHK-Balance of Economic Opinion | |||||||
---|---|---|---|---|---|---|---|
Net Balance Readings | Change | Range Q4'91 | |||||
Q4-07 | Q2-07 | Q1-07 | Yr Ago | 2-Yr | 3-Yr | Percentile | |
Economic Conditions | 31 | 35 | 36 | 7 | 31 | 35 | 91.9 |
Business Expectations | 15 | 24 | 17 | 6 | 12 | 12 | 83.9 |
Export Expectations | 39 | 38 | 42 | 4 | 7 | 4 | 95.2 |
Investment Intentions | 13 | 16 | 13 | 6 | 19 | 24 | 93.5 |
Hiring Intentions | 9 | 12 | 8 | 9 | 23 | 26 | 93.3 |