Recent Updates
- US: Kansas City Fed Mfg Survey (May)
- US: Pending Home Sales Index (Apr)
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- Canada: Retail Trade, Payroll Employment (Mar)
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Economy in Brief
Kansas City Fed Manufacturing Index Dips in May But Remains Strong
The Kansas City Fed reported that its manufacturing sector business activity index declined to 23 in May...
U.S. Pending Home Sales Decline Sharply in April
Home buying remains under pressure...
U.S. Unemployment Claims Eased Slightly in the Latest Week
Initial claims for unemployment insurance filed in the week ended May 21 were 210,000 (-52.4% y/y)...
U.S. Durable Goods Orders Increase Modestly in April
Manufacturers' new orders for durable goods increased 0.4% during April (12.2% y/y)...
U.S. Mortgage Applications Continue to Weaken
The MBA Loan Applications Index fell 1.2% (-54.5% y/y) in the week ended May 20...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
State Coincident Indexes in April 2022
State Labor Markets in April 2022
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
by Louise Curley September 24, 2012
The German IFO business climate index fell in September to 101.4 (2005=100) from 102.3 in August. It was for the fifth straight month of decline. The climate is determined by current conditions and expectations, both of which declined. The former from 111.1 in August to 110.3 in September and the latter from 94.3 in August to 93.2 in September. The indexes of the Business Climate, Current Conditions and Expectations for the next six months are shown in the first chart. Economists had generally been looking for an improved climate due to better expectations as a result of the European Central Bank President Draghi's determination to save the Euro with, in part, an unlimited, though conditional, program of bond purchases. Expectations the financial community represented by the ZEW index had earlier become less pessimistic about the next six months as a consequence of Draghi's announcement. The business community, however, appears to be more skeptical than the financial community.
This was not the first time that the business and financial communities differed in their expectations for the next six months. The second chart shows the expectations of the financial community, as reported in the ZEW survey and the expectations of the business community as reported in the IFO survey. The data are shown in terms of percent balances. Opinions in the financial community tend to be much more volatile than those in the business community or, to put it another way, opinions in the business community are slower to change than those in the financial community. In spite of the improvement in the expectations of the financial community, there are still 18.2% more pessimists than optimists, while in the business community, there are slightly fewer, 16.9%, pessimists over the optimists.
IFO (2005=1000 | Sep '12 | Aug '12 | July '12 | June '12 | May '12 | Apr '12 |
Climate | 101.4 | 102.3 | 103.2 | 105.2 | 106.8 | 109.7 |
Current Conditions | 110.3 | 111.1 | 111.5 | 113.8 | 113.2 | 117.7 |
Expectations | 93.2 | 94.2 | 95.5 | 97.2 | 100.7 | 102.6 |
ZEW Expectations | -18.2 | -25.5 | -19.6 | -16.9 | 10.8 | 23.4 |
IFO Expectations | -16.9 | -15.0 | -12.3 | -9.1 | -2.1 | 1.6 |