Haver’s data services are provided through the DLX platform; delivering tools for data management, visualization, modeling and publishing. DLX is designed to increase productivity and integrates with Excel, PowerPoint, and major statistical software packages; MatLab, R, Python, SAS, E-views and Stata. DLX component application DLXVG3 offers precision graphics, publishing, analytic tools, and easy navigation for all Haver databases.

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Chart and compare multiple data series with accompanying data table of values

Advanced functions (growth rates, moving averages, aggregation, seasonal adjustment)

Analytical tools (cycle charts, scatterplots, trend lines, and recession shading)

Complete graph customization (axis scaling, sizing, formatting, styles)

Excel and PowerPoint direct export and complete integration (dynamic spreadsheets and presentations update on a click)

DLXVG3

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DLX Add-ins for all versions of Excel provide instant data updates of entire workbooks

Use DLXVG3 to locate data series codes from within any file, easily creating new spreadsheets for analysis

Edit date ranges, archive data, apply functions

Excel Spreadsheet Add-ins

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Haver offers timely, accurate, and professionally supported data via an update service, meeting the strictest demands of the institutional research community

AutoUpdate provides fast and reliable data updates within seconds of source releases

Timer service runs continuously on an hourly basis when DLX is running

Manual updates offer clients the independence to update data retrievals on any desired schedule

All database updates retrieve only the data series that have changed and send only the data points that have been updated; including revisions

Timely Updates

DLX software tools to convert data into many different formats needed for diverse analytical frameworks

Haver supports a DLX API permitting clients to leverage and build processes with DLX data

Database Compatibility

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Data Link Express

Platform Independent site delivering DLX Databases across any workstation or device.

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HaverView

[Matlab](http://matlab.com) by The MathWorks lets you access, visualize, and analyze historic time-series data to identify patterns or uncover complex relationships. From within a single environment you can:

- Access data from multiple sources including files, spreadsheets, databases, data providers, and the Web
- Store data in financial time-series objects to simplify data management, data transformation, missing-data handling, and date-math calculations
- Perform technical analysis with moving averages, oscillators, stochastics, and indices
- Create custom analysis routines and visualizations or animations to capture, present, and share your analysis processes and discoveries
- Customize your analysis environment with advanced functionality from signal processing, statistics, or econometrics

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MATLAB

[Stata Data Analysis and Statistical Software](https://www.stata.com) by StataCorp LP is an integrated statistical package designed for researchers of all disciplines. It provides the ability to do data analysis, data management and graphics and has features such as multiple imputation, factor variables, GMM, competing-risks regression, state-space modeling, predictive margins, and more.

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Stata

[SAS](https://www.sas.com) provides an integrated environment for predictive and descriptive modeling, data mining, text analytics, forecasting, optimization, simulation, experimental design and more. From predictive analytics to model deployment and process optimization, SAS provides a range of techniques and processes for the collection, classification, analysis and interpretation of data to reveal patterns, anomalies, key variables and relationships, leading ultimately to new insights and better answers faster.

[SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) is a seamless interface between Haver and SAS data processing that enables SAS users to read economic and financial time series data that reside in a Haver Analytics DLX (Data Link Express) database. [SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) requires both SAS/ETS and Base SAS Software.

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[RATS (Regression Analysis of Time Series) Econometric Software](https://estima.com) by Estima is a leading econometrics and time-series analysis software package. It provides ability to do linear and non-linear least squares, forecasting, SUR and ARIMA models and in addition, supports advanced techniques such as GMM, ARCH and GARCH models, state space models, and more.

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RATS

Session 1: Bootcamp Part 1

Visualization with GGPlot2 and data analysis

Session 2: Bootcamp Part 2

Session 3: Univariate Models Part 1

Session 4: Univariate Models Part 2

Session 5: Vector Autoregressions

Session 6: Cointegration and error-correction models

Estimating, evaluating, and forecasting ARIMA models

Understanding the concept of non-stationarity and testing for unit roots

Estimating autoregressions, granger causality tests, and impulse response functions

Understanding the concept of cointegration and testing using the Enger-Granger test

Estimating and forecasting with vector error correction models

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Teaches econometrics and forecasting at the University of Colorado Denver. He has over 15 years of econometric experience in both the private and public sector.

Daniel L. Jerrett, Ph.D.

Abdel M. Zellou, Ph.D.

Bootcamp and Econometric Tools 1 & 2

Econometrics Training: Applied Time Series in R

Session 5: Multivariate Models Part 1

Session 6: Multivariate Models Part 2

Haver partners with Clear Future Consultants to offer a two week immersive online course introducing participants to the power of the Python programming language. This applied hands-on training develops statistical economics skills with a concentration on economics and finance.

Gain proficiency in building modern time-series models in Python through real-world applications. Designed for professionals in both the public and private sector, the course does not require prior experience, assuming only that participants have a basic understanding of regression and statistical concepts.

Proficiency working in Jupyter notebooks and the Python environment

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Remote Training: Applied Time Series in Python

Ratio of job openings to the number unemployed in the US now below pre-pandemic level

Carol Stone, CBE

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Initial claims for unemployment insurance were 227,000 seasonally adjusted, in the week ended August 31, down 5,000 from the prior week’s 232,000; that was revised slightly from 231,000 reported before. The latest week’s 227,000 was somewhat less than the Action Economics Forecast Survey expectation of 232,000. The four-week moving average of initial claims was 230,000 in the August 31 week, down from 231,750 in the August 24 week.

The total number of Insured unemployment beneficiaries was 1,838,000 seasonally adjusted in the week ended August 24, down from 1,860,000 the prior week; this number is also known as continuing claims. The earlier amount was revised down from 1,868,000 initially reported. The four-week moving average of continuing claims was 1,853,000 in the August 24 week, down from 1,861,250 through the August 17 week.

The insured unemployment rate, which is the total number of beneficiaries as a percent of covered employment, held at 1.2% in the August 24 week; that rate has indeed held at the amount continuously since March 11, 2023.

Economic conditions vary widely across states and territories. Gauged by the number of unemployment insurance beneficiaries as a percent of covered employment, in the week ended August 17, the highest insured unemployment rates were in New Jersey (2.77%), Rhode Island (2.53%), Puerto Rico (2.33%), California (2.15%) and Minnesota (1.97%).  The lowest rates were in South Dakota (0.25%), Kansas (0.36%), Florida (0.41%), North Dakota, North Carolina and Kentucky (each 0.44%) and Virginia (0.45%).  Rates in other notable states include Pennsylvania (1.80%), New York (1.76%), Texas (1.18%) and Ohio (0.77%).  These state rates are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Initial claims again somewhat less than forecast.
- Total beneficiaries down 22,000 in August 24 week.
- Insured unemployment rate still stands at 1.2%.

U.S. Initial Claims for Unemployment Insurance Ease 5,000 in August 31 Week

Robert Brusca

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Retail sales in the European Monetary Union (EMU) in July rose by 0.1% after falling 0.4% in June and rising 0.1% in May. The 0.1% uptick in retail sales volumes is, of course, quite marginal and it comes amid a cluster of other weak readings. The 12-month growth rate of sales volumes is zero. The annualized growth rate of volumes over six months is 0.6%; the annualized change in volumes over three months is -0.8%. EMU retail sales obviously are weak and have been weak for some time - the volume statistics are quite disappointing.

**QTD sales volumes fall**
In the quarter-to-date, euro area retail sales volumes are falling at a 0.8% annual rate. Of course, it's early in the quarter as it's only July, but that figure represents the July growth rate over the Q2 centered average level of retail sales in the second quarter period - it's a poor start to the third quarter.

**Food for thought; some for growth**
Food and beverage sales indicate slightly better results with still erratic sales over the last three months, but food and beverage volume sales from 12-months to six-months to three-months are transitioning into growth and even into acceleration. And the quarter-to-date food and beverage volume statistics are rising by 1.3% at an annual rate.

**Motor vehicle registrations have run out of gas**
Motor vehicle registrations fell by 3.6% in July after rising by a robust 7.1% in June which followed a 10.8% plunge in May. These statistics have been quite choppy and once again are not reassuring. The sequential growth rates reveal motor vehicle sales to be even worse as they are decelerating and imploding. Motor vehicle registrations over 12 months are falling at a 0.3% annual rate, but over six months they're falling at a 13.8% annual rate and over three months they're falling at a 28.2% annual rate; these are far from reassuring trends. In the quarter-to-date, motor vehicle registrations are falling at a 16.7% annual rate.

**European country-level sales look better**
Turning to retail sales volumes across the monetary union and other European countries, we find a proliferation of month-to-month sales increases in July. Eight countries are listed in the table, only one of them, Portugal, shows a volume decline in July while Denmark has unchanged results, and the rest show gains. However, these numbers are coming from June in which five of these countries showed declines month-to-month, while in May only one country showed a month-to-month decline, which was Spain.

**Sequential growth across countries**
Over three months most of the countries in this table show sales increases; there's one exception over three months, Norway, with sales volumes declining 1.7% at an annual rate. Over six months all countries show increases except the Netherlands and Belgium. Over 12 months increases are posted in five of these reporting countries with three of them showing declines. The declines are logged by Belgium, which has a 4.6% decline over 12 months, by Sweden, which has a 0.8% decline over 12 months, and by Norway, which has a 0.5% decline over 12 months. Among the countries in the table, only Sweden’s sales volumes accelerate and there the acceleration is not very impressive, from -0.8% over 12 months to a growth rate of 0.2% over six months, to a pace of 0.9% at an annual rate over three months. While some European countries are showing more solid and consistent growth rates in retail sales such as Spain, Portugal, Denmark, and the United Kingdom - all of which show sales increases over each of the horizons - in general, sales growth has not been impressive. The year-over-year growth rates are strongest for Denmark at 3.9%, the Netherlands at 3.4%, followed by Portugal at 2%. These are all volume growth figures and so they are relatively impressive in their own right, but for the most part, acceleration in sales volumes is not underway.

**Quarter-to-date trends**
In the quarter-to-date, only two of these countries showed declines in progress and that's Portugal the 0.9% annual rate decline in the quarter-to-date and Norway with a 7.1% annual rate decline in the quarter-to-date. The strongest growth percolating in the quarter-to-date is the Netherlands at 5.4%, Belgium at 4.6%, the U.K. at 4.2%, and Spain at 4.2%. So, there is some life in some of these reporting countries in retail sales, but the trick will be to see if these trends are able to hold up and extend themselves.

**Very weak since COVID struck**
Putting these sales trends in a broader perspective, we look at their percentage changes since just prior to COVID's arrival. Calculating growth back from January 2020, we're looking at a period of about 4 1/2 years. Over that span, Belgian sales are still lower by 8.8%, Sweden’s sales are lower by 2%, in the U.K. sales are lower by 1.9%, in Norway they are lower by 2%. Sales are higher by 3.1% in the Netherlands, and by 3% in Spain; they're higher by 1.3% in Denmark. The data for Portugal don't extend back that far. However, these are poor results. For the euro area, sales volumes are up by 1.9% over this span - less than one-half of one-percentage point per year on average. Food and beverage volume sales are lower by 1.5%. In addition, auto registrations over this period for the EU-15 countries show a decline of 15.9%. The consumer has been a weak force for growth during this period. And it's not surprising since COVID struck, then there was the outbreak of war as Russia rolled into Ukraine.

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**Summing up**
In the early part of the period, inflation flared sharply, since then, inflation has come back down and the ECB, as well as the Bank of England, have begun to reduce interest rates. But the interest rate reduction has only been one step and neither of these central banks has taken a second step nor they're promising to take one anytime soon. Monetary policy remains a wild card depending on what happens with inflation; while inflation had declined sharply after its disappointing rise during the COVID, it did recede. For the time being, any follow-through on inflation reduction seems to have been stopped. In Europe and in the United States, central banks are waiting to see if inflation picks back up. For the period ahead, we are playing the waiting game by watching and waiting to see what central banks do.

United Kingdom

July Retail Sales Tick Higher in EMU: Trends Are Weak

Tom Moeller

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The Autodata Corporation reported that U.S. light vehicle sales dropped 5.7% (-2.3% y/y) to 15.13 million units (SAAR) in August following a 4.0% July rise to 16.04 million. It was the lowest level of sales since January. So far in Q3, the 15.59 average level of sales follows 15.86 million units in Q2 and 15.44 million in Q1. Consumers buying power recently has been strained. The decline in August vehicle sales accompanied 1.1% y/y growth in real disposable income through July which compared to 3.8% growth logged last year. Slower income growth accompanied a rise in the unemployment rate to 4.3% in July from 3.5% twelve months earlier.

Sales of light trucks declined 6.0% (-0.9% y/y) during August to 12.14 million units (SAAR) and more than reversed their 3.4% July rise. Purchases of domestically-made light trucks weakened 5.2% (-2.9% y/y) to 9.23 million units, after rising 1.1% in July. Sales of imported light trucks declined 8.2% (+5.8% y/y) to 2.91 million units following July’s 11.2% increase.

Trucks 80.2% share of the light vehicle market last month compared to 80.5% in July and 79.1% in August of last year. The share was 79.4% during all of 2023.

Auto sales fell 4.5% (-7.7% y/y) to 2.98 million units (SAAR) in August following a 6.1% July rise. Purchases of domestically-produced cars weakened 5.7% (-4.4% y/y) last month to 2.16 million units after rising 4.6% in July. Sales of imported autos edged 1.2% lower (-14.4% y/y) to 0.83 million units after rising 12.0% in July.

Imports' share of the U.S. light vehicle market declined to 24.7% in August from 25.0% in July. It compared to a May 2023 low of 22.3% and reached a high of 26.3% in November of last year. Imports' share of the passenger car market rose to 27.9% last month from 26.9% in July. It reached a high of 37.9% in September 2021. Imports' share of the light truck market eased to 24.0% last month from 24.6% in July.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Both light truck and passenger car sales decline with strained consumer buying power.
- Domestic vehicle sales fall along with imports.
- Imports' market share slips.

U.S. Light Vehicle Sales Weaken in August

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Job openings declined 237,000 (-12.9% y/y) during July to 7.673 million after falling 320,000 during June and rising 311,000 in May, according to the Job Openings and Labor Turnover Survey. At the lowest level since January 2021, the number of job openings have been trending downward since early-2022. The latest reading is well below the recent peak of 12.182 million reached in March 2022. The job openings rate fell to 4.6% from 4.8% in June. It remains well below a high of 7.4% in March 2022 and is the lowest since December 2020. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

Private sector openings fell 145,000 in July (-13.7% y/y) to 6.749 million after declining 298,000 in June. The private sector job openings rate eased to 4.7% from 4.8% in June. It was 5.5% twelve months earlier and 7.9% at its peak in March 2022. The level of leisure & hospitality openings eased 0.2% (-22.0% y/y) but information openings increased 0.9% (-28.5% y/y). Private educational & health service openings weakened 10.9% (-19.0% y/y) but financial sector openings improved 0.2% (0.4% y/y). Transportation & utilities openings declined 13.2% (-29.9% y/y) while openings in professional & business services rose 13.3% (13.7% y/y). Manufacturing job openings increased 6.5% (-5.6% y/y) but construction openings fell 17.1% (-29.3% y/y). Mining & logging openings declined 4.5% (-30.0% y/y). Government sector openings declined 9.1% (-6.2% y/y).

Private sector hiring increased 5.8% in July (-3.5% y/y) to 5.185 million after falling 7.4% in June. The private sector hiring rate increased to 3.8% from 3.6% and compared to 4.0% twelve months earlier. It has been trending lower from its 7.1% high in May 2020. Leisure and hospitality hiring strengthened 20.9% (-7.9% y/y). Financial sector hiring rose 6.7% (23.7% y/y) and professional & business services jobs gained 0.8% (-8.1% y/y). Trade, transportation & utilities hiring eased 0.3% (-1.3% y/y) while educational & health services jobs rose 1.9% (-1.6% y/y). Information sector hiring weakened 1.3% both m/m and y/y. Construction sector hiring surged 14.9% (-2.1% y/y) and factory sector hiring improved 6.0% (-11.4% y/y). Government hiring declined 3.2% (-6.9% y/y) in July, reflecting a 20.5% fall (-32.6% y/y) in federal government hiring.

Total job separations rose 6.6% (-4.0% y/y) to 5.420 million in July after falling 5.8% in June. The separation rate rose to 3.4% from 3.2%. Private separations increased 6.4% (-3.8% y/y) after a 5.4% June decline. Manufacturing sector separations held steady (-14.7% y/y) but construction sector separations rose 16.3% (-9.9% y/y). Trade, transportation & utilities separations fell 4.3% (-3.5% y/y) while leisure & hospitality separations rose 13.5% (-5.5% y/y). Government sector job separations rose 9.8% (-6.9% y/y).

Private sector layoffs increased 13.3% to 1.675 million (5.1% y/y) in July led by a 55.0% jump (17.3% y/y) in the leisure & hospitality sector. Financial sector layoffs also surged 46.0% (49.0% y/y). Trade, transportation & utilities layoffs fell 6.4% (+16.4% y/y). Government layoffs rose 6.2% to 86,000, but were down 17.3% y/y. The private sector layoff rate overall rose to 1.2% and reversed the June decline to 1.1%. It has been trending sideways for a year. The government sector layoff rate was 0.4%, up from a low of 0.3% in June. Private sector quits increased 1.4% to 3.090 million (-9.4% y/y) following sharp declines in three of the prior four months. Government quits increased 12.0% to 186,000 (-8.4% y/y). The private sector quits rate was steady at a reduced 2.3%, down from a high of 3.3% in April 2022.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

**Impact of inflation shocks on foreign exchange rates reflects central bank stature** from the Federal Reserve Bank of Dallas can be found [here](https://www.dallasfed.org/research/economics/2024/0903).

- Openings post fifth decline this year, remaining well below 2022 high.
- Hiring recovers much of June decline but remains sharply lower y/y.
- Job separations surge as layoffs jump.

U.S. JOLTS: Job Openings Decline Sharply in July; Hiring Improves

Sandy Batten

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Total factory orders rebounded in July, rising 5.0% m/m (2.2% y/y) after having fallen 3.3% m/m in June. A 4.9% increase had been expected in the Action Economics Forecast Survey. The June decline and the July rebound were due completely to swings in aircraft orders. Aircraft orders rebounded by more than 4385% m/m in July after plummeting 97% m/m in June. Excluding aircraft, orders were essentially unchanged in July and edged up 0.1% m/m in June. Orders excluding transportation rose 0.4% m/m in July (2.1% y/y) after a 0.1% m/m gain in June.

Again, reflecting the swing in aircraft orders, durable goods orders jumped 9.8% m/m (1.3% y/y) July following a 6.9% m/m decline in June. Transportation equipment orders surged 34.7% m/m in July after a 20.6% m/m decline in June. Apart from transportation, other orders were generally soft. Orders for primary metals fell 0.9% m/m in July, their third consecutive monthly decline; machinery orders declined 0.2% m/m; orders for computers and electronic products decreased 0.3%; and orders for electrical equipment and appliances fell 0.6% m/m.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.8% m/m (+3.0% y/y) in July after having been unchanged in June. The July gain was led by a 1.1% m/m increase in petroleum and coal products. Chemical products orders increased 0.7% m/m while orders both for paper products and for food products increased 0.6% m/m. By contrast, orders for textiles fell 0.8% m/m and orders for apparel declined 0.7% m/m.

Total shipments increased 0.9% m/m (2.9% y/y) in July after posting a 0.6% m/m gain in June. Shipments of durable goods increased 1.1% m/m (2.8% y/y) in July on top of a 1.2% monthly increase in June. Again, the rebound in transportation shipments (in fact, just aircraft) was the primary factor behind the overall increase. Apart from aircraft shipments, the remaining shipments were lackluster in July (+0.1% m/m), led by a 1.0% m/m decline in auto shipments, a 7.4% m/m drop in light truck shipments, and a 0.7% m/m decrease in both machinery shipments and furniture shipments.

Unfilled orders edged up 0.2% (4.2% y/y) in June after falling 1.4% m/m in June. Excluding unfilled transported orders, the remaining unfilled orders were unchanged in July. Unfilled transportation orders increased 0.3% m/m in July following a 2.2 m/m decline in June. There are no unfilled orders for nondurable goods.

Inventories increased 0.1% (0.8% y/y) in July following a 0.1% m/m decline in June. Inventories of durable goods edged up 0.1% m/m in July while inventories of nondurable goods were essentially unchanged.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Total orders rose 5.0% m/m in July after a 3.3% decline in June.
- Aircraft orders surged more than 4385% after having plummeted in June.
- Total shipments increased 0.9% m/m.
- Unfilled orders rose 0.2% m/m; inventories edged up 0.1% m/m.

U.S. Factory Orders Rebound in July

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The U.S. trade deficit in goods and services (BOP basis) widened to $78.8 billion in July, the largest deficit since June 2022, from a downwardly revised $73.0 billion in June (previously $73.1 billion). The Action Economics Forecast Survey expected a deficit of $78.7 billion in July. Exports rose 0.5% m/m (5.0% y/y) last month following a 1.7% m/m increase in June. Imports jumped 2.1% m/m (8.4% y/y) following a 0.7% m/m rise in June.

The goods deficit (Census basis) narrowed to $102.8 billion in July from $96.5 billion in June. This was the largest goods deficit since May 2022. Total goods exports were essentially unchanged in July (+4.4% y/y) after a 2.8% m/m increase in June. Exports of capital goods posted a solid 3.4% m/m increase in July as also did “other” exports. Exports of foods, feeds and beverages increase 1.3% m/m. By contrast, auto exports collapsed 11.2% m/m, their largest monthly decline since the pandemic (April 2020) and exports of nonfood consumer goods excluding autos tumbled 3.6% m/m, their largest monthly decline since October 2023.

Total goods imports jumped 2.3% m/m (+8.3% y/y) in July following a 0.8% monthly gain in June. The increase in July was led by a 5.1% m/m gain in imports of industrial supplies and a 4.1% m/m increase in capital goods imports. Auto imports slipped 0.5% m/m while the miscellaneous category called “other” declined 4.3% m/m.

The services surplus narrowed for the second consecutive month to $24.3 billion in July from $24.5 billion in June and $24.9 billion in May. Services exports edged up 0.7% m/m (7.0% y/y) after having been essentially unchanged in June. Exports of maintenance and repair services rose 2.1% m/m in July; exported construction services increased 3.3% m/m; exported financial services gained 1.0% m/m; exports of government goods and services soared 17.3% m/m, its largest monthly gain since July 2009.

Imports of services increased 1.1% m/m (8.9% y/y) in July versus a 0.5% monthly increase in June. The July increase was led by a 10.9% m/m jump in charges for use of intellectual property, the largest monthly gain since February 2022. Insurance imports rose 2.3% m/m in July; transport imports increased 2.1% m/m; construction services imports gained 1.9% m/m. Travel imports fell 1.8% m/m, their first monthly decline in three months.

The real (inflation-adjusted) goods trade deficit (customs value) widened to $97.6 billion in July from $91.4 billion in June. This was well below the $93.0 billion average monthly real trade deficit in the second quarter, indicating that net exports are on course to be a drag on overall real GDP growth in Q3. They subtracted 77 basis points in Q2 and 65 basis points in Q1.

The U.S. goods trade deficit with China widened to $27.2 billion in July from $22.3 billion in June with exports to China plummeting 7.8% m/m while imports from China jumped 11.3% m/m. The goods trade deficit with the European Union widened to $18.4 billion in July from $18.0 billion in June while the deficit with Japan widened to $5.4 billion in July from $4.9 billion June.

The international trade data, including relevant data on oil prices, can be found in Haver’s **USECON** database. Detailed figures on international trade are available in the **USINT** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Trade deficit widened to $78.8 billion in July, the widest since June 2022.
- The goods deficit widened to $103.1 billion while the services surplus narrowed slightly to $24.3 billion.
- Exports edged up 0.5% m/m while imports jumped 2.1% m/m.
- The real deficit widened further, indicating that net exports may be a further drag on GDP growth in Q3.

U.S. Internation Trade Deficit Widens in July

Kathleen Stephansen, CBE

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Mortgage loan applications rose1.6% (25.5% y/y) in the week ended August 30, after an unrevised increase of 0.5% (20.1% y/y) in the week ended August 23. Applications for home purchase loans rose 3.3% (-4.1% y/y), following a rise of 0.9% (-9.0% y/y) during the prior week. Applications to refinance a mortgage eased 0.3% (+93.6% y/y) in the week ended August 30, after a decline of 0.1% (+85.2% y/y) in the week ended August 23. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The effective interest rate on 30-year fixed-rate loans eased 1bp to 6.59% in the week ended August 30 from 6.60% in the week ended August 23, and reaching the lowest rate since the first week of May 2023. The recent high of 7.48% was reached at the end of April. The effective rate on 15-year fixed-rate loans rose 9bps to 6.14% in the latest week from 6.05% the week before. The rate on 30-year Jumbo loans edged down 3bps to 6.83% in the week ended August 30 from 6.86% in the week ended August 23, while the rate on 5-year ARM loans edged up 4bps to 6.26% in the latest week from 6.22%. The recent high of 7.31% was reached last October.

The share of applications to refinance an existing loan dropped to 46.4% in the week ended August 30 from 46.6% in the week of August 23. The latest figures are increased from a low of 27.2% averaged in April 2023. The share of applications for ARMs was unchanged at 5.5% last week. A recent low for the ARM share was 5.4% in the week ended January 5.

The average size of mortgage loans rose 1.6% (4.6% y/y) to $378,200 in the week ended August 30 after a decline of 0.1% (+1.3% y/y) to $372,100 in the week ended August 23. The average size of a loan to purchase a home edged up 0.1% (4.5% y/y) to $427,400 last week from a gain of 0.2% (3.4% y/y) to $427,000 in the prior week. The size of a refinanced loan rose 3.9% (27.5% y/y) to $321,200 in the week ended August 30 after a decline of 0.4% (+18.7% y/y) to $309,200 in the week ended August 23.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Purchase applications rose & refinancing applications edged down in the last week of August.
- Interest rate on 30-year fixed-rate loan remains near May 2023 low.
- Average loan size rises.

U.S. Mortgage Applications Rose in the Last Week of August

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The Baltic Dry Index continues to signal ongoing improvement in global trade

Standard and Poor’s composite PMI readings for August improved globally in 19 of 25 reporting countries. This widespread improvement showed far better improvement in breadth than what has been registered by manufacturing sectors among countries that report those data.

The August result was far better than July when only 10 of 25 reporting countries improved month-to-month. Similarly, June was a weak month with only seven composite PMIs improving month-to-month.

Despite the strong improvement in August, the three-month average finds improvement compared to six-months ago in only 7 reporting units. However, the sequential averages also have a stronger history as the six-month average shows that only 6 reporting units were weaker compared to 12-month averages. The three-month comparison is to a six-month period that saw broad gains. Even so, the 12-month comparison to 12-months ago shows improvement in only 12 of the reporting units, approximately half of them.

Over 12 months, most large/developed economies performed worse including the United States, the European Monetary Union, specifically, Germany, France, Italy, and Spain, as well as Japan. China worsened as well. The United Kingdom was an exception, improving over 12 months compared to 12-months ago.

The unweighted average PMI readings for a group, consisting of the U.S., the U.K., and the European Monetary Union, shows steady improvement from June, to July, to August. Despite uneven sequential results the unweighted average PMIs also have improved from their 12-month averages to their six-month average, to their three-month average.

The BRIC countries excluding Russia (BIC) show steady monthly improvements and show consistent, strong readings above or just below the 55 mark for over three months, six months, and 12 months.

The overall averages of the PMI readings show a tendency to increase but not a clear sequential move in that direction. The overall median readings show the same general reading and trend.

On a composite PMI basis, the number of areas with readings below 50, indicating overall economic contraction, have been reduced to four in August. They total 4 over three months and six months compared to 6 over 12 months. Few economies are showing overall contraction on this measure. While there were as many as eight contracting in July and in June, generally over three and six months the number showing contraction has been small.

The far-right hand column gives the queue percentile standings which place the August readings in an ordered queue of standings in the last 4 ½ years of data. These readings show 12 reporters with current standings below the 50% mark. A reading below 50 would put them below their median over this span. The average reading for the entire group is for a queue standing at 51.8% while the median is at 51.0%. Over this period the 12 readings that are below 50% are simply below their respective medians reading; they do not indicate contraction because these are rankings based on queue standings rather than diffusion data as in the first six columns of data in the table.

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**Summing up**
The bottom line is that a global economy is being held aloft by its service sector which continues to plug away while manufacturing has been weaker and struggling. The outlook depends importantly on what central bank policy does, and central banks are watching inflation developments closely. Inflation, that had spiked during the COVID, settled down and opened the door for central banks to start easing programs. Which was done in most money center countries. However, inflation progress has stopped. Meanwhile, global geopolitical tensions, risks and warfare remain in play obscuring the outlook as escalation is a palpable threat to the outlook.

S&P Composite PMIs Improve on Better Service Sectors

Tian Yong Woon

In this week's newsletter, we explore Asia’s manufacturing activity, with a particular emphasis on the semiconductor sector. While that sector continues to expand overall, some economies are experiencing a slowdown in growth (Chart 1). We also assess the growing role of electronics in Asian exports, highlighting Taiwan's significant increase in electronics export share and South Korea's ongoing recovery in this area (Chart 2). Focusing further on the electronics sector, we note an interim stall in global semiconductor sales growth, although it remains robust with double-digit increases (Chart 3). We then delve into specific Asian economies, starting with Taiwan. Here, we identify dual drivers of industrial production: consumer electronics and electronic parts, including semiconductors (Chart 4). Next, we examine Malaysia, which has developed a strong semiconductor ecosystem with expertise in back-end processes and is more recently making headway in front-end areas like chip design (Chart 5). Finally, we consider India’s emerging semiconductor sector, which, despite being in its early stages, is poised for growth thanks to recent initiatives aimed at bolstering domestic prowess (Chart 6).

**Asia’s manufacturing complex**
The manufacturing sector across much of Asia continues to expand, although recent months have seen a deceleration in the rate of growth for some economies. As illustrated in Chart 1, Taiwan's manufacturing PMI peaked at 53.2 in June 2024 but subsequently moderated to 51.5 in August, reflecting a significant slowdown in growth for output and new orders. A similar trend is evident in Southeast Asia (ASEAN), where the PMI has recently edged closer to the neutral level of 50. Within ASEAN, Indonesia has been a notable drag, with its PMI slipping into contractionary territory in July, while Vietnam's PMI has remained above the regional average. In contrast, South Korea's manufacturing sector has shown robust momentum, with output growth reaching a 40-month high in August, thereby supporting the overall manufacturing PMI for the country.

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A closer look at Asia’s manufacturing sector reveals significant trends in electronics exports, as illustrated in Chart 2. Many Asian economies remain heavily dependent on electronics for export revenue, with some increasing their reliance over recent years. This highlights the crucial role of electronics in the overall economic growth of these countries. For example, Taiwan's share of electronics in its export revenue surged to over 35% in recent years, up from just above 28% in late 2021. In contrast, South Korea’s electronics export share peaked slightly above 36% in late 2018 but fell to below 28% in 2023 before partially recovering. Malaysia, on the other hand, saw its electronics export share exceed 41% in late 2023, though it has since moderated. Beyond these export shares, the specifics of each economy's electronics export mix vary significantly—a topic we will delve into in subsequent segments.

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Next, we delve into the semiconductor industry, which has been making headlines this year due to its pivotal role in the global AI-driven surge. Although worldwide semiconductor sales remain robust, with double-digit growth rates, recent months have seen this growth level off, hovering just below 20%, as illustrated in Chart 3. Asia continues to lead in semiconductor sales, accounting for over 60% of the global market. However, growth in this region appears to have plateaued, while the Americas have rapidly increased their market share. Notably, the Americas surpassed China in semiconductor sales for the first time since China’s sales data was separately reported in 2015. Looking ahead, we can expect ongoing shifts in the semiconductor landscape. Factors contributing to these changes include the US's aggressive strategy to onshore chip production through the CHIPS Act, export controls impacting China's capabilities, and ASEAN countries' efforts to ascend the semiconductor value chain—a topic we will explore further below.

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**Economy-specific developments**
The electronics sector remains a major driver of Taiwan's economy. This extends beyond semiconductors to include computers and other consumer electronics, which have experienced even faster industrial production growth, as illustrated in Chart 4. In addition to the direct revenue from electronics exports, Taiwan also gains from other benefits, including job creation and enhanced expertise. However, the current tech upcycle is attracting increased competition. Other Asian economies are positioning themselves to gain a larger share of the supply chain. In the semiconductor foundry sector, competition remains fierce among Taiwan Semiconductor Manufacturing Company (TSMC), South Korea’s Samsung Electronics, and the US-based Intel. The rivalry is particularly intense at the cutting edge, as these companies strive to advance their next-generation sub-2 nanometer chips into mass production in the coming years.

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Next, we turn our attention to Malaysia, which has been making significant strides in the semiconductor industry. Like several other Asian economies, Malaysia has increasingly benefited from manufacturers seeking to diversify their supply chains to mitigate the risks of concentrating chip production in a single geographic location. Much of Malaysia's semiconductor growth is centred in the northern state of Penang. Although Penang is home to just under two million of Malaysia's total population of approximately 34 million, it hosts semiconductor assembly, testing, and packaging facilities for several major global companies. This burgeoning semiconductor ecosystem has also led Penang to record the highest investment inflows of any state in Malaysia in 2023, totalling 71.9 billion ringgit ($16.6 billion). These inflows are predominantly foreign direct investment (FDI), contributing significantly to Malaysia's overall FDI, as illustrated in Chart 5. Looking ahead, Malaysia aims to advance further up the semiconductor value chain by gaining a foothold in chip design. Recent developments have been promising: in early August, Malaysia officially launched its first semiconductor integrated circuit (IC) design hub in the state of Selangor, marking a key step towards achieving this goal.

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Lastly, we turn to India, a country that may not immediately come to mind as a major electronics hub, but which has been making significant strides to capture a larger share of the electronics pie in recent years. For instance, this year marks the first time iPhone Pro models will be produced in India, perhaps signalling that Prime Minister Modi’s incentives to attract high-end manufacturing are starting to bear fruit. Nonetheless, electronic products remain just a small proportion of India’s overall export mix. When it comes to semiconductors, it may still be early for India to achieve critical mass in the sector, although efforts are already underway. For example, just recently, India and Singapore signed agreements to enhance cooperation in semiconductors and digital technologies. The agreement could prove highly beneficial for India, as Singapore is a major player in the global chipmaking and semiconductor machinery markets, possessing substantial expertise in this field.

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Asia

Economic Letter From Asia: Chipping In

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