Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080922e.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s all-industries index and tertiary index are up in the
month and still very high in their historic ranges going back to the
early 1990s. By contrast the construction sector is extremely weak with
little evidence of any resilience. Despite the bounce in the month for
the all-industry index and for the services sector (tertiary index)
both seem to be still in a cyclical slide. The indices bottomed in this
cycle in February of this year. It is still not clear what trajectory
these two sectors are on. Japan&#8217;s economy is still under stress. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col"> Up to date Japan Industry Surveys</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"></td>
<td colspan="3">Recent Months</td>
<td colspan="3">Moving Averages</td>
<td colspan="3">Extremes; Range</td>
</tr>
<tr>
<td class="firstcol"></td>
<td>Jul 2008</td>
<td>Jun 2008</td>
<td>May 2008</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Max</td>
<td>Min</td>
<td>%-Tile</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>107.3</td>
<td>106.4</td>
<td>107.5</td>
<td>107.1</td>
<td>106.7</td>
<td>107.1</td>
<td>108.1</td>
<td>93.9</td>
<td>94.4%</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>68.8</td>
<td>69.7</td>
<td>70.5</td>
<td>69.7</td>
<td>70.7</td>
<td>71.7</td>
<td>122.3</td>
<td>68.8</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Tertiary</td>
<td>110.6</td>
<td>109.3</td>
<td>110.4</td>
<td>110.1</td>
<td>109.7</td>
<td>110.0</td>
<td>110.9</td>
<td>92.0</td>
<td>98.4%</td>
</tr>
<tr>
<td colspan="10" class="firstcol">Ranges, Max, Min since 1993</td>
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Japan’s all-industries index and tertiary index are up in the month and still very high in their historic ranges going back to the early 1990s. By contrast the construction sector is extremely weak with little evidence of any [...]

Japan's All Industries Index Rises

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Tom Moeller

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The National Activity Index (CFNAI), reported by the Federal Reserve Bank of Chicago, stood at -0.10 in June following a reading of -0.16 in May, revised from -0.28, and -0.41 in April, revised from -0.36.

The index's three-month moving average, which smooths out the m/m volatility in the index, fell to -0.22 last month from -0.14 in May. This reading compares to its zero value, which equals trend real GDP growth. Research at the Chicago Fed indicates that an average reading of -0.70 or below is consistent with the economy being in a recession.

The June reading reflected a negative contribution from each of the four component series. The Production & Income index of -0.01 compared to -0.06 in May and -0.19 in April. The Personal Consumption & Housing contribution of -0.01 in June compared to -0.10 in May and -0.02 in April. The Sales, Orders & Inventories index series of -0.04 in June compared to +0.01 in May and -0.18 in April. The Employment, Unemployment & Hours index weakened to -0.05 last month after contributing -0.01 in May and -0.02 in April.

The CFNAI Diffusion Index, which measures the breadth of change in the component series and is also a three-month moving average, stood at -0.37 in June compared to -0.32 in May and -0.08 in April. A reading of zero indicates that all of the indicators are growing at their long-term average. Thirty-seven of the 85 individual data series made positive contributions to the total index in June while 48 contributed negatively.

The CFNAI is a weighted average of 85 indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

These figures are available in Haver's **SURVEYS** database.

- Latest reading improves versus May.
- Each of four components are negative.
- Three-month trend weakens.

Chicago Fed’s National Activity Index Remains Negative in June

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance declined by 4,000 to 217,000 (-8.1% y/y) in the week ended July 19, from the unrevised level of 221,000 (-7.9% y/y) in the previous week. Initial claims have declined for six consecutive weeks. The Action Economics Forecast Survey expected 230,000 initial claims for last week. The four-week moving average of initial claims declined by 5,000 to 224,500 from the previous week’s unrevised average of 229,500. It was the lowest level since the third week of April.

In the week ended July 12, the total number of unemployment insurance beneficiaries – also known as “continuing claims” – rose 4,000 to 1.955 million (5.5% y/y) from 1.951 million (4.56% y/y) in the prior week, revised down from 1.956 million. The four-week moving average was 1.954 million, a decline of 2,250 from 1.956 million, revised from 1.957 million.

In the week ending July 12, the insured rate of unemployment (the number of beneficiaries as a percent of covered employment) was unchanged at 1.3% for the seventh straight week. It had increased from 1.2% since the beginning of 2023 and 1.0% in November 2022.

The insured unemployment rate varied greatly across individual states and territories. In the week ended July 5, the highest unemployment rates were in New Jersey (2.79%), Rhode Island (2.69%), Puerto Rico (2.65%), Minnesota (2.35%), California (2.21%), Massachusetts (2.15%) and Washington (2.10%). The lowest were in South Dakota (0.31%), Florida (0.42%), and North Carolina (0.48%). Rates in other notable states include Pennsylvania (1.90%), New York (1.74%), Illinois (1.71%), and Texas (1.25%). These state data 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 have declined for six consecutive weeks in the July 19 week.
- Continuing claims rose slightly in the July 12 week.
- Insured unemployment rate was unchanged for the seventh consecutive week.

U.S. Initial Unemployment Insurance Claims Fell Again in Latest Week

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Existing home sales declined 2.7% (0.0% y/y) to 3.93 million (SAAR) in June after increasing 1.0% in May to 4.04 million, revised from 4.03 million, according to the National Association of Realtors (NAR). Sales in April were unrevised at 4.00 million. The Action Economics Forecast Survey expected 4.00 million unit sales in June. Last month’s sales decline accompanied an unchanged effective 30-year mortgage interest rate of 6.82% in June. The sales figures are based on closings of sales signed over the past couple of months.

Existing single-family home sales fell 3.0% (+0.6% y/y) during June to 3.57 million units after a 1.4% increase to 3.68 million in May and a 0.3% decline to 3.63 million in April. Sales of condos and co-ops held steady (-5.3% y/y) at 360,000 after falling 2.7% in May.

Sales were mixed across the country last month. Sales in the Northeast declined 8.0% (-4.2% y/y) to 460,000 following a 4.2% May increase. Sales in the Midwest fell 4.0% (+2.2% y/y) to 950,000 after rising 2.1% in May. Sales in the South were off 2.2% (1.7% y/y) to 1.81 million and reversed the May gain to 1.85 million. Rising by 1.4% (-4.1% y/y) to 710,000 were sales in the West after falling 5.4% in May.

The median price average of all existing homes (NSA) strengthened 2.7% (2.0% y/y) to a record $435,300 in June, up for the fifth straight month. The median price of an existing single-family home rose 3.0% (2.0% y/y) to $441,500 in June and the median price of condos & co-ops improved 0.7% (0.8% y/y) to $374,500 last month. Prices for homes in the West rose 1.0% both m/m and y/y to $636,100 while prices in the Northeast increased 5.9% (4.2% y/y) to $543,300. In the South, prices rose 1.5% (0.3% y/y) to $374,500 while in the Midwest, home prices strengthened 3.2% (3.4% y/y) to $337,600.

The number of existing homes for sale (NSA) fell 0.6% (+15.9% y/y) to 1.53 million units in June after five straight months of strong increase. The supply of homes on the market at the current selling rate (NSA) increased to 4.7 months, the highest level in nine years, up from a low of 1.6 months in January 2022.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- Sales are lowest in nine months.
- Decline spreads throughout country except in West.
- Median sales price strengthens to record high.

U.S. Existing Home Sales Decline in June; Home Prices Set Record

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Mortgage applications increased 0.8% (22.1% y/y) in the week ending July 18, after falling 10.0% the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The increase was the fourth in the last five weeks. Applications for loans to purchase a home increased 3.4% (22.5% y/y) last week, following an 11.8% decline in the week of July 11. Applications for loan refinancing declined 2.6% (+21.6% y/y) in the week of July 18 after falling 7.4% in the prior week.

The effective interest rate on a 30-year fixed-rate loan edged up to 7.02% in the week ending July 18, from 7.00% in the week ending July 11. It was increased from a low of 6.29% in the week of September 20, 2024, but below a peak of 8.12% in the week of October 20, 2023. The rate on 15-year fixed-rate mortgages held steady at 6.32% in the latest week. It has risen from a low of 5.60% in the week of September 20, 2024. The rate on 30-year Jumbo loans of 6.95% last week compared to 6.94% one week earlier. It was up from a low of 6.57% in the week of September 13, 2024. The rate on a 5-year ARM declined to 6.12% after rising to 6.24% in the week of July 13. It was above a low of 5.84% in the week of September 18, 2024.

The share of applications for refinancing an existing loan fell to 39.6% of total applications in the week ending July 18 from 41.1% in the prior week. The adjustable-rate mortgage (ARM) share of activity rose to 7.20% in the week of July 18 from 7.10% in the prior week.

The average size of a mortgage loan fell 1.0% (+0.6% y/y) to $371,800 in the week of July 18, following a 2.8% decline in the prior week. The average size of a purchase loan moved 0.5% lower both m/m and y/y to $426,700 last week, down for the third straight week. The average size of a loan to refinance a mortgage fell 3.8% (+3.0% y/y) to $287,900 in the latest week, after falling 5.6% in the prior week.

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 increase sharply while loan refinancing falls.
- Effective interest rate on 30-year fixed-rate loan increases minimally.
- Average loan size declines for fifth week in last six.

U.S. Mortgage Applications Edge Higher Last Week