Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414b.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated the job openings rate held steady in February at 2.5% versus the revised January level. Both figures remained down slightly from the improved level of 2.6% in December. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.
The hires rate in February slipped back to 3.5% from the upwardly revised January level. The hires rate is the number of hires during the month divided by employment.
The total number of job openings rose 2.2% (+16.8% y/y) following the 3.5% decline in January that was more moderate than reported initially.
Job separations fell 4.5% m/m (-0.9% y/y) for the second consecutive monthly decline. The separation rate fell to 3.1%, the lowest in over a year. Total separations include quits, layoffs, discharges, and other separations as well as retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment.
The survey dates only to December 2000 but has since followed the movement in nonfarm payrolls.
A description of the Jolts survey and the latest release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/jolts.nr0.htm">here</a>.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">&nbsp;Feb &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.5%</td>
<td>2.5%</td>
<td>2.2%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Hires Rate: Total</td>
<td>3.5%</td>
<td>3.6%</td>
<td>3.2%</td>
<td>3.4%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
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The Job Openings & Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated the job openings rate held steady in February at 2.5% versus the revised January level. Both figures remained down slightly from the [...]

JOLTS: U.S. Job Openings Steady

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414b.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated the job openings rate held steady in February at 2.5% versus the revised January level. Both figures remained down slightly from the improved level of 2.6% in December. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.
The hires rate in February slipped back to 3.5% from the upwardly revised January level. The hires rate is the number of hires during the month divided by employment.
The total number of job openings rose 2.2% (+16.8% y/y) following the 3.5% decline in January that was more moderate than reported initially.
Job separations fell 4.5% m/m (-0.9% y/y) for the second consecutive monthly decline. The separation rate fell to 3.1%, the lowest in over a year. Total separations include quits, layoffs, discharges, and other separations as well as retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment.
The survey dates only to December 2000 but has since followed the movement in nonfarm payrolls.
A description of the Jolts survey and the latest release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/jolts.nr0.htm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">&nbsp;Feb &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.5%</td>
<td>2.5%</td>
<td>2.2%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Hires Rate: Total</td>
<td>3.5%</td>
<td>3.6%</td>
<td>3.2%</td>
<td>3.4%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
Initial Claims For Jobless Insurance Down Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414c.jpg" width="353">
Initial claims for unemployment insurance fell last week by 10,000 to 330,000 versus an upwardly revised level the prior week. Consensus expectations had been for 330,000 claims.
During the last ten years there has been a (negative) 74% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 66% correlation with the level of continuing claims.
The four week moving average of initial claims rose very slightly to 338,000 (-1.7% y/y).
Continuing claims for unemployment insurance fell 22,000 following the 88,000 rise the prior week that was little revised.
The insured unemployment rate remained at 2.1%.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">04/09/05</th>
<th scope="col">04/02/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>330</td>
<td>340</td>
<td>-7.6%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,664</td>
<td>-10.9%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
U.S. Business Inventories Still Building 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414a.jpg" width="353">
Total business inventories rose another 0.5% in February but figures back to 2002 were revised somewhat lower. Nevertheless, the y/y rate of inventory accumulation continued strong at 8.2% yet still lagged the improvement in sales growth. In February the ratio of inventories-to-sales rose slightly from the record low but remained below the year ago level.
Retail inventories rose 0.3% in February for the second month. Excluding autos, retail inventories moderated to the weakest gain in four months. Inventories of furniture &amp; electronics (+7.1% y/y) fell for the second month and general merchandise inventories rose just 0.1% (5.9% y/y). Apparel inventories accumulated strongly (4.0% y/y) for the second month.
Factory sector inventories grew 0.5% following the 1.5% jump in January. Regardless, the 8.6% gain versus last year was the strongest since 1989.
Wholesale inventory accumulation moderated to a 0.6% gain but the double digit rise versus last year was the strongest since 1995. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
Overall business sales fell 0.4% (+9.6% y/y) due to lower wholesale sales and a 0.9% decline in factory shipments.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.5%</td>
<td>0.9%</td>
<td>8.2%</td>
<td>7.7%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.3%</td>
<td>0.3%</td>
<td>5.6%</td>
<td>5.7%</td>
<td>3.9%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.4%</td>
<td>0.7%</td>
<td>6.9%</td>
<td>5.9%</td>
<td>2.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.6%</td>
<td>1.0%</td>
<td>11.1%</td>
<td>10.8%</td>
<td>2.0%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.5%</td>
<td>1.5%</td>
<td>8.6%</td>
<td>7.5%</td>
<td>-1.3%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
Consumer Prices in Sweden, Finland and Poland Still Restrained in the Face of Rising Energy 
by <a href="/comment/Stone.html">Carol Stone</a> April 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414d.jpg" width="353">
A couple of weeks ago, we noted here that higher energy prices had failed to ignite new inflation in Italy. The same is true for some other countries, whose CPI data were reported today for March. In Poland, the seasonally adjusted CPI was absolutely flat for a second month, and the year/year increase eased to 3.4% from 3.6% in February. In Finland, the year/year pace did go up in March to 1.0%, from 0.2% in both January and February, but this remains a relatively low number. Finnish inflation has averaged 1.3% over the last five years.
In Sweden, there is almost no inflation at all, nor any sign of a pickup. The March figure was a mere 0.1% above March 2004, with the prior two months averaging a little over 0.3%, about the same as in 2004 overall.
Thus, as in the situation in Italy, which we discussed before, other prices remain weak, offsetting the pressure from energy. Clothing prices and technology-driven communications costs are low in most countries. Even fuel components themselves have slowed from their strongest pace, as seen in the second graph.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050414e.jpg" width="353">
We speak of the restrained inflation as beneficial for these economies, but that remains, of course, a relative statement. As prices are held back in the face of rising fuel costs, someone&#39;s profits or incomes are being squeezed, so the outlook is still clouded by high-priced energy.

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<th scope="col" class="firstcol">Yr/Yr % Changes Not Seasonally Adjusted&nbsp;</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Jan 2005</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Poland</td>
<td>3.4</td>
<td>3.6</td>
<td>3.6</td>
<td>4.4</td>
<td>1.7</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Sweden</td>
<td>0.1</td>
<td>0.7</td>
<td>0.0</td>
<td>0.3</td>
<td>1.3</td>
<td>2.1</td>
</tr>
<tr>
<td class="firstcol">Finland</td>
<td>1.0</td>
<td>0.2</td>
<td>0.2</td>
<td>0.4</td>
<td>0.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>1.9</td>
<td>1.9</td>
<td>1.9</td>
<td>2.0</td>
<td>2.5</td>
<td>2.8</td>
</tr>
<tr>
<td class="firstcol">US</td>
<td>--</td>
<td>3.0</td>
<td>3.0</td>
<td>3.3</td>
<td>1.9</td>
<td>2.4</td>
</tr>
</tbody>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413c.jpg" width="353">
Press reports on today&#39;s UK labor force data highlight the increase in unemployment measures. The ILO-defined concept, similar to that in the US, rose in the three months to February by 0.1% to 4.8%. The so-called &quot;claimant count&quot; increased 11,000 in March, with the associated rate rising to 2.7% from 2.6% in February. Wire service headlines and story leads pointed out that this was the largest monthly increase in claimants since May 2003, and noted that it was unfortunate coincidence that the news came on the very day the Prime Minister and the Labour Party begin their quest for reelection next month.
There are offsetting factors, though, that remove some of the sting from these unemployment figures. Firstly, both unemployment rates even at their new, slightly increased levels, remain the second lowest in nearly 30 years. Except for three recent months at 2.6%, the claimant count rate has not been as low as 2.7% since May 1975. The broader ILO unemployment rate was at or above 4.8% from September 1975 through last June; since then, the low was just 4.6% in August. So these latest figures hardly indicate a significant upturn, let alone a major uptrend in unemployment. (The ILO definition represents a three-month moving average centered on January.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413d.jpg" width="353">
Moreover, employment rose once again and by a larger amount than in the previous several reports. The labor force measure, the number of people saying they have jobs, rose 72,000 to 28.64 million, still another a new high. This too is a 3-month centered moving average for January, compared to the December figure.
The average earnings index (AEI) for February (a 3-month moving average ending in February) was up 4.7% on a year ago, compared with 4.4% in the previous couple of reports. However, the acceleration was due to bonus payments, as the underlying base earnings measure eased to 4.3% from 4.4%.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/UK/UK.HTM">United Kingdom</a> Seasonally adjusted data</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Jan 2005</th>
<th scope="col">Dec 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Unemployment Rate (%)</td>
<td></td>
<td>&nbsp;</td>
<td>4.8*</td>
<td>4.7*</td>
<td>4.7</td>
<td>5.0</td>
<td>5.2</td>
</tr>
<tr>
<td class="firstcol">Claimant Count (thous)</td>
<td>829</td>
<td>818</td>
<td>814</td>
<td>824</td>
<td>854</td>
<td>933</td>
<td>947</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment (mil)</td>
<td></td>
<td>&nbsp;</td>
<td>28.64*</td>
<td>28.57*</td>
<td>28.44</td>
<td>28.18</td>
<td>27.91</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Change (thous)</td>
<td></td>
<td>&nbsp;</td>
<td>+72K</td>
<td>+46K</td>
<td>+0.9%</td>
<td>+0.9%</td>
<td>+0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Earnings Index Incl Bonuses: &quot;Headline Rate&quot;(%)**</td>
<td></td>
<td>4.7</td>
<td>4.4</td>
<td>4.4</td>
<td>4.4</td>
<td>3.4</td>
<td>3.5</td>
</tr>
<tr>
<td class="firstcol">Average Earnings Index Ex Bonuses: &quot;Headline Rate&quot; (%)**</td>
<td></td>
<td>4.3</td>
<td>4.4</td>
<td>4.4</td>
<td>4.2</td>
<td>3.6</td>
<td>4.0</td>
</tr>
</tbody>
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Press reports on today's UK labor force data highlight the increase in unemployment measures. The ILO-defined concept, similar to that in the US, rose in the three months to February by 0.1% to 4.8%. The so-called "claimant count" [...]

UK Unemployment Ticks Up in February, But Employment Also Shows Strong Rise

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413b.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications recovered 6.1% last week to the highest level in four weeks. Nevertheless, the average level so far in April is 3.9% below March which fell 4.8% from February.
Purchase applications reversed all of the prior week&#39;s decline and rose 6.4%. The average so far in April is up 0.5% versus March. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
Applications to refinance recovered all of the prior two weeks&#39; declines with a 5.6% jump though the April average still is down 9.8% from March.
The effective interest rate on a conventional 30-year mortgage rose to 6.22% and the effective rate on a 15-year mortgage rose to 5.85%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
 Moving Up: Trends in Homeownership and Mortgage Indebtedness from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/files/br/brq105wl.pdf"> here</a>. 

<table border="0" cellspacing="0" width="100%">
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<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">04/08/05</th>
<th scope="col">04/01/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>683.6</td>
<td>644.5</td>
<td>-13.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>474.5</td>
<td>446.0</td>
<td>9.8%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,899.6</td>
<td>1,798.8</td>
<td>-33.6%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
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The Mortgage Bankers Association reported that mortgage applications recovered 6.1% last week to the highest level in four weeks. Nevertheless, the average level so far in April is 3.9% below March which fell 4.8% from February. [...]

Mortgage Applications Recover

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413a.jpg" width="353">
US retail sales rose 0.3% in March but the gain fell quite short of Consensus expectations for a 0.8% rise. The 0.5% increase in February was unrevised though figures back to 2003 were revised slightly lower.
March sales excluding motor vehicles also disappointed Consensus expectations for a 0.6% rise.The 0.1% up tick followed a downwardly revised 0.6% increase in February.
Spending on discretionary items eased after increasing strongly through February. Sales at furniture &amp; home furnishings stores slipped 0.5% (+4.1% y/y) after a 1.5% February jump. General merchandise stores reversed an unrevised 0.7% (+4.4% y/y) gain in February and apparel store sales dropped 1.9% (+1.6% y/y) after unrevised gains of 1.1% and 1.9% during the prior two months.
March nonauto retail sales less gasoline fell 0.1% (+5.4% y/y) following a 0.5% February increase. Gasoline service station sales jumped 2.1% (17.8% y/y) as gasoline prices rose 8.9% to an average $2.08 per gallon. In the second week of April gasoline prices rose further to an average $2.28.
Sales of nonstore retailers (internet and catalogue) jumped 1.2% m/m (+13.4% y/y).
Building material store sales surged 1.5% (+5.5% y/y) but the y/y gain eased considerably from the earlier pace. The comparison was tough given the 9.7% m/m spike in March 2004.
Economic Policy and the Sustainability of U.S. Productivity Growth from New York Federal Reserve Bank President Timothy F. Geithner are available <a href="http://www.newyorkfed.org/newsevents/speeches/2005/gei050412.html"> here</a>.
The minutes to the latest meeting of the Federal Open Market Committee can be found <a href="http://www.federalreserve.gov/fomc/minutes/20050322.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.3%</td>
<td>0.5%</td>
<td>5.8%</td>
<td>7.3%</td>
<td>4.3%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.1%</td>
<td>0.6%</td>
<td>6.6%</td>
<td>8.3%</td>
<td>4.7%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

US retail sales rose 0.3% in March but the gain fell quite short of Consensus expectations for a 0.8% rise. The 0.5% increase in February was unrevised though figures back to 2003 were revised slightly lower. March sales excluding [...]

U.S. Retail Sales' Gain Light

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413a.jpg" width="353">
US retail sales rose 0.3% in March but the gain fell quite short of Consensus expectations for a 0.8% rise. The 0.5% increase in February was unrevised though figures back to 2003 were revised slightly lower.
March sales excluding motor vehicles also disappointed Consensus expectations for a 0.6% rise.The 0.1% up tick followed a downwardly revised 0.6% increase in February.
Spending on discretionary items eased after increasing strongly through February. Sales at furniture &amp; home furnishings stores slipped 0.5% (+4.1% y/y) after a 1.5% February jump. General merchandise stores reversed an unrevised 0.7% (+4.4% y/y) gain in February and apparel store sales dropped 1.9% (+1.6% y/y) after unrevised gains of 1.1% and 1.9% during the prior two months.
March nonauto retail sales less gasoline fell 0.1% (+5.4% y/y) following a 0.5% February increase. Gasoline service station sales jumped 2.1% (17.8% y/y) as gasoline prices rose 8.9% to an average $2.08 per gallon. In the second week of April gasoline prices rose further to an average $2.28.
Sales of nonstore retailers (internet and catalogue) jumped 1.2% m/m (+13.4% y/y).
Building material store sales surged 1.5% (+5.5% y/y) but the y/y gain eased considerably from the earlier pace. The comparison was tough given the 9.7% m/m spike in March 2004.
Economic Policy and the Sustainability of U.S. Productivity Growth from New York Federal Reserve Bank President Timothy F. Geithner are available <a href="http://www.newyorkfed.org/newsevents/speeches/2005/gei050412.html"> here</a>.
The minutes to the latest meeting of the Federal Open Market Committee can be found <a href="http://www.federalreserve.gov/fomc/minutes/20050322.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.3%</td>
<td>0.5%</td>
<td>5.8%</td>
<td>7.3%</td>
<td>4.3%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.1%</td>
<td>0.6%</td>
<td>6.6%</td>
<td>8.3%</td>
<td>4.7%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
Mortgage Applications Recover 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 13, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413b.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications recovered 6.1% last week to the highest level in four weeks. Nevertheless, the average level so far in April is 3.9% below March which fell 4.8% from February.
Purchase applications reversed all of the prior week&#39;s decline and rose 6.4%. The average so far in April is up 0.5% versus March. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
Applications to refinance recovered all of the prior two weeks&#39; declines with a 5.6% jump though the April average still is down 9.8% from March.
The effective interest rate on a conventional 30-year mortgage rose to 6.22% and the effective rate on a 15-year mortgage rose to 5.85%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
 Moving Up: Trends in Homeownership and Mortgage Indebtedness from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/files/br/brq105wl.pdf"> here</a>. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">04/08/05</th>
<th scope="col">04/01/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>683.6</td>
<td>644.5</td>
<td>-13.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>474.5</td>
<td>446.0</td>
<td>9.8%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,899.6</td>
<td>1,798.8</td>
<td>-33.6%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
UK Unemployment Ticks Up in February, But Employment Also Shows Strong Rise 
by <a href="/comment/Stone.html">Carol Stone</a> April 13, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413c.jpg" width="353">
Press reports on today&#39;s UK labor force data highlight the increase in unemployment measures. The ILO-defined concept, similar to that in the US, rose in the three months to February by 0.1% to 4.8%. The so-called &quot;claimant count&quot; increased 11,000 in March, with the associated rate rising to 2.7% from 2.6% in February. Wire service headlines and story leads pointed out that this was the largest monthly increase in claimants since May 2003, and noted that it was unfortunate coincidence that the news came on the very day the Prime Minister and the Labour Party begin their quest for reelection next month.
There are offsetting factors, though, that remove some of the sting from these unemployment figures. Firstly, both unemployment rates even at their new, slightly increased levels, remain the second lowest in nearly 30 years. Except for three recent months at 2.6%, the claimant count rate has not been as low as 2.7% since May 1975. The broader ILO unemployment rate was at or above 4.8% from September 1975 through last June; since then, the low was just 4.6% in August. So these latest figures hardly indicate a significant upturn, let alone a major uptrend in unemployment. (The ILO definition represents a three-month moving average centered on January.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050413d.jpg" width="353">
Moreover, employment rose once again and by a larger amount than in the previous several reports. The labor force measure, the number of people saying they have jobs, rose 72,000 to 28.64 million, still another a new high. This too is a 3-month centered moving average for January, compared to the December figure.
The average earnings index (AEI) for February (a 3-month moving average ending in February) was up 4.7% on a year ago, compared with 4.4% in the previous couple of reports. However, the acceleration was due to bonus payments, as the underlying base earnings measure eased to 4.3% from 4.4%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/UK/UK.HTM">United Kingdom</a> Seasonally adjusted data</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Jan 2005</th>
<th scope="col">Dec 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Unemployment Rate (%)</td>
<td></td>
<td>&nbsp;</td>
<td>4.8*</td>
<td>4.7*</td>
<td>4.7</td>
<td>5.0</td>
<td>5.2</td>
</tr>
<tr>
<td class="firstcol">Claimant Count (thous)</td>
<td>829</td>
<td>818</td>
<td>814</td>
<td>824</td>
<td>854</td>
<td>933</td>
<td>947</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment (mil)</td>
<td></td>
<td>&nbsp;</td>
<td>28.64*</td>
<td>28.57*</td>
<td>28.44</td>
<td>28.18</td>
<td>27.91</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Change (thous)</td>
<td></td>
<td>&nbsp;</td>
<td>+72K</td>
<td>+46K</td>
<td>+0.9%</td>
<td>+0.9%</td>
<td>+0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Earnings Index Incl Bonuses: &quot;Headline Rate&quot;(%)**</td>
<td></td>
<td>4.7</td>
<td>4.4</td>
<td>4.4</td>
<td>4.4</td>
<td>3.4</td>
<td>3.5</td>
</tr>
<tr>
<td class="firstcol">Average Earnings Index Ex Bonuses: &quot;Headline Rate&quot; (%)**</td>
<td></td>
<td>4.3</td>
<td>4.4</td>
<td>4.4</td>
<td>4.2</td>
<td>3.6</td>
<td>4.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050412g.jpg" width="353">
China and India recently pledged to increase their bilateral trade from the $14 billion reached in 2003 to $20 billion by 2008 and $30 billion by 2010.
Data enabling one to analyze these prospects are available in the Haver data base, IMFDOTM, which lists monthly exports to and imports from some 210 countries and 24 aggregates. Because it is so detailed, the information tends is published with a long lag. For example, the latest data available today is for November, 2004
One of the first things that emerges from the bilateral trade data between China and India is the contrast between the magnitude of foreign trade of the two countries. In 2003, the last full year available, China&#39;s total exports amounted to $428.3 billion and imports, $412.8. India&#39;s total exports were $60.8 billion and imports, $69.8 billion. The monthly data for total exports of the two countries are shown in the attached chart.
Not only is there a big difference in the importance of total trade, there is also a significant difference in the importance of the bilateral trade to each country. Although the bilateral trade between India and China has been small, it has been more important to India than to China. India&#39;s exports to China amounted to 4.5% of total exports in 2003, while imports from China amounted to 5.3% of total imports. China&#39;s exports to India, in contrast, were only 0.8% of total exports and imports from India were 1.0% of total imports. In trade among all the Asian countries, India&#39;s exports to China were 16.5% of total exports to Asia and imports from China were 24.0% of Indian imports from Asia. China&#39;s exports to India accounted for only 2.3% of total Chinese exports to Asia and imports from India were only 2.7% of total Chinese imports from Asia.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">INDIA TRADE IN 2003</a></th>
<th scope="col">Mil US$</th>
<th scope="col">&nbsp;</th>
<th scope="col">%</th>
<th scope="col">&nbsp;</th>
<th scope="col">Mil US$</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Exports to China</td>
<td>2,713.3</td>
<td>Percent of Total</td>
<td>4.5</td>
<td>Total Trade with China</td>
<td>6,447.5</td>
</tr>
<tr>
<td class="firstcol">Exports to Asia</td>
<td>16,452.8</td>
<td>Percent of Asia</td>
<td>16.5</td>
<td>Total Trade with Asia</td>
<td>31,983.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Exports&nbsp;</td>
<td>30,793.7</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Total Trade</td>
<td>130,620.2</td>
</tr>
<tr>
<td class="firstcol">Imports from China</td>
<td>3,734.2</td>
<td>Percent of Total</td>
<td>5.3</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports from Asia</td>
<td>15,531.1</td>
<td>Percent of Asia</td>
<td>24.0</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Total Imports</td>
<td>69,826.5</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">CHINA TRADE IN 2003</a></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Exports to India</td>
<td>3,343.6</td>
<td>Percent of Total</td>
<td>0.8</td>
<td>Total Trade with India</td>
<td>7,595.</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports to Asia</td>
<td>145,055.5</td>
<td>Percent of Asia</td>
<td>2.3</td>
<td>Total Trade with Asia</td>
<td>301,630.0</td>
</tr>
<tr>
<td class="firstcol">Total Exports&nbsp;</td>
<td>428,273.9</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Total Trade</td>
<td>841,110.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports from India</td>
<td>4,251.5</td>
<td>Percent of Total</td>
<td>1.0</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Imports from Asia</td>
<td>156,574.5</td>
<td>Percent of Asia</td>
<td>2.7</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Imports</td>
<td>412,836.6</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

China and India recently pledged to increase their bilateral trade from the $14 billion reached in 2003 to $20 billion by 2008 and $30 billion by 2010. Data enabling one to analyze these prospects are available in the Haver data base, [...]

Trade Between China and India

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050412f.jpg" width="353">
Chain store sales rose 0.3% for the second week according to the International Council of Shopping Centers (ICSC)-UBS survey. The increase last week pulled the average level in April about even with March.
During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of nonauto retail sales less gasoline.
The leading indicator of chain store sales from ICSC fell by 0.2% (-1.5% y/y), the third consecutive weekly decline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">04/09/05</th>
<th scope="col">04/02/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>452.9</td>
<td>451.5</td>
<td>3.9%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales rose 0.3% for the second week according to the International Council of Shopping Centers (ICSC)-UBS survey. The increase last week pulled the average level in April about even with March. During the last ten years [...]

Chain Store Sales Up Again

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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Initial claims for unemployment insurance dropped 10,000 to 214,000 in the week of December 20, from 224,000 during the week of December 13. The four-week moving average of initial claims was 216,750, a decrease of 750 from the prior week’s unrevised 217,500.

Federal government employees initially filed 805 (NSA) jobless insurance claims in the week ended December 13, after filing 1091 claims in the week ended December 6.

Continuing claims for unemployment insurance rose 38,000 to 1.923 million in the week ending December 13, after rising 55,000 to 1.885 million, revised from 1.897 million in the week ending December 6. The four-week moving average was 1.894 million in the week ending December 13, down 5,250 from 1.899 million, revised from 1,902,000 in the week ending December 6. The insured unemployment rate stood at 1.3% in the week of December 13, up from 1.2% in the week of December 6.

Federal government employees’ continuing benefits claims were 12,887 (NSA) in the week ending December 6, from 14,077 (NSA) in the week of November 29. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 6, the highest unemployment rates were in New Jersey and Washington (both 2.40%), Massachusetts and Minnesota (both 2.10%), California and Rhode Island (both 2.00%). The lowest rates were in Florida (0.30%), and Alabama, Louisiana, North Carolina (all 0.40%). Rates in other notable states include New York (1.80%), Illinois and Pennsylvania (both 1.70%), and Texas (1.10%). 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.


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- Initial claims declined from the prior week.
- Continuing claims rose from the prior week.
- The insured unemployment rate edged up.


U.S. Initial Claims for Unemployment Insurance Dropped in Latest Week

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Mortgage applications dropped 5.0% w/w (+49.8% y/y) in the week of December 19, after a drop of 3.8% w/w (+40.9% y/y) in the week of December 12, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 3.7% w/w (+15.9% y/y) in the latest week, the third consecutive weekly decline, following a drop of 2.8% w/w (+12.3% y/y) in the December 12 week. Applications for loan refinancing dropped 5.6% w/w (+110.1% y/y) in the December 19 week after a decline of 3.6% w/w (+86.0% y/y) in the week of December 12. 

The effective interest rate on a 30-year fixed-rate loan fell 8bps to 6.48% in the week ending December 19 from 6.56% in the week ending December 12. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.86% in the latest week from 5.91% in the prior week. The 30-year Jumbo rate rose 8bps to 6.63% in the December 19 week from 6.55% in the December 12 week. The rate on a 5-year ARM jumped 20bps to 5.96% in the latest week from 5.76% in the December 12 week.

The share of applications for refinancing an existing loan edged up to 59.1% of total applications in the December19 week from 59.0% in the week ending December 12. The adjustable-rate mortgage (ARM) share of activity rose to 8.1% in the latest week from 7.2% in the December 12 week.

The average size of a mortgage loan edged down 0.1% w/w (+7.8% y/y) to $399,700 in the week ending December 19, following a rise of 1.5% w/w (6.4% y/y) to $400,000 in the December 12 week. The average size of a purchase loan rose 1.0% w/w (1.1% y/y) to $428,600 in the latest week, after rising 0.6% w/w (-0.3% y/y) to $424,200 in the prior week. The average size of a loan to refinance a mortgage declined 0.9% w/w (+24.9% y/y) to $379,700 in the December 19 week, following a rise of 2.3% w/w (19.8% y/y) to $383,300 in the week ending December 12.

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.


- Both purchase applications and refinancing loan applications fell in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.48%.
- Average loan size edged down.


U.S. Mortgage Applications Dropped in the Week of December 19

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Real GDP grew 4.3% (SAAR) during the third quarter following a 3.8% Q2 gain, revised from 3.3% reported initially. These increases followed a minimally revised 0.6% decline in Q1. A 3.0% rise had been expected in the Action Economics Forecast Survey. Growth during the last four quarters of 2.3% compared to 2.1% y/y in Q2 and remained below its most recent high of 3.4% in Q4 2023.

After-tax corporate profits without IVA & CCA adjustment surged 7.0% (4.2% y/y) last quarter after edging 0.6% higher in Q2. Before-tax earnings with IVA & CCA rose 4.2% (9.1% y/y) after improving 0.2% in Q2. Financial sector earnings rose 6.2% (21.1% y/y) after rising 1.1% in Q2. Nonfinancial corporate profits rose 2.5% (3.3% y/y) after edging 0.5% higher in Q2. Earnings from abroad jumped 10.6% (26.3% y/y) following a 2.9% Q2  decline.

Foreign trade balance improvement added 1.59 percentage points to growth last quarter after adding 4.83 percentage points in Q2. Real exports increased 2.1% (1.5% y/y) after falling 0.5% in Q2. Real imports declined 1.2% (-1.8% y/y) after declining 8.3% in Q2. Inventories subtracted 0.22 percentage points from growth after subtracting 3.44 percentage point from Q2 growth.

Real final sales to private domestic purchasers grew 3.0% (2.6% y/y) last quartter after rising 2.9% in Q2, revised from 1.6%. Personal consumption expenditures rose 3.5% (2.6% y/y) after a 2.5% rise, revised from 1.6%. Durable goods spending rose 1.6% (3.2% y/y) after increasing 2.3% in Q2. Motor vehicle purchases declined 6.7% (+1.6% y/y) after strengthening 9.7% in Q2. Spending on home furnishings & appliances weakened 4.2% (+0.7% y/y) following a 2.0% fall. Recreational goods & vehicle buying surged 15.7% (7.0% y/y) last quarter after falling 2.5% in Q2.

Nondurable goods outlays in constant dollars rose 3.9% (3.0% y/y) last quarter following 2.2% growth in Q2. Apparel spending strengthened 6.7% (7.0% y/y) following a 5.8% rise. Food & beverage buying gained 2.0% (1.3% y/y) after edging 0.2% higher. Gasoline & fuel oil purchases improved 1.3% (-0.2% y/y) after falling 2.8% in Q2.



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Real spending on services increased 3.7% (2.4% y/y) in Q3 after a 2.6% Q2 gain. Outlays on housing & utilities edged 0.3% higher (1.0% y/y) after easing 0.2% in Q2. Health care expenditures surged 6.8% (4.5% y/y) after a 4.8% increase. Transportation outlays gained 3.1% both  q/q and y/y after a 7.0% rise, while recreation spending jumped 6.6% (2.4% y/y) following a 3.9% rise. Restaurant & hotel expenditures increased 1.2% (2.0% y/y) after strengthening 5.9% in Q2. Financial services expenditures rose 2.6% both q/q and y/y following a 4.8% Q2 increase.

Business fixed investment in constant dollars increased 2.8% (3.9% y/y) last  quarter following a 7.3% Q2 rise, revised from 5.7%. Expenditures on structures declined 6.3% both q/q and y/y, after falling for six consecutive quarters. Expenditures on producers’ durable equipment increased 5.4% (7.4% y/y), after strengthening 8.5% in Q2. Outlays on information processing equipment rose 8.4% (18.6% y/y), after strengthening 11.7% during Q2. Industrial equipment investment rose 2.0% (3.4% y/y) after a 6.5% rise. Transportation equipment investment fell  2.7% (+3.0% y/y) after strengthening 25.2%. Intellectual property product spending rose 5.4% last quarter (6.4% y/y), after surging 15.0% in Q2.

Residential structures investment in real terms declined 5.1% (-1.8% y/y), the same as in Q2. It was the third consecutive quartly decline.

Government spending rose 2.2% (1.1% y/y) during the third quarter after an unrevised 0.1% easing in Q2. Federal government expenditures rose 2.9% (-1.0% y/y) after falling 5.3% in Q2. National defense expenditures increased 5.8% (1.0% y/y) after rising 0.9% in Q2. State & local government spending rose 1.8% (2.4% y/y) following a 3.1% rise.

The GDP chain price index rose 3.8% (3.0% y/y) last quarter vs. 2.1% in Q2. The PCE chain price index increased 2.8% (2.7% y/y) following a 2.1% rise. The PCE price index excluding food and energy rose 2.9% (2.9% y/y) after increasing 2.6% in Q2. The business fixed investment price index rose 5.2% (1.5% y/y) in Q3 after a 0.4% decline. The residential price index rose 4.5% (3.3% y/y) last quarter after a 2.2% rise, while the government price index increased 4.4% (3.5% y/y) following a 3.3% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.



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- Consumer spending strengthens; growth in business investment decelerates.
- Corporate profit growth led by earnings abroad.
- Rise in chain price index accelerates.


U.S. GDP Growth is Strong in Q3; Profits Jump

Sandy Batten

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Industrial production fell 0.1% m/m in October but rose 0.2% m/m (2.5% y/y) in November. The Action Economics Forecast Survey expected 0.1% monthly gains in both months. Manufacturing activity was tepid with manufacturing production falling 0.4% m/m in October and unchanged in November. Manufacturing output has not posted a monthly gain since July. Mining output fell 0.8% m/m in October but rebounded 1.7% m/m in November. Utilities output surged 2.6% m/m in October but fell 0.4% m/m in November. Compared to a year ago, manufacturing production is up 1.9%; mining output is up 3.9%; and utilities output is up 4.8%.

By market group, output of durable consumer goods plunged 2.6% m/m in October and fell another 0.2% in November. Production of durable consumer goods has declined in five of the previous six months. Production of nondurable consumer goods rose 0.5% m/m in both October and November. Compared to a year ago, durable consumer goods production has fallen 5.9% while nondurable consumer goods output has risen 2.7%. Business equipment production fell 0.3% m/m in October but rebounded 0.3% m/m in November and is up 11.2% y/y. Production of nonindustrial supplies fell 0.3% m/m in both October and November.

By industry group, output of durable goods fell 0.5% m/m in October and declined 0.1% m/m in November but were up 3.2% from a year ago. Motor vehicle and parts production slumped 5.1% m/m in October and declined 1.0% m/m in November to be down 5.6% from a year ago. Monthly motor vehicle output has declined in five of the previous six months. In contrast, production of computers and electronic products increased 1.5% m/m in October and rose 0.8% m/m in November. Aerospace production continued to rise, increasing 2.0% m/m in October and 1.1% m/m in November to be up 25.2% from a year ago. Output of nondurable goods fell 0.2% m/m in October and edged up 0.1% m/m in November. Their output is up 0.9% from a year ago. Apparel output fell 1.3% m/m in October but recovered in November, rising 2.3% m/m. Food and beverage output rose 0.3% m/m in October and another 1.2% in November.

Output of selected high-technology industries rebounded in October and November. After having declined 1.0% m/m in both August and September, production jumped 1.9% m/m in October and 1.1% m/m in November to stand 11.8% higher than a year ago. Manufacturing output excluding selected high-tech industries fell 0.4% m/m in October and was unchanged in November. It has risen only 1.6% over the past year. Manufacturing excluding motor vehicle production was unchanged in October and edged up 0.1% m/m in November; it is up 2.6% y/y.

Total industry capacity utilization edged down to 75.9% in October from 76.0% in September and then recovered the decline in November, edging up to 76.0%. In the manufacturing sector, the utilization rate slumped to 75.4% in October from 75.8% in September and remained at 75.4% in November. The October/November reading is the lowest since January.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.



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- Today’s release contained figures for both October and November that had been delayed by the federal government shutdown.
- IP fell in October but recovered in November.
- Manufacturing output was tepid, falling in October and unchanged in November.
- A surge in utilities output in October prevented a larger decline in total production.
- A jump in mining output in November accounted for all of the increase in total production.


U.S. Industrial Production Fell in October and Recovered in November

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New orders for durable goods fell a more-than-expected 2.2% (+4.8% y/y) in October following an upwardly revised 0.7% m/m rise in September (previously +0.5% m/m) and a 3.0% monthly jump in August. The Action Economics Forecast Survey expected a 1.5% m/m decline. A 23.7% m/m drop in aircraft orders more than accounted for the overall decline. Orders excluding aircraft increased 0.2% m/m (4.0% y/y) in October on top of a 0.5% monthly increase in September.

More generally, transportation orders fell 6.5% m/m (+7.3% y/y) in October following a 0.6% m/m increase in September and an 8.0% monthly jump in August. In addition to the drop in aircraft orders, orders for motor vehicles and parts edged up 0.1% m/m in October, their sixth consecutive monthly increase. Across other sectors, orders for primary metals fell 0.7% m/m, their first monthly decline in ten months. Orders for electrical equipment and appliances slumped 1.5% m/m, their first monthly decline in seven months. In contrast, orders for fabricated metal products rose 0.5% m/m, their fourth consecutive monthly gain. Machinery orders increased 0.8% m/m, their eighth consecutive monthly rise. Orders for computers and electronic products increased a solid 1.0% m/m on top of a 1.2% monthly increase in September.

Shipments of core capital goods (nondefense capital goods shipments excluding aircraft) are a reliable coincident indicator of business spending on equipment in the national accounts. They rose 0.7% m/m in October following an upwardly revised 1.2% monthly gain in September (previously +0.9%). The was the second consecutive monthly increase and the fifth in the past six months. The strong end to Q3 and the continued rise in the first month of Q4 provides a solid starting point for all of Q4. The October shipments figure was 5.9% at an annual rate above the Q3 average. Core capital goods orders rose 0.5% m/m in October on top of an upwardly revised 1.1% m/m increase in September (previously +0.9%). This was the fourth consecutive monthly rise.

Total manufacturing shipments edged up 0.1% m/m (+2.8% y/y) in October after having been essentially unchanged in September. Shipments of durable goods increased 0.6% m/m (5.9% y/y), led by 1.4% monthly jump in transportation shipments. However, apart from a 0.1% m/m decline in shipments of other durable goods, all of the other major sectors posted monthly gains in October. In contrast, shipments of nondurable goods fell 0.4% m/m (-0.3% y/y) in October for their third consecutive monthly decline. The monthly decline was led by a 2.4% m/m fall in shipments of petroleum and coal products although it was relatively widely spread across major sectors. The one exception was a 2.1% m/m increase in leather product shipments, but this came after four consecutive sizeable monthly declines.

Unfilled durable goods orders increased 0.2% m/m (7.9% y/y) in October for their third consecutive monthly gain following a 0.8% m/m rise in September and a 0.7% m/m increase in August. Total factory inventories were unchanged in October (+1.4% y/y) following 0.1% monthly declines in both August and September. Durable goods inventories edged up 0.1% m/m in October while inventories of nondurable goods fell 0.2% m/m, the third consecutive monthly decline.

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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- New orders for durable goods slumped 2.2% m/m in October following increases in both August and September
- A 24% monthly drop in aircraft orders drove the overall decline
- Orders excluding aircraft rose 0.2% m/m in October
- Core capital goods shipments and orders continued to rise in October with small upward revisions to September


Economy in Brief: 2005

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JOLTS: U.S. Job Openings Steady

JOLTS: U.S. Job Openings Steady

UK Unemployment Ticks Up in February, But Employment Also Shows Strong Rise

Mortgage Applications Recover

U.S. Retail Sales' Gain Light

U.S. Retail Sales' Gain Light

Trade Between China and India

Chain Store Sales Up Again