Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405b.jpg" width="353">
Challenger, Gray &amp; Christmas reported that job cut announcements in March reversed the prior month&#39;s jump and fell 20.3%.
Challenger also reported that announced hiring plans fell sharply m/m to 18,509 jobs but the 1Q05 level rose by three quarters versus 4Q04.
During the last ten years there has been an 85% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements fell sharply m/m in the consumer goods (-18.2% y/y), industrial goods (-27.1% y/y), telecommunication (-96.1% y/y) and transportation industries but declines elsewhere were limited.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></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">Announced Job Cuts</td>
<td>86,396</td>
<td>108,387</td>
<td>27.0%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
</body>
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Challenger, Gray & Christmas reported that job cut announcements in March reversed the prior month's jump and fell 20.3%. Challenger also reported that announced hiring plans fell sharply m/m to 18,509 jobs but the 1Q05 level rose by [...]

Challenger Layoff Count Fell Sharply

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405a.jpg" width="353">
Chain store sales inched up 0.3% in the opening week of April and recovered a piece of the prior week&#39;s 1.0% drop according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales began the month 0.2% below the March average which rose 1.1% versus the prior month. That gain followed a strong 1.0% rise in February.
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 0.7% (-1.7% y/y) for the second consecutive weekly decline and pulled the measure 2.5% off its peak last year.
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.

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<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">04/02/05</th>
<th scope="col">03/26/05</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>451.5</td>
<td>450.2</td>
<td>4.4%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
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Chain store sales inched up 0.3% in the opening week of April and recovered a piece of the prior week's 1.0% drop according to the International Council of Shopping Centers (ICSC)-UBS survey. Sales began the month 0.2% below the March [...]

Chain Store Sales Recovered Slightly

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405a.jpg" width="353">
Chain store sales inched up 0.3% in the opening week of April and recovered a piece of the prior week&#39;s 1.0% drop according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales began the month 0.2% below the March average which rose 1.1% versus the prior month. That gain followed a strong 1.0% rise in February.
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 0.7% (-1.7% y/y) for the second consecutive weekly decline and pulled the measure 2.5% off its peak last year.
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%">
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<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">04/02/05</th>
<th scope="col">03/26/05</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>451.5</td>
<td>450.2</td>
<td>4.4%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Challenger Layoff Count Fell Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 5, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405b.jpg" width="353">
Challenger, Gray &amp; Christmas reported that job cut announcements in March reversed the prior month&#39;s jump and fell 20.3%.
Challenger also reported that announced hiring plans fell sharply m/m to 18,509 jobs but the 1Q05 level rose by three quarters versus 4Q04.
During the last ten years there has been an 85% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements fell sharply m/m in the consumer goods (-18.2% y/y), industrial goods (-27.1% y/y), telecommunication (-96.1% y/y) and transportation industries but declines elsewhere were limited.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

<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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></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">Announced Job Cuts</td>
<td>86,396</td>
<td>108,387</td>
<td>27.0%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
Mixed Inflation Trends in Latin America 
by <a href="/comment/Curley.html">Louise Curley</a> April 5, 2005


<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405c.jpg" width="353">
Many Latin America are experiencing relatively low rates of inflation as measured by the year to year percent change in the consumer price index. For example, the March inflation was 1.87% for Peru and 2.40% for Chile.(See the first chart.)
Even the 4-5% rates of inflation shown by Mexico, Colombia and Uruguay are not unusually high for emerging markets. Moreover, Colombia and Uruguay have shown good progress in reducing inflation over the past few years while Mexico has maintained a 4-5% range of inflation in the same time frame. (March data for Mexico are not yet available.)
Venezuela&#39;s inflation rose sharply as its oil bonanza and populist government led to big increases in consumer demand. It has since abated but is still among the highest in the area. Inflation in Argentina rose sharply, spiking at over 40% by late 2002 after it had abandoned its currency board. Inflation began to moderate subsequently and reached a low point of 2.26% in February, 2004. Since then, however, inflation has been rising sharply in Argentina. The second chart contrasts the recently declining trend of inflation in Venezuela with the rising trend in Argentina. <img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050405d.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Latin American Countries</a> Y/Y % Change in CPI</th>
<th scope="col">Mar 05</th>
<th scope="col">Feb 05</th>
<th scope="col">Mar 04</th>
<th scope="col">M/M Dif</th>
<th scope="col">Y/Y Dif</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp; 2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Argentina</td>
<td>9.15</td>
<td>8.13</td>
<td>2.28</td>
<td>1.02</td>
<td>6.87</td>
<td>4.42</td>
<td>13.44</td>
<td>25.84</td>
</tr>
<tr>
<td class="firstcol">Chile</td>
<td>2.40</td>
<td>2.19</td>
<td>-0.75</td>
<td>0.21</td>
<td>3.15</td>
<td>1.05</td>
<td>2.81</td>
<td>2.49</td>
</tr>
<tr class="odd">
<td class="firstcol">Colombia</td>
<td>5.03</td>
<td>5.24</td>
<td>6.28</td>
<td>-0.21</td>
<td>-1.25</td>
<td>5.90</td>
<td>7.13</td>
<td>6.35</td>
</tr>
<tr>
<td class="firstcol">Peru</td>
<td>1.87</td>
<td>1.68</td>
<td>3.43</td>
<td>0.19</td>
<td>-1.56</td>
<td>3.66</td>
<td>2.26</td>
<td>0.19</td>
</tr>
<tr class="odd">
<td class="firstcol">Uruguay</td>
<td>5.48</td>
<td>5.66</td>
<td>8.38</td>
<td>-0.18</td>
<td>-2.90</td>
<td>9.16</td>
<td>19.38</td>
<td>13.97</td>
</tr>
<tr>
<td class="firstcol">Venezuela</td>
<td>15.80</td>
<td>16.81</td>
<td>21.88</td>
<td>-1.06</td>
<td>-6.08</td>
<td>21.75</td>
<td>31.09</td>
<td>22.43</td>
</tr>
<tr class="odd">
<td class="firstcol">Mexico</td>
<td>n.a.</td>
<td>4.27</td>
<td>4.23</td>
<td>n.a</td>
<td>n.a.</td>
<td>4.69</td>
<td>4.55</td>
<td>5.03</td>
</tr>
</tbody>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404c.jpg" width="353">
Retail sales in Australia rose 0.6% from A$16,447 million in January to A$16,551 million in February. This was the second month of increase after three successive months of decline, however, the level of sales failed to reach the June 2004 peak of A$16,670 million. Doubts of further increases have risen as a result of the sharp decline in consumer confidence that took place in March. The confidence index tumbled almost 17% from 122.8 to 102.4, the lowest level since March, 2003. While the confidence measure is more volatile than that of retail sales, it seems to be a good indicator of the trend in retail sales as shown in the first chart.
Part of the fall in confidence may have resulted from the Australian Federal Reserve Bank&#39;s action in raising its overnight cash rate target from 5.0% to 5.5% on March 2, the first move in 15 months. The Bank noted that the economy, after 13 years of expansion, had less capacity to grow without engendering price increases.Data on official measures of consumer and producer prices in Australia are reported only quarterly. Producer prices for manufacturing accelerated strongly and while the pace of rise was smaller, consumer prices also accelerated in 2004 as shown in the second chart. First quarter data, available soon, may determine whether another rise in the overnight cash target rate is imminent.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404d.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ANZ/@A1/@A1.HTM">Australia</a></th>
<th scope="col">Feb 05</th>
<th scope="col">Jan 05</th>
<th scope="col">Feb 04</th>
<th scope="col">M/M%</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;%</th>
<th scope="col">&nbsp;2003%</th>
<th scope="col">&nbsp;2002%</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">Retail Sales (Mil A$)</td>
<td>16,551.9</td>
<td>16,447.6</td>
<td>16,212.6</td>
<td>0.6</td>
<td>2.1</td>
<td>6.2</td>
<td>6.7</td>
<td>7.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar 05</td>
<td>Feb 05</td>
<td>Mar 04</td>
<td>M/M%</td>
<td>Y/Y%</td>
<td>&nbsp;2004&nbsp;&nbsp;%</td>
<td>&nbsp;2003%</td>
<td>&nbsp; 2002%</td>
</tr>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>102.4</td>
<td>122.8</td>
<td>114.4</td>
<td>-16.7</td>
<td>-10.5</td>
<td>6.1</td>
<td>1.32</td>
<td>8.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Year to Year % Change&nbsp;</td>
<td>Q1 O4</td>
<td>Q2 04</td>
<td>Q3 04</td>
<td>Q4 O4</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Prices</td>
<td>1.98</td>
<td>2.48</td>
<td>2.32</td>
<td>2.59</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Producer&nbsp; Prices</td>
<td>-1.14</td>
<td>2.78</td>
<td>6.13</td>
<td>8.21</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
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Retail sales in Australia rose 0.6% from A$16,447 million in January to A$16,551 million in February. This was the second month of increase after three successive months of decline, however, the level of sales failed to reach the June [...]

Australian Retail Sales Rise for the Second Month: Will the Rise Continue?

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404b.jpg" width="353">
The total value of construction put in place rose 0.4% in February. Consensus expectations had been for a 0.6% gain. Earlier month&#39;s figures were little revised.
Private residential building activity rose 0.7% paced by a 1.4% (13.7% y/y) jump in new single family building.
Nonresidential building slipped 1.2% after the strong gain in January as commercial building fell 3.2% (+7.1% y/y). Office building rose 1.6% (3.6% y/y) but manufacturing building fell 2.4% (+28.5% y/y).
Public construction rose 1.1%. Spending on highways &amp; streets, nearly one third of the value of public construction spending, rose 2.5% (21.4% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</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>0.4%</td>
<td>0.6%</td>
<td>10.0%</td>
<td>8.9%</td>
<td>5.1%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>0.6%</td>
<td>10.3%</td>
<td>10.7%</td>
<td>6.0%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>0.7%</td>
<td>0.3%</td>
<td>12.1%</td>
<td>13.9%</td>
<td>13.1%</td>
<td>8.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-1.2%</td>
<td>1.3%</td>
<td>6.0%</td>
<td>3.7%</td>
<td>-7.1%</td>
<td>-12.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>0.7%</td>
<td>9.0%</td>
<td>3.3%</td>
<td>2.6%</td>
<td>7.0%</td>
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</tbody>
</table>
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The total value of construction put in place rose 0.4% in February. Consensus expectations had been for a 0.6% gain. Earlier month's figures were little revised. Private residential building activity rose 0.7% paced by a 1.4% (13.7% [...]

U.S. Construction Spending Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404a.jpg" width="353">
Sales of light vehicles in March rose 3.5% versus February to 16.85M units according to Autodata Corporation but the gain only lifted sales to roughly the same level as last year. In 1Q sales averaged 16.45M, down 4.6% versus 17.25M in 4Q04.
Sales of light trucks rose moderately for the second consecutive month, but the 2.6% m/m gain left sales for the quarter down 5.8% versus 4Q.
Total auto sales rose 4.3% during March. Sales of domestic autos rose 4.9% (-1.3% y/y) and imported car sales rose 2.8% (2.6 y/y).
Imports&#39; share of the US market for new vehicles in March fell slightly m/m to 19.9% and was the same as during 2004.

<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/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></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 class="odd">
<td class="firstcol">Total</td>
<td>16.85</td>
<td>16.30</td>
<td>0.3%</td>
<td>16.88</td>
<td>16.63</td>
<td>16.81</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>7.68</td>
<td>7.36</td>
<td>-0.2%</td>
<td>7.49</td>
<td>7.62</td>
<td>8.07</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Trucks</td>
<td>9.17</td>
<td>8.94</td>
<td>0.7%</td>
<td>9.39</td>
<td>9.01</td>
<td>8.74</td>
</tr>
</tbody>
</table>
</body>
</html>

Sales of light vehicles in March rose 3.5% versus February to 16.85M units according to Autodata Corporation but the gain only lifted sales to roughly the same level as last year. In 1Q sales averaged 16.45M, down 4.6% versus 17.25M [...]

U.S. Light Vehicle Sales Continue Sideways

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404a.jpg" width="353">
Sales of light vehicles in March rose 3.5% versus February to 16.85M units according to Autodata Corporation but the gain only lifted sales to roughly the same level as last year. In 1Q sales averaged 16.45M, down 4.6% versus 17.25M in 4Q04.
Sales of light trucks rose moderately for the second consecutive month, but the 2.6% m/m gain left sales for the quarter down 5.8% versus 4Q.
Total auto sales rose 4.3% during March. Sales of domestic autos rose 4.9% (-1.3% y/y) and imported car sales rose 2.8% (2.6 y/y).
Imports&#39; share of the US market for new vehicles in March fell slightly m/m to 19.9% and was the same as during 2004.

<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/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></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 class="odd">
<td class="firstcol">Total</td>
<td>16.85</td>
<td>16.30</td>
<td>0.3%</td>
<td>16.88</td>
<td>16.63</td>
<td>16.81</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>7.68</td>
<td>7.36</td>
<td>-0.2%</td>
<td>7.49</td>
<td>7.62</td>
<td>8.07</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Trucks</td>
<td>9.17</td>
<td>8.94</td>
<td>0.7%</td>
<td>9.39</td>
<td>9.01</td>
<td>8.74</td>
</tr>
</tbody>
</table>
U.S. Construction Spending Up  
by <a href="/comment/Moeller.html">Tom Moeller</a> April 4, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404b.jpg" width="353">
The total value of construction put in place rose 0.4% in February. Consensus expectations had been for a 0.6% gain. Earlier month&#39;s figures were little revised.
Private residential building activity rose 0.7% paced by a 1.4% (13.7% y/y) jump in new single family building.
Nonresidential building slipped 1.2% after the strong gain in January as commercial building fell 3.2% (+7.1% y/y). Office building rose 1.6% (3.6% y/y) but manufacturing building fell 2.4% (+28.5% y/y).
Public construction rose 1.1%. Spending on highways &amp; streets, nearly one third of the value of public construction spending, rose 2.5% (21.4% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

<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/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</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>0.4%</td>
<td>0.6%</td>
<td>10.0%</td>
<td>8.9%</td>
<td>5.1%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>0.6%</td>
<td>10.3%</td>
<td>10.7%</td>
<td>6.0%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>0.7%</td>
<td>0.3%</td>
<td>12.1%</td>
<td>13.9%</td>
<td>13.1%</td>
<td>8.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-1.2%</td>
<td>1.3%</td>
<td>6.0%</td>
<td>3.7%</td>
<td>-7.1%</td>
<td>-12.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>0.7%</td>
<td>9.0%</td>
<td>3.3%</td>
<td>2.6%</td>
<td>7.0%</td>
</tr>
</tbody>
</table>
 Australian Retail Sales Rise for the Second Month:  Will the Rise Continue? 
by <a href="/comment/Curley.html">By  Louise Curley</a> April 4, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404c.jpg" width="353">
Retail sales in Australia rose 0.6% from A$16,447 million in January to A$16,551 million in February. This was the second month of increase after three successive months of decline, however, the level of sales failed to reach the June 2004 peak of A$16,670 million. Doubts of further increases have risen as a result of the sharp decline in consumer confidence that took place in March. The confidence index tumbled almost 17% from 122.8 to 102.4, the lowest level since March, 2003. While the confidence measure is more volatile than that of retail sales, it seems to be a good indicator of the trend in retail sales as shown in the first chart.
Part of the fall in confidence may have resulted from the Australian Federal Reserve Bank&#39;s action in raising its overnight cash rate target from 5.0% to 5.5% on March 2, the first move in 15 months. The Bank noted that the economy, after 13 years of expansion, had less capacity to grow without engendering price increases. Data on official measures of consumer and producer prices in Australia are reported only quarterly. Producer prices for manufacturing accelerated strongly and while the pace of rise was smaller, consumer prices also accelerated in 2004 as shown in the second chart. First quarter data, available soon, may determine whether another rise in the overnight cash target rate is imminent.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050404d.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ANZ/@A1/@A1.HTM">Australia</a></th>
<th scope="col">Feb 05</th>
<th scope="col">Jan 05</th>
<th scope="col">Feb 04</th>
<th scope="col">M/M%</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;%</th>
<th scope="col">&nbsp;2003%</th>
<th scope="col">&nbsp;2002%</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Retail Sales (Mil A$)</td>
<td>16,551.9</td>
<td>16,447.6</td>
<td>16,212.6</td>
<td>0.6</td>
<td>2.1</td>
<td>6.2</td>
<td>6.7</td>
<td>7.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar 05</td>
<td>Feb 05</td>
<td>Mar 04</td>
<td>M/M%</td>
<td>Y/Y%</td>
<td>&nbsp;2004&nbsp;&nbsp;%</td>
<td>&nbsp;2003%</td>
<td>&nbsp; 2002%</td>
</tr>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>102.4</td>
<td>122.8</td>
<td>114.4</td>
<td>-16.7</td>
<td>-10.5</td>
<td>6.1</td>
<td>1.32</td>
<td>8.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Year to Year % Change&nbsp;</td>
<td>Q1 O4</td>
<td>Q2 04</td>
<td>Q3 04</td>
<td>Q4 O4</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Prices</td>
<td>1.98</td>
<td>2.48</td>
<td>2.32</td>
<td>2.59</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Producer&nbsp; Prices</td>
<td>-1.14</td>
<td>2.78</td>
<td>6.13</td>
<td>8.21</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body>
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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/050401f.jpg" width="353">
The TANKAN Survey for March shows generally less favorable readings for Japanese business. But &quot;less favorable that what?&quot; News stories highlighted the so-called Headline Series, large manufacturing companies. These firms&#39; results for March came at +14, well below December&#39;s +22 and also weaker than December&#39;s forecast value for March of +15. This is the lowest outturn since March last year, which was +12 and also the first time since the late 2003 reorganization of the TANKAN survey that these firms have fallen short of their own forecast from just three months prior. Thus, the &quot;bad news&quot; in the TANKAN report.
Other segments of Japanese business performed relatively better, however. Large nonmanufacturing firms did better at +11 than their forecast of +10 and they held steady with December&#39;s result of +11. Medium and small companies had less positive assessments of their business conditions than in December, but better than they were expecting. Medium-sized manufacturing firms, for example, saw a result of +6, considerably better than their projection of +2. The performance still slowed from December, but there was not as much deterioration as they had anticipated.
The mixed picture in the TANKAN survey follows similarly mixed readings in other measures of Japanese activity. Industrial production fell in February following a strong January gain, and services (&quot;tertiary&quot;) activity also rose sharply in January. Unemployment ticked higher in February, but from a six-year low. Employment is very erratic, apparently struggling to establish a rising trend. The Japanese economy overall is struggling to establish a rising trend, and just as it seemed to be achieving that, much higher energy and raw material prices have acted to constrain those nascent gains. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401g.jpg" width="353">
A reminder that in the Haver databases, we present the TANKAN data two ways. Owing to the restructuring of the survey classification scheme and new sampling last March, we have segregated the recent detail data into new series in the &quot;Japan&quot; database. In summary data in the &quot;G10&quot; database, we link the all industry-all enterprise data with the history that uses the old methodology. This broad aggregate is less affected by the Bank of Japan&#39;s reorganization of the categories. This special linked series dipped back below 0 in this report to -2, after two quarters of small positive values. Even so, these past three quarters still constitute the best performance in this series since 1991.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">JAPAN: Business Conditions:&nbsp; % Favorable minus % Unfavorable</th>
March 2005
December 2004
September 2004
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Forecast for Jun</td>
<td>Actual</td>
<td>Forecast for Mar</td>
<td>Actual</td>
<td>Forecast for Dec</td>
<td>Actual</td>
</tr>
<tr>
<td class="firstcol">All Firms</td>
<td>-2</td>
<td>-2</td>
<td>-3</td>
<td>1</td>
<td>0</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms*</td>
<td>12</td>
<td>13</td>
<td>12</td>
<td>16</td>
<td>15</td>
<td>19</td>
</tr>
<tr>
<td class="firstcol">Manufacturing (&quot;Headline Series&quot;)</td>
<td>14</td>
<td>14</td>
<td>15</td>
<td>22</td>
<td>21</td>
<td>26</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>10</td>
<td>11</td>
<td>10</td>
<td>11</td>
<td>10</td>
<td>11</td>
</tr>
<tr>
<td class="firstcol">Medium-Sized Firms**</td>
<td>-1</td>
<td>0</td>
<td>-1</td>
<td>2</td>
<td>3</td>
<td>5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>2</td>
<td>6</td>
<td>2</td>
<td>11</td>
<td>10</td>
<td>14</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>-4</td>
<td>-4</td>
<td>-3</td>
<td>-4</td>
<td>-2</td>
<td>-2</td>
</tr>
<tr class="odd">
<td class="firstcol">Small Firms***</td>
<td>-11</td>
<td>-9</td>
<td>-12</td>
<td>-7</td>
<td>-9</td>
<td>-9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-2</td>
<td>0</td>
<td>-1</td>
<td>5</td>
<td>3</td>
<td>5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>-15</td>
<td>-14</td>
<td>-18</td>
<td>-14</td>
<td>-16</td>
<td>-17</td>
</tr>
</tbody>
</table>
</body>
</html>

The TANKAN Survey for March shows generally less favorable readings for Japanese business. But "less favorable that what?" News stories highlighted the so-called Headline Series, large manufacturing companies. These firms' results for [...]

Bad News -- but Not So Bad -- in Japan's "TANKAN" for March

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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Winnie Tapasanun

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The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, rose 3.3% m/m to 79.2 in November after increases of 2.4% in October (+1.9% initially) and 0.1% in September (unrevised), according to the National Association of Realtors (NAR). The November reading registered the fourth consecutive m/m gain after declining in July and June. The year-on-year growth rate accelerated to 2.6% in November, the highest since August, from 0.1% in October, though still below +6.0% y/y in November 2024. Despite recent gains, the PHSI had fallen 36.7% since its October 2021 high of 125.1.

The m/m rise in November pending home sales coincided with a decline in the average 30-year mortgage rate to 6.24% in November, the lowest since September 2024, down from 6.25% in October and 6.35% in September. These rates, while below a peak of 7.62% in October 2023, had remained higher than a low of 5.22% in August 2022 and more than double a record-low 2.68% in December 2020.

Pending home sales rose m/m in November across all four major regions. Sales in the West recovered 9.2% (2.4% y/y) in November, the first m/m increase since August, following a 1.4% decline in October. Sales in the South rose 2.4% (3.3% y/y), the fourth straight m/m rise, on top of a 2.7% October advance. Sales in the Northeast grew 1.8% (1.8% y/y), the third successive m/m increase, after a 2.3% October gain. Sales in the Midwest rose 1.3% (2.2% y/y), up for the third time in four months, after a 5.3% November rebound.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- PHSI +3.3% (+2.6% y/y) in Nov., driven by lower mortgage rates.
- Home sales m/m up in all four major regions, w/ the highest rate in the West (+9.2%).
- Home sales y/y up across all regions, w/ the highest rate in the South (+3.3%).

U.S. Pending Home Sales Rise for the Fourth Straight Month in November

Kathleen Stephansen, CBE

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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.


Economy in Brief: 2005

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