Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<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

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401d.jpg" width="353">
The University of Michigan&#39;s March reading of consumer sentiment at 92.6 about matched Consensus expectations, ended the month down from the preliminary indication of 92.9 and was 1.6% lower than February.
Sentiment has fallen in each of the last three months and is off 10.8% from the January &#39;04 peak. During the last ten years there has been a 75% (inverse) correlation between the level of consumer sentiment and the unemployment rate.
The reading of current conditions fell for the second month. The 1.1% decline reflected a sharp decline in sentiment regarding current conditions for buying vehicles.
Consumer expectations slipped for the third consecutive month due to a drop in expected business conditions in six months. This reading is down 27.3% from the January &#39;04 high.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<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/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</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">Consumer Sentiment</td>
<td>92.6</td>
<td>94.1</td>
<td>-3.3%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>108.0</td>
<td>109.2</td>
<td>1.1%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>82.8</td>
<td>84.4</td>
<td>-6.8%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan's March reading of consumer sentiment at 92.6 about matched Consensus expectations, ended the month down from the preliminary indication of 92.9 and was 1.6% lower than February. Sentiment has fallen in each [...]

U.S. Consumer Sentiment Faded Further

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401e.jpg" width="353">
The Institute for Supply Management reported that in March the Business Activity Index for the non-manufacturing sector rose for the second consecutive month to 63.1 from 59.8 the prior month.
Since the series&#39; inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
The new orders index rose to 62.1 while the employment sub index fell moderately m/m from the series&#39; high in February. Since the series&#39; inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
Pricing power eased again m/m to the lowest level in a year.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

<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/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Mar &#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">Business Activity Index</td>
<td>63.1</td>
<td>59.8</td>
<td>64.0</td>
<td>62.4</td>
<td>58.2</td>
<td>55.1</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>65.6</td>
<td>66.4</td>
<td>64.8</td>
<td>69.0</td>
<td>56.8</td>
<td>54.0</td>
</tr>
</tbody>
</table>


</html>

The Institute for Supply Management reported that in March the Business Activity Index for the non-manufacturing sector rose for the second consecutive month to 63.1 from 59.8 the prior month. Since the series' inception in 1997 there [...]

ISM Non-Manufacturing Index Higher Again

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401c.jpg" width="353">
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector remained about unchanged in March at 55.2 versus 55.3 in February. Consensus expectations had been for 55.0.
During the last twenty years there has been a 69% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
Only the new orders (57.1) and inventories (54.1) components rose. The production index (56.5) continued its slide from the January &#39;04 peak of 69.0 and the employment index (53.3) reversed all of the prior two months&#39; gains. During the last twenty years there has been a 69% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
The vendor deliveries index (52.5) fell sharply to the lowest level since 2003 and the index of export orders (55.4) also fell hard to the lowest in six months.
The prices paid index recovered more than all of the prior two months&#39; decline but remained off the April &#39;04 high of 88.0.

<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/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">March &#39;04</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">Composite Index</td>
<td>55.2</td>
<td>55.3</td>
<td>62.3</td>
<td>60.5</td>
<td>53.3</td>
<td>52.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>57.1</td>
<td>55.8</td>
<td>65.3</td>
<td>&nbsp;63.5</td>
<td>57.9</td>
<td>56.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>73.0</td>
<td>65.5</td>
<td>86.0</td>
<td>79.8</td>
<td>59.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector remained about unchanged in March at 55.2 versus 55.3 in February. Consensus expectations had been for 55.0. During the last [...]

ISM Factory Index About Stable

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401a.jpg" width="353">
Non-farm payrolls rose just 110,000 in March and the prior month&#39;s gain was revised lower to 243,000. Consensus expectations had been for payrolls to rise 220,000 last month.
The household survey, however, indicated that the unemployment rate fell back to 5.2% as a result of a 357,000 (+1.5% y/y) worker rise in employment. The number of job losers fell 196,000 (-15.4% y/y). The labor force rose 25,000 (1.0% y/y) but the labor force participation rate held steady at a low 65.8% versus a high in 2000 of 67.3%.
Factory sector payrolls fell 8,000 and the prior month&#39;s gain was revised lower. The breadth of hiring gain rose slightly to a still narrow 44.0%. Six-month breadth was only 39.3%.
Private service producing payrolls rose 77,000 (1.9% y/y) in March and the prior month&#39;s gain was lowered. The slowdown in hiring versus earlier months spread throughout industry. Professional &amp; business service jobs grew 27,000 (3.8% y/y) and financial jobs edged up 2,000 (2.0% y/y). Jobs in retailing fell 9,700 (+0.6% y/y) though the gain in education &amp; health services jobs firmed to 23,000 (2.3% y/y). Total government employment rose 9,000 (0.8% y/y) but federal government jobs fell 1,000 (-0.4% y/y).
Construction jobs remained firm and rose 26,000 (3.6% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401b.jpg" width="353">
The index of aggregate hours worked (employment times hours worked) rose 0.1% (+2.5% y/y) in March and the 1Q average is 2.0% (AR) ahead of 4Q04.
Average hourly earnings increased 0.3% but earnings in manufacturing fell 0.2% (2.4% y/y).
Gains in U.S. Productivity: Stopgap Measures or Lasting Change? from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-05.html">here</a>.
A Search for a Structural Phillips Curve from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr203.html"> 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/@EB01/@EB01.HTM">Employment</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">Payroll Employment</td>
<td>110,000</td>
<td>243,000</td>
<td>1.6%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-8,000</td>
<td>15,000</td>
<td>0.2%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.2%</td>
<td>5.4%</td>
<td>5.7%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm payrolls rose just 110,000 in March and the prior month's gain was revised lower to 243,000. Consensus expectations had been for payrolls to rise 220,000 last month. The household survey, however, indicated that the [...]

U.S. Payroll Growth Slowed, Unemployment Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050304a.jpg" width="353">
Non-farm payrolls rose just 110,000 in March and the prior month&#39;s gain was revised lower to 243,000. Consensus expectations had been for payrolls to rise 220,000 last month.
The household survey, however, indicated that the unemployment rate fell back to 5.2% as a result of a 357,000 (+1.5% y/y) worker rise in employment. The number of job losers fell 196,000 (-15.4% y/y). The labor force rose 25,000 (1.0% y/y) but the labor force participation rate held steady at a low 65.8% versus a high in 2000 of 67.3%.
Factory sector payrolls fell 8,000 and the prior month&#39;s gain was revised lower. The breadth of hiring gain rose slightly to a still narrow 44.0%. Six-month breadth was only 39.3%.
Private service producing payrolls rose 77,000 (1.9% y/y) in March and the prior month&#39;s gain was lowered. The slowdown in hiring versus earlier months spread throughout industry. Professional &amp; business service jobs grew 27,000 (3.8% y/y) and financial jobs edged up 2,000 (2.0% y/y). Jobs in retailing fell 9,700 (+0.6% y/y) though the gain in education &amp; health services jobs firmed to 23,000 (2.3% y/y). Total government employment rose 9,000 (0.8% y/y) but federal government jobs fell 1,000 (-0.4% y/y).
Construction jobs remained firm and rose 26,000 (3.6% y/y).
The index of aggregate hours worked (employment times hours worked) rose 0.1% (+2.5% y/y) in March and the 1Q average is 2.0% (AR) ahead of 4Q04.
Average hourly earnings increased 0.3% but earnings in manufacturing fell 0.2% (2.4% y/y).
Gains in U.S. Productivity: Stopgap Measures or Lasting Change? from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-05.html">here</a>.
A Search for a Structural Phillips Curve from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr203.html"> 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/@EB01/@EB01.HTM">Employment</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">Payroll Employment</td>
<td>110,000</td>
<td>243,000</td>
<td>1.6%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-8,000</td>
<td>15,000</td>
<td>0.2%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.2%</td>
<td>5.4%</td>
<td>5.7%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
ISM Factory Index About Stable 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 1, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401c.jpg" width="353">
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector remained about unchanged in March at 55.2 versus 55.3 in February. Consensus expectations had been for 55.0.
During the last twenty years there has been a 69% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
Only the new orders (57.1) and inventories (54.1) components rose. The production index (56.5) continued its slide from the January &#39;04 peak of 69.0 and the employment index (53.3) reversed all of the prior two months&#39; gains. During the last twenty years there has been a 69% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
The vendor deliveries index (52.5) fell sharply to the lowest level since 2003 and the index of export orders (55.4) also fell hard to the lowest in six months.
The prices paid index recovered more than all of the prior two months&#39; decline but remained off the April &#39;04 high of 88.0.

<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/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">March &#39;04</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">Composite Index</td>
<td>55.2</td>
<td>55.3</td>
<td>62.3</td>
<td>60.5</td>
<td>53.3</td>
<td>52.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>57.1</td>
<td>55.8</td>
<td>65.3</td>
<td>&nbsp;63.5</td>
<td>57.9</td>
<td>56.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>73.0</td>
<td>65.5</td>
<td>86.0</td>
<td>79.8</td>
<td>59.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
ISM Non-Manufacturing Index Higher Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 1, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401e.jpg" width="353">
The Institute for Supply Management reported that in March the Business Activity Index for the non-manufacturing sector rose for the second consecutive month to 63.1 from 59.8 the prior month.
Since the series&#39; inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
The new orders index rose to 62.1 while the employment sub index fell moderately m/m from the series&#39; high in February. Since the series&#39; inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
Pricing power eased again m/m to the lowest level in a year.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

<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/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Mar &#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">Business Activity Index</td>
<td>63.1</td>
<td>59.8</td>
<td>64.0</td>
<td>62.4</td>
<td>58.2</td>
<td>55.1</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>65.6</td>
<td>66.4</td>
<td>64.8</td>
<td>69.0</td>
<td>56.8</td>
<td>54.0</td>
</tr>
</tbody>
</table>
U.S. Consumer Sentiment Faded Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 1, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050401d.jpg" width="353">
The University of Michigan&#39;s March reading of consumer sentiment at 92.6 about matched Consensus expectations, ended the month down from the preliminary indication of 92.9 and was 1.6% lower than February.
Sentiment has fallen in each of the last three months and is off 10.8% from the January &#39;04 peak. During the last ten years there has been a 75% (inverse) correlation between the level of consumer sentiment and the unemployment rate.
The reading of current conditions fell for the second month. The 1.1% decline reflected a sharp decline in sentiment regarding current conditions for buying vehicles.
Consumer expectations slipped for the third consecutive month due to a drop in expected business conditions in six months. This reading is down 27.3% from the January &#39;04 high.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<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/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</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">Consumer Sentiment</td>
<td>92.6</td>
<td>94.1</td>
<td>-3.3%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>108.0</td>
<td>109.2</td>
<td>1.1%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>82.8</td>
<td>84.4</td>
<td>-6.8%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
Bad News -- but Not So Bad -- in Japan's "TANKAN" for March 
by <a href="/comment/Stone.html">By Carol Stone</a> April 1, 2005


<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>


</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050331h.jpg" width="353">
The Italian statistical agency Istat today reported that the March CPI was up 1.9% from March 2004. This result means that inflation in Italy has held at or below a 2% yearly pace for the last six months. The persistent decline to such a low rate in recent months seems impressive in light of the strong uptrend in world energy prices.
As seen in the table below, energy components of the Italian CPI array have indeed been strong, with transport-related fuel up 10% during 2004 and 7.7% in February from a year earlier (latest available for this line-item). The behavior of some other basic consumer price items suggests reasons for the moderate overall inflation: food prices in Italy are falling and clothing prices are rising very slowly. Food had seen outsized increases from 2001 through 2003, but steep declines in fruit and vegetables have led that segment down since early last year. Clothing prices are actually falling in a number of countries, and while they are rising in Italy, these increases have been progressively slower since the spring of 2003. Also, surprisingly -- at least to an American commentator -- health care prices are declining. The cost of medicine and pharmaceuticals fell at about a 6% pace in January and February. Notably, over the last couple of years, inflation rates for medications in the US have eased as well, but in Italy, these prices have been falling outright.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050331i.jpg" width="353">
Thus, there are some cushions in the Italian price system against the impact of surging energy costs. So inflation may not automatically ratchet higher with every &#128;1 increase in the price of a barrel of oil.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ITALY/ITALY.HTM">Italy: Consumer Price Index</a> Yr/Yr % Change</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">Total CPI</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 class="odd">
<td class="firstcol">Food</td>
<td>-0.2</td>
<td>-0.4</td>
<td>-0.7</td>
<td>-0.3</td>
<td>3.9</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">Apparel</td>
<td>1.7</td>
<td>1.8</td>
<td>1.8</td>
<td>1.8</td>
<td>2.6</td>
<td>3.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Transport Fuel</td>
<td>--</td>
<td>7.7</td>
<td>6.8</td>
<td>10.0</td>
<td>0.2</td>
<td>4.6</td>
</tr>
<tr>
<td class="firstcol">Housing Electricity &amp; Fuel</td>
<td>--</td>
<td>4.5</td>
<td>3.8</td>
<td>2.5</td>
<td>3.0</td>
<td>-1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: Euro-Zone &quot;Flash Estimate&quot;</td>
<td>2.1</td>
<td>2.1</td>
<td>1.9</td>
<td>2.4</td>
<td>2.0</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">US CPI</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>
</table>
</body>
</html>

The Italian statistical agency Istat today reported that the March CPI was up 1.9% from March 2004. This result means that inflation in Italy has held at or below a 2% yearly pace for the last six months. The persistent decline to [...]

Italian CPI Keeps Low Inflation Despite Higher Energy Costs

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050331e.jpg" width="353">
Initial claims for unemployment insurance rose 20,000 to 350,000 last week versus an upwardly revised level the prior week. Consensus expectations had been for 321,000 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 to 336,000 (-1.2% y/y).
Continuing claims for unemployment insurance dropped 66,000 from the prior week and the insured rate of unemployment remained at 2.1%.

<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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">03/26/05</th>
<th scope="col">03/19/05</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>350</td>
<td>330</td>
<td>1.4%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,608</td>
<td>-11.6%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose 20,000 to 350,000 last week versus an upwardly revised level the prior week. Consensus expectations had been for 321,000 claims. During the last ten years there has been a (negative) 74% [...]

Initial Claims For Unemployment Insurance Rose Further

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

251229F.jpg

251229G.jpg

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

251224A1.jpg

251224b1.jpg

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.


251224c1.jpg

251224e1.jpg

- 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

251224a0.jpg

251224b0.jpg

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

251223n8.jpg

251223c8.jpg

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.



251223o8.jpg

251223p8.jpg

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**.



251223q8.jpg

251223s8.jpg

- 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

251223r1.jpg

251223s1.jpg

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.



251223t1.jpg

251223u1.jpg

- 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

Jump to:

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

U.S. Consumer Sentiment Faded Further

ISM Non-Manufacturing Index Higher Again

ISM Factory Index About Stable

U.S. Payroll Growth Slowed, Unemployment Fell

U.S. Payroll Growth Slowed, Unemployment Fell

Italian CPI Keeps Low Inflation Despite Higher Energy Costs

Initial Claims For Unemployment Insurance Rose Further