Robert Brusca

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I don&#8217;t expect the ECB to declare inflation victory based on
this German external price report. But, German ex energy prices are
coalescing around the 2% level. That&#8217;s not headline inflation. And the
result is for Germany not EMU and Germany consistently has one of the
very best inflation records in EMU. So while the German figures show
signs of inflation coming into line, we can expect figures for the Euro
Area as a whole to fall short of this progress.

Even for Germany there remain question marks on inflation.
Three month export and import headline price trends are, respectively
at 4.5% and 6.7% over thee months, at 3% and 8.5% over 6-months and at
2.2% and 5.9% over 12-months. The twelve month results while better are
still an acceleration over the previous March of 2007 12-month period
(marked as Yr-ago in the table).

Since the ex-petroleum indices are NSA so the sequential
growth rates calculations are not to be relied on. There, the 12-mnth
growth in ex petrol export and import prices is at 1.9% and 1.5%,
respectively: within ECB boundaries at least for an HICP headline rate.

But the actual German CPI headline rate is up by 3% yr/yr
accelerating sharply from 1.9% over the previous March&#8217;s 12-month pace.
Ex-energy the German CPI is up at a 2.3% pace, something the Fed in the
US would be pleased with but it&#8217;s still accelerating from 1.7% in the
12-month period ending in March of 2007. While the ECB may look at
ex-food and ex petrol HICP measures, its standard is for headline
inflation alone and that is running &#8216;wild&#8217; in the ECB&#8217;s mind. Still,
the sequential growth rates for Germany&#8217;s overall and core CPI (which
are based on seasonally adjusted data) are actually showing diminishing
pressures.

The German PPI and its core remain rogue. The same inflation
twist is at work in the US, but the US CPI report continues to perform
well at least for Core inflation. Wholesale prices place a greater
weight on raw goods. At a time of spiking commodity prices, that&#8217;s
going to be a problem. Consumer goods industries use industrial prices
as an input but have another stage of processing and therefore have
another chance for productivity to keep price trends in check.

The German figures, while not up to the ECB&#8217;s lofty standards
are nonetheless showing a lot of progress especially for a period with
such repeated and strong commodity price shocks. One hopes that behind
closed doors the ECB is really more pleased than what it reveals in its
public comments.

Europe still has some inflation to fight. The situation in the
UK seems to be worse than in the Euro Area. But the ECB seems to have
matters more under control especially with the strong euro to help. The
German price trends aren&#8217;t perfect but there are some good things in
train there. As Euro Area economies are getting weaker maybe ECB
rhetoric can tone down its concerns a notch or two &#8211; okay, maybe a
half-notch or so&#8230;.
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">German
International and Domestic Inflation Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% m/m</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="even">
<td class="firstcol">SA:</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">Export Prices</td>
<td>0.1%</td>
<td>0.5%</td>
<td>0.6%</td>
<td>4.5%</td>
<td>3.0%</td>
<td>2.2%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Import Prices</td>
<td>0.0%</td>
<td>0.9%</td>
<td>0.7%</td>
<td>6.7%</td>
<td>8.5%</td>
<td>5.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">NSA</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports excl Petroleum</td>
<td>0.2%</td>
<td>0.6%</td>
<td>0.7%</td>
<td>5.8%</td>
<td>2.6%</td>
<td>1.9%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports excl Petroleum</td>
<td>0.0%</td>
<td>0.9%</td>
<td>0.9%</td>
<td>7.2%</td>
<td>3.7%</td>
<td>1.5%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Memo:
SA</td>
</tr>
<tr class="odd">
<td class="firstcol">CPI</td>
<td>0.4%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>3.5%</td>
<td>3.0%</td>
<td>1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; CPI excl Energy</td>
<td>0.3%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>2.3%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">PPI</td>
<td>0.5%</td>
<td>0.6%</td>
<td>0.5%</td>
<td>6.4%</td>
<td>6.5%</td>
<td>4.2%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; PPI excl Energy</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.4%</td>
<td>4.7%</td>
<td>3.1%</td>
<td>2.8%</td>
<td>3.0%</td>
</tr>
</tbody>
</table></div></body></html>

I don’t expect the ECB to declare inflation victory based on this German external price report. But, German ex energy prices are coalescing around the 2% level. That’s not headline inflation. And the result is for Germany not EMU and [...]

German Export and Import Inflation Trends Blunted in March

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425a.jpg" width="353">
The final April reading of consumer sentiment from the University of Michigan fell 9.9% m/m to 62.6, a bit more than the 9.1% decline in the preliminary figure. The drop was larger than Consensus expectations and it reduced the level of sentiment to the lowest level since 1982.
The current conditions index within overall consumer sentiment was weaker than indicated in the preliminary report. It fell 8.6% m/m after a slight rise during March. The view of current conditions for buying large household goods fell a hard 9.7% (-26.3% y/y) and the view of current personal finances fell a somewhat lesser 7.5% (-27.7% y/y).The view of current buying conditions for large household goods fell 25.7% y/y and 11% of respondents thought that prices were too high, nearly the largest percentage since late 1996. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425b.jpg" width="353">
The expectations component of overall sentiment still accounted for the larger part of the April decline with an 11.3% m/m drop. The index fell to its lowest level since late 1990. Expectations for personal finances fell a sharp 10.7% m/m (-21.3% y/y). Expectations for business conditions during the next year fell an even sharper 13.0% (-54.0% y/y) and expectations for conditions over the next five years fell 12.3% m/m (-21.1% y/y).
Opinions about government policy, which apparently influence economic expectations, fell 5.9% m/m (-29.7% y/y) which was an even deeper decline than in the preliminary report. The percentage of those surveyed who indicated that they thought government was doing a good job fell to 7%, the lowest level since 1991 while 43% indicated that they thought government was doing a poor job.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425c.jpg" width="353">
The mean expected rate of inflation during the next twelve months rose further to 5.7%, the highest level since 1990.Has the Behavior of Inflation and Long-Term Inflation Expectations Changed? from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Clark.pdf"> here</a>.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.
PCE and CPI Inflation Differential: Converting Inflation Forecasts also from the Federal Reserve Bank of Kansas City is available <a href="http://www.kansascityfed.org/Publicat/Econrev/PDF/1q08Hakkio.pdf"> here</a>.

<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/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">April (Final)</th>
<th scope="col">April (Prelim.)</th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">April y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>62.6</td>
<td>63.2</td>
<td>&nbsp;69.5</td>
<td>70.8</td>
<td>-28.1% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>77.0</td>
<td>78.4</td>
<td>84.2</td>
<td>83.8</td>
<td>-26.4%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>53.3</td>
<td>53.4</td>
<td>60.1</td>
<td>62.4</td>
<td>-29.8%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
</body>
</html>

The final April reading of consumer sentiment from the University of Michigan fell 9.9% m/m to 62.6, a bit more than the 9.1% decline in the preliminary figure. The drop was larger than Consensus expectations and it reduced the level [...]

Michigan Consumer Sentiment Lowest Since 1982

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425a.jpg" align="left" border="0" height="265" width="353">
The final April reading of consumer sentiment from the
University of Michigan fell 9.9% m/m to 62.6, a bit more than the 9.1%
decline in the preliminary figure. The drop was larger than Consensus
expectations and it reduced the level of sentiment to the
lowest level since 1982.
The current conditions index within overall consumer sentiment
was weaker than indicated in the preliminary report. It fell 8.6% m/m
after a slight rise during March. The view of current conditions for
buying large household goods fell a hard 9.7% (-26.3% y/y) and the view
of current personal finances fell a somewhat lesser 7.5% (-27.7%
y/y).The view of current buying conditions for large household goods
fell 25.7% y/y and 11% of respondents thought that prices were too
high, nearly the largest percentage since late 1996. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425b.jpg" align="right" border="0" height="265" width="353">
The expectations component of overall sentiment still
accounted for the larger part of the April decline with an 11.3% m/m
drop. The index fell to its lowest level since late 1990. Expectations
for personal finances fell a sharp 10.7% m/m (-21.3% y/y). Expectations
for business conditions during the next year fell an even sharper 13.0%
(-54.0% y/y) and expectations for conditions over the next five years
fell 12.3% m/m (-21.1% y/y).
Opinions about government policy, which apparently influence
economic expectations, fell 5.9% m/m (-29.7% y/y) which was an even
deeper decline than in the preliminary report. The percentage of those
surveyed who indicated that they thought government was doing a good
job fell to 7%, the lowest level since 1991 while 43% indicated that
they thought government was doing a poor job.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425c.jpg" align="left" border="0" height="265" width="353">
The mean expected rate of inflation during the next twelve
months rose further to 5.7%, the highest level since 1990.Has
the Behavior of Inflation and Long-Term Inflation Expectations Changed?
from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Clark.pdf">
here</a>.
The University of Michigan survey is not seasonally
adjusted.The reading is based on telephone interviews with about 500
households at month-end; the mid-month results are based on about 300
interviews. The summary indexes are in Haver's USECON database,
with details in the proprietary UMSCA database.
PCE and CPI Inflation Differential: Converting
Inflation Forecasts also from the Federal Reserve Bank of
Kansas City is available <a href="http://www.kansascityfed.org/Publicat/Econrev/PDF/1q08Hakkio.pdf">
here</a>.

<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/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">April (Final)</th>
<th scope="col">April (Prelim.)</th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">April y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>62.6</td>
<td>63.2</td>
<td>&nbsp;69.5</td>
<td>70.8</td>
<td>-28.1% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>77.0</td>
<td>78.4</td>
<td>84.2</td>
<td>83.8</td>
<td>-26.4%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>53.3</td>
<td>53.4</td>
<td>60.1</td>
<td>62.4</td>
<td>-29.8%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
German Export and Import InflationTrends Blunted in March 
by <a href="/comment/Brusca.html">Robert
Brusca</a> April 25, 2008


<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080425d.jpg" align="left" border="0" height="265" width="353">

I don&#8217;t expect the ECB to declare inflation victory based on
this German external price report. But, German ex energy prices are
coalescing around the 2% level. That&#8217;s not headline inflation. And the
result is for Germany not EMU and Germany consistently has one of the
very best inflation records in EMU. So while the German figures show
signs of inflation coming into line, we can expect figures for the Euro
Area as a whole to fall short of this progress.

Even for Germany there remain question marks on inflation.
Three month export and import headline price trends are, respectively
at 4.5% and 6.7% over thee months, at 3% and 8.5% over 6-months and at
2.2% and 5.9% over 12-months. The twelve month results while better are
still an acceleration over the previous March of 2007 12-month period
(marked as Yr-ago in the table).

Since the ex-petroleum indices are NSA so the sequential
growth rates calculations are not to be relied on. There, the 12-mnth
growth in ex petrol export and import prices is at 1.9% and 1.5%,
respectively: within ECB boundaries at least for an HICP headline rate.

But the actual German CPI headline rate is up by 3% yr/yr
accelerating sharply from 1.9% over the previous March&#8217;s 12-month pace.
Ex-energy the German CPI is up at a 2.3% pace, something the Fed in the
US would be pleased with but it&#8217;s still accelerating from 1.7% in the
12-month period ending in March of 2007. While the ECB may look at
ex-food and ex petrol HICP measures, its standard is for headline
inflation alone and that is running &#8216;wild&#8217; in the ECB&#8217;s mind. Still,
the sequential growth rates for Germany&#8217;s overall and core CPI (which
are based on seasonally adjusted data) are actually showing diminishing
pressures.

The German PPI and its core remain rogue. The same inflation
twist is at work in the US, but the US CPI report continues to perform
well at least for Core inflation. Wholesale prices place a greater
weight on raw goods. At a time of spiking commodity prices, that&#8217;s
going to be a problem. Consumer goods industries use industrial prices
as an input but have another stage of processing and therefore have
another chance for productivity to keep price trends in check.

The German figures, while not up to the ECB&#8217;s lofty standards
are nonetheless showing a lot of progress especially for a period with
such repeated and strong commodity price shocks. One hopes that behind
closed doors the ECB is really more pleased than what it reveals in its
public comments.

Europe still has some inflation to fight. The situation in the
UK seems to be worse than in the Euro Area. But the ECB seems to have
matters more under control especially with the strong euro to help. The
German price trends aren&#8217;t perfect but there are some good things in
train there. As Euro Area economies are getting weaker maybe ECB
rhetoric can tone down its concerns a notch or two &#8211; okay, maybe a
half-notch or so&#8230;.
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">German
International and Domestic Inflation Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% m/m</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="even">
<td class="firstcol">SA:</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">Export Prices</td>
<td>0.1%</td>
<td>0.5%</td>
<td>0.6%</td>
<td>4.5%</td>
<td>3.0%</td>
<td>2.2%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Import Prices</td>
<td>0.0%</td>
<td>0.9%</td>
<td>0.7%</td>
<td>6.7%</td>
<td>8.5%</td>
<td>5.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">NSA</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports excl Petroleum</td>
<td>0.2%</td>
<td>0.6%</td>
<td>0.7%</td>
<td>5.8%</td>
<td>2.6%</td>
<td>1.9%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports excl Petroleum</td>
<td>0.0%</td>
<td>0.9%</td>
<td>0.9%</td>
<td>7.2%</td>
<td>3.7%</td>
<td>1.5%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Memo:
SA</td>
</tr>
<tr class="odd">
<td class="firstcol">CPI</td>
<td>0.4%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>3.5%</td>
<td>3.0%</td>
<td>1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; CPI excl Energy</td>
<td>0.3%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>2.3%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">PPI</td>
<td>0.5%</td>
<td>0.6%</td>
<td>0.5%</td>
<td>6.4%</td>
<td>6.5%</td>
<td>4.2%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; PPI excl Energy</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.4%</td>
<td>4.7%</td>
<td>3.1%</td>
<td>2.8%</td>
<td>3.0%</td>
</tr>
</tbody>
</table>
</div></body></html>

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080326d.jpg" width="353">
During March, new single family home sales fell 8.5%. The decline to 526,000 followed a 5.3% drop during February that was revised deeper from the initial report. A March sales level of 585,000 had been expected. The latest level of sales was the lowest since 1991.
By region, double digit month-to-month declines were logged in the Northeast (-64.6% y/y), in the Midwest (-50.0% Y/Y) and in the West (-39.3% y/y). In the South new home sales fell by a lesser 4.6% m/m (-25.9% y/y).
The median price for a new single family home fell 6.8% to $227,600 and reduced prices to near their lowest since 2004. 
The number of new homes for sale fell 1.1% last month (-14.6% y/y). That inventory was down 18.3% from the peak in mid-2006.
Will Rural Prosperity Prevail in 2008? from the Federal Reserve Bank of Kansas City is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Henderson.pdf"> here</a>.<div align="left"><div align="left"></div></div>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">US New Homes</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales (SAAR, 000s)</td>
<td>526</td>
<td>575</td>
<td>-36.6%</td>
<td>773</td>
<td>1,049</td>
<td>1,279</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA, $)</td>
<td>227,600</td>
<td>244,200</td>
<td>-13.3%</td>
<td>243,500</td>
<td>243,067</td>
<td>234,208</td>
</tr>
</tbody>
</table>
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During March, new single family home sales fell 8.5%. The decline to 526,000 followed a 5.3% drop during February that was revised deeper from the initial report. A March sales level of 585,000 had been expected. The latest level of [...]

U.S. New Home Sales & Prices Drop

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424h.jpg" align="left" border="0" height="265" width="353">
Germany&#8217;s IFO index has dropped sharply in March to 102.4 from
104.8. Its current conditions index fell to 109.4 from 111.5. The April
expectations index moved lower to 96.8 from 98.4. On a Yr/Yr basis the
percentage declines in the IFO index accelerated for each of these
components (see table below). 
The readings for the IFO and its components are not yet dour,
but they clearly have weakened and are no longer strong. The Business
Climate index stands in the 73rd percentile of
its range, a firm reading. The current situation is a bit better than
that, lodged at its 78th percentile. Expectations, the forward-looking
indicator, are weaker; still standing in the 60th
percentile of their range. That is still above the midpoint but longer
looking very strong and certainly losing momentum. Expectations
readings, while above their range mid point stand at their period
average at a value of 96.8.
The sector indices tell curious stories. Compared to their
respective average values since January of 2001, all are still well
above average. But all are not well-off. Retailing is the most curious
having moved strongly higher earlier this year even as the euro was
gaining in value. But in April it is falling sharply even as it was
retaining some of those gains. The message from this sector is not
clear. It resides in the 78th percentile of its
range. In that respect it is the relative strongest of the sectors in
its range since 2001. Wholesaling is the weakest sector residing in the
65th percentile of its range. MFG Construction
and retailing are in the low seventieth percentiles of their respective
ranges. All of them fell in the month, retailing fell the mostly
sharply shedding 10 points in one month. Wholesaling lost over 6 points
on its diffusion index. Manufacturing lost about four and one-half
points.
It was not a good month for the IFO report that was generally
worse than the Zew index has suggested. The IFO&#8217;s details are yet to be
revealed. A MFG morale report from neighboring France, a fellow EMU
member, (also released today) showed that French morale was off and
that orders had dropped sharply. That result accords with the Belgian
National Bank index released on Wednesday, just one day ago. We are
getting confirming signs with similar causes about spreading weakness
in the Euro Area. Even the UK&#8217;s CBI MFG survey showed a similar pattern
of weakness made more nettlesome by reports that more firms were
passing through price increases.
The reports for the EMU in the coming months are going to be
important. On today&#8217;s weakness the Euro shed a large dollop of its
recent outsized dollar gains. The ECB rhetoric about tightening rates
has done a quick 180-degree turn, suddenly the IMF is pleased with the
state of ECB policy and the ECB itself no longer seems to threaten a
rate-hiking agenda.
What a difference a few bad economic reports can make. Stay
tuned as we try to discern how weak things will get. For its part the
German government has not cut its growth rate further for 2008 but has
lowered the outlook for 2009. In the face of all the complaining that
the euro is too strong, some of this is going have to undergo a
credibility check. If the euro is far, far above parity (and seems to
suggest that is so) then the recent strength in a number of euro
indicators would seem to at risk. More weak readings from the IFO and
its companion reports must lie ahead. All this talk of a resilient and
robust economy in Europe surely must be about to go by the boards. 
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"> IFO
Survey: Germany</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="5">Percent: Yr/Yr</td>
<td colspan="3">INDEX NUMBERS</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>CURRENT</td>
<td>Average</td>
<td>Percentile</td>
</tr>
<tr>
<td class="firstcol">Biz Climate</td>
<td>-5.7%</td>
<td>-2.7%</td>
<td>-2.7%</td>
<td>-4.2%</td>
<td>-5.3%</td>
<td>102.4</td>
<td>96.0</td>
<td>73.1%</td>
</tr>
<tr>
<td class="firstcol">Current Situation</td>
<td>-4.2%</td>
<td>-0.7%</td>
<td>-1.1%</td>
<td>-4.3%</td>
<td>-6.2%</td>
<td>108.4</td>
<td>95.2</td>
<td>78.6%</td>
</tr>
<tr>
<td class="firstcol">Biz Expectations</td>
<td>-7.2%</td>
<td>-4.7%</td>
<td>-4.4%</td>
<td>-4.1%</td>
<td>-4.3%</td>
<td>96.8</td>
<td>96.8</td>
<td>60.5%</td>
</tr>
</tbody>
</table>

</body></html>

Germany’s IFO index has dropped sharply in March to 102.4 from 104.8. Its current conditions index fell to 109.4 from 111.5. The April expectations index moved lower to 96.8 from 98.4. On a Yr/Yr basis the percentage declines in the [...]

IFO Weakness: A New Trend Lower or a ‘Mild’ Offset to a Spurious Jump?

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<div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424g.jpg" width="353">
The index of help-wanted advertising reported by the Conference Board fell sharply last month to 19 from an unrevised 21 in February. The latest level was a new record low.
During the last ten years there has been a 57% correlation between the level of help-wanted advertising and the three month change in non-farm payrolls.
The proportion of labor markets with rising want-ads rose slightly to a still low 39%. The latest was nevertheless improved from 12% in August which was the lowest monthly reading since October 2001.</div>
Each region of the country showed a m/m decline in its help wanted index except the Middle Atlantic and the New England regions.
The Conference Board surveys help-wanted print advertising volume in 51 major newspapers across the country every month. The latest help wanted report from the Conference Board is available <a href="http://www.conference-board.org/economics/helpwanted.cfm">here</a>.
In 2006, the Conference Board introduced its Help Wanted Online Data Series and the latest release can be found in this <a href="http://www.conference-board.org/pdf_free/HWOnLine3183_PR.pdf">link</a>.<div align="left"></div>

<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/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">March 2007</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">National Help Wanted Index</td>
<td>19</td>
<td>21</td>
<td>29</td>
<td>26</td>
<td>33</td>
<td>39</td>
</tr>
</tbody>
</table>
</body>
</html>

The index of help-wanted advertising reported by the Conference Board fell sharply last month to 19 from an unrevised 21 in February. The latest level was a new record low. During the last ten years there has been a 57% correlation [...]

U.S. Help-Wanted Advertising Fell to a Record Low

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424e.jpg" width="353">
Unexpectedly, initial unemployment insurance claims fell 33,000 last week to 342,000. The decline followed a little revised 20,000 increase during the prior week and it dropped claims to the lowest level in two months. Consensus expectations had been for claims to total 375,000 last week.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424f.jpg" width="353">
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.
The four week moving average of initial claims fell to 369,500 (14.0% y/y), its lowest level in a month.
Continuing claims for unemployment insurance fell 65,000 after an upwardly revised 46,000 increase during the prior week. The figure provides some indication of workers&#39; ability to find employment.
The continuing claims numbers lag the initial claims figures by one week.
The insured rate of unemployment held steady at 2.2% for the fifth week in the last six.

<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>&nbsp;</th>
<th scope="col">04/19/08</th>
<th scope="col">04/12/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;342</td>
<td>375</td>
<td>8.2%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,934</td>
<td>14.8%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Unexpectedly, initial unemployment insurance claims fell 33,000 last week to 342,000. The decline followed a little revised 20,000 increase during the prior week and it dropped claims to the lowest level in two months. Consensus [...]

U.S. Initial Claims for Jobless Insurance Lowest Since February

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424c.jpg" width="353">
During March, new orders for durable manufactured goods dipped 0.3% after falling 0.9% in February, a decline which was less than the 1.7% drop reported initially. Consensus expectations had been for a slight 0.1% uptick in March orders and it was the third consecutive m/m decline.
Outsized weakness was registered in the transportation sector where new orders fell 4.6%. Excluding the volatile transportation sector durable goods orders rose 1.5%, double the expected gain. A 2.1% February decline in orders was little revised.
The 4.6% decline in transportation equipment orders was led by a 4.6% (-14.7% y/y) downdraft in orders for motor vehicles &amp; parts. That was partially offset by a 10.7% gain in new orders for aircraft &amp; parts. Orders for nondefense aircraft &amp; parts rose 5.5% (-18.9% y/y), about the same as they did in February.
Orders for nondefense capital goods rose 1.5% after a revised 0.3% dip during February. During the last ten years there has been an 80% correlation between the y/y gain in nondefense capital goods orders and the rise in equipment &amp; software spending in the GDP accounts. The correlation with capital goods shipments is, as one would expect, a larger 92%.
March new orders for nondefense capital goods less aircraft were unchanged, following a little revised 2.0% February decline which was double the 1.0% drop during January.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424d.jpg" width="353">
Orders for machinery rose 6.2% (1.9% y/y) and recovered about half of the February decline.Computers &amp; related products orders rose 1.6% on the heels of February&#39;s 11.3% surge while new orders for communications equipment dipped 0.3%. More extreme weakness in these orders is indicated by the sharp 19.2% decline from their peak level last July. Primary metal orders ticked up 0.2% (6.3% y/y).
Overall shipments of durable goods dipped 0.4% (+0.4% y/y) as shipments from the transportation sector fell 1.9% (-5.3% Y/Y). Less transportation, shipments ticked up 0.2% (2.5% y/y).
Inventories of durable goods backed up by 1.1% (5.1% y/y). The three month gain in durable goods inventories remained about steady with the prior several months at 8.6% (AR). That is, however, sharply elevated from the -0.1% rate of decumulation last August. Less transportation, inventories also rose at an accelerated 4.9% rate during the last three months.
Maintaining Stability in a Changing Financial System: Some Lessons Relearned Again? From the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Hoenig.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.3%</td>
<td>-0.9%</td>
<td>-2.1%</td>
<td>0.9%</td>
<td>6.3%</td>
<td>9.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>1.5%</td>
<td>-2.1%</td>
<td>2.2%</td>
<td>0.2%</td>
<td>7.6%</td>
<td>8.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>1.5%</td>
<td>-0.3%</td>
<td>-3.3%</td>
<td>3.5%</td>
<td>10.6%</td>
<td>17.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>0.0%</td>
<td>-2.0%</td>
<td>1.7%</td>
<td>-1.6%</td>
<td>8.5%</td>
<td>11.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

During March, new orders for durable manufactured goods dipped 0.3% after falling 0.9% in February, a decline which was less than the 1.7% drop reported initially. Consensus expectations had been for a slight 0.1% uptick in March [...]

U.S. Durable Goods Orders Dipped Unexpectedly

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

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

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251110A0.jpg

251110B0.jpg

Initial claims for unemployment insurance rose 9,379 during the week ended November 1 to 228,899 (3.4% y/y) and mostly reversed the prior week’s 12,643 decline to 219,520. The four-week moving average of initial claims eased to 225,213 from 226,766. The four-week average hit a low of 200,323 in January 2024.

Federal government employees filed 7,482 initial jobless insurance claims last week after 9,435 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.964 million (4.4% y/y) in the week ended October 25 from 1.957 million in the prior week. The four-week moving average rose to 1.949 million from 1.940 million. It was the highest level since the last week of August.

Federal government employees continuing benefits rose to 30,649 in the week ended October 25 from 23,188 in the prior week. These figures are increased from 8,676 at the end of September.

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.

- Increase in initial claims reverses most of earlier decline.
- Continuing claims continue to increase.

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

251110E.jpg

Industrial production for the European Monetary Union (EMU) is not yet available for the union as a whole; however, a number of European countries have reported production, and they give us a good sense of what's happening. In September, among the 13 European countries that reported in the table, all but four of them showed increases in industrial production. Declines were posted in Ireland where production fell by 9.4% in one month, Luxembourg where it fell by 6.1%, Malta where it fell by 1.7%, and in Finland where it fell by 0.4%. In the remaining nine countries, production increased. The median increase for monetary union members in the table was a rise of 0.8% month-to-month. 45.5% of the reporters in the monetary union showed production acceleration.

In August, there were 5 European members with production decreasing. Among European Monetary Union members, the median was a decline of 0.5% with 46.2% of the reporters showing output accelerating on the month. July had been a much worse month with 8 reporting European countries showing declines and with the monetary union median showing a decline of 0.3% and only 38.5% of the reporting EMU members showing output accelerating month-to-month.

There has been gradual moderate improvement in these monthly statistics both in terms of improvement in the median and improvement in the breadth as output has accelerated, with a step back in August.

Looking at the sequential data that compare three-month results to six-month results to 12-month results, we see a median annualized increase of 2.9% for output across monetary union members over three months; that's up from 0.8% over six months and compares to a 2.1% increase for monetary union members over twelve months. The breadth of increase over the period is above 50% on all the horizons and it's fairly steady over three months and six months at about a 54-percentile standing.

September data conclude the results for the third quarter. In this quarter-to-date calculation, 6 of the 13 reporters in the table shows output declining in the third quarter. Monetary Union members generate a median increase of 0.3% in terms of annualized quarter-to-quarter industrial output changes. The pattern and the monthly data seem to be slightly stronger than what we see in the quarter-to-date.

The final column of the table presents the queue standings that calculate the positioning of the year-over-year growth rates across country-reporters among growth rates back to late-2007. Ranked among this cluster of growth rates, only five of the current year-over-year rates stand at levels that are below their median growth rate for the period. Countries with below median growth rates (below a standing of 50%) for industrial production growth are Austria, Germany, Finland, Luxembourg, and Malta. Among these, only one belongs to the four largest economies in the monetary union—Germany, which is also the largest of them. Germany has the standing only its 39th percentile. The unweighted median ranking for the group of monetary union economies is at 57.3%, above the 50% mark and therefore above the historic median.

The industrial production data for the monetary union in September is somewhat encouraging but certainly not crystal clear. There continues to be a lot of weaknesses displayed in the data. While the aggregate ranking is above its historic median, it's not above it by very much and clearly the growth rates are still relatively weak. There still is not a clear trend of acceleration in the group. However, what's lacking in the data is any sign of real deterioration. There clearly is weakness across countries but not a sense of deterioration. The best news in the report may be that there's not any really bad news.

251110.jpg

Europe

Production in a Gradual Recovery in Europe Despite Recent Setbacks

Tian Yong Woon

This week, we review key developments across several Asian economies as the year nears its close. On balance, many of investors’ and policymakers’ worst fears did not materialize. Despite US tariffs, regional exports have shown resilience (chart 1), partly supported by stronger intra-Asia trade, even as exports to the US declined in some cases.

In China, factors including importer front-loading, stronger exports to non-US markets, and government efforts to boost consumption—albeit with potentially one-off effects—have kept the economy on track to meet its 5% growth target this year (chart 2), barring a substantial slowdown in Q4. In Japan, political uncertainty has eased following Prime Minister Takaichi’s rise, though her pro-growth, pro-loose monetary stance has contributed to further yen weakness (chart 3). India, while still likely Asia’s fastest-growing major economy this year, has seen trade setbacks (chart 4) as US–India discussions continue, though recent progress suggests a deal may be near.

However, not all developments in Asia have avoided worst-case outcomes. For example, the Philippines, which has already been hit by a string of storms this year, continues to reel from the effects of Typhoons Fung-wong and Kalmaegi. These storms have highlighted corruption in the Philippines’ flood control systems, rattling investors and pressuring the peso (chart 5), in a manner reminiscent of the rupiah’s decline during Indonesia’s political turmoil earlier this year. In Thailand, political uncertainty continues ahead of general elections eyed at next March, while the expected full return of Chinese tourists has yet to materialize (chart 6).

**Trade in Asia**
For Asia, the year has ultimately not played out as bleakly as investors once feared, particularly on the trade front. Despite US President Trump’s tariffs and a persistent backdrop of uncertainty, export performance in several Asian economies has proven more resilient than expected. This is most clearly reflected in export growth readings for China and key Southeast Asian economies (chart 1), which have remained firm—and at times exceeded expectations—even as China’s shipments to the US fell sharply. Much of this resilience reflects a redirection of exports toward other markets, often within the region. India, however, has seen more limited gains, with exports in US dollar terms struggling to materially surpass last year’s levels.

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**China**
Among the main investor concerns earlier this year was China, which once again came under close scrutiny as President Trump sought to address issues ranging from the large US–China trade imbalance to intensifying AI competition and perceived overcapacity. Yet China’s growth—particularly on the export front—has proven more resilient than expected, with increased shipments to other markets more than offsetting reduced trade with the US. Earlier front-loading by importers ahead of anticipated tariff hikes also temporarily supported export figures. Domestically, government initiatives to stimulate consumption led to a brief lift in retail spending, though signs suggest these effects may be fading, indicating their largely one-off nature. Even so, China has maintained year-to-date growth above its 5% annual target (chart 2), keeping that goal within reach provided momentum does not weaken significantly in Q4. Meanwhile, the more conciliatory tone in recent US–China discussions, including the halving of US fentanyl-related tariffs, offers a modest further relief. That said, longer-term structural issues still loom, including the difficult shift toward a more consumption-led economy, demographic pressures, and questions around sustained overcapacity in key industries.

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**Japan**
In Japan, the political uncertainty that followed the Liberal Democratic Party’s weak election performances earlier in the year has largely eased with Takaichi’s appointment as the country’s first female Prime Minister. Attention now turns to her supplementary budget—reported to be around $65 billion—which aims to address the rising cost of living while also bolstering defence and diplomatic capabilities. Investors, however, are already contemplating the policy implications. In particular, expectations that Takaichi’s agenda could make it harder for the Bank of Japan to pursue further significant tightening have added renewed pressure on the yen, pushing it to multi-year lows (chart 3). And while a weaker yen could, in theory, support tourism, forthcoming measures to curb overtourism—such as Kyoto’s planned 900% increase in accommodation taxes—may act as offsetting factors.

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**India**
Turning to India, the economy remains on track to be the region’s fastest-growing major economy. Growth forecasts were downgraded earlier in the year by the IMF and Blue Chip survey panellists, but these revisions were later reversed. These early-year downgrades reflected India’s heavy exposure to US trade, a concern that materialized when the US raised its reciprocal tariff rate on India from 25% to 50%. This contrasts with the situation of many other Asian economies, who successfully negotiated lower rates below the “Liberation Day” baseline. Although India managed to expand exports to other trading partners, this gain resulted in only a muted net impact on overall exports and, in turn, GDP growth. That said, US–India discussions have made some progress over the year, particularly on previously contentious issues such as India’s purchases of Russian crude. While these developments bring India closer to a potential trade deal, the benefits are likely to materialize beyond this year, meaning current growth readings still largely reflect the impact of the steep US tariffs in place today.

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**The Philippines**
Moving to the Philippines, the country is grappling with the impact of Typhoon Fung-wong, which struck the northern regions on Sunday, forcing over a million people to evacuate and causing widespread landslides and damaged roads. Fung-wong follows a string of storms this year, including Typhoon Kalmaegi, which also inflicted substantial damage just a few days ago. The disasters have reignited concerns over longstanding corruption in the country’s flood control systems, spooking investors and prompting capital outflows, which have weighed on the Philippine peso (chart 5). The currency’s weakness has been compounded by the central bank’s ongoing easing, which has cut the policy rate from last year’s peak of 6.5% to 4.75%—nearly 200 basis points—and with markets still pricing in further cuts.

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**Thailand**
Lastly, Thailand’s economy continues to struggle to regain the footing it had before the pandemic, weighed down by both domestic and external factors. Politically, the country remains in a transitional phase, with new Prime Minister Anutin under scrutiny to deliver on his pledge to hold general elections soon. Deputy Prime Minister indications suggest March 29, 2026 as a likely date, leaving a period of uncertainty in the meantime, as the durability of policies enacted during this interim phase remains unclear. Externally, tourism—which should have been a key growth driver—has underperformed, as the return of Chinese visitors to pre-pandemic levels did not materialize, partly due to tourism-related scares. In contrast, Vietnam appears to have captured a larger share of Chinese tourists this year (chart 6).

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Asia

Economic Letter from Asia: As the Dust Settles

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Consumer credit outstanding increased $13.1 billion (2.3% y/y) in September after rising $3.1 billion in August, revised from $0.4 billion, and $17.7 billion in July, revised from $18.1 billion. A $10.0 billion rise had been expected in the Action Economics Forecast Survey.

Nonrevolving credit outstanding rose $11.4 billion (2.1% y/y) in September after increasing $9.2 billion in August, revised from $6.3 billion, and increasing $6.7 billion in July, revised from $6.9 billion. Nonrevolving credit held by depository institutions declined 6.8% y/y in September after falling 7.4% y/y in August. Finance company debt holdings fell 1.5% y/y after declining 1.3%, while credit union holdings rose an increased 12.8% y/y in September, the quickest growth since in two years. Nonrevolving debt of the federal government rose 3.6% y/y in September, the same as in August.

In September, revolving credit outstanding, which includes credit cards, rose $1.7 billion (2.6% y/y) after falling $6.1 billion in August, revised from a $6.0 billion decline, and rising $11.0 billion in July, revised from $11.2 billion. Revolving credit outstanding held by depository institutions fell 3.0% y/y. Revolving credit held by finance companies fell a steady 14.7% y/y in September, while credit union debt rose 4.5% y/y in September, up from 3.7% y/y in August.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

**AI and the Economy** is the title of today’s speech by Federal Reserve Vice Chair Philip N. Jefferson and it can be found [here](https://www.federalreserve.gov/newsevents/speech/jefferson20251107a.htm).

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- Notable gain in credit usage follows prior month’s slowdown.
- Nonrevolving credit usage strengthens and revolving turns positive.

U.S. Consumer Credit Strengthens in September

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the four weeks ended November 7, 2025 after improving 0.3% in the prior four-week period. The index increased 0.5% y/y following a 0.8% y/y gain at the end of October.

Prices in the **Textile** group increased 2.5% during the last four weeks and rose 3.3% y/y. The cost of burlap increased 23.8% in the last four weeks while surging 48.1% over the last year. Showing modest improvement, cotton prices rose 0.9% in four weeks but declined 5.6% y/y.

**Metals** group prices increased 1.5% (5.9% y/y) in the last four weeks as the cost of aluminum rose 4.9	% (10.3% y/y). Zinc prices moved up 3.6% (5.4% y/y) and the cost of steel scrap rose 1.4% (-5.9% y/y). Lead prices increased 1.1% (-0.2% y/y) in four weeks and the cost of copper scrap rose 0.6% (13.9% y/y). Working lower, tin prices declined 2.2% (+13.8% y/y) in four weeks.

**Miscellaneous** group prices weakened 2.9% in the last four weeks and were off 1.0% y/y, as framing lumber prices fell 11.3% (-4.3% y/y). The cost of tallow, used for frying & baking, declined 9.0% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 2.0% in four weeks, but were off 6.6% y/y.

Prices in the **crude oil & benzene** group declined 1.6% (-10.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 2.2% in four weeks to $60.31 per barrel and declined 15.6% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene fell 3.8% (-23.2% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index was unchanged (+1.5% y/y) over the last four weeks after rising 0.5% during the prior four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

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- Textile and metals prices strengthen.
- Framing lumber costs plummet.
- Crude oil prices weaken.

Economy in Brief: 2008

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German Export and Import Inflation Trends Blunted in March

Michigan Consumer Sentiment Lowest Since 1982

Michigan Consumer Sentiment Lowest Since 1982

U.S. New Home Sales & Prices Drop

IFO Weakness: A New Trend Lower or a ‘Mild’ Offset to a Spurious Jump?

U.S. Help-Wanted Advertising Fell to a Record Low

U.S. Initial Claims for Jobless Insurance Lowest Since February

U.S. Durable Goods Orders Dipped Unexpectedly