Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424a.jpg" align="left" border="0" height="265" 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.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424b.jpg" align="right" border="0" height="265" width="353">
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>.

<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>
</body></html>

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

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424c.jpg" align="left" border="0" height="265" 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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424d.jpg" align="right" border="0" height="265" 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'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>
U.S. New Home Sales &amp;
Prices Drop 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424a.jpg" align="left" border="0" height="265" 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.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424b.jpg" align="right" border="0" height="265" width="353">
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>.

<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>
U.S. Help-Wanted Advertising Fell
to a Record Low 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 24, 2008



<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424g.jpg" align="left" border="0" height="265" 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>
<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>
U.S. Initial Claims for Jobless
Insurance Lowest Since February 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424e.jpg" align="left" border="0" height="265" 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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080424f.jpg" align="right" border="0" height="265" 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' 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>
IFO Weakness: A New Trend Lower ora &#8216;Mild&#8217; Offset to a Spurious Jump? 
by <a href="/comment/Brusca.html">Robert
Brusca</a> April 24, 2008


<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>

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

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423f.jpg" align="left" border="0" height="265" width="353">
What is for real and what is whistling past the
graveyard? 
 
Tangled trends 
Euro Area orders are up in February, making it a two-month gain
following a dive in December. Still the 3-month growth rate is negative
for orders at a -3.9% compared to an annual rate gains of 6% over six
months and 6.6% over 12-months. So the sequential growth rates point to
some sliding in growth despite recent two-month pickup. 
 
Orders: the lagging leading statistic&#8230; 
More to the point is the fact that the orders figures for the Euro Area
are for February when many other series at the country level already
are available for March. Survey data are beginning to come available
for April as we saw in the release of the Belgian National Bank&#8217;s April
index that plunged &#8211; ironically, led by weakness in orders. The Belgian
index April result is nothing like the recent numbers we are seeing
through April. Still, the BNB survey, truncated at February, would have
been quite compatible with the figures in the table above. That begs
the question of what the trend really is, doesn&#8217;t it? At the end of the
month we we&#8217;ll get the comprehensive survey results for April that
addresses the sectors of the Euro Area and EU from the European
Commission. Based on the Belgian report we would seem to have a much
darker set of trends that will be placed before us. Germany&#8217;s Zew index
for April is already in hand and it shows a weakening in expectations
to a very low level with some so-far minor weakness in current
conditions. But this is a survey of expectations among financial
experts. The upcoming German IFO report will survey the industrial and
other sector participants directly about how their businesses are
performing. . 
 
The drop off in the Belgian index is still isolated but it is highly
topical and reasonably comprehensive across sectors&#8230; and it is an index
known to have leading indicator properties. 
 
Whistling past the graveyard? 
For my taste the smugness of the European reaction to ongoing growth
there and the ECB&#8217;s stubbornness in ignoring the high euro exchange
rate value in setting policy has been hard to stomach since this
behavior has sent inconsistent signals to the markets. In looking at
the euro historically &#8211;even extending the construction of a &#8216;synthetic
euro&#8217; back to the early years of fluctuating exchange rates- it is
PAINFULLY clear how overvalued that rate has become &#8211; and not just VS
the dollar! All the talk of how robust Germany&#8217;s economy remains in the
face of this strikes me as akin to the Spartans swallowing their teeth
to hide the fact that they have been injured. The index above is broad
and inflation adjusted. It is the real deal showing &#8216;euro&#8217;
competitiveness at its lowest level in 36 years &#8211; or more. The ECB&#8217;s
ignoring this clearly deflationary force in setting policy is similarly
puzzling. The real, broad euro exchange rate stands nearly 20% above
its average for the period. 
 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423g.jpg" align="right" border="0" height="265" width="353">Single mandate does
not mean closed-minded 
It does not matter if the ECB has a singular focus and mandate on
inflation with no growth mandate at all. To crank rates up and to
threaten to do it some more as temporary &#8216;inflation&#8217; effects wash
through economy when they &#8216;know&#8217; there is a powerful deflation force at
work (i.e. the overly strong euro) is not good monetary policy. The
German government has long known its place in such monetary fights and
has taken to extolling the benefits of a strong euro. I guess the
response there is this: If you can&#8217;t beat &#8216;em, join &#8216;em. Thus the
German economics and finance ministries seem in some way complicit with
this policy of excessive anti-inflation zeal. It may be that ECB-types
feel they have to lean hard against the unwanted advice urging
flexibility from the IMF. The International Monetary Fund said Monday
in its latest Regional Economic Outlook for Europe that the European
Central Bank has some leeway to loosen its monetary stance. Today aft r
the euro has screamed higher, the IMF&#8217;s John Lipsky has called euro
monetary policy appropriate as it is. I don&#8217;t know if that will end
this verbal silliness or not. 
 
Right hand does not seem to know (or care?) what the left is
doing&#8230; 
So the economic growth/inflation outlooks and assessments have flies in
the ointment. Unfortunately it seems that the more topical reports are
the weaker ones. While the title &#8216;industrial orders&#8217; sounds like a
leading sort of barometer, no report is any fresher than the data it
contains. If this one continued fish you would not touch it. The
topical reports lead us to be cautious in the assessment of current
trends. Germany and Europe have for too long been too resistant to the
impact of a euro whose strength has been eating away ravenously at
their competitive positive. The resiliency of the economic data has
belied the urgency in the tone of policy makers who have sought some
help in stemming the euro&#8217;s rise. But, in the end, you can&#8217;t have it
both ways. If the euro is too strong it must do damage. If it does not,
it is not too strong. If policy markers are going to extol the vibrant
nature of their own economies as its fundamentals are being undercut
surely they can expect no urgency to help them with their nonexistent
FX problem! 
 
Call to action: THINK! 
Governmental and central banking policymakers must be on the same page
and willing to look ahead if they are to foster a correct view of their
economy. For the moment we continue to have the sort of fair-weather
analysis from officials that we were spoon fed by commercial bankers
over the previous year. We know what that is worth. It is a good time
to look closely at the data yourself and remember the key
constituencies of the policymakers that go public. I think we may be in
for a rude awakening. But that&#8217;s only one man&#8217;s opinion. And economists
are wrong at least as often as markets are&#8230; Who is &#8216;wrong&#8217; now? 
 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col"> Euro Area and UK Industrial Orders &amp; Sales Trends</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">% m/m</td>
<td colspan="3">Feb-08</td>
<td>Feb-07</td>
<td>Feb-06</td>
<td>Qtr-2 Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro Area Detail</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>3Mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Manufacturing Orders</td>
<td>0.6%</td>
<td>2.2%</td>
<td>-3.7%</td>
<td>-3.9%</td>
<td>6.0%</td>
<td>6.6%</td>
<td>7.0%</td>
<td>11.1%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol" colspan="10">MFG Orders</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Orders</td>
<td>0.6%</td>
<td>2.2%</td>
<td>-3.7%</td>
<td>-3.9%</td>
<td>6.0%</td>
<td>6.6%</td>
<td>7.0%</td>
<td>11.1%</td>
<td>2.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Countries:</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>3Mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Qtr-2 Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany:</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>-1.6%</td>
<td>-6.5%</td>
<td>7.7%</td>
<td>5.9%</td>
<td>12.7%</td>
<td>12.3%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">France:</td>
<td>1.0%</td>
<td>4.1%</td>
<td>-1.7%</td>
<td>14.2%</td>
<td>5.7%</td>
<td>9.7%</td>
<td>5.9%</td>
<td>4.7%</td>
<td>17.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>2.0%</td>
<td>2.8%</td>
<td>-5.2%</td>
<td>-2.5%</td>
<td>3.9%</td>
<td>9.9%</td>
<td>1.6%</td>
<td>11.4%</td>
<td>5.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK (EU)</td>
<td>-13.2%</td>
<td>23.8%</td>
<td>-6.3%</td>
<td>2.9%</td>
<td>4.6%</td>
<td>13.7%</td>
<td>-7.5%</td>
<td>15.8%</td>
<td>81.3%</td>
</tr>
</tbody>
</table>
</body></html>

What is for real and what is whistling past the graveyard? Tangled trends Euro Area orders are up in February, making it a two-month gain following a dive in December. Still the 3-month growth rate is negative for orders at a -3.9% [...]

Euro Area Orders Stabilize: A Leading or Misleading Statistic?

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423e.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s retail sales rose by 0.3% in nominal terms in
February. Nominal growth in retail sales shows some pick up as the
overall three month growth rate has improved. But this is an inflation
effect. When we deflate nominal retail sales buy Italy&#8217;s CPI we find
three month growth is still declining&#8230; albeit at a slower pace than in
come previous periods. Still, the current quarter (2008-Q1), with two
months worth of data in hand, shows real retail sales posting a decline
at a 2.8% annual rate. This compares to an actual Q4 rise in real
retail sales of +3.8%. in 2007 Q4. As you can see from the plotting of
real retail sales, Italy&#8217;s consumers have been challenged for quite
some time. While there is a minor abatement of the ongoing sales
deceleration in place, that seems to be in the context of a broader and
still declining overall trend. So we should take no consolation from
the current nominal retail sales pick up or even from the &#8216;upward hook&#8217;
formation on the growth chart for real retail sales as of February. It
has no fundamental basis. 
 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col">Italy Retail Sales Growth </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">mo/mo %</td>
<td colspan="4">At annual rates</td>
<td></td>
</tr>
<tr class="grey3">
<td class="firstcol">Nominal</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr -Ago</td>
<td>Qtr-to-Date</td>
</tr>
<tr class="grey2">
<td class="firstcol">Retail Trade</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>2.2%</td>
<td>1.3%</td>
<td>1.4%</td>
<td>0.4%</td>
<td>1.7%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Food Beverages &amp; Tobacco</td>
<td>0.5%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>3.1%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>0.2%</td>
<td>2.3%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Clothing &amp; Furniture</td>
<td>1.4%</td>
<td>0.7%</td>
<td>0.2%</td>
<td>9.6%</td>
<td>3.9%</td>
<td>1.7%</td>
<td>0.9%</td>
<td>4.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Total Real Retail</td>
<td>0.2%</td>
<td>-0.2%</td>
<td>-0.4%</td>
<td>-1.7%</td>
<td>-2.6%</td>
<td>-1.5%</td>
<td>-1.4%</td>
<td>-2.8%</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s retail sales rose by 0.3% in nominal terms in February. Nominal growth in retail sales shows some pick up as the overall three month growth rate has improved. But this is an inflation effect. When we deflate nominal retail [...]

Italy’s Retail Sales Growth Remains Stunted

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423d.jpg" align="left" border="0" height="265" width="353">
BNB index is a harbinger for the Euro-Area: The BNB index has
plunged sharply in April. This early read on Euro Area health in April
has been a GOOD SOLID barometer of what the larger and geographically
linked key EMU economies will report for the month. The chart shows the
tracking of the Belgian industrial index &#8211; usually the first read on
the Euro Area and EU in any given month - with the EU&#8217;s industrial
index and with the EU Commission index for Germany. The Belgian index
has often moved ahead of the EU and German indices. In this episode,
the Belgian index had started to strengthen ahead of any such signs for
Germany and EU before posting this recent drop. So the plunge in
Belgium in April may overstate the extent of the drop yet to be seen in
Germany and in EU. In any event, the smaller Belgian economy often sees
its BNB index move more sharply than the indices for Germany and the EU
but it is generally a good &#8216;hint&#8217; for them and is not to be ignored. 
 
MFG sector is weak 
The BNB index shows us widespread weakness in Belgium. The MFG index
(an up minus down net reading, like all the other components) is at
-7.9, the weakest since it was at -10.5 in August of 2005. The domestic
production reading slipped from +6 to +2 in April but the domestic and
foreign orders indices have both plunged to register deep negative
readings. Foreign orders were last weaker in May of 2005 and domestic
orders were last weaker in June of 2003. 
 
They&#8217;re here &#8211; not the poltergeist but worse&#8230; FX gremlins 
The current assessment, by comparison, is only mildly negative at a -2
reading, and was last weaker in January of 2008 at -5: so that&#8217;s no big
deal- or is it? Foreign orders at a -8 are more serious weakened in the
current assessment, suggesting that foreign-linked weakness is here now
and not just in some vague pipeline of indeterminate length. This is
the sort of thing we have been waiting to see happen in the aftermath
of the ongoing surge in the euro. Maybe the Euro Area is not so
resilient after all. Maybe the German economy is not as &#8216;robust&#8217; as its
deputy Finance minister sees things. Maybe the ECB has lost its cool in
pursuit of an inflation objective that made no SHORT TERM SENSE given
the nature of the international strains in the system. Maybe, maybe,
maybe- a great word that word &#8216;maybe.&#8217; 
 
Weakness across Belgium a geographically central-EU state 
Apart from industry the Belgian wholesale/retail index fell sharply to
-9.5 in April from +0.2 in March. It had briefing resided at -8 in
February of this year and then recovered - but no more. It was last
weaker in May of 2005 at -8.7. The construction index is very weak as
well. It was last weaker in Sept of 2002. The business services index
at 6.3 was last weaker in August of 2005. And so on&#8230; 
 
Raven-mad? 
Those lows in 2005 mark the time when the Euro Area was beginning to
recover from its period of extended weakness. What we see is the new
lows in the various components of the April 2008 Belgian survey go back
to OR BEYOND that point, inviting comparisons with a time when things
were bad and terms like euro-sclerosis were in vogue. The &#8216;New Europe&#8217;
where &#8216;robust&#8217; and &#8216;solid&#8217; and &#8216;inflation-fighting&#8217; have been key words
and phrases may now be past their vintage years. The euro consumer
never did kick in as force to support growth. Investment-led growth can
only take you so far especially when the rest of the world is slowing
and external demand for investment goods begins to dry up&#8230;and your
currency is setting record highs while your central bank with inflation
marginally over the target starts threatening to HIKE RATES! For a time
Euro Area growth seemed to be able to out-run the speeding bullet that
was the streaking strong euro. But as Edgar Alan Poe once
wrote&#8230;nevermore. The basis for the belief was flawed from the start,
even raven-mad. Exchange rates do matter. Maybe (oh, that word again&#8230;)
now the ECB can let its policy pay some heed to that. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Belgium
National Bank Indices </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-Mo Change</td>
<td>6-Mo Change</td>
<td>12-Mo Change</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Industry</td>
<td style="color: red;">-7.9</td>
<td style="color: red;">1.2</td>
<td style="color: red;">0.2</td>
<td style="color: red;">-7.1</td>
<td style="color: red;">-7.8</td>
<td style="color: red;">-11.7</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td style="color: red;">-7.4</td>
<td>1.1</td>
<td>0.5</td>
<td style="color: red;">-6.6</td>
<td style="color: red;">-5.6</td>
<td style="color: red;">-9.7</td>
</tr>
<tr>
<td class="firstcol">Production</td>
<td>2.0</td>
<td>6.0</td>
<td>3.0</td>
<td>2.0</td>
<td>3.0</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">Domestic Orders</td>
<td style="color: red;">-22.0</td>
<td>1.0</td>
<td>0.0</td>
<td style="color: red;">-19.0</td>
<td style="color: red;">-19.0</td>
<td style="color: red;">-28.0</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td style="color: red;">-14.0</td>
<td>1.0</td>
<td>6.0</td>
<td style="color: red;">-18.0</td>
<td style="color: red;">-17.0</td>
<td style="color: red;">-18.0</td>
</tr>
<tr>
<td class="firstcol">Prices</td>
<td>8.0</td>
<td>7.0</td>
<td>15.0</td>
<td>5.0</td>
<td>5.0</td>
<td>1.0</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td class="firstcol" colspan="7">Current
assess</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td style="color: red;">-2.0</td>
<td style="color: red;">-1.0</td>
<td>3.0</td>
<td>3.0</td>
<td>4.0</td>
<td style="color: red;">-5.0</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td style="color: red;">-8.0</td>
<td>4.0</td>
<td>0.0</td>
<td style="color: red;">-6.0</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-11.0</td>
</tr>
<tr>
<td class="firstcol">Inventories</td>
<td>5.0</td>
<td>3.0</td>
<td>4.0</td>
<td>1.0</td>
<td>3.0</td>
<td>0.0</td>
</tr>

<tr>
<td class="firstcol">Wholesale &amp; Retail</td>
<td style="color: red;">-9.5</td>
<td>0.2</td>
<td style="color: red;">-8.0</td>
<td style="color: red;">-6.8</td>
<td style="color: red;">-16.2</td>
<td style="color: red;">-19.8</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td style="color: red;">-8.7</td>
<td>2.9</td>
<td>7.0</td>
<td style="color: red;">-10.1</td>
<td style="color: red;">-9.7</td>
<td style="color: red;">-12.7</td>
</tr>
<tr>
<td class="firstcol">Business Services</td>
<td>6.3</td>
<td>6.4</td>
<td>7.5</td>
<td style="color: red;">-0.8</td>
<td style="color: red;">-6.5</td>
<td style="color: red;">-7.2</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="2">Comparisons:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Changes lag one month</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">EU Index: Industry</td>
<td>#N/A</td>
<td>0.0</td>
<td>0.0</td>
<td style="color: red;">-2.0</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-6.0</td>
</tr>
<tr>
<td class="firstcol">Germany Index: Industry</td>
<td>#N/A</td>
<td>2.0</td>
<td>2.0</td>
<td style="color: red;">-2.0</td>
<td style="color: red;">-1.0</td>
<td style="color: red;">-7.0</td>
</tr>
<tr>
<td class="firstcol" colspan="2">Compare: BNB
Index</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>3.1</td>
<td style="color: red;">-0.2</td>
<td style="color: red;">-0.2</td>
</tr>
</tbody>
</table>
</body></html>

BNB index is a harbinger for the Euro-Area: The BNB index has plunged sharply in April. This early read on Euro Area health in April has been a GOOD SOLID barometer of what the larger and geographically linked key EMU economies will [...]

Belgian National Bank Index Signals Euro-Trouble Ahead

<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/080423a.jpg" width="353">
U.S. exports through February rose 22% from a year earlier. The double digit growth rate reflects broad based export gains to virtually all of America&#39;s trading partners. No doubt, the weaker foreign exchange value of the dollar is behind much of this growth. But the larger force driving those gains is more likely to have been the foreign countries&#39; own economic growth. In areas where the dollar&#39;s value is down, U.S. exports are up. Where the dollar is unchanged, U.S. exports are up. Where it is up, exports also have grown.
Strongest have been the gains in U.S. exports to Europe which account for 27% of total U.S. exports. Thirty percent y/y growth through this February followed several years of double digit gain. Here is where the decline in the dollar&#39;s value seems to be paying off. Moreover, 2.6% growth in Europe&#39;s real GDP last year and 3.1% growth in 2006 is well elevated from 1-2% growth during five years and this too raised U.S. exports. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423b.jpg" width="353">
Exports to Mexico, another major U.S. trading partner, recently surged after a temporary growth slowdown last year. The recent pickup in growth reflects the acceleration in the country&#39;s rate of economic growth.
Recent firmness in exports to Mexico occurred along with still strong export growth to Canada. Here again, the dollar&#39;s decline against the Canadian currency has helped U.S. exports but Canada&#39;s solid growth in real GDP of 2.9% follows ten years of growth at about that rate. Cross border, two-way trade between the U.S. and its North American trading partners clearly plays a role in the export growth rates.
Exports to the Pacific Rim also have been strong, fueled by the dollar&#39;s lower value against the Yen and by the double digit GDP growth in China. Together, these two countries account for 10% of U.S. exports. Here again, two-way trade does play a role in boosting the U.S. export figures. In addition, the decline in the dollar&#39;s value against the Yen has supported U.S. export growth even as Japan&#39;s domestic growth was sagging. With China, U.S. export growth has boomed due to the country&#39;s double digit GDP growth as well as the decision during 2005 to let the value of the Yuan appreciate.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080423c.jpg" width="353">
With the &quot;lesser&quot; trading partners of the U.S. the story is one of a boom, fueled by strong GDP growth and, in the case of exports to OPEC, higher oil prices.
By type of product, 7.7% growth in exports of capital goods last year followed the strong 14.2% gain during 2006. Double digit growth in exports of transportation equipment resulted as airplane exports surged, but exports of electrical &amp; nonelectrical machinery also were quite firm. In the consumer area, exports excluding autos have been growing double digit since 2004 led by double growth in exports of furniture, though apparel exports have been falling. Exports of computers recently have fallen after weak growth during 2007. Exports of food and beverages have been exceptionally strong. The 40.9% y/y growth rate through February is double the growth during all of last year which was double the strong growth during 2005 and 2006.
The figures referenced above can be found in Haver&#39;s USECON database as well as in the OECDMEI database.
Globalization and Inflation Dynamics: The Impact of Increased Competition from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/staff_reports/sr324.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"></th>
<th scope="col">% of Total U.S. Exports</th>
<th scope="col">U.S. Export Growth (Feb. Y/Y %)</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">Area&#39;s Real GDP Growth (4Q Y/Y %)</th>
<th scope="col">2-Year Change in U.S. Dollar&#39;s Value</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Total Goods</td>
<td>100</td>
<td>25</td>
<td>12.2</td>
<td>14.4</td>
<td>--</td>
<td>-17.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Canada</td>
<td>20</td>
<td>16</td>
<td>7.9</td>
<td>8.8</td>
<td>2.9</td>
<td>-13.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mexico</td>
<td>12</td>
<td>22</td>
<td>1.8</td>
<td>11.4</td>
<td>3.8</td>
<td>-0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Europe</td>
<td>27</td>
<td>30</td>
<td>16.7</td>
<td>16.2</td>
<td>2.6</td>
<td>-29.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Pacific Rim</td>
<td>23</td>
<td>21</td>
<td>9.5</td>
<td>15.3</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Japan</td>
<td>5</td>
<td>18</td>
<td>5.1</td>
<td>7.5</td>
<td>1.7</td>
<td>-14</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; China</td>
<td>5</td>
<td>25</td>
<td>18.2</td>
<td>31.6</td>
<td>17.8</td>
<td>-12</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South/Central America</td>
<td>10</td>
<td>39</td>
<td>20.9</td>
<td>22.9</td>
<td>4.3</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; OPEC</td>
<td>4</td>
<td>59</td>
<td>23.1</td>
<td>25.8</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Africa</td>
<td>2</td>
<td>25</td>
<td>24.4</td>
<td>22.4</td>
<td>4.8</td>
<td>--</td>
</tr>
</tbody>
</table>
</body>
</html>

U.S. exports through February rose 22% from a year earlier. The double digit growth rate reflects broad based export gains to virtually all of America's trading partners. No doubt, the weaker foreign exchange value of the dollar is [...]

The U.S. Export Boom: Where Do They Go?

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
 



The 27 countries in the European Union reported a current
account deficit of $2.8 billion for the fourth quarter of 2007, a
decrease of $18.4 billion from the third quarter. A major factor in the
decline was the reduction in the deficit of the United Kingdom, which
declined from $29.7 billion to $8.2 billion. (See the first chart.) For
the year as a whole the deficit declined from $82.9 billion in 2006 to
$72.4 billion in 2007.
Within the European Union, the fifteen countries of the Euro
Area reported a surplus of $11.0 billion in the fourth quarter, a
decline from the $13.6 of the third year. For the entire year, 2007,
the Euro Area reported a surplus of $26.4 billion in contrast to a
deficit of $1.3 billion in 2006. The second chart compares the current
account balances of the entire EU area and the Euro Area.
In the fourth quarter the EU reported surpluses with the
United States ($33.6 bil.), Switzerland ($9.2 bil,), Canada $4.9 bil.),
India($2.2 bil.) and Hong Kong ($2.2 bil.); and deficits with China
(38.6 bil.), Russia ($8.7 bil.) and Japan ($6.2 bil.).
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422g.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422f.jpg" border="0" height="265" width="312">


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">CURRENT
ACCOUNTS IN THE EUROPEAN UNION (BIL. US$)</th>
<th scope="col">Q4 07</th>
<th scope="col">Q3 07&nbsp;</th>
<th scope="col">Q2 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">Q4 06&nbsp;</th>
<th scope="col">Q/Q Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</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">EU 27</td>
<td> -2.8</td>
<td>-21.2</td>
<td>-18.1</td>
<td>-30.4</td>
<td>-13.4</td>
<td>18.4</td>
<td>10.6</td>
<td>-72.4</td>
<td>-82.9</td>
<td>-19.6</td>
</tr>
<tr>
<td class="firstcol">U.K.
&nbsp;&nbsp;</td>
<td> -8.3</td>
<td>-29.8</td>
<td>-20.2</td>
<td>-26.9</td>
<td>-19.0</td>
<td>21.5</td>
<td>10.7</td>
<td>-85.1</td>
<td>-74.5</td>
<td>-45.3</td>
</tr>
<tr class="odd">
<td class="firstcol">EA 15&nbsp;</td>
<td> 11.0</td>
<td>13.6</td>
<td>-2.0</td>
<td>3.7</td>
<td>18.9</td>
<td>-2.6</td>
<td>-7.0</td>
<td>26.4</td>
<td>-1.3</td>
<td>18.1</td>
</tr>
<tr>
<td colspan="11" class="firstcol">EA15: Austria, Belgium,
Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg,
Portugal, Spain, Cyprus, Malta, Slovenia&nbsp;&nbsp;</td>
</tr>
<tr>
<td colspan="11" class="firstcol">EU 27:&nbsp; EA 15
Plus: Bulgaria, the Czech Republic, Denmark, Estonia, Slovakia, Sweden,
United Kingdom, Hungary, Latvia, Lithuania, Slovenia, Slovakia&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

The 27 countries in the European Union reported a current account deficit of $2.8 billion for the fourth quarter of 2007, a decrease of $18.4 billion from the third quarter. A major factor in the decline was the reduction in the [...]

The European Union: Fourth Quarter Balance of Payments

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

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

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

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

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.

251110T1.jpg

**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.

251110T2.jpg

**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.

251110T3.jpg

**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.

251110T4.jpg

**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.

251110T5.jpg

**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).

251110T6.jpg

Asia

Economic Letter from Asia: As the Dust Settles

251107F5.jpg

251107G5.jpg

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).

251107H5.jpg

251107I5.jpg

- 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

251107A2.jpg

251107D2.jpg

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.

251107C2.jpg

251107B2.jpg

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

Economy in Brief: 2008

Jump to:

U.S. New Home Sales & Prices Drop

U.S. Durable Goods Orders Dipped Unexpectedly

Euro Area Orders Stabilize: A Leading or Misleading Statistic?

Italy’s Retail Sales Growth Remains Stunted

Belgian National Bank Index Signals Euro-Trouble Ahead

The U.S. Export Boom: Where Do They Go?

The U.S. Export Boom: Where Do They Go?

The European Union: Fourth Quarter Balance of Payments