Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422d.jpg" width="353">
The retail price for a gallon of regular gasoline topped $3.50 last week. According to the U.S. Department of Energy survey, prices rose twelve cents w/w to a new record of $3.51 per gallon.
Higher prices on the spot market drove the rise and as of yesterday, the wholesale price of gasoline was up another six cents from last week&#39;s average.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422e.jpg" width="353">
Strength in crude oil prices is behind the strength in gasoline prices. Yesterday&#39;s price of $117.48 for a barrel of WTI crude compared to an average $114.41 last week.
Prices for natural gas also have been notably strong. The wholesale price of $10.13 per mmbtu was not a record but it was up by more than one-third from last year.
Energy and the Economy from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20080401/cover.pdf">here</a>.
Deliverability and Regional Pricing in U.S. Natural Gas Markets is a working paper from the Federal Reserve Bank of Dallas and it can be found <a href="http://dallasfed.org/research/papers/2008/wp0802.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/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">04/21/08</th>
<th scope="col">04/14/08</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">Retail Gasoline ($ per Gallon)</td>
<td>3.51</td>
<td>3.39</td>
<td>22.3%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>114.41</td>
<td>108.93</td>
<td>81.4%</td>
<td>94.00</td>
<td>61.11</td>
<td>58.16</td>
</tr>
</tbody>
</table>


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The retail price for a gallon of regular gasoline topped $3.50 last week. According to the U.S. Department of Energy survey, prices rose twelve cents w/w to a new record of $3.51 per gallon. Higher prices on the spot market drove the [...]

U.S. Gasoline Prices Top $3.50 per Gallon

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422c.jpg" width="353">
According to the International Council of Shopping Centers ICSC-UBS Chain Store survey, sales slipped 0.7% last week and took back about all of the prior week&#39;s gain. 
Despite the latest decline sales so far in April have risen 0.8% from March, due to gains early in the month. Chain store sales in March were about unchanged from February.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
During the latest week the leading indicator of chain store sales from ICSC-UBS fell 0.5% (-2.0% y/y) and reversed most of the prior week&#39;s gain.
Opportunity Knocks: Selling Our Services to the Rest of the World from the Federal Reserve Bank of Dallas and it is available <a href="http://dallasfed.org/fed/annual/2007/ar07b.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></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</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>491.8</td>
<td>495.3</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


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According to the International Council of Shopping Centers ICSC-UBS Chain Store survey, sales slipped 0.7% last week and took back about all of the prior week's gain.

U.S. Chain Store Sales Slip

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422a.jpg" width="353">
According to the National Association of Realtors, March sales of existing home sales fell 2.0% m/m to 4.930M. The drop reversed most of February&#39;s unrevised 2.9% increase and it was as expected.
The downward momentum behind last year&#39;s sales declines continued to look like it&#39;s flattened out. During the last three months sales were about even with the yearend &#39;07 level.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422b.jpg" width="353">
Despite a 2.6% one month rise in median home prices, the trend still is lower. The gain followed three consecutive months of decline and the three month average of home prices fell to a new cycle low, 12.6% below the high last August.
Sales of existing single family homes in March fell 2.7% to 4.350M and reversed all of February&#39;s gain.
By region, home sales in the Midwest fell a hard 6.5% (-15.9% y/y) while sales in the South also fell by 3.5% (-20.0% y/y). In the Northeast sales rose for the second consecutive month following three months of decline. Sales in the West rose a modest 2.2% after two months of decline.
The number of unsold homes on the market rose a modest 1.0% (6.6% y/y). At the current sales rate the inventory still amounts to a 9.9 months supply which is barely down from last year&#39;s peak. For single family homes there is a 9.5 months supply at the current sales rate and for condos and co-ops there is a 12.8 months supply.
New Monetary Policy Tools? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20080501/cover.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Existing Single Family Home Sales (Thous)</th>
<th scope="col">March</th>
<th scope="col">y/y %</th>
<th scope="col">February</th>
<th scope="col">March &#39;07</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">Total</td>
<td>4,930</td>
<td>-19.3</td>
<td>5,030</td>
<td>6,110</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>910</td>
<td>-18.8</td>
<td>890</td>
<td>1,120</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,160</td>
<td>-15.9</td>
<td>1,240</td>
<td>1,380</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>1,920</td>
<td>-20.0</td>
<td>1,990</td>
<td>2,400</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>940</td>
<td>-22.3</td>
<td>920</td>
<td>1,210</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,350</td>
<td>-18.4</td>
<td>4,470</td>
<td>5,330</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>200,700</td>
<td>-7.7</td>
<td>195,600</td>
<td>217,400</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
</body>
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According to the National Association of Realtors, March sales of existing home sales fell 2.0% m/m to 4.930M. The drop reversed most of February's unrevised 2.9% increase and it was as expected. The downward momentum behind last [...]

U.S. Existing Home Sales Fell, Prices Rose

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422a.jpg" align="left" border="0" height="265" width="353">
According to the National Association of Realtors, March sales
of existing home sales fell 2.0% m/m to 4.930M.
The drop reversed most of February's unrevised 2.9% increase and it was
as expected.
The downward momentum behind last year's sales declines
continued to look like it's flattened out. During the last three months
sales were about even with the yearend '07 level.
Despite a 2.6% one month rise in median home prices,
the trend still is lower. The gain followed three consecutive months of
decline and the three month average of home prices fell to a new cycle
low, 12.6% below the high last August.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422b.jpg" align="right" border="0" height="265" width="353">
Sales of existing single family homes in March fell 2.7% to
4.350M and reversed all of February's gain.
By region, home sales in the Midwest fell a hard 6.5% (-15.9%
y/y) while sales in the South also fell by 3.5% (-20.0% y/y). In the
Northeast sales rose for the second consecutive month following three
months of decline. Sales in the West rose a modest 2.2% after two
months of decline.
The number of unsold homes on the market rose a modest 1.0%
(6.6% y/y). At the current sales rate the inventory still amounts to a
9.9 months supply which is barely down from last year's peak. For
single family homes there is a 9.5 months supply at the current sales
rate and for condos and co-ops there is a 12.8 months supply.
New Monetary Policy Tools? from the
Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20080501/cover.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Existing
Single Family 
Home Sales (Thous)</th>
<th scope="col">March</th>
<th scope="col">y/y %</th>
<th scope="col">February</th>
<th scope="col">March '07</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">Total</td>
<td>4,930</td>
<td>-19.3</td>
<td>5,030</td>
<td>6,110</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>910</td>
<td>-18.8</td>
<td>890</td>
<td>1,120</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,160</td>
<td>-15.9</td>
<td>1,240</td>
<td>1,380</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>1,920</td>
<td>-20.0</td>
<td>1,990</td>
<td>2,400</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>940</td>
<td>-22.3</td>
<td>920</td>
<td>1,210</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,350</td>
<td>-18.4</td>
<td>4,470</td>
<td>5,330</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>200,700</td>
<td>-7.7</td>
<td>195,600</td>
<td>217,400</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
U.S. Chain Store Sales Slip 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 22, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422c.jpg" align="left" border="0" height="265" width="353">
According to the International Council of Shopping Centers
ICSC-UBS Chain Store survey, sales slipped 0.7% last week and took back
about all of the prior week's gain. 

Despite the latest decline sales so far in April have
risen 0.8% from March, due to gains early in the month. Chain store
sales in March were about unchanged from February.
During the last ten years there has been a 45% correlation
between the y/y change in chain store sales and the change in nonauto
retail sales less gasoline.

The ICSC-UBS retail
chain-store sales index is constructed using the same-store sales
(stores open for one year) reported by 78 stores of seven retailers:
Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.


During the latest week the leading indicator of chain store
sales from ICSC-UBS fell 0.5% (-2.0% y/y) and reversed most of the
prior week's gain.
Opportunity Knocks: Selling Our Services to the Rest
of the World from the Federal Reserve Bank of Dallas and it
is available <a href="http://dallasfed.org/fed/annual/2007/ar07b.pdf"> here</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></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</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>491.8</td>
<td>495.3</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
U.S. Gasoline Prices Top $3.50 per
Gallon 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 22, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422d.jpg" align="left" border="0" height="265" width="353">
The retail price for a gallon of regular gasoline
topped $3.50 last week. According to the U.S. Department of
Energy survey, prices rose twelve cents w/w to a new record of $3.51
per gallon.
Higher prices on the spot market drove the rise and as of
yesterday, the wholesale price of gasoline was up another six cents
from last week's average.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080422e.jpg" align="right" border="0" height="265" width="353">
Strength in crude oil prices is behind the strength in
gasoline prices. Yesterday's price of $117.48 for a barrel of WTI crude
compared to an average $114.41 last week.
Prices for natural gas also have been notably strong. The
wholesale price of $10.13 per mmbtu was not a record but it was up by
more than one-third from last year.


Energy and the Economy from the Federal
Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20080401/cover.pdf">here</a>.
Deliverability and Regional Pricing in U.S. Natural
Gas Markets is a working paper from the Federal Reserve Bank
of Dallas and it can be found <a href="http://dallasfed.org/research/papers/2008/wp0802.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/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">04/21/08</th>
<th scope="col">04/14/08</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">Retail Gasoline ($ per Gallon)</td>
<td>3.51</td>
<td>3.39</td>
<td>22.3%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>114.41</td>
<td>108.93</td>
<td>81.4%</td>
<td>94.00</td>
<td>61.11</td>
<td>58.16</td>
</tr>
</tbody>
</table>
The EuropeanUnion:&nbsp;
Fourth Quarter Balance of Payments 
by <a href="/comment/Curley.html">Louise
Curley</a> April 22, 2008


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>
IFO Weakness: A New Trend Lower or
a &#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>

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421e.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s MFG and services sectors diverged in February. The MFG
index stands at its highest level since 1993 and in growth terms
(chart) it is accelerating to a more midrange value. The services
sector (Japan&#8217;s tertiary Index) has, however, fallen sharply. While the
service index is still strong, residing in the 87th percentile of its
range, the drop in the index is sharp and worrisome. Even in recessions
the index does not usually drop this sharply. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col">Up-to-date Japan Industry Surveys </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"></td>
<td colspan="3">Recent Months</td>
<td colspan="3">Moving Averages</td>
<td colspan="3">Extremes: Range</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Feb-2008</td>
<td>Jan-2008</td>
<td>Dec-2007</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Max</td>
<td>Min</td>
<td>%-Tile</td>
</tr>
<tr class="odd">
<td class="firstcol">Mining and MFG</td>
<td>110.2</td>
<td>108.5</td>
<td>109.1</td>
<td>109.3</td>
<td>109.0</td>
<td>108.0</td>
<td>110.2</td>
<td>87.0</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Tertiary</td>
<td>108.4</td>
<td>110.3</td>
<td>109.9</td>
<td>109.5</td>
<td>109.9</td>
<td>110.0</td>
<td>110.9</td>
<td>91.4</td>
<td>87.2%</td>
</tr>
<tr>
<td colspan="11" class="firstcol">Ranges, Max, Min since 1993</td>
</tr>
</tbody>
</table>
</body></html>

Japan’s MFG and services sectors diverged in February. The MFG index stands at its highest level since 1993 and in growth terms (chart) it is accelerating to a more midrange value. The services sector (Japan’s tertiary Index) has, [...]

Japan MFG and Services Indices Diverge

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421b.jpg" align="left" border="0" height="265" width="353">
Four countries, Russia, Slovenia, Latvia and Estonia in
Eastern Europe reported Producer Price Indexes (PPI) today. Except for
Estonia where producer price inflation declined by 69 basis points in
March, the other countries showed increases: in Slovenia, a rise of 17
basis points; in Latvia, a rise of 94 basis points and in Russia a rise
of 230 basis points. The first chart shows producer price inflation in
the four countries. While increases in producer price inflation have
tended to moderate in Estonia, Latvia and Slovenia, the increase in
Russia has accelerated. In March the producer price inflation,
represented by the year to year rise in Russia's PPI was 26.6%, nearing
the peak of 28.8% reached at the end of 2004 and well above producer
price inflation in the other three countries.
Earlier this month consumer price indexes (CPI) for these
countries were released. Inflation at the consumer level, measured by
the year to year changes in the CPI is shown in the second chart and
noted in the table below. Consumer price inflation in all four
countries has shown a similar rising trend since early 2007. In
contrast to producer price inflation, it is Latvia where consumer price
inflation is currently highest at 16.7% and Russia, second highest at
13.3%. So far in 2008, inflation at the consumer level has been higher
than that at the producer level for all except Russia where producer
inflation has been twice as high as consumer price inflation. The
recent steep rise world in food prices may account for the relative
greater increase in the consumer price index since food has a greater
weight in the CPI than in the PPI. Like the rest of the world, these
countries have seen record rises in food prices as shown in the third
chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421c.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421d.jpg" border="0" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">PPI
AND CPI INFLATION (%)&nbsp;</th>
<th scope="col">Mar 08</th>
<th scope="col">Feb 08&nbsp;</th>
<th scope="col">Mar 07&nbsp;</th>
<th scope="col">M/M 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" colspan="4">PPI INFLATION&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">RUSSIA</td>
<td>26.59</td>
<td>26.38</td>
<td>5.95</td>
<td>2.30</td>
<td>20.24</td>
<td>14.30</td>
<td>12.41</td>
<td>20.55</td>
</tr>
<tr>
<td class="firstcol">SLOVENIA</td>
<td>5.71</td>
<td>5.54</td>
<td>5.01</td>
<td>0.17</td>
<td>0.70</td>
<td>5.37</td>
<td>2.34</td>
<td>2.70</td>
</tr>
<tr>
<td class="firstcol">LATVIA</td>
<td>10.47</td>
<td>11.41</td>
<td>15.99</td>
<td>0.94</td>
<td>5.52</td>
<td>16.14</td>
<td>10.36</td>
<td>7.81</td>
</tr>
<tr>
<td class="firstcol">ESTONIA</td>
<td>7.98</td>
<td>8.29</td>
<td>7.30</td>
<td>-0.69</td>
<td>0.68</td>
<td>8.27</td>
<td>4.48</td>
<td>2.11</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="4">CPI INFLATION</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">RUSSIA</td>
<td>13.29</td>
<td>12.64</td>
<td>7.39</td>
<td>0.65</td>
<td>5.90</td>
<td>9.00</td>
<td>9.68</td>
<td>12.68</td>
</tr>
<tr>
<td class="firstcol">SLOVENIA</td>
<td>6.84</td>
<td>6.52</td>
<td>2.37</td>
<td>0.32</td>
<td>4.47</td>
<td>3.61</td>
<td>2.46</td>
<td>2.49</td>
</tr>
<tr>
<td class="firstcol">LATVIA</td>
<td>16.74</td>
<td>16.88</td>
<td>8.49</td>
<td>-0.14</td>
<td>8.25</td>
<td>10.09</td>
<td>6.53</td>
<td>6.77</td>
</tr>
<tr>
<td class="firstcol">ESTONIA</td>
<td>10.94</td>
<td>11.26</td>
<td>5.71</td>
<td>-0.32</td>
<td>5.23</td>
<td>1.60</td>
<td>4.43</td>
<td>4.09</td>
</tr>
</tbody>
</table>
</body></html>

Four countries, Russia, Slovenia, Latvia and Estonia in Eastern Europe reported Producer Price Indexes (PPI) today. Except for Estonia where producer price inflation declined by 69 basis points in March, the other countries showed [...]

Producer and Consumer Price Inflation in Eastern Europe

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421a.jpg" width="353">
The National Activity Index (CFNAI) for March, published by the Chicago Federal Reserve Bank, improved slightly to -0.78 from its low February reading of -1.28. Nevertheless, the recent level was near the lowest since early 2003 and was just above the levels reached during the 2001 recession.
A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth of roughly 3%. During the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP. An index level at or below -0.70 typically has indicated negative U.S. economic growth.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_april2008.pdf">here</a> and the historical data are available in Haver&#39;s Surveys database.
Each of the four broad categories of indicators &#151; employment, production, consumption and housing &#151; continued to make negative contributions to the CFNAI during March.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production &amp; income, the labor market, personal consumption &amp; housing, manufacturing &amp; trade sales, and inventories &amp; orders.
Economic Trends and the Chicago Fed National Activity Index from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmay2008_250.pdf"> here</a>.
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"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">March &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.78</td>
<td>-1.28</td>
<td>0.05</td>
<td>-0.42</td>
<td>-0.05</td>
<td>0.26</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Average</td>
<td>-0.86</td>
<td>-0.92</td>
<td>-0.41</td>
<td>-0.34</td>
<td>-0.03</td>
<td>0.26</td>
</tr>
</tbody>
</table>
</body>
</html>

The National Activity Index (CFNAI) for March, published by the Chicago Federal Reserve Bank, improved slightly to -0.78 from its low February reading of -1.28. Nevertheless, the recent level was near the lowest since early 2003 and [...]

Chicago Fed Index Indicates Recession

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421a.jpg" align="left" border="0" height="265" width="353">
The National Activity Index (CFNAI) for March, published by
the Chicago Federal Reserve Bank, improved slightly to -0.78 from its
low February reading of -1.28. Nevertheless, the recent level was near
the lowest since early 2003 and was just above the levels reached
during the 2001 recession.
A zero value of the CFNAI indicates that the economy is
expanding at its historical trend rate of growth of roughly 3%. During
the last twenty years there has been a 68% correlation between the
level of the CFNAI and q/q growth in real GDP. An index level at or
below -0.70 typically has indicated negative U.S. economic growth.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_april2008.pdf">here</a>
and the historical data are available in Haver's Surveys
database.
Each of the four broad categories of indicators &#8212; employment,
production, consumption and housing &#8212; continued to make negative
contributions to the CFNAI during March.
The CFNAI is a weighted average of 85 indicators of economic
activity. The indicators reflect activity in the following categories:
production &amp; income, the labor market, personal consumption
&amp; housing, manufacturing &amp; trade sales, and inventories
&amp; orders.
Economic Trends and the Chicago Fed National Activity
Index from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmay2008_250.pdf">
here</a>.
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"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Fed</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">March '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.78</td>
<td>-1.28</td>
<td>0.05</td>
<td>-0.42</td>
<td>-0.05</td>
<td>0.26</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Average</td>
<td>-0.86</td>
<td>-0.92</td>
<td>-0.41</td>
<td>-0.34</td>
<td>-0.03</td>
<td>0.26</td>
</tr>
</tbody>
</table>
&nbsp;Producer and
ConsumerPrice Inflation in Eastern Europe&nbsp; 
by <a href="/comment/Curley.html">Louise
Curley</a> April 21, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421b.jpg" align="left" border="0" height="265" width="353">
Four countries, Russia, Slovenia, Latvia and Estonia in
Eastern Europe reported Producer Price Indexes (PPI) today. Except for
Estonia where producer price inflation declined by 69 basis points in
March, the other countries showed increases: in Slovenia, a rise of 17
basis points; in Latvia, a rise of 94 basis points and in Russia a rise
of 230 basis points. The first chart shows producer price inflation in
the four countries. While increases in producer price inflation have
tended to moderate in Estonia, Latvia and Slovenia, the increase in
Russia has accelerated. In March the producer price inflation,
represented by the year to year rise in Russia's PPI was 26.6%, nearing
the peak of 28.8% reached at the end of 2004 and well above producer
price inflation in the other three countries.
Earlier this month consumer price indexes (CPI) for these
countries were released. Inflation at the consumer level, measured by
the year to year changes in the CPI is shown in the second chart and
noted in the table below. Consumer price inflation in all four
countries has shown a similar rising trend since early 2007. In
contrast to producer price inflation, it is Latvia where consumer price
inflation is currently highest at 16.7% and Russia, second highest at
13.3%. So far in 2008, inflation at the consumer level has been higher
than that at the producer level for all except Russia where producer
inflation has been twice as high as consumer price inflation. The
recent steep rise world in food prices may account for the relative
greater increase in the consumer price index since food has a greater
weight in the CPI than in the PPI. Like the rest of the world, these
countries have seen record rises in food prices as shown in the third
chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421c.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421d.jpg" border="0" height="265" width="312">


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">PPI
AND CPI INFLATION (%)&nbsp;</th>
<th scope="col">Mar 08</th>
<th scope="col">Feb 08&nbsp;</th>
<th scope="col">Mar 07&nbsp;</th>
<th scope="col">M/M 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" colspan="4">PPI
INFLATION&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">RUSSIA</td>
<td>26.59</td>
<td>26.38</td>
<td>5.95</td>
<td>2.30</td>
<td>20.24</td>
<td>14.30</td>
<td>12.41</td>
<td>20.55</td>
</tr>
<tr>
<td class="firstcol">SLOVENIA</td>
<td>5.71</td>
<td>5.54</td>
<td>5.01</td>
<td>0.17</td>
<td>0.70</td>
<td>5.37</td>
<td>2.34</td>
<td>2.70</td>
</tr>
<tr>
<td class="firstcol">LATVIA</td>
<td>10.47</td>
<td>11.41</td>
<td>15.99</td>
<td>0.94</td>
<td>5.52</td>
<td>16.14</td>
<td>10.36</td>
<td>7.81</td>
</tr>
<tr>
<td class="firstcol">ESTONIA</td>
<td>7.98</td>
<td>8.29</td>
<td>7.30</td>
<td>-0.69</td>
<td>0.68</td>
<td>8.27</td>
<td>4.48</td>
<td>2.11</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="4">CPI
INFLATION</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">RUSSIA</td>
<td>13.29</td>
<td>12.64</td>
<td>7.39</td>
<td>0.65</td>
<td>5.90</td>
<td>9.00</td>
<td>9.68</td>
<td>12.68</td>
</tr>
<tr>
<td class="firstcol">SLOVENIA</td>
<td>6.84</td>
<td>6.52</td>
<td>2.37</td>
<td>0.32</td>
<td>4.47</td>
<td>3.61</td>
<td>2.46</td>
<td>2.49</td>
</tr>
<tr>
<td class="firstcol">LATVIA</td>
<td>16.74</td>
<td>16.88</td>
<td>8.49</td>
<td>-0.14</td>
<td>8.25</td>
<td>10.09</td>
<td>6.53</td>
<td>6.77</td>
</tr>
<tr>
<td class="firstcol">ESTONIA</td>
<td>10.94</td>
<td>11.26</td>
<td>5.71</td>
<td>-0.32</td>
<td>5.23</td>
<td>1.60</td>
<td>4.43</td>
<td>4.09</td>
</tr>
</tbody>
</table>
Japan MFG and Services Indices
Diverge 
by <a href="/comment/Brusca.html">Robert
Brusca</a> April 21, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080421e.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s MFG and services sectors diverged in February. The MFG
index stands at its highest level since 1993 and in growth terms
(chart) it is accelerating to a more midrange value. The services
sector (Japan&#8217;s tertiary Index) has, however, fallen sharply. While the
service index is still strong, residing in the 87th percentile of its
range, the drop in the index is sharp and worrisome. Even in recessions
the index does not usually drop this sharply. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Up-to-date
Japan Industry Surveys </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"></td>
<td colspan="3">Recent Months</td>
<td colspan="3">Moving Averages</td>
<td colspan="3">Extremes: Range</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Feb-2008</td>
<td>Jan-2008</td>
<td>Dec-2007</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Max</td>
<td>Min</td>
<td>%-Tile</td>
</tr>
<tr class="odd">
<td class="firstcol">Mining and MFG</td>
<td>110.2</td>
<td>108.5</td>
<td>109.1</td>
<td>109.3</td>
<td>109.0</td>
<td>108.0</td>
<td>110.2</td>
<td>87.0</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Tertiary</td>
<td>108.4</td>
<td>110.3</td>
<td>109.9</td>
<td>109.5</td>
<td>109.9</td>
<td>110.0</td>
<td>110.9</td>
<td>91.4</td>
<td>87.2%</td>
</tr>
<tr>
<td colspan="11" class="firstcol">Ranges,
Max, Min since 1993</td>
</tr>
</tbody>
</table>
</body></html>

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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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

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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. Gasoline Prices Top $3.50 per Gallon

U.S. Chain Store Sales Slip

U.S. Existing Home Sales Fell, Prices Rose

U.S. Existing Home Sales Fell, Prices Rose

Japan MFG and Services Indices Diverge

Producer and Consumer Price Inflation in Eastern Europe

Chicago Fed Index Indicates Recession

Chicago Fed Index Indicates Recession