Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323b.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications dropped 9.5% last week and pulled the average level in March 4.1% below February.
Applications to refinance plummeted 16.5% leaving the February average off 13.5% from February.
Purchase applications fell for the first week in the last four. The 3.5% decline still left purchase applications 5.1% higher than in February.
The effective interest rate on a conventional 30-year mortgage rose to 6.19% from 6.16% the prior week and from 5.85% in February. The effective rate on a 15-year mortgage also rose to 5.81%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">03/18/05</th>
<th scope="col">03/11/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>658.8</td>
<td>727.6</td>
<td>-40.9%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>446.4</td>
<td>462.8</td>
<td>-0.6%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,894.4</td>
<td>2,267.5</td>
<td>-62.0%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
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</tbody>
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The Mortgage Bankers Association reported that mortgage applications dropped 9.5% last week and pulled the average level in March 4.1% below February. Applications to refinance plummeted 16.5% leaving the February average off 13.5% [...]

Mortgage Applications Lower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323a.jpg" width="353">
Consumer Prices (CPI-U) rose 0.4% in February, the strongest monthly increase since October and exceeded Consensus expectations for a 0.3% rise.
A 0.3% gain in prices less food &amp; energy also was the firmest since last September and beat expectations for a 0.2% increase.
Services price inflation firmed slightly last month and caused the acceleration. Less energy, services prices rose 0.3% versus 0.2% gains during the prior four months. Shelter price inflation moved slightly higher to 0.3% (3.0% y/y) and medical care services prices ramped to a 0.6% (5.0% y/y) gain after four months at 0.4%. Public transportation prices were unchanged (-1.0% y/y) following two months of decline but school tuition rose 0.5% (6.5% y/y).
Goods prices less energy were unchanged (0.7% y/y) after a 0.3% January gain despite a 0.4% (5.0% y/y) increase in tobacco prices. New vehicle prices rose just 0.1% (1.1% y/y) while apparel prices (0.0% y/y) and furniture prices (0.3% y/y) both fell 0.2%. Personal computer prices also fell 3.6% (NSA, -15.6% y/y).
Energy prices moved up 2.0%. Gasoline prices rose 3.2% (14.7% y/y) last month and so far in March gasoline prices have moved roughly another 10% higher to $2.11 per gallon. Fuel oil prices rose 1.4% (21.5% y/y) and natural gas &amp; electricity prices rose 0.8% (5.1% y/y).
Food prices rose 0.1% for the second month, the gain held back by another decline in fruit &amp; vegetable prices (+2.3% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases jumped 0.5%. Core chain prices also rose a strong 0.6%.

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<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.4%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.3%</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>2.0%</td>
<td>-1.1%</td>
<td>10.3%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a></td>
<td>0.5%</td>
<td>0.2%</td>
<td>2.6%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.6%</td>
<td>0.2%</td>
<td>2.0%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
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Consumer Prices (CPI-U) rose 0.4% in February, the strongest monthly increase since October and exceeded Consensus expectations for a 0.3% rise. A 0.3% gain in prices less food & energy also was the firmest since last September and [...]

CPI Gain The Strongest Since October

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323a.jpg" width="353">
Consumer Prices (CPI-U) rose 0.4% in February, the strongest monthly increase since October and exceeded Consensus expectations for a 0.3% rise.
A 0.3% gain in prices less food &amp; energy also was the firmest since last September and beat expectations for a 0.2% increase.
Services price inflation firmed slightly last month and caused the acceleration. Less energy, services prices rose 0.3% versus 0.2% gains during the prior four months. Shelter price inflation moved slightly higher to 0.3% (3.0% y/y) and medical care services prices ramped to a 0.6% (5.0% y/y) gain after four months at 0.4%. Public transportation prices were unchanged (-1.0% y/y) following two months of decline but school tuition rose 0.5% (6.5% y/y).
Goods prices less energy were unchanged (0.7% y/y) after a 0.3% January gain despite a 0.4% (5.0% y/y) increase in tobacco prices. New vehicle prices rose just 0.1% (1.1% y/y) while apparel prices (0.0% y/y) and furniture prices (0.3% y/y) both fell 0.2%. Personal computer prices also fell 3.6% (NSA, -15.6% y/y).
Energy prices moved up 2.0%. Gasoline prices rose 3.2% (14.7% y/y) last month and so far in March gasoline prices have moved roughly another 10% higher to $2.11 per gallon. Fuel oil prices rose 1.4% (21.5% y/y) and natural gas &amp; electricity prices rose 0.8% (5.1% y/y).
Food prices rose 0.1% for the second month, the gain held back by another decline in fruit &amp; vegetable prices (+2.3% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases jumped 0.5%. Core chain prices also rose a strong 0.6%.

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<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/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.4%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.3%</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>2.0%</td>
<td>-1.1%</td>
<td>10.3%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a></td>
<td>0.5%</td>
<td>0.2%</td>
<td>2.6%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.6%</td>
<td>0.2%</td>
<td>2.0%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
Mortgage Applications Lower 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 23, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323b.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications dropped 9.5% last week and pulled the average level in March 4.1% below February.
Applications to refinance plummeted 16.5% leaving the February average off 13.5% from February.
Purchase applications fell for the first week in the last four. The 3.5% decline still left purchase applications 5.1% higher than in February.
The effective interest rate on a conventional 30-year mortgage rose to 6.19% from 6.16% the prior week and from 5.85% in February. The effective rate on a 15-year mortgage also rose to 5.81%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">03/18/05</th>
<th scope="col">03/11/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>658.8</td>
<td>727.6</td>
<td>-40.9%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>446.4</td>
<td>462.8</td>
<td>-0.6%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,894.4</td>
<td>2,267.5</td>
<td>-62.0%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Consumer Confidence Up over Last Year in Sweden, Netherlands and Italy, But Consumers Still Seem Unwilling To Spend 
by <a href="/comment/Stone.html">Carol Stone</a> March 23, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323d.jpg" width="353">
Consumer confidence is little changed this month in three European countries. In Sweden, the monthly &quot;CCI&quot; indicator, eased from +11.6% to +10.7%; Italy&#39;s index also decreased, by 0.3% to 104.1 from 104.4 in February. The balance indicator in the Netherlands edged &quot;up&quot; to -21 from -22. These three movements indicate moderate improvements in all three countries over the last year, but in the two for which buying plans are also reported, there is little willingness to increase spending.
In Sweden, the distinctive feature about the recent behavior of the &quot;CCI&quot; is the narrow range of its movement. Through the 1990s and up to 2002, this indicator moved down and up in wide cyclical swings, or in shorter oscillations. In contrast, over the last 18 months or so, it has held to a narrow range, maintaining similar, moderately positive readings from month to month. This pattern coincides with relative stability of the kronor against the euro. It also corresponds to a period of near stability in Swedish consumer prices (see graph). Since February 2004, year-on-year inflation in Sweden has hovered between 1.1% and 1.7%, gauged according to the so-called &quot;underlying&quot; rate. The steadiness of the price situation at such low inflation rates is most probably encouraging to consumers.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323e.jpg" width="353">
Dutch consumers seem encouraged by what they perceive as a better outlook for the Dutch economy as a whole, a component of this survey which has moved in parallel with overall confidence since the middle of 2003. However, this seems not to translate into ideas about spending more, as the &quot;willingness to buy&quot; component has hardly moved over the same time span. In the Netherlands, improvements in the economic climate are relative: the climate index is still negative, but less so. Similarly, employment is no longer falling, but it has been no more than holding its own in recent months. We&#39;d surmise that until employment actually turns consistently upward, the &quot;willingness to buy&quot; indicator will sustain its recent sluggish readings.
The improvement in Italian confidence is relative too. While the index based on 1980 values has gained since early last year, the components expressed as favorable-less-unfavorable balances remain mostly negative, some quite strongly so. Thus, hesitation and uncertainty seem to be the order of the day with the result that &quot;current intention to make major purchases&quot; is the most negative item in the survey.

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<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Sweden (% Balance)</td>
<td>10.7</td>
<td>11.6</td>
<td>5.1</td>
<td>8.7</td>
<td>0.9</td>
<td>7.2</td>
</tr>
<tr>
<td class="firstcol">Netherlands (% Balance)</td>
<td>-21</td>
<td>-22</td>
<td>-26</td>
<td>-25</td>
<td>-35</td>
<td>-20</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy (1980 = 100)</td>
<td>104.1</td>
<td>104.4</td>
<td>101.8</td>
<td>101.4</td>
<td>106.1</td>
<td>115.8</td>
</tr>
</tbody>
</table>
</body>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322c.jpg" width="353">
The Korean economy showed signs of continued improvement in the fourth quarter of last year as Real Gross Domestic Product (RGDP) rose 0.94% in the fourth quarter, compared with 0.81% in the third quarter. For the year 2004 as a whole, real GDP was up 4.66%, compared with 3.15% in the previous year.
Exports of goods and services in 2004 rose almost 20% in spite of a 15% appreciation of the won. Consumer expenditures remain subdued as consumers have been trying to restore their balance sheets after having gone on a buying spree during an earlier period of relaxed credit controls. At the end of last year, one in 13 persons was estimated to be three or more months behind on debt payments. The attached chart shows the divergent paths in the year to year increases in consumer spending and those in net exports.
Of the 30,768 billion 2000 won increase in RGDP between 2003 and 2004, 22,504 billion 2000 won, or 73% was accounted for by an increase in net exports. Consumption on the other hand, accounted for only 2.2% of the increase and while investment increased by 9,89l billion 2000 won, or 30.7%, more than half that, 18.1%, was due to inventory accumulation. Some of these figures may have been overstated as there was a statistical discrepancy in the total of -2,310.7 billion 2000 won, or -6.1%.

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<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/EMERGEPR/@P2/@P2.HTM">Korea: Gross Domestic Product</a> (Billions of 2000 Korean Won)</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">Difference</th>
<th scope="col">% of Dif</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Gross domestic product</td>
<td>693,420.0</td>
<td>662,654.9</td>
<td>30,769.1</td>
<td>100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Final Consumption</td>
<td>430,768.9</td>
<td>430,077.0</td>
<td>691.9</td>
<td>2.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Investment</td>
<td>204,024.6</td>
<td>194,579</td>
<td>9,445.6</td>
<td>30.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Fixed</td>
<td>202,927.5</td>
<td>199,048.0</td>
<td>3,879.5</td>
<td>12.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Inventories</td>
<td>1097.1</td>
<td>-4,469.0</td>
<td>5,566.1</td>
<td>18.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Exports</td>
<td>58394.9</td>
<td>35,894.8</td>
<td>22,500.1</td>
<td>73.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Statistical discrepancy</td>
<td>235.9</td>
<td>2,104.3</td>
<td>-1,868.9</td>
<td>-6.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Addendum:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>% Chg</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Exports</td>
<td>359,995.2</td>
<td>300,824.5</td>
<td>59,170.7</td>
<td>19.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imports</td>
<td>301,600.3</td>
<td>264,929.7</td>
<td>36,670.6</td>
<td>13.8</td>
</tr>
</tbody>
</table>
</body>
</html>

The Korean economy showed signs of continued improvement in the fourth quarter of last year as Real Gross Domestic Product (RGDP) rose 0.94% in the fourth quarter, compared with 0.81% in the third quarter. For the year 2004 as a [...]

Korean GDP up 4.6%: Exports Rise Outweighs Consumer Slump

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323c.jpg" width="353">
The Federal Open Market Committee raised the target rate for federal funds an expected 25 basis points to 2.75%. The discount rate also was raised 25 basis points to 3.75%.
The decision to raise rates the seventh time since last June was unanimous.
Today&#39;s press release from the Fed continued to contain a comment suggesting that rates could be raised again. &quot;With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.&quot;
With regard to prices the press release indicated &quot;Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.&quot;
For the complete text of the Fed&#39;s latest press release please click <a href="http://www.federalreserve.gov/BoardDocs/Press/monetary/2005/20050322/default.htm">here</a>.
Paul Samuelson and Monetary Analysis from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20050401/cover.pdf">here</a>.

</body>
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The Federal Open Market Committee raised the target rate for federal funds an expected 25 basis points to 2.75%. The discount rate also was raised 25 basis points to 3.75%. The decision to raise rates the seventh time since last June [...]

Federal Funds Rate Raised to 2.75%

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322a.jpg" width="353">
Chain store sales last week added 0.2% to the prior week&#39;s 0.6% advance according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales so far in March are 1.2% ahead of the February average which rose 1.0% from January.
During the last ten years there has been a 59% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC rose 0.3% in the latest week (0.2% y/y).
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<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">03/19/05</th>
<th scope="col">03/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>454.6</td>
<td>453.6</td>
<td>3.4%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales last week added 0.2% to the prior week's 0.6% advance according to the International Council of Shopping Centers (ICSC)-UBS survey. Sales so far in March are 1.2% ahead of the February average which rose 1.0% from [...]

Chain Store Sales Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322b.jpg" width="353">
The Producer Price Index for finished goods rose 0.4% last month versus Consensus expectations for a 0.3% rise. The gain equaled the average of the prior twelve months. Excluding food &amp; energy prices rose 0.1%, calmer than the 0.8% spike in January and equaled Consensus expectations.
The PPI for core finished consumer goods rose 0.2% (2.8% y/y) after the prior month&#39;s 0.9% jump. Prices for tobacco products again were strong and rose 0.5% (3.7% y/y) but consumer durable prices fell 0.5% (2.3% y/y) due to lower prices for passenger cars. Capital goods prices fell 0.2% (+2.8% y/y).
Finished energy prices rose 1.4% (11.9% y/y) due to higher gasoline prices (23.7% y/y) and higher fuel oil prices (46.0% y/y). Finished food prices jumped 0.8% (+4.9% y/y).
Intermediate goods prices nearly doubled the prior month&#39;s increase and rose 0.7%. Core intermediate prices again were firm and rose 0.5%, led higher by a 6.1% (10.8% y/y) increase in prices for softwood lumber.
Crude prices fell 1.6%, down for the third straight month as core crude prices dropped 3.0%. Prices for iron &amp; steel scrap flopped 7.1% (-3.5% y/y). During the last thirty years &quot;core&quot; crude prices have been a fair indicator of industrial sector activity with a 48% correlation between the six month change in core crude prices and the change in factory sector industrial production.

<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/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>0.4%</td>
<td>0.3%</td>
<td>4.7%</td>
<td>3.6%</td>
<td>3.2%</td>
<td>-1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.1%</td>
<td>0.8%</td>
<td>2.8%</td>
<td>1.5%</td>
<td>0.2%</td>
<td>0.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.7%</td>
<td>0.4%</td>
<td>8.4%</td>
<td>6.6%</td>
<td>4.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.5%</td>
<td>0.8%</td>
<td>8.1%</td>
<td>5.7%</td>
<td>2.0%</td>
<td>-0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>-1.6%</td>
<td>-2.0%</td>
<td>8.1%</td>
<td>17.6%</td>
<td>25.1%</td>
<td>-10.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-3.0%</td>
<td>-2.5%</td>
<td>5.1%</td>
<td>26.5%</td>
<td>12.4%</td>
<td>3.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Producer Price Index for finished goods rose 0.4% last month versus Consensus expectations for a 0.3% rise. The gain equaled the average of the prior twelve months. Excluding food & energy prices rose 0.1%, calmer than the 0.8% [...]

PPI Rose A Moderate 0.4%, Core Pricing Calmer

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050323c.jpg" width="353">
The Federal Open Market Committee raised the target rate for federal funds an expected 25 basis points to 2.75%. The discount rate also was raised 25 basis points to 3.75%.
The decision to raise rates the seventh time since last June was unanimous.
Today&#39;s press release from the Fed continued to contain a comment suggesting that rates could be raised again. &quot;With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.&quot;
With regard to prices the press release indicated &quot;Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.&quot;
For the complete text of the Fed&#39;s latest press release please click <a href="http://www.federalreserve.gov/BoardDocs/Press/monetary/2005/20050322/default.htm">here</a>.
Paul Samuelson and Monetary Analysis from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20050401/cover.pdf">here</a>.

PPI Rose A Moderate 0.4%, Core Pricing Calmer 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322b.jpg" width="353">
The Producer Price Index for finished goods rose 0.4% last month versus Consensus expectations for a 0.3% rise. The gain equaled the average of the prior twelve months. Excluding food &amp; energy prices rose 0.1%, calmer than the 0.8% spike in January and equaled Consensus expectations.
The PPI for core finished consumer goods rose 0.2% (2.8% y/y) after the prior month&#39;s 0.9% jump. Prices for tobacco products again were strong and rose 0.5% (3.7% y/y) but consumer durable prices fell 0.5% (2.3% y/y) due to lower prices for passenger cars. Capital goods prices fell 0.2% (+2.8% y/y).
Finished energy prices rose 1.4% (11.9% y/y) due to higher gasoline prices (23.7% y/y) and higher fuel oil prices (46.0% y/y). Finished food prices jumped 0.8% (+4.9% y/y).
Intermediate goods prices nearly doubled the prior month&#39;s increase and rose 0.7%. Core intermediate prices again were firm and rose 0.5%, led higher by a 6.1% (10.8% y/y) increase in prices for softwood lumber.
Crude prices fell 1.6%, down for the third straight month as core crude prices dropped 3.0%. Prices for iron &amp; steel scrap flopped 7.1% (-3.5% y/y). During the last thirty years &quot;core&quot; crude prices have been a fair indicator of industrial sector activity with a 48% correlation between the six month change in core crude prices and the change in factory sector industrial production.

<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/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>0.4%</td>
<td>0.3%</td>
<td>4.7%</td>
<td>3.6%</td>
<td>3.2%</td>
<td>-1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.1%</td>
<td>0.8%</td>
<td>2.8%</td>
<td>1.5%</td>
<td>0.2%</td>
<td>0.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.7%</td>
<td>0.4%</td>
<td>8.4%</td>
<td>6.6%</td>
<td>4.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.5%</td>
<td>0.8%</td>
<td>8.1%</td>
<td>5.7%</td>
<td>2.0%</td>
<td>-0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>-1.6%</td>
<td>-2.0%</td>
<td>8.1%</td>
<td>17.6%</td>
<td>25.1%</td>
<td>-10.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-3.0%</td>
<td>-2.5%</td>
<td>5.1%</td>
<td>26.5%</td>
<td>12.4%</td>
<td>3.8%</td>
</tr>
</tbody>
</table>
Chain Store Sales Higher 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322a.jpg" width="353">
Chain store sales last week added 0.2% to the prior week&#39;s 0.6% advance according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales so far in March are 1.2% ahead of the February average which rose 1.0% from January.
During the last ten years there has been a 59% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC rose 0.3% in the latest week (0.2% y/y).
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<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">03/19/05</th>
<th scope="col">03/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>454.6</td>
<td>453.6</td>
<td>3.4%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Korean GDP up 4.6%: Exports Rise Outweighs Consumer Slump  
by <a href="/comment/Curley.html">Louise Curley</a> March 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050322c.jpg" width="353">
The Korean economy showed signs of continued improvement in the fourth quarter of last year as Real Gross Domestic Product (RGDP) rose 0.94% in the fourth quarter, compared with 0.81% in the third quarter. For the year 2004 as a whole, real GDP was up 4.66%, compared with 3.15% in the previous year.
Exports of goods and services in 2004 rose almost 20% in spite of a 15% appreciation of the won. Consumer expenditures remain subdued as consumers have been trying to restore their balance sheets after having gone on a buying spree during an earlier period of relaxed credit controls. At the end of last year, one in 13 persons was estimated to be three or more months behind on debt payments. The attached chart shows the divergent paths in the year to year increases in consumer spending and those in net exports.
Of the 30,768 billion 2000 won increase in RGDP between 2003 and 2004, 22,504 billion 2000 won, or 73% was accounted for by an increase in net exports. Consumption on the other hand, accounted for only 2.2% of the increase and while investment increased by 9,89l billion 2000 won, or 30.7%, more than half that, 18.1%, was due to inventory accumulation. Some of these figures may have been overstated as there was a statistical discrepancy in the total of -2,310.7 billion 2000 won, or -6.1%.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/EMERGEPR/@P2/@P2.HTM">Korea: Gross Domestic Product</a> (Billions of 2000 Korean Won)</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">Difference</th>
<th scope="col">% of Dif</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Gross domestic product</td>
<td>693,420.0</td>
<td>662,654.9</td>
<td>30,769.1</td>
<td>100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Final Consumption</td>
<td>430,768.9</td>
<td>430,077.0</td>
<td>691.9</td>
<td>2.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Investment</td>
<td>204,024.6</td>
<td>194,579</td>
<td>9,445.6</td>
<td>30.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Fixed</td>
<td>202,927.5</td>
<td>199,048.0</td>
<td>3,879.5</td>
<td>12.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Inventories</td>
<td>1097.1</td>
<td>-4,469.0</td>
<td>5,566.1</td>
<td>18.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Exports</td>
<td>58394.9</td>
<td>35,894.8</td>
<td>22,500.1</td>
<td>73.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Statistical discrepancy</td>
<td>235.9</td>
<td>2,104.3</td>
<td>-1,868.9</td>
<td>-6.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Addendum:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>% Chg</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Exports</td>
<td>359,995.2</td>
<td>300,824.5</td>
<td>59,170.7</td>
<td>19.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imports</td>
<td>301,600.3</td>
<td>264,929.7</td>
<td>36,670.6</td>
<td>13.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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General business activity in Texas declined further in December, according to the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas. The overall measure, the general business activity index, fell to -10.9 in December, the lowest level since June, from -10.4 in November and -5.0 in October. The index, while above a low of -35.8 in April, was well below a high of +14.1 in January and +4.5 in December 2024. The index had been in negative territory from February through December 2025, except for a one-month positive reading of +0.9 in July. In December, 12.7% of respondents reported improved business activity, down from 18.9% in November, while 23.6% of respondents reported worsened business conditions, down from November's 29.3%. The company outlook index dropped to -11.9 in December, the fourth consecutive negative reading and the lowest since April, from -6.3 in November. Just 10.8% of respondents expected improved company outlook this month while 22.7% expected deterioration. Data were collected between December 15 and 23 from 74 Texas manufacturers.

The production index, a key measure of state manufacturing conditions, plunged to -3.2 in December after a 15.3-point jump to 20.5 in November, indicating production contracted for the first time since February. A lessened 17.2% of respondents reported higher production this month while an increased 20.4% reported a decline. The capacity utilization index plummeted to -4.5 in December, the lowest reading since February, following a four-year-high 19.4 in November; it was up from a low of -15.0 in January 2024 but well below a record-high 46.3 in March 2021.

The growth rate of orders index declined steeply to -16.0 in December from -1.3 in November, marking the weakest of four successive negative readings and the lowest level since June. The index was above a low of -22.0 in April and a low of -24.3 in November 2023 but significantly below a peak of 29.6 in April 2021. The new orders index fell to -6.4 this month after rising to 4.8 in November, indicating a decline in demand for the third time in four months and the lowest level since June. The index was above a low of -20.0 in April and a low of -21.8 in November 2022 but well below a high of 22.6 in February 2022 and a record-high 38.6 in April 2021. The shipments index plunged to -10.6 this month after jumping to 15.1 in November, marking its first negative reading since June and the lowest since July 2024. The unfilled orders index dropped to -13.5 in December from -6.6 in November, registering the 16th straight negative reading and the lowest since November 2024. The index was below a high of 1.4 in August 2024 but above a low of -26.3 in July 2024. Meanwhile, the delivery time index increased to 3.3 this month, the highest reading since March, from -8.4 in November.

Labor market indexes showed flat employment conditions and shorter workweeks in December. The employment index slipped to -1.1 this month from 1.2 in November, marking its first negative reading since September, with the near-zero level indicating little change in employment. The latest reading, while up from a low of -9.7 in January 2024, was far below a high of 17.9 in January 2023 and a record-high 31.8 in April 2021. A lessened 12.3% of respondents reported net hiring in December while 13.4% reported net layoffs. The hours worked index fell sharply to -7.5 this month, the lowest reading since June, after rising to 9.9 in November. Meanwhile, the wages & benefits index climbed to 21.8 in December, the highest level since October 2024 and near its series average of 21.0, up from 15.4 in November; nevertheless, having been trending downward since a peak of 55.0 in March 2022.

Inflationary pressures were little changed this month. The index for prices received for finished goods declined to 8.2 in December following a 3.1-point rise to 10.8 in November; it was up from a low of -7.0 in November 2023 but meaningfully below a high of 47.4 in March 2022 and a peak of 51.4 in October 2021. In December, 13.1% of respondents reported raising prices while only 4.9% reported lowering prices. The index of prices paid for raw materials rose to 36.0 this month, the highest reading since September, after a 1.9-point increase to 35.3 in November. The index was well above a low of 1.0 in June 2023 but significantly below 73.2 in March 2022 and a record-high 83.8 in November 2021.

Expectations on future manufacturing activity remained positive this month. The future general business activity index dipped to 10.8 in December after rising to 11.0 in November, registering the eighth straight positive reading. The future production index rose to a four-month-high 34.2 from November’s 33.7. Other indexes of future manufacturing activity also rose in December (vs. November), signaling increased activity six months ahead: company outlook (16.5 vs. 16.2), shipments (33.9 vs. 27.0), wages & benefits (42.5 vs. 39.1), and capital expenditures (17.7 vs. 12.9). Meanwhile, future indexes for capacity utilization (28.9 vs. 34.0), new orders (30.5 vs. 39.2), growth rate of new orders (24.9 vs. 27.8), and employment (20.9 vs. 22.3) declined in December (vs. November), but they remained in positive territory.

Each index is calculated by subtracting the percentage reporting a decrease in activity from the percentage reporting an increase. When all firms report rising activity, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase equals the number reporting a decrease. Data for the Texas Manufacturing Outlook, conducted by the Federal Reserve Bank of Dallas, can be found in Haver's **SURVEYS** database.

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- General Business Activity down in Dec. to -10.9, lowest level since June.
- Company Outlook (-11.9) negative for the fourth straight mth. and at an eight-month low; Production (-3.2) negative for the first time since Feb.
- New Orders Growth (-16.0) and New Orders (-6.4) at a six-month low.
- Employment (-1.1) negative for the first time since Sept.
- Prices Received down 2.6 pts. to 8.2; Prices Paid up 0.7 pts. to a three-month-high 36.0.
- Future General Business Activity down to 10.8, still positive for the eighth consecutive mth.

Texas General Business Activity Still Negative in December, But Expectations Remain Positive

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

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

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

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

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

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

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

Robert Brusca

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Swedish exports advanced month-to-month for the second month in a row while imports continued on a losing streak declining by 0.9% in November.

Exports have gradually been firming with exports falling by 6.1% over 12 months, rising at an annual rate of 4.8% over six months, and then rising at a 3.9% annual rate over three months. Exports are not on a steady acceleration path, but they have transitioned from a year-over-year growth rate that's negative to moderate positive short-term rates of growth.

Swedish imports, on the other hand, are weakening relatively sharply. Imports were down 4.4% over 12 months, down at a 1.2% annual rate over six months, and falling at a 17% annual rate over three months.

The global trade picture remains somewhat mixed. The Baltic Dry goods index, which is an indicator of global trade volume, has backed off of its highs but continues to post relatively steady volume indications. However, the S&P global manufacturing survey has been showing weakness; when manufacturing is weak, typically international trade is weak as well. Swedish trade may be picking up some of that weakness as well.

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On balance, Sweden's trade surplus has continued to recover and hold to a relatively high level over recent months as exports have maintained momentum better than imports.

Swedish domestic barometers of economic growth have remained relatively upbeat including orders and industrial production as well as employment growth and GDP. There is no reason there to expect weak imports based on the recent data we have seen. But then sometimes trade data show economic weakness first.   

At this time, the yearend weakness in Sweden’s imports is without a specific cause. Year-end flows can be surprising. Domestic demand, however, does not appear to be weak. But there is a good deal of weakness in Europe and the Ukraine-Russia war is still a nagging factor – a cloud that hangs over all of Europe with no certain end date or result in sight.

Sweden

Sweden’s Trade; Exports Surge as Imports Recede

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance dropped 10,000 to 214,000 in the week of December 20, from 224,000 during the week of December 13. The four-week moving average of initial claims was 216,750, a decrease of 750 from the prior week’s unrevised 217,500.

Federal government employees initially filed 805 (NSA) jobless insurance claims in the week ended December 13, after filing 1091 claims in the week ended December 6.

Continuing claims for unemployment insurance rose 38,000 to 1.923 million in the week ending December 13, after rising 55,000 to 1.885 million, revised from 1.897 million in the week ending December 6. The four-week moving average was 1.894 million in the week ending December 13, down 5,250 from 1.899 million, revised from 1,902,000 in the week ending December 6. The insured unemployment rate stood at 1.3% in the week of December 13, up from 1.2% in the week of December 6.

Federal government employees’ continuing benefits claims were 12,887 (NSA) in the week ending December 6, from 14,077 (NSA) in the week of November 29. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 6, the highest unemployment rates were in New Jersey and Washington (both 2.40%), Massachusetts and Minnesota (both 2.10%), California and Rhode Island (both 2.00%). The lowest rates were in Florida (0.30%), and Alabama, Louisiana, North Carolina (all 0.40%). Rates in other notable states include New York (1.80%), Illinois and Pennsylvania (both 1.70%), and Texas (1.10%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.


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- Initial claims declined from the prior week.
- Continuing claims rose from the prior week.
- The insured unemployment rate edged up.


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

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Mortgage applications dropped 5.0% w/w (+49.8% y/y) in the week of December 19, after a drop of 3.8% w/w (+40.9% y/y) in the week of December 12, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 3.7% w/w (+15.9% y/y) in the latest week, the third consecutive weekly decline, following a drop of 2.8% w/w (+12.3% y/y) in the December 12 week. Applications for loan refinancing dropped 5.6% w/w (+110.1% y/y) in the December 19 week after a decline of 3.6% w/w (+86.0% y/y) in the week of December 12. 

The effective interest rate on a 30-year fixed-rate loan fell 8bps to 6.48% in the week ending December 19 from 6.56% in the week ending December 12. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.86% in the latest week from 5.91% in the prior week. The 30-year Jumbo rate rose 8bps to 6.63% in the December 19 week from 6.55% in the December 12 week. The rate on a 5-year ARM jumped 20bps to 5.96% in the latest week from 5.76% in the December 12 week.

The share of applications for refinancing an existing loan edged up to 59.1% of total applications in the December19 week from 59.0% in the week ending December 12. The adjustable-rate mortgage (ARM) share of activity rose to 8.1% in the latest week from 7.2% in the December 12 week.

The average size of a mortgage loan edged down 0.1% w/w (+7.8% y/y) to $399,700 in the week ending December 19, following a rise of 1.5% w/w (6.4% y/y) to $400,000 in the December 12 week. The average size of a purchase loan rose 1.0% w/w (1.1% y/y) to $428,600 in the latest week, after rising 0.6% w/w (-0.3% y/y) to $424,200 in the prior week. The average size of a loan to refinance a mortgage declined 0.9% w/w (+24.9% y/y) to $379,700 in the December 19 week, following a rise of 2.3% w/w (19.8% y/y) to $383,300 in the week ending December 12.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.


- Both purchase applications and refinancing loan applications fell in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.48%.
- Average loan size edged down.


Economy in Brief: 2005

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Mortgage Applications Lower

CPI Gain The Strongest Since October

CPI Gain The Strongest Since October

Korean GDP up 4.6%: Exports Rise Outweighs Consumer Slump

Federal Funds Rate Raised to 2.75%

Chain Store Sales Higher

PPI Rose A Moderate 0.4%, Core Pricing Calmer

Federal Funds Rate Raised to 2.75%