Tom Moeller

The composite index of leading economic indicators, reported by the Conference Board, increased 0.1% in March after an unrevised 0.3% February decline. It was the leaders' first increase in six months. During the last ten years there [...]

U.S. Leading Economic Indicators Up Slightly

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416c.jpg" align="left" border="0" height="265" width="353">
Euro Area inflation was revised higher in March and now is
expanding at a 3.6% annual rate, not quite as fast as the universe, but
fast enough to create a gnashing of teeth at the ECB. Yesterday,
Juergen Stark of the ECB said that current policy may not be enough to
hold medium term prices stability in line. Among the four largest EMU
economies, core inflation is over the 2% inflation ceiling, ranging
from a 2.4% yr/yr pace in Germany to a 3.5% pace in Spain. France an
Italy are seeing their respective core inflation rates accelerated from
12 months, to 6 months to, 3 months. Now those are not good trends at
all. Germany&#8217;s core inflation acceleration broke off from six months to
three months, as the three month rate has dropped back to 1.9%. In
Spain the three month rate fell back to 3.1% from 4.2% over six months. 
 

Within EMU as a whole core inflation is still accelerating,
with the 3-month pace up to 3.4%. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"> Trends in HICP</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% mo/mo</td>
<td colspan="4">% saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr>
<td class="firstcol">EMU-13</td>
<td>0.5%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>4.1%</td>
<td>4.8%</td>
<td>3.6%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.4%</td>
<td>3.3%</td>
<td>2.7%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">Goods</td>
<td>1.4%</td>
<td>0.3%</td>
<td>-0.5%</td>
<td>4.5%</td>
<td>6.1%</td>
<td>4.1%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>0.4%</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>2.8%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">HICP</td>
<td>&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">Germany</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>3.3%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.5%</td>
<td>0.0%</td>
<td>0.3%</td>
<td>3.5%</td>
<td>4.8%</td>
<td>3.5%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.6%</td>
<td>0.6%</td>
<td>0.1%</td>
<td>5.0%</td>
<td>5.2%</td>
<td>3.6%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.1%</td>
<td>6.2%</td>
<td>4.6%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Core excl Food, Energy
and Alcohol</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.4%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>1.9%</td>
<td>2.5%</td>
<td>2.4%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.4%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>3.2%</td>
<td>3.1%</td>
<td>2.5%</td>
<td>1.3%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.7%</td>
<td>0.4%</td>
<td>0.0%</td>
<td>4.3%</td>
<td>4.1%</td>
<td>2.9%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.1%</td>
<td>4.2%</td>
<td>3.5%</td>
<td>2.5%</td>
</tr>
</tbody>
</table>
</body></html>

Euro Area inflation was revised higher in March and now is expanding at a 3.6% annual rate, not quite as fast as the universe, but fast enough to create a gnashing of teeth at the ECB. Yesterday, Juergen Stark of the ECB said that [...]

Already High, Euro Area Inflation is Revised Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416g.jpg" width="353">
Industrial production last month rose 0.3% after a 0.7% February decline which was deeper than reported initially. Also revised down was production growth last year and during 2006. A 0.1% decline in March output had been the Consensus expectation.
Factory output ticked up 0.1% in March after falling by a downwardly revised 0.5% in February. The three month change in output, however, fell to a negative 1.4% (AR). Production in the high tech sector has been strong and rose 1.3% (13.1% y/y), as it did in February. Outside the high tech sector, factory output fell 0.1% and a February decline was revised deeper to -0.7%. Three month output growth in manufacturing output less high tech fell to -2.8% (AR) but appliance production rose 5.0% last month.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416h.jpg" width="353">
Production of computers &amp; electronics surged again last month by 2.6% and three month growth totaled 20.3% (AR).
Weakness elsewhere in the durable goods area continued intense. Output of furniture &amp; appliances is down at a 10.5% rate during the last three months while production of automotive products has fallen at a 29.0% rate. Auto output is down partially due to the workers&#39; strike at the American Axel Company. Machinery production is off at a 1.2% rate and metals output turned negative. In the nondurables sector apparel product output has fallen at a 10.8% rate over the last three months.
Output of business equipment increased 0.6% after no change in February. Output of industrial equipment less high tech recovered 0.7% after a 0.2% February slip. The three month growth rate improved to 3.9%.
Capacity utilization rose slightly to 80.5% during March but utilization in the factory sector slipped to 78.5%, its lowest also since late 2005. Annual growth in capacity is growing 1.8% y/y and at 2.1% in the factory sector. Less high tech, capacity growth is a lower 0.9% y/y.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INDUSTRIAL PRODUCTION (SA)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3</td>
<td>-0.7</td>
<td>1.5</td>
<td>1.7</td>
<td>2.2</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.1</td>
<td>-0.5</td>
<td>1.2</td>
<td>1.7</td>
<td>2.4</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Utilities</td>
<td>1.9</td>
<td>-3.6</td>
<td>2.3</td>
<td>3.3</td>
<td>-0.6</td>
<td>2.1</td>
</tr>
</tbody>
</table>
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Industrial production last month rose 0.3% after a 0.7% February decline which was deeper than reported initially. Also revised down was production growth last year and during 2006. A 0.1% decline in March output had been the [...]

U.S. Industrial Output Up 0.3% Last Month

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416f.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) reported that its April Composite Housing Market Index remained stable with the prior two months and at about the same level where it&#39;s been since September. Nevertheless, these levels are more than two-thirds lower than the highs of 2004.
During the last twenty years there has been a 76% correlation between the y/y change in the Composite Index and the change in single family housing starts.
The index for single family detached homes also remained near the cycle&#39;s low which was down about three quarters from the 2004 high. Builders saw a modest improvement in single family home sales during the next six months.
The Home Builders&#39; index remained low and stable throughout the countries&#39; regions.
Traffic of prospective home buyers was stable for the second month at a level which was up somewhat from the recent low.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions good than poor.
Visit the <a href="http://www.nahb.org">National Association of Home Builders</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/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">April</th>
<th scope="col">March &nbsp;</th>
<th scope="col">April &#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">Composite Housing Market Index</td>
<td>20</td>
<td>20</td>
<td>33</td>
<td>27</td>
<td>42</td>
<td>67</td>
</tr>
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The National Association of Home Builders' (NAHB) reported that its April Composite Housing Market Index remained stable with the prior two months and at about the same level where it's been since September. Nevertheless, these levels [...]

U.S. NAHB Housing Market Index Remained Low But Stable

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416d.jpg" width="353">
During March, housing starts were weaker than expected, falling 11.9% m/m to 947,000 units. A decline to 1.010M had been generally expected. The latest level was the lowest since early 1991.
Accentuating the total&#39;s m/m decline was a 24.6% drop in starts of multi-family units which more than reversed February&#39;s 11.7% rise. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416e.jpg" width="353">
Single family starts last month fell by about the same 5.7% as they did in February. That month&#39;s decline was revised slightly shallower. Single family starts in March also were at their lowest level since early 1991 and they have fallen 63.0% since their early 2006 peak. For 1Q08, starts fell 12.6% from 4Q07.
By region, in the Midwest single family starts fell to a record low and were down 25.0% y/y. Single family starts in the Northeast were roughly unchanged m/m but were down 30.4% y/y. In the South, single family starts also were about unchanged (-40.9% y/y) and in the West single family starts fell 11.8%. (-48.3% y/y). That decline reversed much of the surge in February and they remained down 70% from the August 2005 peak.
Building permits fell 5.8% m/m and single-family permits fell 6.2% (-46.4% y/y).
Understanding the Securitization of Subprime Mortgage Credit from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/staff_reports/sr318.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>947</td>
<td>1,075</td>
<td>-36.5%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>680</td>
<td>721</td>
<td>-43.6%</td>
<td>1,039</td>
<td>1,474</td>
<td>1,719</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-Family</td>
<td>267</td>
<td>354</td>
<td>-6.6%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>927</td>
<td>984</td>
<td>-40.9%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
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During March, housing starts were weaker than expected, falling 11.9% m/m to 947,000 units. A decline to 1.010M had been generally expected. The latest level was the lowest since early 1991. Accentuating the total's m/m decline was a [...]

U.S. Housing Starts Weaker Than Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416a.jpg" width="353">
During March, the consumer price index (CPI-U) rose an expected 0.3% after having been unchanged in February. Less food &amp; energy, consumer prices rose 0.2% and that also was as expected. A Comparison of Measures of Core Inflation from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/epr/07v13n3/0712rich.pdf">here</a>.
Energy prices were quite firm last month and they rose 1.9% overall, the strongest increase since last November. Fuel oil prices led the strength with a 7.9% (40.2% y/y) rise while natural gas &amp; electricity prices also were strong. They rose 1.9% (4.1% y/y). Gasoline prices increased 1.3% (26.0% y/y) and in April already have increased another 3.6%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416b.jpg" width="353">
Inflation of food &amp; beverage prices remained moderate at 0.2% due to continued softness in prices for meats poultry &amp; fish which were unchanged m/m (3.7% y/y). That followed a slight decline in February. Conversely, prices for cereal &amp; bakery products remained strong and rose 1.3% (8.1% y/y). Earlier strength in dairy products took a breather m/m and they fell 0.8% (+11.0% y/y).
Core goods prices posted the second consecutive 0.1% m/m decline. Apparel prices fell 1.3% (-1.3% y/y) but prices for household furnishings &amp; operations rose 0.5% (-0.2% y/y). March prices for new &amp; used motor vehicles fell 0.1% (-0.0% y/y).
Core services prices increased 0.2% as shelter prices, which constitute 33% of the total CPI, rose just 0.1% (2.9% y/y) after having been unchanged in February. Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, rose 0.2% (2.6% y/y). Medical care services prices ticked up 0.1% (4.8% y/y) for the second straight month. Tuition costs rose 0.4% and the annual rate of gain has been fairly stable at 5.5% y/y. Another source of price strength, however, has been for public transportation where prices surged 2.5% (7.5% y/y).
Stable Prices, Stable Economy: Keeping Inflation in Check Must be No. 1 Goal of Monetary Policymakers from the Federal Reserve bank of St. Louis is available <a href="http://stlouisfed.org/publications/re/2008/a/pdf/inflation.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"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> (%)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y&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">Total&nbsp;</td>
<td>0.3</td>
<td>0.0</td>
<td>0.4</td>
<td>4.0&nbsp;</td>
<td>2.9</td>
<td>3.2</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.2</td>
<td>0.0</td>
<td>0.3</td>
<td>2.4</td>
<td>2.3</td>
<td>2.5</td>
<td>2.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.1</td>
<td>-0.1</td>
<td>0.2</td>
<td>0.0&nbsp;</td>
<td>-0.4</td>
<td>0.2</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Services less Energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.4</td>
<td>3.3</td>
<td>3.4</td>
<td>3.4</td>
<td>2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>1.9</td>
<td>-0.5</td>
<td>0.7</td>
<td>17.0</td>
<td>5.6</td>
<td>11.0</td>
<td>17.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp; Beverages</td>
<td>0.2</td>
<td>0.4</td>
<td>0.7</td>
<td>4.4</td>
<td>4.0</td>
<td>2.3</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;&nbsp;</td>
<td></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>&nbsp;</td>
<td>0.8</td>
<td>0.3</td>
<td>0.5</td>
<td>3.6 </td>
<td>2.5</td>
<td>2.9 </td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy&nbsp;</td>
<td>0.5</td>
<td>0.3</td>
<td>0.3</td>
<td>2.1</td>
<td>2.0</td>
<td>2.2</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body>
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During March, the consumer price index (CPI-U) rose an expected 0.3% after having been unchanged in February. Less food & energy, consumer prices rose 0.2% and that also was as expected. A Comparison of Measures of Core Inflation from [...]

U.S. CPI Total Rose An Expected 0.3%

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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416a.jpg" align="left" border="0" height="265" width="353">
During March, the consumer price index
(CPI-U) rose an expected 0.3% after having been unchanged in February. Less
food &amp; energy, consumer prices rose 0.2% and that
also was as expected. A Comparison of Measures of Core
Inflation from the Federal Reserve Bank of New York can be
found <a href="http://www.newyorkfed.org/research/epr/07v13n3/0712rich.pdf">here</a>.
Energy prices were quite firm last month
and they rose 1.9% overall, the strongest increase since last November.
Fuel oil prices led the strength with a 7.9% (40.2% y/y) rise while
natural gas &amp; electricity prices also were strong. They rose
1.9% (4.1% y/y). Gasoline prices increased 1.3% (26.0% y/y) and in
April already have increased another 3.6%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416b.jpg" align="right" border="0" height="265" width="353">
Inflation of food &amp; beverage prices
remained moderate at 0.2% due to continued softness in prices for
meats, poultry &amp; fish which were unchanged m/m (3.7% y/y). That
followed a slight decline in February. Conversely, prices for cereal
&amp; bakery products remained strong and rose 1.3% (8.1% y/y).
Earlier strength in dairy products took a breather m/m and they fell
0.8% (+11.0% y/y).
Core goods prices posted the second
consecutive 0.1% m/m decline. Apparel prices fell 1.3% (-1.3% y/y) but
prices for household furnishings &amp; operations rose 0.5% (-0.2%
y/y). March prices for new &amp; used motor vehicles fell 0.1%
(-0.0% y/y).
Core services prices increased 0.2% as
shelter prices, which constitute 33% of the total CPI, rose just 0.1%
(2.9% y/y) after having been unchanged in February. Owners equivalent
rent of primary residence, a measure not equivalent to other house
price measures, rose 0.2% (2.6% y/y). Medical care services prices
ticked up 0.1% (4.8% y/y) for the second straight month. Tuition costs
rose 0.4% and the annual rate of gain has been fairly stable at 5.5%
y/y. Another source of price strength, however, has been for public
transportation where prices surged 2.5% (7.5% y/y).
Stable Prices, Stable Economy: Keeping Inflation in
Check Must be No. 1 Goal of Monetary Policymakers from the
Federal Reserve bank of St. Louis is available <a href="http://stlouisfed.org/publications/re/2008/a/pdf/inflation.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"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> (%)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y&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">Total&nbsp;</td>
<td>0.3</td>
<td>0.0</td>
<td>0.4</td>
<td>4.0&nbsp;</td>
<td>2.9</td>
<td>3.2</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.2</td>
<td>0.0</td>
<td>0.3</td>
<td>2.4</td>
<td>2.3</td>
<td>2.5</td>
<td>2.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>-0.1</td>
<td>-0.1</td>
<td>0.2</td>
<td>0.0&nbsp;</td>
<td>-0.4</td>
<td>0.2</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.4</td>
<td>3.3</td>
<td>3.4</td>
<td>3.4</td>
<td>2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>1.9</td>
<td>-0.5</td>
<td>0.7</td>
<td>17.0</td>
<td>5.6</td>
<td>11.0</td>
<td>17.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.4</td>
<td>0.7</td>
<td>4.4</td>
<td>4.0</td>
<td>2.3</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;&nbsp;</td>
<td></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>&nbsp;</td>
<td>0.8</td>
<td>0.3</td>
<td>0.5</td>
<td>3.6 </td>
<td>2.5</td>
<td>2.9 </td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.5</td>
<td>0.3</td>
<td>0.3</td>
<td>2.1</td>
<td>2.0</td>
<td>2.2</td>
<td>1.9</td>
</tr>
</tbody>
</table>
U.S. Housing Starts Weaker Than
Expected 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 16, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416d.jpg" align="left" border="0" height="265" width="353">
During March, housing starts were weaker than expected,
falling 11.9% m/m to 947,000 units. A decline to 1.010M had been
generally expected. The latest level was the lowest since early 1991.
Accentuating the total's m/m decline was a 24.6% drop in
starts of multi-family units which more than reversed February's 11.7%
rise. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416e.jpg" align="right" border="0" height="265" width="353">
Single family starts last month fell by about the same 5.7% as
they did in February. That month's decline was revised slightly
shallower. Single family starts in March also were at their lowest
level since early 1991 and they have fallen 63.0% since their early
2006 peak. For 1Q08, starts fell 12.6% from 4Q07.
By region, in the Midwest single family starts fell
to a record low and were down 25.0% y/y. Single family starts
in the Northeast were roughly unchanged m/m but were down 30.4% y/y. In
the South, single family starts also were about unchanged (-40.9% y/y)
and in the West single family starts fell 11.8%. (-48.3% y/y). That
decline reversed much of the surge in February and they remained down
70% from the August 2005 peak.
Building permits fell 5.8% m/m and single-family permits fell
6.2% (-46.4% y/y).
Understanding the Securitization of Subprime Mortgage
Credit from the Federal Reserve Bank of New York can be found
<a href="http://www.newyorkfed.org/research/staff_reports/sr318.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing
Starts (000s, AR)</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>947</td>
<td>1,075</td>
<td>-36.5%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>680</td>
<td>721</td>
<td>-43.6%</td>
<td>1,039</td>
<td>1,474</td>
<td>1,719</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-Family</td>
<td>267</td>
<td>354</td>
<td>-6.6%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>927</td>
<td>984</td>
<td>-40.9%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
</table>
U.S. NAHB Housing Market Index
Remained Low But Stable 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 16, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416f.jpg" align="left" border="0" height="265" width="353">
The National Association of Home Builders' (NAHB) reported
that its April Composite Housing Market Index remained stable with the
prior two months and at about the same level where it's been since
September. Nevertheless, these levels are more than two-thirds lower
than the highs of 2004.
During the last twenty years there has been a 76% correlation
between the y/y change in the Composite Index and the change in single
family housing starts.
The index for single family detached homes also remained near
the cycle's low which was down about three quarters from the 2004 high.
Builders saw a modest improvement in single family home sales during
the next six months.
The Home Builders' index remained low and stable throughout
the countries' regions.
Traffic of prospective home buyers was stable for the second
month at a level which was up somewhat from the recent low.
The NAHB index is a diffusion index based on a survey of
builders. Readings above 50 signal that more builders view conditions
good than poor.
Visit the <a href="http://www.nahb.org">National
Association of Home Builders</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/@S4/@S4.HTM">Nat'l
Association of Home Builders</a></th>
<th scope="col">April</th>
<th scope="col">March
&nbsp;</th>
<th scope="col">April '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>20</td>
<td>20</td>
<td>33</td>
<td>27</td>
<td>42</td>
<td>67</td>
</tr>
</tbody>
</table>
U.S. Industrial Output Up 0.3%
Last Month 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 16, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416g.jpg" align="left" border="0" height="265" width="353">
Industrial production last month rose 0.3% after a 0.7%
February decline which was deeper than reported initially. Also revised
down was production growth last year and during 2006. A 0.1% decline in
March output had been the Consensus expectation.
Factory output ticked up 0.1% in March after falling by a
downwardly revised 0.5% in February. The three month change in output,
however, fell to a negative 1.4% (AR). Production in the high tech
sector has been strong and rose 1.3% (13.1% y/y), as it did in
February. Outside the high tech sector, factory output fell 0.1% and a
February decline was revised deeper to -0.7%. Three month output growth
in manufacturing output less high tech fell to -2.8% (AR) but appliance
production rose 5.0% last month.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416h.jpg" align="right" border="0" height="265" width="353">
Production of computers &amp; electronics surged again
last month by 2.6% and three month growth totaled 20.3% (AR).
Weakness elsewhere in the durable goods area continued
intense. Output of furniture &amp; appliances is down at a 10.5%
rate during the last three months while production of automotive
products has fallen at a 29.0% rate. Auto output is down partially due
to the workers' strike at the American Axel Company. Machinery
production is off at a 1.2% rate and metals output turned negative. In
the nondurables sector apparel product output has fallen at a 10.8%
rate over the last three months.
Output of business equipment increased 0.6% after no change in
February. Output of industrial equipment less high tech recovered 0.7%
after a 0.2% February slip. The three month growth rate improved to
3.9%.
Capacity utilization rose slightly to 80.5% during March but
utilization in the factory sector slipped to 78.5%, its lowest also
since late 2005. Annual growth in capacity is growing 1.8% y/y and at
2.1% in the factory sector. Less high tech, capacity growth is a lower
0.9% y/y.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">INDUSTRIAL
PRODUCTION (SA)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3</td>
<td>-0.7</td>
<td>1.5</td>
<td>1.7</td>
<td>2.2</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>0.1</td>
<td>-0.5</td>
<td>1.2</td>
<td>1.7</td>
<td>2.4</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Utilities</td>
<td>1.9</td>
<td>-3.6</td>
<td>2.3</td>
<td>3.3</td>
<td>-0.6</td>
<td>2.1</td>
</tr>
</tbody>
</table>
Already High, Euro Area Inflationis Revised Up 
by <a href="/comment/Brusca.html">Robert
Brusca</a> April 16, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080416c.jpg" align="left" border="0" height="265" width="353">
Euro Area inflation was revised higher in March and now is
expanding at a 3.6% annual rate, not quite as fast as the universe, but
fast enough to create a gnashing of teeth at the ECB. Yesterday,
Juergen Stark of the ECB said that current policy may not be enough to
hold medium term prices stability in line. Among the four largest EMU
economies, core inflation is over the 2% inflation ceiling, ranging
from a 2.4% yr/yr pace in Germany to a 3.5% pace in Spain. France an
Italy are seeing their respective core inflation rates accelerated from
12 months, to 6 months to, 3 months. Now those are not good trends at
all. Germany&#8217;s core inflation acceleration broke off from six months to
three months, as the three month rate has dropped back to 1.9%. In
Spain the three month rate fell back to 3.1% from 4.2% over six months. 
 

Within EMU as a whole core inflation is still accelerating,
with the 3-month pace up to 3.4%. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Trends
in HICP</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% mo/mo</td>
<td colspan="4">% saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr>
<td class="firstcol">EMU-13</td>
<td>0.5%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>4.1%</td>
<td>4.8%</td>
<td>3.6%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.4%</td>
<td>3.3%</td>
<td>2.7%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">Goods</td>
<td>1.4%</td>
<td>0.3%</td>
<td>-0.5%</td>
<td>4.5%</td>
<td>6.1%</td>
<td>4.1%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>0.4%</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>2.8%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">HICP</td>
<td>&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">Germany</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>3.3%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.5%</td>
<td>0.0%</td>
<td>0.3%</td>
<td>3.5%</td>
<td>4.8%</td>
<td>3.5%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.6%</td>
<td>0.6%</td>
<td>0.1%</td>
<td>5.0%</td>
<td>5.2%</td>
<td>3.6%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.1%</td>
<td>6.2%</td>
<td>4.6%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Core
excl Food, Energy
and Alcohol</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.4%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>1.9%</td>
<td>2.5%</td>
<td>2.4%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.4%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>3.2%</td>
<td>3.1%</td>
<td>2.5%</td>
<td>1.3%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.7%</td>
<td>0.4%</td>
<td>0.0%</td>
<td>4.3%</td>
<td>4.1%</td>
<td>2.9%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.1%</td>
<td>4.2%</td>
<td>3.5%</td>
<td>2.5%</td>
</tr>
</tbody>
</table>
</body></html>

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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080415k.jpg" align="left" border="0" height="265" width="353">

The Royal Institution of Chartered Surveyors' (RICS) said
that 78.5% more surveyors reported a fall than a rise in house prices
in March. This was the weakest reading since RICS began the survey back
in 1978. Since 1999 new sales
prices and price expectations are on the lowest readings we have seen.&nbsp;Still
anther house price survey, this one from an official
source, the Department for Communities and Local Government (DCLG),
provided evidence that house price pressures were easing in the UK but
not yet actually falling. In that report, the DCLG found that annual
house price inflation in February (not March) was up by 6.7%, lower
than the 8.0% recorded on the same basis in January.
The average house price in February was Stg217,737, down
from Stg221,278 in January, a monthly drop of 1.6%. The DCLG records
prices when sales are concluded using data from completed mortgages and
therefore are considered to be the most accurate of the surveys but
they lag other market generated sources. Right now all methods are
showing some weakening in home prices. The RICS survey results are
among the most gloomy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col></colgroup>
<thead><tr>
<th scope="col" colspan="7">RICS:
House Prices and Expectations for Prices and Sales</th>
<th scope="col">Range</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3Mo Avg</td>
<td>6Mo Avg</td>
<td>12Mo Avg</td>
<td>Percentile</td>
</tr>
<tr>
<td class="firstcol">Prices</td>
<td>-79</td>
<td>-66</td>
<td>-55</td>
<td>-67</td>
<td>-52</td>
<td>-22</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Price Expectations</td>
<td>-73</td>
<td>-58</td>
<td>-56</td>
<td>-62</td>
<td>-56</td>
<td>-31</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Sales expectations</td>
<td>-15</td>
<td>1</td>
<td>-11</td>
<td>-8</td>
<td>-10</td>
<td>-4</td>
<td>7.8%</td>
</tr>
<tr>
<td class="firstcol">New Sales</td>
<td>-50</td>
<td>-34</td>
<td>-29</td>
<td>-38</td>
<td>-33</td>
<td>-23</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td colspan="6" class="firstcol">Range
percentile takes range back to
1999</td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
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The Royal Institution of Chartered Surveyors' (RICS) said that 78.5% more surveyors reported a fall than a rise in house prices in March. This was the weakest reading since RICS began the survey back in 1978. Since 1999 new sales [...]

U.K. RICS Survey at All-time Low for House Prices

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

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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.

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Europe

Production in a Gradual Recovery in Europe Despite Recent Setbacks

Tian Yong Woon

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

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

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

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

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

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

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

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

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

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Asia

Economic Letter from Asia: As the Dust Settles

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

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

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

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

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

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

U.S. Consumer Credit Strengthens in September

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

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

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

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

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

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

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

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

Economy in Brief: 2008

Jump to:

U.S. Leading Economic Indicators Up Slightly

Already High, Euro Area Inflation is Revised Up

U.S. Industrial Output Up 0.3% Last Month

U.S. NAHB Housing Market Index Remained Low But Stable

U.S. Housing Starts Weaker Than Expected

U.S. CPI Total Rose An Expected 0.3%

U.S. CPI Total Rose An Expected 0.3%

U.K. RICS Survey at All-time Low for House Prices