Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205e.jpg" width="353">
The correction of factory inventory levels has picked up steam. In December, the 1.4% decline followed a 0.5% November drop that was roughly double the initial estimate of -0.3%. On a three-month basis, the rate of decline accelerated to 9.7%. To be sure, these figures have been influenced by the decline in oil prices. However, a broad-based inventory correction in the factory sector still is underway. Less oil, factory inventories fell 0.5% during December. That lowered the three-month change to a negative 0.6% (AR) after 8% rates of growth earlier in 2008.
The commercial aircraft industry continued to dominate the nonoil industry figures with a positive 45.6% year-to-year growth rate. To the downside, automobile inventories have been reduced by 8.7% versus last year. Electrical equipment &amp; appliance inventories grew at a 0.5% rate in December versus double-digit growth early in 2007 and growth in machinery inventories has been nearly halved to 6%. Steep production cutbacks pulled furniture inventories down 5.2%. The computer industry bucked the trend and inventories rose at a 6.8% rate last year versus slight decumulation in 2007.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205f.jpg" width="353">
Total factory orders dropped sharply again in December. The 3.9% decline was the fourth in a row between -3% and -7%, but that reflected the drop in oil prices (orders here equal shipments). Textile mill orders fell 4.2% (-18.2% y/y) and apparel orders fell 3.1% y/y. Orders for durable goods orders fell 3.0% reflecting the 43.8% drop in commercial aircraft orders. Less commercial aircraft, orders for durable goods fell 1.9% or 16.0% y/y.
Factory shipments dropped 2.9% due to lower oil prices. Less oil, shipments fell a lesser 1.3% but year-to-year they were down sharply by 7.4%. Automobile shipments were off by more than one quarter year-to-year and shipments of electrical equipment were off 9.7%. Electronic computer shipments fell 29.1% y/y with lower prices while shipments of furniture &amp; related products fell 12.5%.
Total unfilled orders fell 1.4%, but less the transportation sector where aircraft backlogs still are strong, unfilled orders fell 2.2%.
Why Do Firms Use Temporary Workers? from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmarch2009_260.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS, %)</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>-1.4</td>
<td>-0.5</td>
<td>2.6</td>
<td>2.6</td>
<td>3.7</td>
<td>8.2&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-2.3</td>
<td>-1.1</td>
<td>-0.0</td>
<td>-0.0</td>
<td>2.7</td>
<td>7.9</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders</td>
<td>-3.9</td>
<td>-6.5</td>
<td>-18.7</td>
<td>0.2</td>
<td>1.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-4.4</td>
<td>-6.0</td>
<td>-15.2</td>
<td>3.2</td>
<td>1.2</td>
<td>7.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>-2.9</td>
<td>-6.5</td>
<td>-12.8</td>
<td>1.8</td>
<td>1.2</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-3.5</td>
<td>-6.8</td>
<td>-12.2</td>
<td>3.7</td>
<td>1.5</td>
<td>6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Unfilled Orders</td>
<td>-1.4</td>
<td>-0.9</td>
<td>3.7</td>
<td>3.7</td>
<td>17.1</td>
<td>15.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Transportation</td>
<td>-2.2</td>
<td>-1.4</td>
<td>-0.6</td>
<td>-0.6</td>
<td>8.2</td>
<td>16.0</td>
</tr>
</tbody>
</table>
</body>
</html>

The correction of factory inventory levels has picked up steam. In December, the 1.4% decline followed a 0.5% November drop that was roughly double the initial estimate of -0.3%. On a three-month basis, the rate of decline accelerated [...]

U.S. Factory Inventories Lower Still

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205c.jpg" width="353">
During last year&#39;s fourth quarter, labor productivity in the nonfarm business sector rose 3.2% (AR), up sharply from a 1.5% increase during 3Q. The rise pulled growth for the whole year up to 2.8% which doubled the gain during all of 2007. The rise far outpaced Consensus expectations for a 1.2% increase.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205d.jpg" width="353">
As workers became more productive last quarter, that raised the growth in compensation to 5.0%. Year-to-year, however, the rise failed to translate into faster growth in worker pay. Growth in compensation per hour in fact decelerated last year to 3.4% which was the slowest since 1997.
The drop in compensation growth was the result of the recession. It lowered output by 5.5% during 4Q and growth for the full year to 1.0% from 2.0% in 2007 and from 3.2% in 2006. Hours worked fell by more, thus lifting productivity. They fell at an 8.4% rate last quarter and 1.8% for the full year.
The acceleration in productivity growth dropped the quarterly increase in unit labor costs to 1.8%. For the full year, the 0.5% gain in unit labor costs was the weakest in five years.
In the factory sector, however, the story was different. Productivity declined at a 3.0% rate which was near the rate of decline during the prior two quarters. For the year as a whole factory sector productivity did rise 1.3%. However, that only about matched the 2006 increase which was down sharply from a 4.9% rise in 2005 and gains of 6% to 7% in 2002 and 2003. Unit labor cost growth in the factory sector thus surged last quarter at a 13.3% rate and it rose at a quickened 2.5% rate for the year.

<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/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR, %)</th>
<th scope="col">4Q &#39;08</th>
<th scope="col">3Q &#39;08</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>3.2</td>
<td>1.5</td>
<td>2.7</td>
<td>2.8</td>
<td>1.4</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>5.0</td>
<td>4.2</td>
<td>3.5</td>
<td>3.4</td>
<td>4.1</td>
<td>3.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>1.8</td>
<td>2.6</td>
<td>0.7</td>
<td>0.5</td>
<td>2.7</td>
<td>2.8</td>
</tr>
</tbody>
</table>
</body>
</html>

During last year's fourth quarter, labor productivity in the nonfarm business sector rose 3.2% (AR), up sharply from a 1.5% increase during 3Q. The rise pulled growth for the whole year up to 2.8% which doubled the gain during all of [...]

U.S. Worker Productivity Growth Up, Unit Costs Ease

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205a.jpg" width="353">
U.S. labor market conditions became more bleak last week as initial claims for unemployment insurance jumped 35,000 to 626,000. Moreover, the prior week&#39;s modest increase was revised up slightly and the latest level by far surpassed Consensus expectations for 580,000 initial claims. Initial claims continue to be the highest since late during the sharp recession of 1981-82. During that recession, real GDP fell by 2.9% peak-to-trough.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205b.jpg" width="353">
The Labor Department indicated that the largest increases in initial claims for the week ending January 24 were in Wisconsin (+1,355), Rhode Island (+689), Virginia (+682), Oklahoma (+406), and Puerto Rico (+314), while the largest decreases were in Florida (-14,703), California (-12,074), Michigan (-11,639), Georgia (-9,949), and Ohio (-9,926).
Labor market stress was further indicated by a rise in continuing claims for unemployment insurance to another record level. The series dates back to 1966. During the week of January 24 they rose 20,000 on top of 151,000 and 102,000 increases during the prior two weeks. The four-week average of continuing claims rose 44,000 to 4,672,000. Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
Though the latest level of continuing claims was a record, the labor force has grown as well. Therefore, the insured rate of unemployment was not at a new high. It remained stable at 3.6% which was, however, the highest since 1983. The highest insured unemployment rates in the week ending January 17 were in Michigan (8.9 percent), Idaho (6.6), Oregon (6.6), Pennsylvania (6.2), South Carolina (6.0), Wisconsin (6.0), Alaska (5.6), Nevada (5.5), Indiana (5.4), and Montana (5.3).

<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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">01/31/09</th>
<th scope="col">01/24/09</th>
<th scope="col">01/17/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>626</td>
<td>591</td>
<td>585</td>
<td>78.3%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,788</td>
<td>4,768</td>
<td>72.7%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
</body>
</html>

U.S. labor market conditions became more bleak last week as initial claims for unemployment insurance jumped 35,000 to 626,000. Moreover, the prior week's modest increase was revised up slightly and the latest level by far surpassed [...]

U.S. Initial Claims For Jobless Insurance Highest Since 1982, Continuing Claims Reach Another Record

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205a.jpg" width="353">
U.S. labor market conditions became more bleak last week as initial claims for unemployment insurance jumped 35,000 to 626,000. Moreover, the prior week&#39;s modest increase was revised up slightly and the latest level by far surpassed Consensus expectations for 580,000 initial claims. Initial claims continue to be the highest since late during the sharp recession of 1981-82. During that recession, real GDP fell by 2.9% peak-to-trough.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205b.jpg" width="353">
The Labor Department indicated that the largest increases in initial claims for the week ending January 24 were in Wisconsin (+1,355), Rhode Island (+689), Virginia (+682), Oklahoma (+406), and Puerto Rico (+314), while the largest decreases were in Florida (-14,703), California (-12,074), Michigan (-11,639), Georgia (-9,949), and Ohio (-9,926).
Labor market stress was further indicated by a rise in continuing claims for unemployment insurance to another record level. The series dates back to 1966. During the week of January 24 they rose 20,000 on top of 151,000 and 102,000 increases during the prior two weeks. The four-week average of continuing claims rose 44,000 to 4,672,000. Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
Though the latest level of continuing claims was a record, the labor force has grown as well. Therefore, the insured rate of unemployment was not at a new high. It remained stable at 3.6% which was, however, the highest since 1983. The highest insured unemployment rates in the week ending January 17 were in Michigan (8.9 percent), Idaho (6.6), Oregon (6.6), Pennsylvania (6.2), South Carolina (6.0), Wisconsin (6.0), Alaska (5.6), Nevada (5.5), Indiana (5.4), and Montana (5.3).

<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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">01/31/09</th>
<th scope="col">01/24/09</th>
<th scope="col">01/17/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>626</td>
<td>591</td>
<td>585</td>
<td>78.3%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,788</td>
<td>4,768</td>
<td>72.7%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
U.S. Worker Productivity Growth Up, Unit Costs Ease 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 5, 2009


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205c.jpg" width="353">
During last year&#39;s fourth quarter, labor productivity in the nonfarm business sector rose 3.2% (AR), up sharply from a 1.5% increase during 3Q. The rise pulled growth for the whole year up to 2.8% which doubled the gain during all of 2007. The rise far outpaced Consensus expectations for a 1.2% increase.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205d.jpg" width="353">
As workers became more productive last quarter, that raised the growth in compensation to 5.0%. Year-to-year, however, the rise failed to translate into faster growth in worker pay. Growth in compensation per hour in fact decelerated last year to 3.4% which was the slowest since 1997.
The drop in compensation growth was the result of the recession. It lowered output by 5.5% during 4Q and growth for the full year to 1.0% from 2.0% in 2007 and from 3.2% in 2006. Hours worked fell by more, thus lifting productivity. They fell at an 8.4% rate last quarter and 1.8% for the full year.
The acceleration in productivity growth dropped the quarterly increase in unit labor costs to 1.8%. For the full year, the 0.5% gain in unit labor costs was the weakest in five years.
In the factory sector, however, the story was different. Productivity declined at a 3.0% rate which was near the rate of decline during the prior two quarters. For the year as a whole factory sector productivity did rise 1.3%. However, that only about matched the 2006 increase which was down sharply from a 4.9% rise in 2005 and gains of 6% to 7% in 2002 and 2003. Unit labor cost growth in the factory sector thus surged last quarter at a 13.3% rate and it rose at a quickened 2.5% rate for the year.

<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/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR, %)</th>
<th scope="col">4Q &#39;08</th>
<th scope="col">3Q &#39;08</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>3.2</td>
<td>1.5</td>
<td>2.7</td>
<td>2.8</td>
<td>1.4</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>5.0</td>
<td>4.2</td>
<td>3.5</td>
<td>3.4</td>
<td>4.1</td>
<td>3.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>1.8</td>
<td>2.6</td>
<td>0.7</td>
<td>0.5</td>
<td>2.7</td>
<td>2.8</td>
</tr>
</tbody>
</table>
U.S. Factory Inventories Lower Still 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 5, 2009


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205e.jpg" width="353">
The correction of factory inventory levels has picked up steam. In December, the 1.4% decline followed a 0.5% November drop that was roughly double the initial estimate of -0.3%. On a three-month basis, the rate of decline accelerated to 9.7%. To be sure, these figures have been influenced by the decline in oil prices. However, a broad-based inventory correction in the factory sector still is underway. Less oil, factory inventories fell 0.5% during December. That lowered the three-month change to a negative 0.6% (AR) after 8% rates of growth earlier in 2008.
The commercial aircraft industry continued to dominate the nonoil industry figures with a positive 45.6% year-to-year growth rate. To the downside, automobile inventories have been reduced by 8.7% versus last year. Electrical equipment &amp; appliance inventories grew at a 0.5% rate in December versus double-digit growth early in 2007 and growth in machinery inventories has been nearly halved to 6%. Steep production cutbacks pulled furniture inventories down 5.2%. The computer industry bucked the trend and inventories rose at a 6.8% rate last year versus slight decumulation in 2007.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090205f.jpg" width="353">
Total factory orders dropped sharply again in December. The 3.9% decline was the fourth in a row between -3% and -7%, but that reflected the drop in oil prices (orders here equal shipments). Textile mill orders fell 4.2% (-18.2% y/y) and apparel orders fell 3.1% y/y. Orders for durable goods orders fell 3.0% reflecting the 43.8% drop in commercial aircraft orders. Less commercial aircraft, orders for durable goods fell 1.9% or 16.0% y/y.
Factory shipments dropped 2.9% due to lower oil prices. Less oil, shipments fell a lesser 1.3% but year-to-year they were down sharply by 7.4%. Automobile shipments were off by more than one quarter year-to-year and shipments of electrical equipment were off 9.7%. Electronic computer shipments fell 29.1% y/y with lower prices while shipments of furniture &amp; related products fell 12.5%.
Total unfilled orders fell 1.4%, but less the transportation sector where aircraft backlogs still are strong, unfilled orders fell 2.2%.
Why Do Firms Use Temporary Workers? from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmarch2009_260.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS, %)</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>-1.4</td>
<td>-0.5</td>
<td>2.6</td>
<td>2.6</td>
<td>3.7</td>
<td>8.2&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-2.3</td>
<td>-1.1</td>
<td>-0.0</td>
<td>-0.0</td>
<td>2.7</td>
<td>7.9</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders</td>
<td>-3.9</td>
<td>-6.5</td>
<td>-18.7</td>
<td>0.2</td>
<td>1.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-4.4</td>
<td>-6.0</td>
<td>-15.2</td>
<td>3.2</td>
<td>1.2</td>
<td>7.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>-2.9</td>
<td>-6.5</td>
<td>-12.8</td>
<td>1.8</td>
<td>1.2</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>-3.5</td>
<td>-6.8</td>
<td>-12.2</td>
<td>3.7</td>
<td>1.5</td>
<td>6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Unfilled Orders</td>
<td>-1.4</td>
<td>-0.9</td>
<td>3.7</td>
<td>3.7</td>
<td>17.1</td>
<td>15.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Transportation</td>
<td>-2.2</td>
<td>-1.4</td>
<td>-0.6</td>
<td>-0.6</td>
<td>8.2</td>
<td>16.0</td>
</tr>
</tbody>
</table>
</body>
</html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090204i.jpg" align="left" border="0" height="265" width="353">
Challenger, Grey &amp; Christmas reported that January job
cut announcements soared to 241,749 following 166,348 layoffs during
December. The latest figure was the highest since early-2002.
Job cut announcements in the retail industry led overall with
53,968. The industrial goods industry was not far behind with 32,083
layoffs and in the computer industry there were 22,330 job cuts.
Announced were 22,063 layoffs in the pharmaceutical industry, 17,195
layoffs in the chemical industry and the electronics industry shed
11,050 jobs
During the last ten years there has been a 67% (inverse)
correlation between the three month moving average of announced job
cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved
through attrition, early retirement or just never occur.
Challenger also reported that announced hiring plans were up
sharply from the prior three months.
The Challenger figures are available in Haver's SURVEYS
database.

<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/@S3/@S301/@S301.HTM">Challenger,
Gray &amp; Christmas</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>241,749</td>
<td>166,348</td>
<td>222.4%</td>
<td>1,223,993</td>
<td>768,264</td>
<td>839,822</td>
</tr>
</tbody>
</table>
</body></html>

Challenger, Grey & Christmas reported that January job cut announcements soared to 241,749 following 166,348 layoffs during December. The latest figure was the highest since early-2002. Job cut announcements in the retail industry led [...]

Challenger Layoffs Highest Since 2002

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090204g.jpg" width="353">
The January Composite Index for the nonmanufacturing sector from the Institute for Supply Management (ISM) rose for the second consecutive month. The rise to 42.9 raised the level to its highest since October and it was much firmer than Consensus expectations for a reading of 39.0. A level of the ISM indices below 50 indicates declining activity. Since the series&#39; inception in 1997 there has been a 48% correlation between the level of the business activity index for the nonmanufacturing sector and the Q/Q change in real GDP for the services and the construction sectors.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090204h.jpg" width="353">
The rise in the overall figure last month was led by improvement in the business activity sub-component, also its highest since October. The new orders sub-index increased as well to 41.6.
The employment index was relatively less robust and was about unchanged from December at 34.4, but that was still up moderately from the November low. Since the series&#39; inception in 1997 there has been a 56% correlation between the level of the ISM nonmanufacturing employment index and the m/m change in payroll employment in the service-producing plus the construction industries.
Pricing power firmed as well to a reading of 42.5 which was the highest since October. Since its inception ten years ago, there has been a 60% correlation between the price index and the q/q change in the GDP services chain price index.
Beginning with the January 2008 Nonmanufacturing <cite>Report On Business</cite>&reg;, the composite index is calculated as an indicator of the overall economic condition for the non-manufacturing sector. It is a composite index based on the diffusion indexes for four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.
ISM surveys more than 370 purchasing managers in more than 62 industries including law firms, hospitals, government and retailers. The nonmanufacturing survey dates back to July 1997.

<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/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">January &#39;08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>42.9</td>
<td>40.1</td>
<td>44.6</td>
<td>47.4</td>
<td>53.5</td>
<td>55.7</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>42.5</td>
<td>36.1</td>
<td>71.2</td>
<td>66.0</td>
<td>63.8</td>
<td>65.3</td>
</tr>
</tbody>
</table>


</html>

The January Composite Index for the nonmanufacturing sector from the Institute for Supply Management (ISM) rose for the second consecutive month. The rise to 42.9 raised the level to its highest since October and it was much firmer [...]

U.S. ISM Nonmanufacturing Index Moved Higher Again

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090204f.jpg" align="left" border="0" height="265" width="353">
The EMU Services PMIs from Market show continued weakness in
EMU and UK service sectors but not accelerating weakness. 
 

The signal for the Zone is just one month up from its low.
Country indices are low in their respective ranges, but generally they
are not on their bottoms. Germany for example saw its service sector
slip further this month; it now lies in the bottom 10 percentile of its
range. Italy and the UK each saw some of their weakness dissipate yet
they remain the worst tow countries with the lowest services diffusion
readings in this grouping. . The EU Commission&#8217;s measures on services
and confidence are generally a bit weaker and are at or nearer all time
lows compared to the Market treatment for services. 
 

The bounce in services in Europe is echoed by the bounce in
the US non-MFG ISM, the closest US measure to these European service
sector indices. The US ISM is in the bottom 23% of its range. Europe
and the US seem to be passing though this cycle with remarkably similar
impacts on their respective goods and services sectors. 
 

<div> </div>


 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> NTC
Services Indices for EU/EMU</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Jan-09</td>
<td> Dec-08</td>
<td> Nov-08</td>
<td> 3Mo</td>
<td> 6Mo</td>
<td> 12Mo</td>
<td> Percentile</td>
</tr>
<tr class="grey3">
<td class="firstcol"> Euro-13</td>
<td> 42.16</td>
<td> 42.06</td>
<td> 42.47</td>
<td> 42.23</td>
<td> 44.89</td>
<td> 47.77</td>
<td>0.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany</td>
<td>45.20</td>
<td>46.57</td>
<td>45.14</td>
<td>45.64</td>
<td>47.81</td>
<td>50.40</td>
<td>10.7%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France</td>
<td>42.56</td>
<td>40.57</td>
<td>46.17</td>
<td>43.10</td>
<td>45.84</td>
<td>49.27</td>
<td>8.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy</td>
<td>41.10</td>
<td>40.30</td>
<td>39.46</td>
<td>40.29</td>
<td>44.07</td>
<td>46.03</td>
<td>7.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Spain</td>
<td>31.84</td>
<td>32.10</td>
<td>28.23</td>
<td>30.72</td>
<td>33.24</td>
<td>37.17</td>
<td>11.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Ireland</td>
<td>33.94</td>
<td>34.14</td>
<td>32.60</td>
<td>33.56</td>
<td>36.23</td>
<td>40.52</td>
<td>3.7%</td>
</tr>
<tr class="grey4">
<td class="firstcol" colspan="8"> EU
only</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK (CIPs)</td>
<td>42.48</td>
<td>40.21</td>
<td>40.06</td>
<td>40.92</td>
<td>43.38</td>
<td>46.76</td>
<td>11.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; US NONFMG ISM</td>
<td>42.90</td>
<td>40.10</td>
<td>37.40</td>
<td>40.13</td>
<td>44.23</td>
<td>47.21</td>
<td>22.9%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol"> EU Commission Indices for
EU and EMU</td>
</tr>
<tr class="grey4">
<td class="firstcol"> EU Index</td>
<td>Jan-09</td>
<td> Dec-08</td>
<td> Nov-08</td>
<td> 3Mo</td>
<td> 6Mo</td>
<td> 12Mo</td>
<td> Percentile</td>
</tr>
<tr class="grey3">
<td class="firstcol">EU Services</td>
<td>-28</td>
<td>-23</td>
<td>-18</td>
<td> -28.67</td>
<td> -24.67</td>
<td> -19.67</td>
<td>0.0%</td>
</tr>
<tr class="grey4">
<td class="firstcol"> EMU</td>
<td>Jan-09</td>
<td>Dec-08</td>
<td>Nov-08</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey3">
<td class="firstcol">Services</td>
<td>-22</td>
<td>-17</td>
<td>-12</td>
<td> -17.00</td>
<td>-9.50</td>
<td> -2.58</td>
<td>0.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Cons Confidence</td>
<td>-31</td>
<td>-30</td>
<td>-25</td>
<td> -28.67</td>
<td>-24.67</td>
<td> -8.28</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">
Consumer confidence by
country</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany-Ccon</td>
<td>-27</td>
<td>-22</td>
<td>-15</td>
<td> -21.33</td>
<td>-15.67</td>
<td> -9.50</td>
<td>0.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France-Ccon</td>
<td>-35</td>
<td>-34</td>
<td>-29</td>
<td> -32.67</td>
<td>-29.50</td>
<td> -23.75</td>
<td>0.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Ital-Ccon</td>
<td>-26</td>
<td>-30</td>
<td>-26</td>
<td> -27.33</td>
<td>-25.17</td>
<td> -24.17</td>
<td>12.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Spain-Ccon</td>
<td>-44</td>
<td>-46</td>
<td>-44</td>
<td> -44.67</td>
<td>-42.33</td>
<td> -35.58</td>
<td>4.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK-Ccon</td>
<td>-35</td>
<td>-29</td>
<td>-27</td>
<td> -30.33</td>
<td>-27.50</td>
<td> -21.50</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">percentile
is over range since May
2000</td>
</tr>
</tbody>
</table>
</body></html>

The EMU Services PMIs from Market show continued weakness in EMU and UK service sectors but not accelerating weakness. The signal for the Zone is just one month up from its low. Country indices are low in their respective ranges, but [...]

EMU Services PMI's Slow Descent Signal In January

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090204e.jpg" align="left" border="0" height="265" width="353">
The chart at top shows the Yr/Yr trend in EMU consumer
spending. It is working its way lower, lead by a declining trend in
consumer spending plans. The Yr/Yr drops seem to have stopped to hover
around the -2% pace, Yr/Yr. But the table shows that more recently
downward momentum seems to have picked up. Over six months the sales
volume is only lower at a 1.2% annual rate but over three-months that
is down to a -4.4% pace. The drop in the pace of nonfood items has
accelerated even more sharply over the recent 3-months as economic
conditions have worsened. Despite some really poor consumer sentiment
surveys spending in the UK is holding up. In Germany, though,
conditions are poor. 
 

<div> </div>


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Ezone (15)
Retail Sales Volume</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-08</td>
<td>Nov-08</td>
<td>Oct-08</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Zone-15 Total</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-1.0%</td>
<td>-4.4%</td>
<td>-1.2%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-2.2%</td>
<td>0.0%</td>
<td>-1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">NonFood</td>
<td>-0.4%</td>
<td>-0.2%</td>
<td>-1.1%</td>
<td>-6.6%</td>
<td>-2.2%</td>
<td>-2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Textiles</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>-3.1%</td>
<td>-4.3%</td>
<td>-6.6%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Books news,
etc</td>
<td>#N/A</td>
<td>-1.1%</td>
<td>-1.1%</td>
<td>-9.0%</td>
<td>-5.0%</td>
<td>-3.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Pharma</td>
<td>#N/A</td>
<td>0.2%</td>
<td>-0.6%</td>
<td>-1.6%</td>
<td>1.1%</td>
<td>0.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Other
NonSpec</td>
<td>#N/A</td>
<td>0.3%</td>
<td>0.1%</td>
<td>-0.6%</td>
<td>-3.6%</td>
<td>-2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mail Order</td>
<td>#N/A</td>
<td>-0.1%</td>
<td>-1.9%</td>
<td>-4.3%</td>
<td>-1.9%</td>
<td>-0.6%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Country
detail; Volume</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany: VolxAuto</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>-0.9%</td>
<td>-4.6%</td>
<td>0.6%</td>
<td>0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy (Total; Value)</td>
<td>#N/A</td>
<td>-0.2%</td>
<td>-0.4%</td>
<td>-1.5%</td>
<td>-1.5%</td>
<td>-1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK (EU): Vol</td>
<td>1.6%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>6.7%</td>
<td>6.2%</td>
<td>3.9%</td>
</tr>
<tr class="even">
<td colspan="7" class="firstcol">Shaded areas
calculated on a
one-month lag due to lagging data</td>
</tr>
<tr class="even">
<td colspan="7" class="firstcol">The EA 13 countries are Austria,
Belgium, Finland, France, Germany,</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Greece,
Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Slovenia</td>
</tr>
</tbody>
</table>
</body></html>

The chart at top shows the Yr/Yr trend in EMU consumer spending. It is working its way lower, lead by a declining trend in consumer spending plans. The Yr/Yr drops seem to have stopped to hover around the -2% pace, Yr/Yr. But the [...]

EMU Consumer Spending Tanks Along With Spending Plans

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

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

**The US housing market**
This first chart below highlights the growing downside risks to the US economic outlook stemming from the housing market. The S&P Case-Shiller home price index has slowed sharply from the pandemic-era surge, while the NAHB (National Association of Homebuilders) housing market index has weakened to levels historically associated with falling home prices. Housing matters because it is not just a cyclical sector but also a key transmission channel for the broader economy: consumer confidence, household balance sheets and credit conditions are all heavily influenced by shifts in the housing market.

250821Z1.jpg

**China’s economy**
The latest run of data from China has also reinforced downside risks for the broader world economy. As the Citigroup Economic Surprise Indices shows below, China-specific data have more consistently undershot expectations in recent days. China’s July releases in particular disappointed: retail sales growth slowed to just 3.7% y/y, with weakness in autos and furniture hinting that earlier policy-driven boosts are fading. Industrial output and fixed-asset investment also came in below consensus, while property prices continued to fall and retail sector investment contracted by double digits. Even the labour market showed strain, with unemployment edging higher. The worry is not just China’s slowdown in isolation, but the spillovers. Softer Chinese demand feeds directly into global supply chains, commodity markets, and regional trade partners. Combined with tariff and non-tariff headwinds from the US, the risk is that China’s structural challenges spill into weaker global growth momentum.

250821Z2.jpg

**UK inflation** 
Persistently high services inflation remains one of the biggest headaches for UK monetary policy - and the UK is far from unique in that regard. Services are wage- and demand-sensitive, and their stickiness complicates the calibration of monetary policy even as broader disinflation takes hold. This week’s July upside surprise to UK services inflation was driven in no small part by airfares, which spiked 30% month-on-month – the largest July rise on record. While such volatility may prove temporary, it nonetheless lifted year-on-year services inflation to 5.0%, well above comfort levels. Still, the offsets are important: stripping out airfares and other volatile components, underlying services momentum appears to have eased, while broader data on wages, employment, and activity point to cooling demand. Nevertheless, this tension – headline stickiness versus softer underlying trends – underscores why the Bank of England is treading carefully.

250821Z3.jpg

**Inflation expectations and energy**
US medium-term inflation expectations have been unusually decoupling from oil prices in recent weeks. Normally, falling oil prices would help anchor breakevens, yet the 5-year forward inflation rate has edged higher of late even as WTI has slipped. This probably reflects US tariff policies that are shifting inflation dynamics away from energy and toward trade-related costs. At the same time, a weaker dollar has lifted imported prices, and the upward creep in expectations suggests markets may be more actively questioning whether the Fed’s “higher for longer” stance is sufficient to contain medium-term inflation risks.

250821Z4.jpg

**Clean energy**
Pivoting to more structural issues, the stark divergence between the global clean energy equity market index and the broader S&P 500 underlines the mounting challenges facing the renewables sector at present. While US equities have pushed to record highs, clean energy stocks have languished, weighed down by policy uncertainty, higher financing costs, and a more sceptical public mood. In the US, shifting political winds and uneven implementation of green subsidies have clouded the outlook for investment, while globally, resistance to renewables has grown as consumers and businesses grapple with high energy bills. Rising interest rates have further undermined the economics of capital-intensive clean energy projects, eroding returns and delaying investment pipelines. At the same time, bottlenecks in transmission infrastructure, permitting delays, and questions over the pace of the net-zero transition have all dented confidence. The result is a sector underperforming dramatically even as the urgency of the climate challenge grows.

250821Z5.jpg

**Renewables versus non-renewables**
Global energy consumption data show how limited—and in some respects, stalled—the transition away from fossil fuels has become. Oil, gas, and coal still dominate the energy mix, with shares that have proven remarkably resilient over the past several years. In fact, coal use has ticked higher in of late as countries turned back to cheaper, more secure supplies amid energy price spikes and supply disruptions. While renewables have grown rapidly in percentage terms, their absolute contribution remains small compared with the scale of fossil fuel demand. Nuclear and hydro have also struggled to gain ground, leaving the overall mix looking more like a story of continuity than transformation. The result is a global transition that has not just slowed but, in key areas, has partially reversed—highlighting the gulf between climate ambitions and energy realities.

250821Z6.jpg

Recent financial market gains have been underpinned by resilient global data, AI-fuelled optimism, and hopes that most central banks will continue to loosen monetary policy. Yet beneath the surface, a more complicated picture may be emerging. In the US, housing indicators are flashing warnings about household balance sheets and credit channels (chart 1), while China’s latest data—covering retail sales, industrial output, and property—underscore persistent weakness (chart 2). In the UK, this week’s data showing sticky services inflation is complicating the Bank of England’s easing path (chat 3), while back in the US, medium-term inflation expectations have been rising despite softer oil prices (chart 4), hinting at a more disruptive role for trade policy. Against this cyclical backdrop sit deeper structural challenges: global energy consumption remains overwhelmingly dependent on fossil fuels, the clean energy sector has lost momentum amid high costs and policy uncertainty, and equity markets have punished renewables even as climate imperatives intensify (charts 5 and 6). Together, these dynamics suggest that while markets continue to trade on optimism, the mix of weak housing signals, patchy Chinese demand, sticky inflation, and an uneven energy transition potentially leaves the global outlook more fragile than headline performance implies.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/1GqSlFq3gfZuMYDWhif8Ht?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Cracks Beneath The Shine

250820A5.jpg

250820B5.jpg

Mortgage applications fell 1.4% (+22.7% y/y) in the week ending August 15 after rising 10.9% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans edged 0.1% higher (22.7% y/y) last week, following a 1.4% gain in the prior week. Applications to refinance a home loan fell 3.1% (+22.8% y/y) last week, following a 23.0% rise in the week of August 8.

The effective interest rate on a 30-year fixed-rate loan held steady at 6.86% in the week ending August 15 after falling from 6.94% in the first week of August. It was the lowest rate since the first week of March, down from a high of 7.28% in the second week of January. The rate on 15-year fixed-rate mortgages rose to 6.13% in the latest week from 6.09% in the week of August 8. Conversely, the rate on 30-year Jumbo loans decreased to 6.82% last week from 6.86% one week earlier. The rate on a 5-year ARM rose to 6.24% in the week of August 15 and reversed the prior week’s decline to 6.05%.

The share of applications for refinancing an existing loan eased to 46.1% of total applications in the week ending August 15 after rising to 46.5% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity declined to 8.60% in the latest week after rising to 9.60% in the week of August 8.

The average size of a mortgage loan fell 2.7% (+4.1% y/y) to $387,800 in the week of August 15, following a 4.5% rise in the prior week. The average size of a purchase loan edged 0.5% higher (0.6% y/y) to $429,000 in the latest week after falling 1.2% in the week ending August 8. The average size of a loan to refinance a mortgage fell 7.3% (+9.5% y/y) to $339,800 last week, after rising 18.3% to $366,400 in the prior week. It was increased from $277,900 in the last week of May.

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.

**Tracking Labor Market Stress** from the Federal Reserve Bank of San Francisco is available [here](https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/08/tracking-labor-market-stress/).

- Purchase applications edge higher while loan refinancing declines.
- Effective fixed-interest rate on 30-year loans remains at four-month low.
- Average loan size declines.

U.S. Mortgage Applications Decline Last Week as Interest Rates Steady

250819F1.jpg

250819G1.jpg

Total housing starts increased 5.2% (12.9% y/y) in July to 1.428 million (SAAR) after rising 5.9% in June to 1.358 million, revised from 1.321 million, and falling 8.3% to 1.282 in May, revised from 1.263 million, according to the U.S. Census Bureau. Total starts in July remained 22.5% below their peak of 1.820 million units reached in April 2022. The Action Economics Forecast Survey expected 1.30 million starts in July.

Single-family starts in July rose 2.8% (7.8% y/y) to 939,000 after falling 3.8% in June to 913,000, revised from 883,000, and edging 0.1% higher in May to 949,000, revised from 926,000. Multi-family starts surged 9.9% (24.1% y/y) in July to 489,000 after strengthening 33.6% in June to 445,000, revised from 438,000, and declining 26.0% to a little-revised 333,000 units in May.

Housing starts in the Midwest surged 33.3% (40.8% y/y) in July to 252,000 after rising 3.3% in June. Adding to this increase, starts in the South rose 19.2% (29.5% y/y) to 833,000 after holding steady in June. Offsetting these gains, starts in the West declined 27.5% (-14.4% y/y) to 232,000 after rising 8.1% in June. Housing starts in the Northeast declined 26.0% (-35.5% y/y) to 111,000 after increasing 44.2% in June.

Building permits declined 2.8% (-5.7% y/y) last month to 1.354 million after easing slightly in June. It was the fourth consecutive monthly decline. Single-family permits rose 0.5% (-7.9% y/y) in July to 870,000 after weakening for four straight months. Multi-family permits fell 8.2% (-1.4% y/y) to 484,000 after rising 6.5% in June. Building permits in the Northeast rose 25.2% (-7.9% y/y), and they edged up 0.5% (12.9% y/y) in the Midwest. In the South, building permits declined 4.6% (-6.1% y/y) while in the West, building permits weakened 10.1% (-15.2% y/y).

The housing starts and building permits figures can be found in Haver’s **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

250819H1.jpg

250819I1.jpg

- Increase brings starts to five-month high.
- Multi-family starts surge while single-family starts rise moderately.
- Building permits decline is led by multi-family.

U.S. Housing Starts Strengthen Unexpectedly in July

Winnie Tapasanun

250819A35.jpg

250819B35.jpg

Online retail sales, formally known as retail e-commerce sales, rose a seasonally adjusted 1.4% q/q in Q2'25 to $304.2 billion following a 0.1% downtick in Q1’25 (0.0% initially) and a 1.7% increase in Q4’24 (unrevised), according to the U.S. Census Bureau. The Q2’25 reading was the 14th q/q gain in 15 quarters. The year-on-year rate of increase decelerated to 5.3% in Q2'25, the lowest since Q2'22, from 6.0% Q1’25. The latest y/y number was lower than 7.1% in Q2'24; thus, having remained significantly below a high of 45.3% in Q1'21 and a peak of 53.5% in Q2’20.

The Q2'25 rise in retail e-commerce sales compared to a 0.4% q/q gain (3.9% y/y) to $1,865.4 billion in total retail sales during the same period. This overall measure of retail sales excludes food services and restaurant sales. Retail e-commerce sales accounted for 16.3% of total retail sales in Q2'25 following 16.1% in Q1'25, registering the highest rate since Q2'20; the percentage was 16.1% in 2024, 15.3% in 2023, and 7.1% in 2015.

Details of the retail e-commerce sales data by sector are not seasonally adjusted. Sales of nonstore retailers, which accounted for 58.5% of total e-commerce sales, rose 5.3% (1.8% y/y) in Q2'25, the fourth q/q rise in five quarters, following a 20.7% decrease in Q1'25. Building materials & garden equipment sales recovered 34.7% (9.9% y/y), the largest q/q gain since Q2'20, reversing a 16.2% drop. Health & personal care sales rebounded 12.8% (1.7% y/y), the second q/q increase in three quarters, after having plummeted 40.9%.

Clothing accessory store sales rose 9.2% (-1.3% y/y) in Q2'25 after a 38.3% plunge in Q1'25. General merchandise store sales increased 8.4% (17.2% y/y) following a 20.9% drop. Sales of furniture & home furnishings rose 5.1% (4.4% y/y) after a 15.6% fall. Sporting goods, hobby, musical instrument & book sales grew 4.3% (6.7% y/y) following a 31.3% slump. These series registered the fourth q/q gain in five quarters.

Sales of motor vehicles & parts advanced 8.3% (15.9% y/y) in Q2'25, the largest of six straight q/q increases, on top of a 1.0% rise in Q1'25. Miscellaneous sales including gasoline stations recovered 2.6% (2.3% y/y), up for the second quarter in three, following a 2.3% decline. Food & beverage sales excluding food services rose 0.8% (15.5% y/y), the third q/q rise in four quarters, after a 0.1% easing.

E-commerce sales are goods and services ordered over an internet, mobile device (M-commerce), extranet, Electronic Data Interchange (EDI) network, electronic mail, or other comparable online system. Payment may or may not be made online and sometimes sale & price are negotiated. Total sales estimates are adjusted for seasonal variation, but not for price changes. They are also adjusted for trading-day differences and moving holidays.

Retail e-commerce sales data can be found in Haver's **USECON** database.

- Sales +1.4%, the 14th q/q rise in 15 qtrs.; +5.3% y/y, the lowest since Q2'22.
- Online share of total retail sales up to 16.3%, the highest since Q2'20.
- Nonstore sales rebound, up for the fourth quarter in five.
- Widespread gain in online sales led by bldg. materials & garden equipt. (+34.7% q/q).

U.S. Retail E-Commerce Sales Rise in Q2'25

250819C20.jpg

250819D20.jpg

Retail gasoline prices for all grades, on average, inched up to $3.25 per gallon (-7.1% y/y) last week after falling to $3.24 one week earlier. Prices remained above their low of $3.13 in the week of December 9. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel fell to $3.71 per gallon (+0.7% y/y) in the week of August 18 after easing to $3.75 in the prior week. The latest diesel price stood well below a high of $4.63 in the week ending September 18, 2023 and a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil declined to $63.31 per barrel (-19.7% y/y) in the week ended August 15 from $64.71 in the prior week. The drop left prices at the lowest level since the first week of June. Prices remained above a $59.04 low in the second week of May. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $63.96 per barrel. The price of European Brent crude fell to $67.17 per barrel (-18.6% y/y) in the week of August 15, after falling to $68.17 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. The price was $68.18 per gallon yesterday.

Natural gas prices slipped to an average $2.94/mmbtu (+38.0% y/y) in the week ended August 15, after falling to an average $2.99/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $2.96 per mmbtu.

Gasoline demand declined 1.5% y/y in the four weeks ending August 8, following a 2.2% y/y decline in the prior four weeks. Demand for all petroleum products rose 2.9% y/y in the four weeks ending August 8, after a 1.6% y/y increase in the previous four-week period. Crude oil input to refineries rose 4.2% y/y in the four weeks ending August 8, after a 2.9% y/y gain in the prior four weeks.

Gasoline inventories rose 1.8% y/y in the week ending August 8 after a 0.9% y/y in the prior week. Residual fuel oil inventories fell 25.7% y/y in the week of August 8, after a 25.8% y/y fall in the prior week. Crude oil inventories rose 2.8% y/y in the week of August 8 after a 2.7% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories stood at 25.0 days in the week of August 8, unchnged from the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil held at 25.0 days in the week of August 8, and remained below a high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** & **USENERGY** database.

Economy in Brief: February 2009

Jump to:

U.S. Factory Inventories Lower Still

U.S. Worker Productivity Growth Up, Unit Costs Ease

U.S. Initial Claims For Jobless Insurance Highest Since 1982, Continuing Claims Reach Another Record

U.S. Initial Claims For Jobless Insurance Highest Since 1982, Continuing Claims Reach Another Record

Challenger Layoffs Highest Since 2002

U.S. ISM Nonmanufacturing Index Moved Higher Again

EMU Services PMI's Slow Descent Signal In January

EMU Consumer Spending Tanks Along With Spending Plans