Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407e.jpg" width="353">
For February, the Bureau of Labor Statistics reported in its Job Openings &amp; Labor Turnover Survey (JOLTS) that job availability made up just a piece of the January decline. The 2.9% rise in the number of job opening followed a 9.4% January falloff and openings remained off by roughly one-third from the year ago level. The latest level remained near the record low for the series which dates back to December 2000.
The job openings rate also rose modestly in February to 2.2% versus a downwardly revised 2.1% rate in January. These rates were down from more than a 3% rate in 2007. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.
The actual number of job openings in the construction sector fell by 81% from the year ago level and factory sector job openings fell 50%, as did leisure &amp; hospitality jobs which also were off by 50%. Professional &amp; business services job openings fell more than one-third year-to-year while openings in the education &amp; health sectors also were off by nearly one quarter. Openings in retail trade fell a slight 6% y/y. Not only were private sector openings down but government sector job openings fell a sharp 12% with state &amp; local off 17% as tax revenues fell.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407f.jpg" width="353">
By region, openings in the West fell the hardest, by 42% year-to-year, while openings in the South and the Midwest were off roughly 30%. Openings in the Northeast they were down by a more moderate 12%.
The hires rate held steady for the third month at 3.3% and that was near the lowest in the series&#39; short eight year history.The hires rate is the number of hires during the month divided by employment.The actual number of hires fell by 13% year-to-year with the largest declines coming in the leisure &amp; hospitality industry (-25%) followed by the factory sector (-23%) and the retail sector (-22%). In the professional &amp; business services industry the decline was a more moderate 11% while education &amp; health services jobs fell 8%. Construction sector hires fell 2%.
The job separations rate fell slightly to 3.6%, about where it&#39;s been since early 2008. Separations include quits, layoffs, discharges, and other separations as well as retirements. The level of job separations fell 3.5% y/y.
The JOLTS survey dates only to December 2000 but has followed the movement in nonfarm payrolls, though the actual correlation between the two series is low.
A description of the Jolts survey and the latest release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a> and the figures are available in Haver&#39;s USECON 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/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor &nbsp;Turnover Survey)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">February &#39;08</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">Job Openings, Total&nbsp;&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">&nbsp; Rate (%)</td>
<td>2.2</td>
<td>2.1</td>
<td>3.0</td>
<td>2.3</td>
<td>3.1</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>3,006</td>
<td>2,920</td>
<td>4,248</td>
<td>3,224</td>
<td>4,382</td>
<td>4,606</td>
</tr>
<tr class="odd">
<td class="firstcol">Hires, Total</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.3</td>
<td>3.3</td>
<td>3.7</td>
<td>41.1</td>
<td>46.1</td>
<td>47.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,360</td>
<td>4,460</td>
<td>5,035</td>
<td>56,486</td>
<td>63,666</td>
<td>64,879</td>
</tr>
</tbody>
</table>
</body>
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For February, the Bureau of Labor Statistics reported in its Job Openings & Labor Turnover Survey (JOLTS) that job availability made up just a piece of the January decline. The 2.9% rise in the number of job opening followed a 9.4% [...]

JOLTS: U.S. Job Openings Tick Higher In February But Remain Off By One-Third Y/Y

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407d.jpg" width="353">
After a weak March, the consumer may be showing signs of returning to the stores. The International Council of Shopping Centers-Goldman Sachs Index indicated that sales in early April rose 0.6% after the 1.1% jump during the prior week. As a result, sales began this month 1.2% above the March average following that month&#39;s tepid 0.3% uptick.
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
During the last ten years there has been a 64% correlation between the year-to-year growth in chain store sales and the growth in general merchandise sales. These weekly figures are available in Haver&#39;s SURVEYW database.
The outlook for sales continued cautiously optimistic. The leading indicator of sales has been moving sideways since early February.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">04/03/09</th>
<th scope="col">03/27/09</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">Total Weekly Chain Store Sales</td>
<td>489.5</td>
<td>486.5</td>
<td>-0.3%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>


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After a weak March, the consumer may be showing signs of returning to the stores. The International Council of Shopping Centers-Goldman Sachs Index indicated that sales in early April rose 0.6% after the 1.1% jump during the prior [...]

U.S. Chain Store Sales Pick Up Early This Month

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407a.jpg" align="right" border="0" height="265" width="353">Regular
gasoline prices last week held firm at $2.04 per gallon, the
highest level since last November. The latest was up 42 cents from the
December low. Yesterday, the spot market price for regular gasoline
also remained firm at $1.37 per gallon. That was roughly unchanged from
the prior two weeks but up from under $1.00 at the end of last year.
The figures are reported by the U.S. Department of Energy.
Weekly
gasoline prices can be found in Haver's WEEKLY database.
Daily prices are in the DAILY database.
Crude oil <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407b.jpg" align="right" border="0" height="265" width="353">
prices backpedaled from their
earlier high as
estimates of crude oil production strengthened. The American Petroleum
Institute indicated that production rose in the latest week by 7.8%
y/y. That increase compares with a decline in crude oil production of
2.1% during all of last year. Inventories of crude oil also were
strong, as estimated by DOE's Energy Information Association.
Inventories rose 15.6% following the 9.0% increase in 2008. The
inventory and production figures lowered the price for a barrel of West
Texas Intermediate to $50.32 from the recent high of $53.09. However,
that remained up more than 50% from the December low of $32.37 per
barrel. In futures trading the May contract price for crude oil fell
back yesterday to a still firm $51.05 per barrel. Prices reached a high
of $145.66 last July.
The figures on crude oil production and
inventories are available in Haver's Weekly Oil Statistics
database.
 Gasoline demand last week fell 0.2% y/y
versus the 4.8% rate of decline seen last October. (Gasoline prices at
the time were just off their peak.) The change in demand is measured
using the latest four weeks versus the same four weeks in 2008. Demand
for all <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407c.jpg" align="right" border="0" height="265" width="353">
petroleum products was down 4.4% y/y. That
negative comparison was led by a 9.1% decline in distillate demand.
Demand for residual rose a modest 1.2%. These numbers are available in
Haver's OILWKLY database.
 The price of natural
gas continued downward with the coming end to the winter heating
season. Prices fell to $3.64 per mmbtu (-61.7% y/y) which was near the
lowest level since 2002. The latest average price was down more than
two-thirds from the high reached in early-July of $13.19/mmbtu.
The
Panic of 2008 is the title of yesterday's speech by Fed
Governor Kevin Warsh and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/warsh20090406a.htm">
here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">04/06/09</th>
<th scope="col">03/30/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.04</td>
<td>2.05</td>
<td>-38.9%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>50.32</td>
<td>53.09</td>
<td>-51.4%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>

</body></html>

Regular gasoline prices last week held firm at $2.04 per gallon, the highest level since last November. The latest was up 42 cents from the December low. Yesterday, the spot market price for regular gasoline also remained firm at [...]

Gasoline Prices Hold Prior Weeks' Gains

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407a.jpg" align="right" border="0" height="265" width="353">Regular
gasoline prices last week held firm at $2.04 per gallon, the
highest level since last November. The latest was up 42 cents from the
December low. Yesterday, the spot market price for regular gasoline
also remained firm at $1.37 per gallon. That was roughly unchanged from
the prior two weeks but up from under $1.00 at the end of last year.
The figures are reported by the U.S. Department of Energy.
Weekly
gasoline prices can be found in Haver's WEEKLY database.
Daily prices are in the DAILY database.
Crude oil <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407b.jpg" align="right" border="0" height="265" width="353">
prices backpedaled from their
earlier high as
estimates of crude oil production strengthened. The American Petroleum
Institute indicated that production rose in the latest week by 7.8%
y/y. That increase compares with a decline in crude oil production of
2.1% during all of last year. Inventories of crude oil also were
strong, as estimated by DOE's Energy Information Association.
Inventories rose 15.6% following the 9.0% increase in 2008. The
inventory and production figures lowered the price for a barrel of West
Texas Intermediate to $50.32 from the recent high of $53.09. However,
that remained up more than 50% from the December low of $32.37 per
barrel. In futures trading the May contract price for crude oil fell
back yesterday to a still firm $51.05 per barrel. Prices reached a high
of $145.66 last July.
The figures on crude oil production and
inventories are available in Haver's Weekly Oil Statistics
database.
 Gasoline demand last week fell 0.2% y/y
versus the 4.8% rate of decline seen last October. (Gasoline prices at
the time were just off their peak.) The change in demand is measured
using the latest four weeks versus the same four weeks in 2008. Demand
for all <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407c.jpg" align="right" border="0" height="265" width="353">
petroleum products was down 4.4% y/y. That
negative comparison was led by a 9.1% decline in distillate demand.
Demand for residual rose a modest 1.2%. These numbers are available in
Haver's OILWKLY database.
 The price of natural
gas continued downward with the coming end to the winter heating
season. Prices fell to $3.64 per mmbtu (-61.7% y/y) which was near the
lowest level since 2002. The latest average price was down more than
two-thirds from the high reached in early-July of $13.19/mmbtu.
The
Panic of 2008 is the title of yesterday's speech by Fed
Governor Kevin Warsh and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/warsh20090406a.htm">
here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">04/06/09</th>
<th scope="col">03/30/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.04</td>
<td>2.05</td>
<td>-38.9%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>50.32</td>
<td>53.09</td>
<td>-51.4%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>

U.S. Chain Store Sales Pick Up
Early This Month 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 7, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407d.jpg" align="left" border="0" height="265" width="353">
After a weak March, the consumer may be showing signs of
returning to the stores. The International Council of Shopping
Centers-Goldman Sachs Index indicated that sales in early April rose
0.6% after the 1.1% jump during the prior week. As a result, sales
began this month 1.2% above the March average following that month's
tepid 0.3% uptick.
The ICSC-Goldman
Sachs retail chain-store sales index is constructed using the
same-store sales (stores open for one year) reported by 78 stores of
seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney,
Sears and Wal-Mart.


During the last ten years there has been a 64% correlation
between the year-to-year growth in chain store sales and the growth in
general merchandise sales. These weekly figures are
available in Haver's SURVEYW database.
The outlook for sales continued cautiously optimistic. The
leading indicator of sales has been moving sideways since early
February.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></th>
<th scope="col">04/03/09</th>
<th scope="col">03/27/09</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">Total Weekly Chain
Store Sales</td>
<td>489.5</td>
<td>486.5</td>
<td>-0.3%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
JOLTS: U.S. Job Openings Tick
Higher In February But Remain Off By One-Third Y/Y 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 7, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407e.jpg" align="left" border="0" height="265" width="353">
For February, the Bureau of Labor Statistics reported in its
Job Openings &amp; Labor Turnover Survey (JOLTS) that job
availability made up just a piece of the January decline. The 2.9% rise
in the number of job opening followed a 9.4% January falloff and
openings remained off by roughly one-third from the year ago level. The
latest level remained near the record low for the series which dates
back to December 2000.
The job openings rate also rose modestly
in February to 2.2% versus a downwardly revised 2.1% rate in January.
These rates were down from more than a 3% rate in 2007. The
job openings rate is the number of job openings on the last business
day of the month as a percent of total employment plus job openings.
The actual number of job openings in the construction sector
fell by 81% from the year ago level and factory sector job openings
fell 50%, as did leisure &amp; hospitality jobs
which also were off by 50%. Professional &amp; business services
job openings fell more than one-third year-to-year while openings in
the education &amp; health sectors also were off by nearly one
quarter. Openings in retail trade fell a slight 6% y/y. Not only were
private sector openings down but government sector job openings fell a
sharp 12% with state &amp; local off 17% as tax revenues fell.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407f.jpg" align="right" border="0" height="265" width="353">
By region, openings in the West fell the hardest, by 42%
year-to-year, while openings in the South and the Midwest were off
roughly 30%. Openings in the Northeast they were down by a more
moderate 12%.
The hires rate held steady for the third
month at 3.3% and that was near the lowest in the series' short eight
year history.The hires rate is the number of hires during the
month divided by employment.The actual number of hires fell
by 13% year-to-year with the largest declines coming in the leisure
&amp; hospitality industry (-25%) followed by the factory sector
(-23%) and the retail sector (-22%). In the professional &amp;
business services industry the decline was a more moderate 11% while
education &amp; health services jobs fell 8%. Construction sector
hires fell 2%.
The job separations rate fell slightly to
3.6%, about where it's been since early 2008. Separations
include quits, layoffs, discharges, and other separations as well as
retirements. The level of job separations fell 3.5% y/y.
The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low.
A description of the Jolts survey and the latest release from
the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's USECON
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/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a>
(Job Openings &amp; Labor &nbsp;Turnover Survey)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">February '08</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">Job Openings, Total&nbsp;&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">&nbsp; Rate (%)</td>
<td>2.2</td>
<td>2.1</td>
<td>3.0</td>
<td>2.3</td>
<td>3.1</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>3,006</td>
<td>2,920</td>
<td>4,248</td>
<td>3,224</td>
<td>4,382</td>
<td>4,606</td>
</tr>
<tr class="odd">
<td class="firstcol">Hires, Total</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.3</td>
<td>3.3</td>
<td>3.7</td>
<td>41.1</td>
<td>46.1</td>
<td>47.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,360</td>
<td>4,460</td>
<td>5,035</td>
<td>56,486</td>
<td>63,666</td>
<td>64,879</td>
</tr>
</tbody>
</table>
Consumer Credit Usage Remains
Negative 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 7, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407g.jpg" align="left" border="0" height="265" width="353">
For February the Federal Reserve reported that consumer credit
outstanding fell $7.4B. As a result of the decline, which was the fifth
since July, credit growth slowed to just 1.1% year-to-year which was
the weakest since late 1992. On a three-month basis credit outstanding
has followed the decline in retail spending and fallen at a 0.8% annual
rate.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407h.jpg" align="right" border="0" height="265" width="353">
Non-revolving credit (autos &amp; other consumer
durables), which accounts for nearly two-thirds of the total, ticked up
just $0.3B in February. However, it rose at a 1.9% rate over the last
three months, a pickup from the negative growth at the end of last
year. Usage of revolving credit fell a huge $7.8B in February which was
a record. The decline lowered three-month growth to a negative 5.1%
which was near the record.
These figures are the major input to the Fed's quarterly Flow
of Funds accounts for the household sector.
Credit data are available in Haver's USECON
database. The Flow of Funds data are in Haver's FFUNDS
database.
Credit Storm Sinking
Global Trade from the Federal Reserve Bank of Atlanta can be
found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=440A110B-5056-9F12-1273B38469A2401E&amp;method=display_body">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Consumer
Credit (m/m Chg, SAAR)</th>
<th scope="col">February</th>
<th scope="col">January</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 class="odd">
<td class="firstcol">Total</td>
<td>$-7.4B</td>
<td>&nbsp;$8.1B</td>
<td>1.1%</td>
<td>1.8%</td>
<td>5.5%</td>
<td>4.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-7.8B</td>
<td>$1.9B</td>
<td>0.5%</td>
<td>2.4%</td>
<td>7.4%</td>
<td>6.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$0.3B</td>
<td>$6.2B</td>
<td>1.4%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
News from Australia and New
Zealand 
by <a href="/comment/Curley.html">Louise
Curley</a> April 7, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407i.jpg" align="left" border="0" height="265" width="353">
The Bank of Australia reduced its benchmark interest rate from
3.25% to 3.00% today. This marks a 525 basis point reduction from the
8.25% rate in June, 2008. Growth in the Australian economy virtually
came to a halt in the third quarter of 2008 when GDP increased by 0.08%
and disappeared in the fourth quarter when GDP declined by 0.53%. In
February of this year, the Australian government announced a A$42
billion (3.5% of GDP) stimulus program of cash disbursements and
infrastructure spending.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407j.jpg" align="right" border="0" height="265" width="353">
NZIER (New Zealand Institute of Economic Research) published
its quarterly survey of business opinion today. The results are shown
as percent balances between those expecting improvement in the economy
over next six months and those expecting a deterioration. The overall
opinion is based on the opinions of manufacturers, builders, merchants
and those engaged in the service industries. In the latest survey, the
overall, or economy wide, balance of opinion was -65% meaning that
there were 65% more pessimists than optimists. There is a great deal of
volatility in the opinions of the participants in the survey but also a
clear down ward trend as can be seen in the first chart. In the latest
survey, there was a slightly less negative balance for the manufactures
and the merchants and a slightly more negative for the builders and
those engaged in the service industries.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090407k.jpg" align="left" border="0" height="265" width="353">
New Zealand's economy has been weaker than that of Australia
as can be seen in the second chart that shows the quarterly changes in
real GDP for the two countries. In New Zealand, GDP declined throughout
2008 and for the year as a whole was 1.0% below 2007. In Australia, GDP
did not decline until the fourth quarter and for the year 2.1% above
2007. The quarterly changes in real GDP in New Zealand and Australia
are shown in the second chart. The third chart shows the official
policy interest rates for both countries.New Zealand has, until
recently, had a higher benchmark interest rate than Australia, largely
as a result of New Zealand's large current account deficit, which has
been running between 8 and 9% of GDP for the past few years. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">AUSTRALIA
&amp; NEW ZEALAND</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08&nbsp;</th>
<th scope="col">Q3&nbsp; 08&nbsp;</th>
<th scope="col">Q2 08&nbsp;</th>
<th scope="col">Q1 08</th>
<th scope="col">2008 CHG%</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP % Change</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">Australia</td>
<td>--</td>
<td>-0.53</td>
<td>0.08</td>
<td>0.28</td>
<td>0.49</td>
<td>2.06</td>
<td>4.02</td>
</tr>
<tr>
<td class="firstcol">New Zealand</td>
<td>--</td>
<td>-0.57</td>
<td>-0.65</td>
<td>-.061</td>
<td>-.052</td>
<td>-0.97</td>
<td>3.12</td>
</tr>
<tr class="odd">
<td class="firstcol">NZIER (% Balance)</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">Manufacturers</td>
<td>-61</td>
<td>-67</td>
<td>-24</td>
<td>-60</td>
<td>-73</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Builders</td>
<td>-64</td>
<td>-62</td>
<td>-12</td>
<td>-56</td>
<td>-64</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Merchants</td>
<td>-62</td>
<td>-70</td>
<td>-10</td>
<td>-66</td>
<td>-60</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Service Industries</td>
<td>-66</td>
<td>-62</td>
<td>-21</td>
<td>-65</td>
<td>-62</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

Gasoline Prices Hold Prior Weeks'Gains

Louise Curley

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<html><head>
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<body>
 




<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406b.jpg" align="left" border="0" height="265" width="353">
The value of retail sales excluding motor vehicles and
motorcycles in the Euro Area had risen each month since the series
began in 1995 until September of last year. (In the Euro Area, retail
sales, excluding motor vehicles and motorcycles, are reported in index
form with a base of 2005=100.) Since then, they have declined in four
of the five subsequent months. By February 2009, they were 2.7% below
February 2008<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406c.jpg" align="right" border="0" height="265" width="353">
In general, retail sales tend to show increases in year to
year growth reflecting the growing demands of an increasing population.
Even in mild recessions, retail sales tend to increase. The growth in
retail sales in the Euro Area has tended to be lower than that in
either the UK or the US, as can be seen in the first chart. In the last
four months retail sales in the Euro Area show much smaller declines in
sales relative to the US but slightly larger declines than the UK. (The
chart shows recession shading for the US.)
Good data for retail sales, like data on employment,
production and such, take time to compile and by the time they are
published, then current conditions may well have changed. Measures of
consumer and business confidence help in judging current sentiment and
they have recently shown some slight improvement. The stock markets
also reflect economic sentiment and markets around the world have
improved in the very recent past.. The second chart plots the daily
price of stocks in the Euro Area, the UK and the US on a log scale.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Retail
sales ex motor vehicles and motor cycles (2005=100)</th>
<th scope="col">Feb 09</th>
<th scope="col">Jan 09&nbsp;</th>
<th scope="col">Dec&nbsp; 08&nbsp;</th>
<th scope="col">Nov 08&nbsp;</th>
<th scope="col">Oct 08</th>
<th scope="col">Sep 08</th>
<th scope="col">Feb 09/Feb 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">EURO AREA&nbsp;</td>
<td>105.97</td>
<td>106.38</td>
<td>106.10</td>
<td>106.59</td>
<td>107.36</td>
<td>108.70</td>
<td>-2.66</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>109.57</td>
<td>110.64</td>
<td>106.91</td>
<td>109.98</td>
<td>110.71</td>
<td>116.41</td>
<td>-2.14</td>
</tr>
<tr class="odd">
<td class="firstcol">United States</td>
<td>107.72</td>
<td>106.76</td>
<td>105.12</td>
<td>108.94</td>
<td>112.42</td>
<td>116.16</td>
<td>-6.04</td>
</tr>
</tbody>
</table>
</body></html>

The value of retail sales excluding motor vehicles and motorcycles in the Euro Area had risen each month since the series began in 1995 until September of last year. (In the Euro Area, retail sales, excluding motor vehicles and [...]

Retail Sales Continue To Fall In The Euro Area

Robert Brusca

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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406a.jpg" align="left" border="0" height="265" width="353">
EMU inflation drops at record pace in February. EMU
inflation dropped in February after a very sharp drop in January. Over
three-months the annual pace of decline is at -12% compared to -11%
over six-months. This is a strong pace to stay in force over these two
periods. Over 12-months, inflation is off by 1.8% compared to being up
by 5.3% Yr/Yr one year ago. Thus average inflation over the past two
years is quite tame, under two percent. 
 

A job well done&#8230;but. Central banks can be
content that despite all the angst, they handled the energy price spurt
well and did manage to keep inflation at bay. Still, inflation is well
under control and last week ahead of the G-20 meeting, the ECB gave the
markets a smaller rate cut than they had anticipated. Now with the
inflation numbers still showing declines the ECB is expected to be
cutting rates again. 
 

Widespread drops, too. Inflation is falling
in Germany and in Italy at about the same pace as in EMU over the last
3 and 6 months. The UK has inflation falling fast over six months but
the pace of decline has let up over the past three-months. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro Area
and UK PPI Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr>
<td class="firstcol">Euro Area</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Total ex Construction</td>
<td>-0.6%</td>
<td>-1.5%</td>
<td>-12.0%</td>
<td>-11.2%</td>
<td>-1.8%</td>
<td>5.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>-0.6%</td>
<td>0.6%</td>
<td>1.7%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.2%</td>
<td>-0.8%</td>
<td>-5.0%</td>
<td>-3.6%</td>
<td>-0.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Intermediate &amp; Capital
Goods</td>
<td>-1.1%</td>
<td>-1.9%</td>
<td>-15.4%</td>
<td>-11.9%</td>
<td>-3.1%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-0.5%</td>
<td>-1.0%</td>
<td>-11.7%</td>
<td>-12.9%</td>
<td>-3.9%</td>
<td>5.5%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>-0.7%</td>
<td>-1.4%</td>
<td>-12.5%</td>
<td>-5.9%</td>
<td>2.1%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">Gy Ex Energy</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-6.6%</td>
<td>-5.1%</td>
<td>-0.7%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-0.8%</td>
<td>-0.9%</td>
<td>-12.0%</td>
<td>-13.1%</td>
<td>-3.3%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>0.4%</td>
<td>0.7%</td>
<td>-5.2%</td>
<td>-14.7%</td>
<td>2.1%</td>
<td>13.1%</td>
</tr>
</tbody>
</table>
</body></html>

EMU inflation drops at record pace in February. EMU inflation dropped in February after a very sharp drop in January. Over three-months the annual pace of decline is at -12% compared to -11% over six-months. This is a strong pace to [...]

Euro Area Inflation Is Still Dropping Fast

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406a.jpg" align="left" border="0" height="265" width="353">
EMU inflation drops at record pace in February. EMU
inflation dropped in February after a very sharp drop in January. Over
three-months the annual pace of decline is at -12% compared to -11%
over six-months. This is a strong pace to stay in force over these two
periods. Over 12-months, inflation is off by 1.8% compared to being up
by 5.3% Yr/Yr one year ago. Thus average inflation over the past two
years is quite tame, under two percent. 
 

A job well done&#8230;but. Central banks can be
content that despite all the angst, they handled the energy price spurt
well and did manage to keep inflation at bay. Still, inflation is well
under control and last week ahead of the G-20 meeting, the ECB gave the
markets a smaller rate cut than they had anticipated. Now with the
inflation numbers still showing declines the ECB is expected to be
cutting rates again. 
 

Widespread drops, too. Inflation is falling
in Germany and in Italy at about the same pace as in EMU over the last
3 and 6 months. The UK has inflation falling fast over six months but
the pace of decline has let up over the past three-months. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro Area
and UK PPI Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr>
<td class="firstcol">Euro Area</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Total ex Construction</td>
<td>-0.6%</td>
<td>-1.5%</td>
<td>-12.0%</td>
<td>-11.2%</td>
<td>-1.8%</td>
<td>5.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>-0.6%</td>
<td>0.6%</td>
<td>1.7%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.2%</td>
<td>-0.8%</td>
<td>-5.0%</td>
<td>-3.6%</td>
<td>-0.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Intermediate &amp; Capital
Goods</td>
<td>-1.1%</td>
<td>-1.9%</td>
<td>-15.4%</td>
<td>-11.9%</td>
<td>-3.1%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-0.5%</td>
<td>-1.0%</td>
<td>-11.7%</td>
<td>-12.9%</td>
<td>-3.9%</td>
<td>5.5%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>-0.7%</td>
<td>-1.4%</td>
<td>-12.5%</td>
<td>-5.9%</td>
<td>2.1%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">Gy Ex Energy</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-6.6%</td>
<td>-5.1%</td>
<td>-0.7%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-0.8%</td>
<td>-0.9%</td>
<td>-12.0%</td>
<td>-13.1%</td>
<td>-3.3%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>0.4%</td>
<td>0.7%</td>
<td>-5.2%</td>
<td>-14.7%</td>
<td>2.1%</td>
<td>13.1%</td>
</tr>
</tbody>
</table>
Retail Sales Continue To Fall In
The Euro Area 
by <a href="/comment/Curley.html">Louise
Curley</a> April 6, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406b.jpg" align="left" border="0" height="265" width="353">
The value of retail sales excluding motor vehicles and
motorcycles in the Euro Area had risen each month since the series
began in 1995 until September of last year. (In the Euro Area, retail
sales, excluding motor vehicles and motorcycles, are reported in index
form with a base of 2005=100.) Since then, they have declined in four
of the five subsequent months. By February 2009, they were 2.7% below
February 2008<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090406c.jpg" align="right" border="0" height="265" width="353">
In general, retail sales tend to show increases in year to
year growth reflecting the growing demands of an increasing population.
Even in mild recessions, retail sales tend to increase. The growth in
retail sales in the Euro Area has tended to be lower than that in
either the UK or the US, as can be seen in the first chart. In the last
four months retail sales in the Euro Area show much smaller declines in
sales relative to the US but slightly larger declines than the UK. (The
chart shows recession shading for the US.)
Good data for retail sales, like data on employment,
production and such, take time to compile and by the time they are
published, then current conditions may well have changed. Measures of
consumer and business confidence help in judging current sentiment and
they have recently shown some slight improvement. The stock markets
also reflect economic sentiment and markets around the world have
improved in the very recent past.. The second chart plots the daily
price of stocks in the Euro Area, the UK and the US on a log scale.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Retail
sales ex motor vehicles and motor cycles (2005=100)</th>
<th scope="col">Feb 09</th>
<th scope="col">Jan 09&nbsp;</th>
<th scope="col">Dec&nbsp; 08&nbsp;</th>
<th scope="col">Nov 08&nbsp;</th>
<th scope="col">Oct 08</th>
<th scope="col">Sep 08</th>
<th scope="col">Feb 09/Feb 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">EURO AREA&nbsp;</td>
<td>105.97</td>
<td>106.38</td>
<td>106.10</td>
<td>106.59</td>
<td>107.36</td>
<td>108.70</td>
<td>-2.66</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>109.57</td>
<td>110.64</td>
<td>106.91</td>
<td>109.98</td>
<td>110.71</td>
<td>116.41</td>
<td>-2.14</td>
</tr>
<tr class="odd">
<td class="firstcol">United States</td>
<td>107.72</td>
<td>106.76</td>
<td>105.12</td>
<td>108.94</td>
<td>112.42</td>
<td>116.16</td>
<td>-6.04</td>
</tr>
</tbody>
</table>
</body></html>

Euro Area Inflation Is StillDropping Fast

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090403f.jpg" align="left" border="0">
In the Market PMI framework Europe is stabilizing as the rates
of decline in MFG and Services bottom and begin to show some
improvement. But the EU framework of surveys shows declines are still
in train. The table above shows the EMU and EU EC-Commission readings
along with the Market PMI readings. They are in conflict. The EC
readings for services are mostly on their lows while the Market figures
have risen from their respective lows. 
 

Germany, France, Italy Spain and Ireland each showed Service
sector improvement in March in the Market framework. The UK also showed
some nice improvement. All the indices are still below 50, indicating
ongoing contraction for the sector. The three-month averages are still
falling and MEU Ireland France and UK each do show current market
reading that surpass their respective three-month averages a good sign
for stability and recovery. 


<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>Mar-09</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey4">
<td class="firstcol">Euro-13</td>
<td>40.95</td>
<td>39.24</td>
<td>42.16</td>
<td>40.78</td>
<td>42.11</td>
<td>45.80</td>
<td>8.0%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Germany</td>
<td>42.30</td>
<td>41.32</td>
<td>45.20</td>
<td>42.94</td>
<td>44.81</td>
<td>48.70</td>
<td>5.0%</td>
</tr>
<tr class="grey4">
<td class="firstcol">France</td>
<td>43.64</td>
<td>40.18</td>
<td>42.56</td>
<td>42.13</td>
<td>43.44</td>
<td>46.64</td>
<td>14.1%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Italy</td>
<td>39.10</td>
<td>37.85</td>
<td>41.10</td>
<td>39.35</td>
<td>40.58</td>
<td>44.45</td>
<td>5.2%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Spain</td>
<td>34.11</td>
<td>31.73</td>
<td>31.84</td>
<td>32.56</td>
<td>31.71</td>
<td>35.40</td>
<td>18.3%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Ireland</td>
<td>35.69</td>
<td>31.78</td>
<td>33.94</td>
<td>33.80</td>
<td>34.03</td>
<td>38.10</td>
<td>10.8%</td>
</tr>
<tr class="grey4">
<td class="firstcol" colspan="8">EU
only</td>
</tr>
<tr class="grey4">
<td class="firstcol">UK (CIPs)</td>
<td>45.47</td>
<td>43.24</td>
<td>42.48</td>
<td>43.73</td>
<td>42.31</td>
<td>45.31</td>
<td>26.4%</td>
</tr>
<tr class="grey4">
<td class="firstcol">US NONFMG ISM</td>
<td>#N/A</td>
<td>41.60</td>
<td>42.90</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
</tr>
<tr class="grey3">
<td colspan="8" class="firstcol">EU Commission Indices for
EU and EMU</td>
</tr>
<tr class="grey2">
<td class="firstcol">EU Index</td>
<td>Mar-09</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey2">
<td class="firstcol">EU Services</td>
<td>-31</td>
<td>-29</td>
<td>-28</td>
<td>-32.67</td>
<td>-29.50</td>
<td>-23.25</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">EMU</td>
<td>Mar-09</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey2">
<td class="firstcol">Services</td>
<td>-25</td>
<td>-24</td>
<td>-22</td>
<td>-23.67</td>
<td>-17.83</td>
<td>-8.63</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Cons Confidence</td>
<td>-34</td>
<td>-33</td>
<td>-31</td>
<td>-32.67</td>
<td>-29.50</td>
<td>-13.50</td>
<td>0.0%</td>
</tr>
<tr class="grey3">
<td colspan="8" class="firstcol">Consumer confidence by
country</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany-Ccon</td>
<td>-31</td>
<td>-29</td>
<td>-27</td>
<td>-29.00</td>
<td>-22.67</td>
<td>-14.08</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">France-Ccon</td>
<td>-36</td>
<td>-36</td>
<td>-35</td>
<td>-35.67</td>
<td>-33.67</td>
<td>-27.33</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Ital-Ccon</td>
<td>-31</td>
<td>-28</td>
<td>-26</td>
<td>-28.33</td>
<td>-27.33</td>
<td>-25.08</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Spain-Ccon</td>
<td>-43</td>
<td>-48</td>
<td>-44</td>
<td>-45.00</td>
<td>-44.83</td>
<td>-39.83</td>
<td>10.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK-Ccon</td>
<td>-28</td>
<td>-32</td>
<td>-35</td>
<td>-31.67</td>
<td>-29.67</td>
<td>-24.92</td>
<td>18.4%</td>
</tr>
<tr class="grey3">
<td colspan="8" class="firstcol">percentile
is over range since May
2000</td>
</tr>
</tbody>
</table>
</body></html>

In the Market PMI framework Europe is stabilizing as the rates of decline in MFG and Services bottom and begin to show some improvement. But the EU framework of surveys shows declines are still in train. The table above shows the EMU [...]

Market Services PMIs Turn Higher In March

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

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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The U.S. trade deficit in goods and services (BOP basis) in March grew to $140.5 billion after narrowing slightly to $123.2 billion in February, revised from $122.7 billion, after widening to $130.7 billion in January according to the U.S. Census Bureau. A $136.7 billion deficit was expected by the Action Economics Forecast Survey. Exports rose 0.2% (6.7% y/y) in March after increasing 2.8% in February. This was accompanied by a 4.4% rise (27.1% y/y) rise in imports which came after m/m stability in February. In Q1’25, the deficit grew to an average $131.4 billion, after rising to an average $83.3 billion in Q4’24.

The trade deficit in goods (BOP basis) widened to a record $163.2 billion in March from $147.9	 billion in February, revised from $147.0 billion. Goods exports (customs value) rose 1.4% (7.0% y/y) in March, after increasing 3.6% in February. The latest increase reflected an 8.2% (8.4% y/y) surge in auto exports which came after a 12.7% strengthening. A 3.5% (4.0% y/y) gain occurred in industrial supplies & materials exports which followed a 5.1% rise. Foods, feeds & beverage exports rose 6.6% (1.4% y/y) after declining in four of the prior five month. Working lower, capital goods exports fell 2.5% (+13.9% y/y) in March after a 4.	8% increase and nonauto consumer goods exports were off 1.1% (+3.4% y/y) in March after a 2.4% gain.

Imports of goods increased 5.5% (31.4% y/y) in March after a 0.2% February easing. Imports of nonauto consumer goods imports surged 27.9% (56.0% y/y) following a 3.1% February gain. Auto imports rose 6.6% (8.7% y/y) after a 1.2% rise. Capital goods imports rose 4.2% (22.5% y/y) following a 1.1% rise. Foods, feeds & beverage imports eased 0.4% (+11.1% y/y) following a 2.0% weakening. Industrial supplies & materials imports declined 12.4% (+39.5% y/y) after weakening 4.6% in February. Petroleum imports by end-use fell 4.1% (-10.2% y/y) after a 2.9% decline. Nonpetroleum imports increased 6.0% (34.8% y/y) after holding steady in February.

The inflation-adjusted goods trade deficit (customs value) deepened to $150.9 billion in March from $136.9 billion in February. Real exports rose 1.6% (5.3% y/y) after a 3.0% February increase, while real imports rose 5.8% (29.8% y/y) in March following a 0.5% February slip.

The services trade surplus narrowed to $23.0 billion in March after decreasing to $23.8 billion in February. It reached a peak of $25.7 billion in November of last year. Service exports fell 0.9% (+5.7% y/y) after a 0.8% decline in February. Construction services exports rose 1.0% (37.7% y/y) after increasing 2.6% in February. Travel services exports fell 7.1% (-3.7% y/y) and financial exports increased 0.9% (7.3% y/y). Transport exports rose 3.1% (2.4% y/y). Service imports eased 0.1% (+10.8% y/y) in March following a 0.8% gain. Maintenance & repair services declined 1.5% (+32.1% y/y) while imported transport services increased 1.2% (1.7% y/y). Imported travel services fell 2.2% (5.3% y/y) while charges for use of intellectual property rose 1.0% (13.6 y/y).

The U.S. goods trade deficit with China narrowed to a seasonally adjusted $24.8 billion in March from $26.6 billion in February. Exports to China declined 8.2% (-10.5% y/y) while imports weakened 7.2% (-2.7% y/y). The deficit with the European Union deepened to a record $48.3 billion in March from $30.9 billion in February. Exports rose 10.9% (14.5% y/y) while imports soared 34.0% (65.4% y/y). The deficit with Japan deepened to $5.8 billion from $5.2 billion in February. Exports rose 1.8% (8.8% y/y) and imports rose 6.4% (9.9% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver’s **USECON** database. Detailed figures on international trade are available in the **USINT** and **USTRADE** databases. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Goods deficit grows as imports surge ahead of tariff imposition.
- Exports edge higher, led by autos.
- Petroleum product imports fall as crude oil prices decline.

U.S. Trade Deficit Deepens to Record in March

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Retail gasoline prices for all grades improved to an average $3.27 per gallon (-13.1% y/y) in the week ended May 5 and reversed the prior week’s easing to $3.26. Prices were $3.37 per gallon to begin the month but remained above their low of $3.13 in the week of December 9. An earlier high was $3.79 in the week ending April 22, 2024. The all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel eaed to $3.50 per gallon (-10.2% y/y) in the week of May 5 from $3.51 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 $59.64 per barrel (-26.4% y/y) in the week ended May 2, after rising to $63.09 per barrel in the prior week. Prices remained below a high of $91.45 in the week of September 29, 2023. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $57.13 per barrel. The price of European Brent crude oil declined to $63.50 per barrel (-25.9% y/y) in the week of May 2 from $67.92 in the previous week. Prices remained well below a recent high of $95.61 in the week of September 29, 2023 and compared to a peak of $127.40 in the week of June 10, 2022.

Natural gas prices improved to an average $3.09 per mmbtu (+88.4% y/y) in the week ended May 2, after falling to $3.00/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’s price was $3.26/mmbtu.

Gasoline demand rose 3.2% y/y in the four weeks ending April 25 following a 0.4% y/y decline in the prior four weeks. Demand for all petroleum products improved 0.3% y/y in the four weeks ending April 25 after a 0.4% y/y rise in the previous four-week period. Crude oil input to refineries eased 0.1% y/y in the four weeks ending April 25 after a 1.3% y/y decline in the prior four weeks.

Gasoline inventories slipped 0.7% y/y in the week ending April 25 after a 1.2% y/y rise in the week ending April 18. Residual fuel oil inventories fell 18.7% y/y in the week of April 25, after a 19.0% y/y fall in the prior week. Crude oil inventories rose 1.4% y/y in the week of April 25 after a 2.6% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories fell w/w to 25.5 days in the week of April 25 from 26.4 days in the prior. The recent low was 22.9 days in the week of November 8. The supply of crude oil eased w/w to 27.9 days in the week of April 25 after three weeks at 28.3 days, 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.

- Gasoline prices edge higher.
- Crude oil prices decline.
- Natural gas costs rise.

U.S. Energy Prices Remain Mixed in Latest Week

Tian Yong Woon

This week, we focus on trade developments between the US and major Asian economies. Early indications coming out of US-India trade talks seem encouraging, with terms such as “forward most-favoured-nation” for the US and “zero-for-zero” tariffs appearing in news reports — terms which, if enacted, would represent a significant win for the US. India stands to benefit greatly as well if key exports to the US, such as pharmaceuticals (chart 1), receive substantial tariff relief. The benefits could be strongly mutual if a deal also grants the US greater access to India’s large auto consumer market, particularly for major US electric vehicle (EV) producers, given that EV adoption in India remains at a very early stage (chart 2).

Turning to South Korea, discussions also appear to be progressing at a healthy pace, although details remain limited and ongoing domestic political challenges continue to hinder substantive breakthroughs. Nonetheless, the South Korean won has shown signs of stabilisation, while local equity markets have remained buoyant (chart 3). Recent trade data for April has also provided some investor relief, as weak exports to the US were more than offset by a strong performance in semiconductor shipments (chart 4).

In Japan, the race to secure a trade deal with the US is well underway, with automotive exports expected to be a key focal point given their significance to Japan’s economy and the US being a major export destination (chart 5). China, however, remains a notable outlier, with formal trade talks with the US not yet underway. Still, the US-China trade relationship continues to be the most closely watched, given its scale and potential impact on global growth and trade dynamics. While markets await China’s official April trade data, early indicators such as port activity already suggest a decline in bilateral trade flows (chart 6).

**US-India trade talks**
US-India trade discussions have reportedly been progressing rapidly, with both sides having already finalized in April the terms of reference for talks, setting the stage for formal negotiations. One early sign of favourable momentum is India’s possible offering of a “forward most-favoured-nation” clause to the US. This would ensure the US always receives the most favourable tariff terms, ahead of any other trade partner. If enacted, this would be a significant win for the US and a major leap forward in the US-India trade relationship. Another reported breakthrough involves India’s reported proposal of “zero-for-zero” tariffs on steel, auto components, and pharmaceuticals—offered on a reciprocal basis up to a certain quantity. If agreed, this would be mutually beneficial, especially as pharmaceuticals remain one of the US economy’s key imports from India, as shown in chart 1. On a separate note, and more recently, India’s phone exports to the US have reportedly gained prominence. With steep US tariffs on China, firms like Apple are increasingly incentivised to accelerate production shifts to India.

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Additionally, India’s proposed “zero-for-zero” tariff plan for auto parts may galvanise US access to India’s large domestic auto market, which has remained comparatively insulated due to high import tariffs. Another area to watch in the trade talks is electric vehicle (EV) imports, especially given US EV giant Tesla’s continued interest in expanding into the Indian market. That said, EV adoption in India remains in its early stages by many measures. While India has an immense middle class with future sales potential, EVs accounted for only about 2% of new cars sold in 2023, as shown in chart 2. This is well below levels seen in other Asian economies like China, or leaders in this space like Norway, where nearly all new cars sold are EVs. Challenges remain in unlocking the domestic Indian market—particularly around affordability and the underdeveloped state of EV infrastructure.

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**US-South Korea trade talks**
Discussions on the US-South Korea trade front also appear to be progressing at a steady pace, with technical talks reportedly having concluded in Washington last week. However, details remain limited, and full-scale negotiations have not yet begun. Complicating matters is South Korea’s domestic political landscape. With the country heading into a snap presidential election on June 3, Vice Industry Minister Park has said there is no chance of a comprehensive deal being reached before then. Still, both sides have committed to working toward an agreement before the expiration of Trump’s 90-day reciprocal tariff pause on July 8. In financial markets, the won continues to swing but remains above its year-to-date lows (chart 3). Meanwhile, South Korean equities have been lifted by a softening in trade rhetoric from both the US and China, as well as optimism around the US-South Korea talks.

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Turning to the hard trade data, South Korea’s more complete April numbers offered some initial relief to investors. The economy still managed to post moderate export growth, surprising many, despite a nearly 7% y/y decline in exports to the US, as shown in chart 4. One of the key drivers was semiconductors, which recorded double-digit y/y growth for the second consecutive month. However, these figures likely do not yet reflect the full initial impact of the steep mutual tariffs between the US and China. Firmer indications may emerge in the coming months. By then, though, attention will likely have shifted toward the outcome of US trade talks with key partners, as the end of its 90-day reciprocal tariff pause draws near.

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**US-Japan trade talks**
Turning to Japan, there is a sense of cautious optimism, with Japan’s chief trade negotiator Akazawa expressing hope for a US-Japan trade deal by June, following the second and most recent round of talks held in Washington last week. A key point of interest is whether Japan can negotiate an exemption from the current 25% automotive tariffs imposed by the US. This is especially significant given the importance of the US as a destination for Japanese auto exports, as shown in chart 5, and the central role the sector plays in Japan’s broader manufacturing economy. Also worth noting is a recent clarification by Japan’s Finance Minister Kato, who walked back earlier remarks and stated that Japan will not use the sale of US Treasuries as a bargaining tool. The clarification may help defuse a potential point of friction between the two sides as trade discussions continue.

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**US-China trade developments**
Turning to US-China trade developments — while progress here has lagged, this relationship remains the most closely watched, given its potentially large impact if meaningful movement occurs. Recent messaging from both sides has softened, stepping back from the fiery exchanges and tariff escalations seen earlier in April, offering some interim relief for investors. China has reportedly exempted certain US imports from tariffs, including specific pharmaceutical and industrial chemical products. However, on US-China trade talks, they remain at a very early stage, with China merely “evaluating” the prospect of negotiations with the US. This suggests we are still far from anything resembling a formal deal. Investors are now closely watching for first-round effects of US tariffs, which are expected to appear in China’s April trade numbers due later this week. Early signs point to a slowdown. For example, vessel traffic at the Los Angeles–Long Beach port remains at range lows, hinting at reduced shipments from China.

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Asia

Economic Letter from Asia: Art of the Deal

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The U.S. ISM Services PMI rose to 51.6 during April, after falling sharply to 50.8 in March from 53.5 in February, according to today’s report by the Institute for Supply Management. The reading indicated service sector expansion for the tenth consecutive month, although the rate of expansion has slowed significantly. The index hit a recent high of 55.8 in October of last year and remains below the all-time high of 67.5 in November 2021. The Action Economics Forecast Survey expected 50.2 for April.

Haver Analytics constructs a composite index combining the services index and the manufacturing index released on Thursday. This index rose to 51.2 in Apri from 50.6 in March. The latest figure remains above its June low of 49.1.

Amongst the services component series, the employment index led last month’s improvement in the overall index. It rose to 49.0 after falling sharply to 46.2 in March. Higher employment was reported by a slightly improved 14.6% (NSA) of respondents while a lessened 16.4% reported a decline. The new orders index rose to 52.3 after falling to 50.4 in March. A higher 22.4% (NSA) of respondents reported a rise in orders while a lessened 15.3% reported a decline. Reporting slower delivery speeds, the supplier delivery series edged up to 51.3 in April after falling to 50.6 in March. Working lower, the business activity series declined to 53.7 after rising to 55.9 in March. A higher 26.2% (NSA) of respondents reported improved activity while a lessened 14.0% reported deterioration.

On the inflation front, the prices index surged to 68.9 in April after easing to 62.8 in March. A greatly increased 39.6% (NSA) of respondents reported higher prices while a lessened 1.9% reported lower prices. The index was increased from its December 2022 low 53.1 and stood at its highest level since October 2022.

Additionally, the new export orders index increased to 48.6 (NSA) in April following a decline to 45.8 in March from 52.1 in February. Just 14.8% of survey respondents reported higher exports while an increased 17.7% reported a decline. The imports index plummeted to 44.3 last month from 52.6 in March. A greatly lessened 4.7% of respondents reported higher imports while a doubled 16.2% reported a decline. The inventory change index jumped to 53.4, a six-month high. The order backlog index edged up to 48.0 in April after falling sharply to 47.4 in March. A lessened 12.2% of respondents reported higher backlogs while a fewer 16.2% reported a decline. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector, while below 50 suggests	 contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver's **USECON** database, with additional detail in the **SURVEYS** database. The expectations figure from Action Economics is in the **AS1REPNA** database.

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- Total index remains near nine-month low.
- Employment, new orders & supplier deliveries edge up. Business activity weakens. 
- Prices Index strengthens to roughly two-year high.

U.S. ISM Services PMI Edges Higher in April; Prices Strengthen

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Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.8% in April from 7.9% in March.

In the **establishment survey**, private-sector employment rose 167,000 (1.2% y/y) after a 170,000 March increase. Factory sector jobs edged 1,000 lower (-0.7% y/y) following a 3,000 gain. Construction sector employment increased 11,000 (1.7% y/y), after rising 7,000 in March.

Private service-producing sector employment increased 156,000 (1.4% y/y) in April after improving 161,000 in March. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 70,000 (3.4% y/y) last month following a 74,000 March increase. Leisure & hospitality employment rose 24,000 (1.3% y/y) after a 38,000 gain. Trade, transportation & utilities rose 32,000 (0.9% y/y) in April following a 25,000 March increase. Professional & business services employment rose 17,000 (-0.1% y/y) following a 3,000 rise while temporary help employment rose 3,600 (-3.9% y/y) following a 2,700 decline. Financial activities employment improved 14,000 (1.2% y/y) after a 6,000 gain. The number of information sector jobs held steady (-0.4% y/y) last month after falling 2,000 in March.

Government sector payrolls rose 10,000 (1.3% y/y) last month after increasing 15,000 in March. The number of local government jobs increased 13,000 (1.4% y/y) following a 17,000 gain. State government employment rose 6,000 (1.8% y/y) following a 2,000 March increase but federal government payrolls fell 9,000 (-0.3% y/y), the third consecutive monthly decline.

Private-sector average hourly earnings rose 0.2% (3.8% y/y) in April after increasing 0.3% in March. Earnings in the goods-producing sector eased 0.1% (+4.0% y/y) following a 0.6% gain. Earnings in construction rose 0.3% (3.6% y/y), after a 0.2% rise but factory sector earnings declined 0.3% (+4.3% y/y) after surging 0.8% in March. In the private services-sector, earnings rose 0.2% (3.7% y/y) in April for the third straight month. Information sector pay increased 1.0% (5.2% y/y) last month after easing 0.1%, and financial activities earnings rose 0.5% (4.3% y/y) for the second straight month. Trade, transportation & utilities sector pay increased 0.4% (3.4% y/y) after 0.6%. Professional & business sector earnings increased 0.1% (4.4% y/y) after 0.2% in March. Leisure & hospitality earnings held steady (+3.8% y/y) following a 0.6% March increase.

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The length of the average workweek held steady at 34.3 hours in April. The workweek in the goods-producing sector eased to 39.8 hours from 40.0 hours. The construction sector average workweek eased to 39.0 hours from 39.3 hours while the factory sector workweek moved lower to 40.0 hours from 40.2. The average workweek in the private service sector held at 33.2 hours. Professional & business service hours fell to 36.3 hours from 36.4 while trade, transportation & utilities hours improved to 34.3 from 34.0 hours. Private education hours rose slightly to 32.8, but leisure & hospitality held steady at 25.5 hours.

In the **household survey**, the unemployment rate held at 4.2% in April as employment rose 436,000 and the size of the labor force increased 518,000. The labor force participation rate edged up to 62.6% last month from 62.5% in March. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.9%. For workers aged 20-24, the rate held steady at 72.1%, up from 71.8% six months earlier. For workers aged 25-54 the rate rose to 83.6%, a five-month high. For individuals 55 and over, the rate improved to 38.4% in April.

The employment/population ratio for all workers in April rose to 60.0%. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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- Job growth spreads across most sectors.
- Earnings growth trend decelerates.
- Jobless rate holds steady.

Economy in Brief: April 2009

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