Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080610d.jpg" width="353">
Small business optimism, according to the National Federation of Independent Business (NFIB), fell 2.4% in June and reversed its May rise. The decline to 89.3 dropped optimism to the lowest level since January 1975, its second lowest level on record.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.
Twelve percent fewer respondents expected the economy to improve and only two percent were planning to raise employment, the least since early-2003. Only fifteen percent had one or more job openings. During the last ten years there has been a 71% correlation between the NFIB employment percentage and the y/y change in nonfarm payrolls.
Eight percent of firms indicated that credit was harder to get, near the highest level since 1993 and that was more than double the percentage during 2004.
A much reduced four percent of respondents thought that now was a good time to expand the business, the least since 1982, but 28% of respondents expected lower earnings, near the recent low.
The percentage of firms actually raising prices again rose m/m, to 23% which was the highest level since July of 2006. During the last ten years there has been a 64% correlation between the y/y change in the producer price index and the level of the NFIB price index. The percentage of firms planning to raise prices also rose to 32%, its highest since late-2005.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
The NFIB figures can be found in Haver&#39;s SURVEYS database.
Reducing Systemic Risk in a Dynamic Financial System is yesterday&#39;s speech by New York Fed President Timothy F. Geithner and it can be found <a href="http://www.newyorkfed.org/newsevents/speeches/2008/tfg080609.html"> here</a>

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<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat&#39;l Federation of Independent Business</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>89.3</td>
<td>91.5</td>
<td>-8.1%</td>
<td>96.7</td>
<td>98.9</td>
<td>101.6</td>
</tr>
</tbody>
</table>
</body>
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Small business optimism, according to the National Federation of Independent Business (NFIB), fell 2.4% in June and reversed its May rise. The decline to 89.3 dropped optimism to the lowest level since January 1975, its second lowest [...]

U.S. Small Business Optimism Near 1975 Low

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080610a.jpg" align="left" border="0" height="265" width="353">
The U.S. foreign trade deficit deepened to $60.9B in April. A
$59.7B figure had been generally expected and March's deficit was
revised shallower to $56.5B. Benchmark revisions to the seasonally
adjusted figures back to 2005, and the not seasonally adjusted data to
2007, generally lowered the trade deficit. Exports were revised up
slightly due to raised estimates for services.
U.S. exports rebounded 3.3% in April following their 1.9%
March decline. At an annual rate exports during the last three months
rose 15.0%. While that was improved from 13.0% growth last year, it
actually is down from 32.3% growth last summer.
Goods exports surged 4.5% in April and in chained dollars they
also jumped by 4.5% (11.3% y/y). That recovered virtually all of the
4.7% March decline. Chained dollar exports of nonauto consumer goods
bounced back after March's decline and surged 6.1% (10.0% y/y). Exports
of capital goods more than recovered the prior month's drop with a 5.5%
(13.9% y/y) pop as exports of civilian aircraft (in nominal terms)
surged 23.8% (33.0% y/y). That rise did not, however, recover declines
during the prior several months. Nominal exports of computers also
surged 13.9% (20.6% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080610b.jpg" align="right" border="0" height="265" width="353">
Exports of services rose 0.9% (17.0% y/y) as travel exports
rose 0.7% (19.5% y/y) and passenger fares rose 1.0% (25.4% y/y).
Higher oil prices again raised petroleum imports in April by
12.1%. Adjusted for those higher prices, however, petroleum imports
rose just 3.9% (-4.2% y/y) and for all of this year so far the volume
is down 2.6% from the annual peak for all of 2005. The average cost for
a barrel of crude oil was $96.81 in April.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080610c.jpg" align="left" border="0" height="265" width="353">
Month-to-month, a 3.5% rise in imports of nonpetroleum
products recovered the prior month's decline. However, measured in
chained 2000 dollars these imports rose only 2.6% after a 4.0% March
drop and the y/y gain was barely positive following a reduced 2.6%
increase in 2007. Also in chained dollars, imports of capital goods
rose 2.7% (6.5% y/y), about equal to last year's full year growth.
Chained imports of nonauto consumer goods did rise 1.6% but they were
down 0.3% from last April. Real imports of automotive vehicles
&amp; parts surged 4.6% but they were down 3.0% from last year.
Services imports nudged up 0.9% (10.2% y/y). Travel imports
increased 0.8% (11.1% y/y) and passenger fares increased 1.6% (19.9%
y/y).
With China, the U.S. trade deficit in goods deteriorated
sharply m/m to $20.3B. That was the deepest deficit since January, but
so far this year the U.S. trade deficit with China averaged $18.7B per
month versus a $21.2B monthly average last year. Exports to China rose
in April 19.4% y/y and imports rose a moderate 6.9% which, due to
slower U.S. economic growth, is down from an 11.7% increase last year.
Imports from China rose 18.2% in 2006 and the annual gains exceeded 20%
back to 2003.
Outstanding Issues in the Analysis of Inflation
is yesterday's speech by Fed Chairman Ben S. Bernanke and it is
available <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20080609a.htm">
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/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$60.9B</td>
<td>$56.5B</td>
<td>$60.3B (4/07)</td>
<td>$700.3</td>
<td>$753.3</td>
<td>$711.6B</td>
</tr>
<tr>
<td class="firstcol">Exports - Goods &amp;
Services</td>
<td>3.3%</td>
<td>-1.9%</td>
<td>19.2%</td>
<td>13.0%</td>
<td>13.5%</td>
<td>10.6%</td>
</tr>
<tr>
<td class="firstcol">Imports - Goods &amp;
Services</td>
<td>4.5%</td>
<td>-3.3%</td>
<td>13.5%</td>
<td>6.1%</td>
<td>10.8%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>12.1%</td>
<td>-7.5%</td>
<td>55.8%</td>
<td>9.4%</td>
<td>20.1%</td>
<td>39.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>3.5%</td>
<td>-3.0%</td>
<td>6.0%</td>
<td>4.8%</td>
<td>9.1%</td>
<td>10.3%</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. foreign trade deficit deepened to $60.9B in April. A $59.7B figure had been generally expected and March's deficit was revised shallower to $56.5B. Benchmark revisions to the seasonally adjusted figures back to 2005, and the [...]

U.S. Trade Deficit Deeper in April, Prior Deficits Revised Shallower

Louise Curley

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In its assessment of the April, composite leading, lagging and
coincident indicators Japan's Cabinet Office remarked that the
indicators were "signaling a possible turning point." The first chart,
in which we plot the composite indexes for the last 22 years and the
Japanese recessions in that period, appears to bear out the Cabinet
Office's assessment.
The May survey of the Economy Watchers was also released
today. The Economy Watchers have been reducing their appraisals of
current and future conditions since early 2006 and their appraisals are
now at levels reached in the last recession as can be seen in the
second chart.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609f.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609g.jpg" border="0" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN</th>
<th scope="col">May 08</th>
<th scope="col">Apr 08&nbsp;</th>
<th scope="col">May 07&nbsp;</th>
<th scope="col">M/M CHG</th>
<th scope="col">Y/Y&nbsp; CHG&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol" colspan="9">Economy Watchers
Survey&nbsp;</td>
</tr>
<tr class="even">
<td class="firstcol">Current Conditions</td>
<td>32.1</td>
<td>35.5</td>
<td>46.8</td>
<td>-9.58</td>
<td>-31.41</td>
<td>44.9</td>
<td>51.4</td>
<td>44.9</td>
</tr>
<tr class="even">
<td class="firstcol">Future Conditions</td>
<td>35.1</td>
<td>36.1</td>
<td>50.0</td>
<td>-2.77</td>
<td>-29.80</td>
<td>46.9</td>
<td>52.9</td>
<td>51.5</td>
</tr>
<tr>
<td class="firstcol">Economic Indicators(
2005=100)</td>
<td>Apr 08</td>
<td>Mar 08&nbsp;</td>
<td>Apr 07&nbsp;</td>
<td>M/M CHG</td>
<td>Y/Y CHG</td>
<td>2007</td>
<td>2006</td>
<td>2005</td>
</tr>
<tr class="even">
<td class="firstcol">Leading</td>
<td>92.8</td>
<td>90.8</td>
<td>98.4</td>
<td>2.20</td>
<td>-5.69</td>
<td>97.4</td>
<td>102.4</td>
<td>100.0</td>
</tr>
<tr class="even">
<td class="firstcol">Coincident</td>
<td>101.7</td>
<td>102.4</td>
<td>104.4</td>
<td>-0.68</td>
<td>-2.59</td>
<td>104.8</td>
<td>103.8</td>
<td>100.0</td>
</tr>
<tr class="even">
<td class="firstcol">Lagging</td>
<td>103.0</td>
<td>104.9</td>
<td>106.9</td>
<td>-1.81</td>
<td>-3.65</td>
<td>105.7</td>
<td>104.8</td>
<td>100.0</td>
</tr>
</tbody>
</table>
</body></html>

In its assessment of the April, composite leading, lagging and coincident indicators Japan's Cabinet Office remarked that the indicators were "signaling a possible turning point." The first chart, in which we plot the composite [...]

More Discouraging News From Japan: Economic Indicators Pointing To Recession And Economy Watchers Continue Gloomy

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609e.jpg" align="left" border="0" height="265" width="353">
Despite weakening industrial output and fast decelerating
orders German trade flows produced a larger surplus again in April.
Exports rose by 1.2% in the month as imports dropped by a large 2.1%.
Over the last three months import growth is off at an 8% pace, while
for exports growth has decelerated from 6.8% Yr/Yr to 5% over six
months to 1% over 3-months. 
 

The month&#8217;s rise in the surplus does not repeal the trend of
fading German export orders. German export trends themselves are still
fading. But the trade balance is, as the name suggests, a balance
between what is bought and what is sold. In April although exports are
still part of a declining trend, imports contracted and did so sharply,
thrusting the trade scene into a surplus. 
 

Weak growth at home is another factor that will come to be
caused by a weakness in exports since Germany&#8217;s whole economy is
reliant on trade and on its ability to export. The signals from
weakening orders are due to hit the economy in time. For this month
there is nothing inconsistent about the broad export slowdown trend and
the rise in the trade surplus. The export slowdown is still in place. 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">German Trade trends for goods </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="2">m/m%</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>3-M</td>
<td>6-M</td>
<td>12-M</td>
<td>12-M Prev</td>
<td>2-Yr Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance*</td>
<td>&#8364;&#8364; 17.73</td>
<td>&#8364;&#8364; 15.25</td>
<td>&#8364;&#8364; 16.44</td>
<td>&#8364;&#8364; 16.92</td>
<td>&#8364;&#8364; 16.93</td>
<td>&#8364;&#8364; 14.41</td>
<td>&#8364;&#8364; 12.66</td>
</tr>
<tr>
<td class="firstcol" colspan="8">EXPORTS</td>
</tr>
<tr class="odd">
<td class="firstcol">All Exports</td>
<td>1.2%</td>
<td>-0.8%</td>
<td>1.0%</td>
<td>5.0%</td>
<td>6.8%</td>
<td>18.3%</td>
<td>36.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital Goods</td>
<td>--</td>
<td>-0.8%</td>
<td>2.8%</td>
<td>0.6%</td>
<td>5.0%</td>
<td>7.3%</td>
<td>10.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles</td>
<td>--</td>
<td>0.8%</td>
<td>6.0%</td>
<td>5.0%</td>
<td>7.2%</td>
<td>10.1%</td>
<td>9.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Goods</td>
<td>--</td>
<td>-2.3%</td>
<td>16.7%</td>
<td>5.6%</td>
<td>10.2%</td>
<td>4.3%</td>
<td>15.3%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">IMPORTS</td>
</tr>
<tr class="odd">
<td class="firstcol">All Imports</td>
<td>-2.1%</td>
<td>0.6%</td>
<td>-8.0%</td>
<td>8.3%</td>
<td>5.8%</td>
<td>12.5%</td>
<td>34.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital Goods</td>
<td>--</td>
<td>2.9%</td>
<td>44.8%</td>
<td>7.0%</td>
<td>8.2%</td>
<td>-3.3%</td>
<td>23.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles</td>
<td>--</td>
<td>4.3%</td>
<td>57.7%</td>
<td>15.0%</td>
<td>9.9%</td>
<td>9.3%</td>
<td>9.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Goods</td>
<td>--</td>
<td>-4.1%</td>
<td>6.7%</td>
<td>-2.0%</td>
<td>0.7%</td>
<td>3.6%</td>
<td>21.3%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">*Eur Blns; mo or period average;
Shaded area trends lag one Month</td>
</tr>
</tbody>
</table>
</body></html>

Despite weakening industrial output and fast decelerating orders German trade flows produced a larger surplus again in April. Exports rose by 1.2% in the month as imports dropped by a large 2.1%. Over the last three months import [...]

German Trade Surplus Bulges Again in April

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609c.jpg" align="left" border="0" height="265" width="353">
The OECD composite leading indicators (CLIs) show fang growth
trends for the OEC and highly accelerated slowing in the US. The main
regions show an accelerated slowing is in progress, even EMU with a six
month growth rate of -23.1% compared to -1.3% for the previous three
months. Japan alone shows a rebound in place and forceful one with a
current six month growth rate of 4.7% up sharply from -7.2% over the
previous six months. 


<table border="0" cellspacing="0" width="100%">
</table>

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="5" scope="col">OECD Trend-restored leading Indicators </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td colspan="5">Growth progression-SAAR</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>3-Mos</td>
<td>6-Mos</td>
<td>12-Mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>-1.6%</td>
<td>-1.8%</td>
<td>-1.6%</td>
<td>1.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>-2.7%</td>
<td>-3.1%</td>
<td>-2.6%</td>
<td>0.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD Europe</td>
<td>-4.8%</td>
<td>-3.3%</td>
<td>-2.3%</td>
<td>1.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD Japan</td>
<td>5.0%</td>
<td>4.7%</td>
<td>-1.5%</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>-4.3%</td>
<td>-5.2%</td>
<td>-2.9%</td>
<td>0.8%</td>
</tr>
<tr class="grey1">
<td colspan="5" class="firstcol">Six month readings at 6-Mo
Intervals:</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6-Mo Ago</td>
<td>12-Mo Ago</td>
<td>18-Mo Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>-1.8%</td>
<td>-1.5%</td>
<td>2.2%</td>
<td>0.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>-3.1%</td>
<td>-2.0%</td>
<td>1.2%</td>
<td>-0.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD Europe</td>
<td>-3.3%</td>
<td>-1.3%</td>
<td>0.9%</td>
<td>1.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD Japan</td>
<td>4.7%</td>
<td>-7.2%</td>
<td>0.0%</td>
<td>-0.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>-5.2%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>-0.4%</td>
</tr>
<tr class="grey2">
<td colspan="5" class="firstcol">Slowdowns indicated by BOLD RED</td>
</tr>
</tbody>
</table>
</body></html>

The OECD composite leading indicators (CLIs) show fang growth trends for the OEC and highly accelerated slowing in the US. The main regions show an accelerated slowing is in progress, even EMU with a six month growth rate of -23.1% [...]

OECD CLIs Point to Further Slowing Except Japan

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609d.jpg" align="left" border="0" height="265" width="353">
German industrial output in April fell by 0.8% for the second
straight month, held back by dropping construction sector output.
However, the sector indices for consumer goods and intermediate goods
tumbled in April as well. Capital goods output is now down in two of
the last three months and is lower by 1.9% at an annual rate compared
to Q1. Manufacturing IP is flat or lower in the three recent months and
is falling at a 1.3% annual rate in Q2. Manufacturing orders are off
even more sharply, at a 9.3% annual rate in the new quarter. 
 

The signal from orders is clear. It has not yet hit IP with
full force. For now German IP is off in the quarter and more slowing is
coming in the pipeline. 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">Total German IP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar exept m/m</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-Date</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>-0.8%</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>-5.8%</td>
<td>2.4%</td>
<td>4.8%</td>
<td>-3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Goods</td>
<td>-2.5%</td>
<td>0.8%</td>
<td>-0.8%</td>
<td>-9.5%</td>
<td>-2.7%</td>
<td>-0.6%</td>
<td>-4.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital Goods</td>
<td>1.7%</td>
<td>-2.2%</td>
<td>-0.7%</td>
<td>-4.8%</td>
<td>5.2%</td>
<td>8.9%</td>
<td>-1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediary Goods</td>
<td>-2.2%</td>
<td>0.9%</td>
<td>1.2%</td>
<td>-0.3%</td>
<td>4.2%</td>
<td>5.7%</td>
<td>0.9%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Memo</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-2.9%</td>
<td>-13.1%</td>
<td>3.1%</td>
<td>-42.5%</td>
<td>-2.2%</td>
<td>-2.3%</td>
<td>-38.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG IP</td>
<td>-0.7%</td>
<td>-0.3%</td>
<td>0.0%</td>
<td>-4.1%</td>
<td>3.3%</td>
<td>5.7%</td>
<td>-1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Orders</td>
<td>-1.8%</td>
<td>-0.5%</td>
<td>-0.6%</td>
<td>-11.1%</td>
<td>-5.1%</td>
<td>4.0%</td>
<td>-9.3%</td>
</tr>
</tbody>
</table>
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German industrial output in April fell by 0.8% for the second straight month, held back by dropping construction sector output. However, the sector indices for consumer goods and intermediate goods tumbled in April as well. Capital [...]

German Industrial Output Trends Head Lower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609a.jpg" width="353">
The National Association of Realtors reported that the level of pending sales of existing homes rose an unexpected 6.3% during April. A slight decline in sales had been the Consensus expectation.
While a m/m rise in sales is normally expected due to the warming of temperatures after Winter, the m/m increase was the series&#39; strongest. Nevertheless, sales remained down 13.1% from last April after the 14.6% decline during all of 2007.
These figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080609b.jpg" width="353">
The regional figures indicate a surprising improvement in sales out West which rose 8.3% and by 4.0% y/y. That was the first y/y increase since the middle of 2005. Elsewhere in the country, sales continued to meander with a 1.9% m/m decline in sales in the Northeast. A 13.0% rise in sales in the Midwest left them still down 13.2% from last year as it followed a 10.4% March drop. Sales in the South rose 4.6% m/m but remained down a hefty 22.5% from a year earlier.
The Realtors association indicated in an earlier report that the number of homes on the market &amp; available for sale surged a not seasonally adjusted 10.5% (7.9% y/y) during April. The rise was indeed strong and rivaled past year&#39;s April gains. However, it likely reflected a rise usual for the Spring sales season. It followed five months when home inventories declined. As a result the y/y change in the inventory of unsold homes held steady with the prior three months at 7.9% which was down sharply from the 40% growth rates logged during 2006.
At the current sales rate there was an 11.2 months&#39; supply of homes on the market versus an 8.9 months&#39; average during all of last year, a 6.5 months&#39; supply in 2006 and a 4.5 months&#39; supply in 2005. The latest figure was elevated by the low sales rate.
The pending home sales data are available in Haver&#39;s PREALTOR database and the number of homes on the market are in the REALTOR 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/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>88.2&nbsp;</td>
<td>&nbsp;83.0</td>
<td>&nbsp;&nbsp; -13.1%</td>
<td>95.7</td>
<td>112.1&nbsp;</td>
<td>124.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>79.3</td>
<td>80.8</td>
<td>-12.3</td>
<td>85.6</td>
<td>98.5</td>
<td>108.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>83.7</td>
<td>74.1</td>
<td>-13.2</td>
<td>89.6</td>
<td>102.0</td>
<td>116.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>88.8</td>
<td>84.9</td>
<td>-22.5</td>
<td>107.3</td>
<td>127.3</td>
<td>134.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>98.8</td>
<td>91.2</td>
<td>4.0</td>
<td>92.1</td>
<td>109.5</td>
<td>128.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The National Association of Realtors reported that the level of pending sales of existing homes rose an unexpected 6.3% during April. A slight decline in sales had been the Consensus expectation. While a m/m rise in sales is normally [...]

U.S. Pending Home Sales in April Rose Unexpectedly

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

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?

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Winnie Tapasanun

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The U.S. trade deficit in goods and services (BOP basis) narrowed to $60.18 billion in June after widening to $71.66 billion in May ($71.52 billion originally), according to the U.S. Census Bureau. This was the second month in three in which the deficit had narrowed. The June deficit was the smallest since September 2023 and much smaller than the $73.89 billion in June 2024. A deficit of $61.6 billion had been expected in the Action Economics Forecast Survey. Exports declined 0.5% m/m (+3.3% y/y) in June following a 4.1% drop in May (-4.0% previously) and four successive m/m increases. Imports fell 3.7% (-1.4% y/y) after an unrevised 0.1% downtick in May, registering the third consecutive m/m fall and the fourth in five months.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars) narrowed to $84.61 billion in June after widening to $93.32 billion in May; it was smaller than the $92.82 billion in June 2024. The $87.43 billion average monthly real trade deficit in Q2'25 was the smallest since Q4'23 and much smaller than the record $143.28 billion in Q1'25. A trade balance (net exports) added 4.99%-points to Q2'25 real GDP growth after subtracting 4.61%-points in Q1'25.

The deficit in goods trade (BOP basis) narrowed to $85.88 billion in June, the smallest since September 2023, after widening to $97.30 billion in May; it was much smaller than the $99.56 billion in June 2024. Goods exports fell 0.7% (+3.3% y/y) in June following a 5.9% drop in May and four straight m/m rises. Imports of goods fell 4.5% (-2.9% y/y), down for the fourth month in five, after a 0.1% May easing.

The customs value goods trade deficit fell to $84.85 billion in June, the smallest since September 2023, after widening to $96.21 billion in May; it was much smaller than the $98.81 billion in June 2024. The latest figure was slightly smaller than an $85.99 billion deficit in the advance report released on July 29. Custom value exports fell 0.7% (+3.5% y/y) in June following a 5.6% drop in May and four consecutive m/m gains. This reflected m/m falls of 7.4% (+0.7% y/y) in industrial supplies & materials and 2.6% (+22.8% y/y) in other goods. To the upside, exports for the following end-use categories rose m/m in June: nonfood consumer goods excluding autos (4.6%; 4.3% y/y), foods, feeds & beverages (4.4%; 1.2% y/y), capital goods excluding autos (3.4%; 9.7% y/y), and automotive vehicles, parts & engines (1.6%; -15.8% y/y).

Customs value imports slid 4.6% (-2.9% y/y) in June, the third straight m/m slide and the fourth in five months, after a 0.1% downtick in May. This reflected m/m drops of 12.7% (-13.3% y/y) in nonfood consumer goods excluding autos, 5.2% (-12.4% y/y) in industrial supplies & materials, 4.9% (+7.8% y/y) in other goods, 3.6% (-12.2% y/y) in automotive vehicles, parts & engines, and 1.5% (+3.8% y/y) in foods, feeds & beverages. In contrast, imports of capital goods excluding autos, the only end-use category with a monthly increase in June, rose 0.7% (14.0% y/y), the seventh m/m rise in eight months, on top of a 0.3% May rebound. Meanwhile, petroleum imports fell 3.8% (-24.7% y/y) in June, the fourth m/m fall in five months, reversing a 1.5% rise in May. Nonpetroleum imports slid 4.6% (-1.1% y/y), the third straight m/m slide, after a 0.2% May decline.

The services trade surplus rose to $25.70 billion in June after narrowing to $25.64 billion in May; it was in line with $25.67 billion in June 2024. Services exports fell 0.2% (+3.3% y/y) in June, the fifth m/m fall in six months, on top of a 0.6% decline in May. This reflected m/m drops of 4.8% (-11.3% y/y) in government goods & services, 2.1% (+30.8% y/y) in maintenance & repair services, and 1.1% (-0.02% y/y) in travel services, while exports for construction services (0.9%; -5.7% y/y), insurance services (0.7%; 18.9% y/y) and charges for the use of intellectual property (0.5%; 7.0% y/y) increased m/m in June. Services imports fell 0.3% (+4.5% y/y) after a 0.3% May fall and two successive m/m increases. This reflected m/m drops of 1.9% (+48.0% y/y) in maintenance & repair services, 1.5% (+2.9% y/y) in travel services and 1.3% (-1.3% y/y) in transport services, while imports for construction services (2.0%; 82.3% y/y), charges for the use of intellectual property (0.8%; 1.3% y/y) and financial services (0.5%; 4.9% y/y) rose m/m in June.

The U.S. goods trade deficit with China narrowed to a seasonally adjusted $9.38 billion in June, the smallest on record, after falling to $13.97 billion in May. Exports surged 45.4% (-16.6% y/y) following a 19.9% May slump, while imports fell 6.9% (-45.6% y/y) on top of a 26.3% May plunge. The goods trade deficit with the European Union narrowed markedly to $9.52 billion in June, the smallest since June 2013, after widening to $22.54 billion in May, with exports up 6.8% (16.6% y/y) and imports down 19.2% (-8.2% y/y). The trade shortfall with Japan narrowed marginally to $5.72 billion in June, the smallest since March, from $5.77 billion in the previous month, reflecting declines of 3.4% (-7.5% y/y) in exports and 2.3% (-0.4% y/y) in imports.

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**.

250805L23.jpg

250805M23.jpg

- $60.2 bil. trade deficit, reflecting $85.9 bil. goods deficit & $25.7 bil. services surplus.
- Exports -0.5% m/m, down for the second consecutive month.
- Imports -3.7% m/m, down for the third straight month.
- Real goods trade deficit narrows to $84.6 bil. after May’s widening.
- Goods trade deficits w/ China at a record low, w/ EU at a June ’13 low, and w/ Japan at a 3-month low.

U.S. Trade Deficit Narrows in June; the Smallest Since Sept. ’23

250805E.jpg

The S&P Global PMI indexes once again showed mixed performance in July. Most large economies continue to do better, and the total PMI services sectors continue to make up for shortcomings in manufacturing.

**Stability on a low growth path**
In July, 24% of the reporting countries showed activity was slowing; that's down from 48% in both June and May and indicates some progress. Only five of the reporting jurisdictions have PMI values below 50 indicating economic contraction in July; that July figure compares to five in June and seven in May. Declining activity continues to be an unusual event. Medians and average readings for the group of 25 countries or regions show extreme stability in the recent months as well as across sequential averages.

**Growth moderately improves**
Comparing period averages from 12-months to six-months to three-months, unweighted readings of the U.S., the U.K., and European monetary union show extremely flat PMI values oscillating between values of 51.2 to 51.7 on those period averages; over three months, six months, and 12 months. The jurisdictions in the table show PMI readings below 50 are rare; once again declining activity is an unusual event. The proportion of reporters slowing over three months is 34.8% compared to 52.2% over six months and 30.4% over 12 months. Once again, we see these statistics tilted toward improving growth rather than towards slowing

**Summing up**
The queue percentile standings for the group in July have an average value at 65.9% which is above the 50% mark that coincides with the median for the period. This tells us the growth is largely better than what its median has been over the past 4 1/2 years. On a queue ranking basis, the largest economies consistently perform better with readings above the 50% mark for the U.S. and for the European Monetary System including each of its largest EMU economies: Germany, France, Italy, and Spain. Japan has a queue standing in its 57th percentile. However, China’s percentile standing is in its 26th percentile and the U.K. is at its 40.5 percentile. Not all large economies are in the catbird seat, but most are faring well despite the moderate growth track globally.

250805.jpg

Service Sectors Prop-up Global Economy

250804J1.jpg

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Total factory orders declined 4.8% (+5.6% y/y) in June after surging 8.3% in May, revised from 8.2%, as reported by the U.S. Census Bureau. A 4.9% decline had been expected in the Action Economics Forecast Survey. A halving in orders for nondefense aircraft accounted for much of the June decline. Factory orders excluding transportation altogether rose 0.4% after increasing 0.3% in May, revised from 0.2%.

Durable goods orders fell 9.4% (+10.9% y/y) in June after 16.5% rise in May. The advance report indicated a 9.3% decline. Transportation orders fell 22.4% (+30.5% y/y). Automobile orders declined 3.1% (-2.7% y/y). Computer & electronic product orders increased 0.6% (5.2% y/y) while electrical equipment, appliances & components rose 0.1% (4.5% y/y). Machinery orders improved 0.3% (3.0% y/y). Furniture & related products increased 0.1% (1.1% y/y). Primary metals orders increased 0.6% (-0.5% y/y) while fabricated metals orders edged 0.1% (3.1% y/y) higher.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.5% (0.6% y/y) in June after edging 0.1% higher in May. Shipments of petroleum & coal products rose 1.4% (-4.5% y/y) and beverage & tobacco products rose 1.5% (4.2% y/y). Food product shipments improved 0.4% (0.9% y/y) and textile product shipments rose a minimal 0.1% (1.9% y/y). To the downside, apparel shipments declined 0.9% (-4.7% y/y) and chemical product shipments eased 0.1% (+3.6% y/y). Paper products declined 0.3% (+0.7% y/y).

Total shipments increased 0.5% (1.8% y/y) in June following a 0.2% May increase. Excluding transportation, shipments rose 0.4% (1.3% y/y) in June after a 0.1% uptick in May. Shipments of durable goods industries rose 0.5% (3.0% y/y) in April, the seventh consecutive m/m rise.  Transportation equipment shipments rose 0.8% (4.3% y/y) as nondefense aircraft shipments fell 6.2% (+13.8% y/y). Machinery shipments rose 1.0% (1.5% y/y), and electrical equipment, appliances & components shipments increased 0.6 (4.6% y/y). Primary metals shipments rose 0.6% (2.4% y/y), fabricated metals shipment rose 0.2% (1.9% y/y), but furniture & related products eased 0.2% (+1.4% y/y).

Unfilled orders rose 1.0% (7.1% y/y) in June after a 3.4% jump in May. Excluding transportation, unfilled orders held steady (+0.8 y/y) after a 0.1% rise in May. Backlogs of durable goods increased 1.0% (7.1% y/y), reflecting a 2.1% rise (14.7% y/y) in nondefense aircraft and a 0.1% decline (-1.8% y/y) in machinery. Electrical equipment, appliances & components backlogs also rose 0.1% (1.0% y/y) while computer & electronic equipment backlogs eased 0.1% both m/m and y/y.
 
Inventories increased 0.2% (1.1% y/y) in June after edging 0.1% higher in May. Excluding transportation, inventories rose 0.2% (1.0% y/y) in June after a 0.1% uptick in May. Durable goods inventories rose 0.2% (1.5% y/y) in June, the same as in May, and rose 0.1% in both of the prior two months. Nondurable goods inventories increased 0.2% 0.5% y/y) after declines in both of the prior two months.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

250804L1.jpg

250804M1.jpg

- Total orders less transportation rise moderately.
- Shipments pick up.  
- Unfilled orders surge as inventories rise modestly.

U.S. Factory Orders Retreat in June, Largely Centered in Aircraft

Tian Yong Woon

This week, we examine the latest wave of trade developments across Asia as the US unveiled a full list of its modified reciprocal tariff rates, set to take effect on August 7. As anticipated, many of the updated rates are now lower than the original tariffs, with Cambodia and Vietnam seeing the sharpest reductions (chart 1). However, from peak tariff levels, China stands out—continuing to benefit from a 10% pause rate, down from triple-digit highs.

South Korea secured a deal just before the deadline, lowering its tariff from 25% to 15%. The new rate also applies to auto exports, offering relief to Korean automakers (chart 2). Thailand and Cambodia followed with US trade agreements after agreeing to an unconditional ceasefire following earlier military clashes. Their US-imposed tariffs dropped from 36% to 19%, highlighting how US trade policy can intersect with geopolitical interests and, in this case, may help reduce trade uncertainty (chart 3).

Malaysia, a key mediator in the ceasefire, also finalized a trade deal, reducing its tariff rate to 19% and gaining exemptions on key exports such as semiconductors (chart 4). Turning to Japan, while its US trade deal helped avert immediate tensions, the vague terms and a headline $550 billion investment—mostly in the form of loans—leave room for future friction (chart 5). China, however, remains a wildcard. Talks to extend its tariff pause are ongoing, but failure could see a return to extreme tariff levels (chart 6). Meanwhile, tech tensions linger, despite eased restrictions on Nvidia AI chip exports.

**Latest US tariff developments**
We gained further clarity on the new reciprocal tariff rates announced by the US administration last week, as the White House released a full list of the modified rates on Thursday. It also announced that the new rates will take effect on August 7, giving partner countries a bit more time to negotiate new terms. Overall, as earlier indications suggested, Trump’s post-pause tariff rates—regardless of whether trade deals were secured—have often ended up lower than the original rates, as shown in chart 1. The largest reductions from original tariff levels have so far come from Cambodia and Vietnam. However, when looking at the steepest reductions from peak tariff rates, China stands out. It continues to benefit from a 10% tariff pause—down sharply from the triple-digit rates imposed at the height of US-China trade tensions earlier this year. On the flipside, a handful of economies—including New Zealand, the Philippines, and Brunei—are now facing modified tariff rates that are actually higher than their original Liberation Day levels. Notably, the Philippines ended up in this group despite having secured a trade deal with the US.

250804T1.jpg

**South Korea**
As for South Korea, the US reduced its tariff rate to 15% just ahead of the August 1 deadline, a significant drop from the original Liberation Day rate of 25%. In return, South Korea committed to, among other terms, $350 billion in investments into the US. Of that total, $150 billion will go specifically toward shipbuilding cooperation—supporting the entry of Korean firms into the US shipbuilding industry—while the remaining $200 billion will be directed toward semiconductors and other sectors. Similar to Japan’s arrangement, the new 15% tariff rate will also apply to South Korean auto exports, likely providing relief to the country’s automakers. As shown in chart 2, South Korea’s vehicle exports—and, by extension, its export-driven growth—have come under pressure, with more recent headwinds stemming from the broad 25% auto tariffs imposed by the US. Notably, South Korea’s dealmaking pace with the US has been considered exceptionally swift, especially given that the country had only recently undergone an administrative transition following its presidential elections, leaving limited time to initiate formal trade negotiations.

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**Thailand and Cambodia**
Moving to other parts of Asia, one of the more notable developments last week was the signing of two additional US trade deals—specifically with Thailand and Cambodia. The two countries had recently been engaged in escalating border clashes but agreed to an unconditional ceasefire after mediation by Malaysia and the US. In reality, tensions between Thailand and Cambodia had been simmering for some time, likely driving in part the heightened uncertainty shown in chart 3, though other factors may have played a role. Notably, US President Trump stated that he had made it clear to both governments that no trade deal would be considered while they remained in conflict—an ultimatum that may have incentivized both sides to pursue de-escalation. Ultimately, US trade deals with both countries were announced, reducing their tariff rates from the original Liberation Day level of 36% to 19%. This illustrates how the US approach to dealmaking goes beyond trade, sometimes factoring in broader geopolitical considerations as well.

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**Malaysia**
Touching further on Malaysia, which played a key role in mediating the Thailand-Cambodia conflict mentioned earlier, a last-minute US-Malaysia trade deal also materialized shortly after the agreements with Thailand and Cambodia were hinted at. Under the new terms, Malaysia’s tariff rate was reduced to 19%, down from the original 24%. Malaysian Trade Minister Zafrul described the deal as a “win-win,” noting that Malaysia has either reduced or eliminated tariffs on nearly all American products. Notably—and perhaps offering some interim relief—Malaysia also secured tariff exemptions for its exports of semiconductors and pharmaceuticals. This is especially significant, as semiconductor exports account for a substantial share of Malaysia’s shipments to the US, as shown in chart 4.

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**Japan**
Turning to Japan, the recent US-Japan trade deal appears to have averted the worst for now. However, many key details remain unclear, particularly regarding Japan’s reported $550 billion investment into the US. While the headline figure is striking, Japan’s chief trade negotiator, Akazawa, later clarified that only 1–2% of the amount would constitute actual investment, with the remainder largely consisting of loans. More critically, the deal—like several other recent US-Asia trade agreements—was not accompanied by formal documentation, leaving its terms vague and, perhaps more concerning, open to future revision. These loose ends present ongoing risks to US-Japan economic relations and could potentially unwind recent market gains driven by trade optimism, as uncertainty remains and may yet resurface (see chart 5). This lingering uncertainty likely contributed to the Bank of Japan’s decision to hold its policy rate steady last week. The central bank adopted a wait-and-see approach before considering further rate hikes, while notably revising its inflation forecasts upward and presenting a slightly improved growth outlook for the fiscal year.

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**China**
Amid the recent flurry of US trade deals, one critical issue that may have slipped from the spotlight—but remains central to the global outlook —is China. Ongoing discussions between the two countries aim to extend China’s current tariff pause. If talks break down, US Treasury Secretary Scott Bessent has warned that the existing 10% tariff on Chinese exports could “boomerang” back to its previously exorbitant levels. This could potentially drive the US effective import tariff rate on China well above its already-elevated levels, as shown in chart 6. Meanwhile, the recent reversal of export restrictions by the US on Nvidia’s H20 AI chips may have brought temporary relief to China’s AI sector. However, Chinese authorities have raised national security concerns over the chips’ built-in tracking features and potential remote shutdown capabilities—adding yet another layer of complexity to the already tense US-China trade relationship and broader economic rivalry.

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Asia

Economic Letter from Asia: New Duty Roster

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Nonfarm payrolls increased 73,000 during July after rising 14,000 in June, revised from 147,000, and 19,000 in May, revised from 144,000. Expectations had been for a 102,000 rise in the Action Economics Forecast Survey. The three-month average change in payrolls of 35,000 compared to 64,000 in June. The Bureau of Labor Statistics indicates that monthly revisions result from additional reports received from businesses and government agencies since the last published estimates.

Average hourly earnings rose an expected 0.3% during July after unrevised gains of 0.2% and 0.4% in June & May. Earnings growth of 3.9% y/y is little changed over twelve months, but has been trending lower from its 5.9% high in March 2022.

The unemployment rate, measured in the household survey, edged up m/m to an expected 4.2% from 4.1% and compared to 4.2% in the previous three months. 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, rose to 7.9% last month from 7.7% In June. It was 6.6% in April 2023.

In the **establishment survey**, private-sector employment in July rose 83,000, factory sector jobs declined 11,000, off for the third straight month. Construction sector employment increased 2,000, after rising 3,000 in June. The number of mining & logging industry jobs declined 4,000 after falling in both of the prior two months. 

Private service sector employment increased 96,000 July after improving 16,000 in June. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 79,000 last month, following a 52,000 increase in June. The number of trade, transportation & utilities jobs gained 11,000, following a 22,000 decline and financial activities employment improved 15,000 after a 2,000 drop, while leisure & hospitality employment rose just 5,000 after a 4,000 gain. The number of professional & business services jobs fell 14,000, down for the third straight month.  Information sector employment fell 2,000, after holding steady in June.

Government sector payrolls declined 10,000 last month and revered June’s 11,000 rise. Federal government employment weakened 12,000 and has fallen for six straight months. Local government employment eased 3,000 after rising 10,000 in June while state government payrolls rose 5,000 after increasing 10,000.

Private-sector average hourly earnings rose 0.3% (3.9% y/y) in July. Earnings in the goods-producing sector edged up 0.1% (3.6% y/y). In construction, earnings rose 0.2% (3.7% y/y) following a 0.4% rise, but factory sector earnings eased 0.1% (+3.6% y/y). In the service sector, earnings rose 0.4% (4.0% y/y) in July after increasing 0.2% in June.

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The length of the average workweek rose to 34.3 hours in July from 34.2 hours in June. The workweek in the goods-producing sector lengthened to 39.9 hours from 39.7 hours. The construction sector average workweek rose to 39.1 hours from 38.9 while the factory sector workweek held steady at 40.1 hours. The average workweek in the private service sector edged up to 33.2 hours from 33.1 hours.

In the **household survey**, the unemployment rate increased to 4.2% in July after falling to 4.1% as employment fell 260,000 after rising 93,000 in June and the size of the labor force declined 38,000, off for the third straight month. The labor force participation rate eased to 62.2% last month from 62.3% and remained below the high of 63.3% early in 2020. The rate for teenagers declined to 35.0%, after plunging to 35.1%. For workers aged 20-24, the rate declined to 70.9%. For workers aged 25-54, the participation rate eased to 83.4%. For individuals 55 and over, the rate improved slightly to 38.1% but remained near a 20-year low of 38.0% in June.

The employment/population ratio for all workers slipped to 59.6% last month. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic. For men, the rate fell to 64.7% in July from 64.9% and for women, the rate eased to 54.7% from 54.8% in June.

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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- Recent job growth reduced by fewer factory & government jobs.
- Earnings gain remains steady y/y.
- Jobless rate reverses June decline.

Economy in Brief: June 2008

Jump to:

U.S. Small Business Optimism Near 1975 Low

U.S. Trade Deficit Deeper in April, Prior Deficits Revised Shallower

U.S. Trade Deficit Deeper in April, Prior Deficits Revised Shallower

More Discouraging News From Japan: Economic Indicators Pointing To Recession And Economy Watchers Continue Gloomy

German Trade Surplus Bulges Again in April

OECD CLIs Point to Further Slowing Except Japan

German Industrial Output Trends Head Lower

U.S. Pending Home Sales in April Rose Unexpectedly