Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081208d.jpg" align="left" border="0" height="265" width="353">
German industrial output fell by 2.1% in October and its
sequential growth rates show a steady drumbeat of negativism more than
an acceleration of weakness. This is in stark contrast to the
unraveling in orders. But order weakness always takes several months to
become embedded in the behavior of output so the steadier path of
output is not much in which to take solace. Finally it is the consumer
sector that it showing some resiliency. But capital goods and
intermediate goods industry output each show persisting deep if not
accelerating declines in output. With the economic crisis spreading
this resiliency by consumers will not be long lived. MFG IP shows
relatively more weakness. And orders are pointing the way much lower. 


 
<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="odd">
<td class="firstcol">Saar except m/m</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Aug-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-Date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>-2.1%</td>
<td>-3.3%</td>
<td>3.2%</td>
<td>-8.7%</td>
<td>-10.5%</td>
<td>-3.9%</td>
<td>-17.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.4%</td>
<td>-2.3%</td>
<td>3.5%</td>
<td>2.8%</td>
<td>-1.6%</td>
<td>-3.4%</td>
<td>-4.8%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-3.1%</td>
<td>-3.1%</td>
<td>3.7%</td>
<td>-10.1%</td>
<td>-14.6%</td>
<td>-4.6%</td>
<td>-21.4%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-2.2%</td>
<td>-4.6%</td>
<td>2.9%</td>
<td>-15.3%</td>
<td>-11.6%</td>
<td>-3.4%</td>
<td>-23.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</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">Construction&nbsp;</td>
<td>-3.0%</td>
<td>-3.0%</td>
<td>6.4%</td>
<td>0.5%</td>
<td>-5.1%</td>
<td>-4.3%</td>
<td>-16.5%</td>
</tr>
<tr>
<td class="firstcol">MFG IP</td>
<td>-2.2%</td>
<td>-3.6%</td>
<td>3.3%</td>
<td>-9.8%</td>
<td>-11.0%</td>
<td>-3.9%</td>
<td>-19.2%</td>
</tr>
<tr>
<td class="firstcol">MFG Orders</td>
<td>-6.1%</td>
<td>-8.3%</td>
<td>3.5%</td>
<td>-36.8%</td>
<td>-28.3%</td>
<td>-17.3%</td>
<td>-48.2%</td>
</tr>
</tbody>
</table>
</body></html>

German industrial output fell by 2.1% in October and its sequential growth rates show a steady drumbeat of negativism more than an acceleration of weakness. This is in stark contrast to the unraveling in orders. But order weakness [...]

German Industrial Output Trends is Weaker Than Expectedly

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081208d.jpg" align="left" border="0" height="265" width="353">
German industrial output fell by 2.1% in October and its
sequential growth rates show a steady drumbeat of negativism more than
an acceleration of weakness. This is in stark contrast to the
unraveling in orders. But order weakness always takes several months to
become embedded in the behavior of output so the steadier path of
output is not much in which to take solace. Finally it is the consumer
sector that it showing some resiliency. But capital goods and
intermediate goods industry output each show persisting deep if not
accelerating declines in output. With the economic crisis spreading
this resiliency by consumers will not be long lived. MFG IP shows
relatively more weakness. And orders are pointing the way much lower. 


 

<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="odd">
<td class="firstcol">Saar except m/m</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Aug-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-Date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>-2.1%</td>
<td>-3.3%</td>
<td>3.2%</td>
<td>-8.7%</td>
<td>-10.5%</td>
<td>-3.9%</td>
<td>-17.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.4%</td>
<td>-2.3%</td>
<td>3.5%</td>
<td>2.8%</td>
<td>-1.6%</td>
<td>-3.4%</td>
<td>-4.8%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-3.1%</td>
<td>-3.1%</td>
<td>3.7%</td>
<td>-10.1%</td>
<td>-14.6%</td>
<td>-4.6%</td>
<td>-21.4%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-2.2%</td>
<td>-4.6%</td>
<td>2.9%</td>
<td>-15.3%</td>
<td>-11.6%</td>
<td>-3.4%</td>
<td>-23.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</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">Construction&nbsp;</td>
<td>-3.0%</td>
<td>-3.0%</td>
<td>6.4%</td>
<td>0.5%</td>
<td>-5.1%</td>
<td>-4.3%</td>
<td>-16.5%</td>
</tr>
<tr>
<td class="firstcol">MFG IP</td>
<td>-2.2%</td>
<td>-3.6%</td>
<td>3.3%</td>
<td>-9.8%</td>
<td>-11.0%</td>
<td>-3.9%</td>
<td>-19.2%</td>
</tr>
<tr>
<td class="firstcol">MFG Orders</td>
<td>-6.1%</td>
<td>-8.3%</td>
<td>3.5%</td>
<td>-36.8%</td>
<td>-28.3%</td>
<td>-17.3%</td>
<td>-48.2%</td>
</tr>
</tbody>
</table>
Japan's Current Account Balance In
Sharp Deterioration&nbsp; 
by <a href="/comment/Curley.html">Louise
Curley</a> December 8, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081208b.jpg" align="left" border="0" height="265" width="353">
Japan's current account balance has deteriorated severely this
year. The balance for the first 10 months of 2008 was a surplus 14,943
billion yen, compared with 21,206 billion yen surplus in the comparable
period of 2007, a decline of 30%. The first chart puts the magnitude of
the decline in perspective.(We express the values in terms of billion
yen, rather than the 100 million yen shown in the balance of payments
data in Haver's JAPAN Data Base and in the attached
charts)
Traditionally, Japan has had negative balances on Services and
Transfers and positive balances on Income and Goods. The second chart
shows these balances over the past twenty-three years. The deficit in
the balance on services has tended to be less negative, and the balance
on income has become more positive but it is clear from this chart that
the major cause of the recent steep decline in the current account
balance is the decline in the balance on goods. So steep has been the
decline that in August and September, the customary surpluses on trade
in goods turned into deficits.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081208a.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081208c.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
CURRENT ACCOUNT BALANCE&nbsp;</th>
<th scope="col">Oct 08</th>
<th scope="col">Sep 08&nbsp;</th>
<th scope="col">Oct 07&nbsp;</th>
<th scope="col">M/M chg&nbsp;</th>
<th scope="col">Y/Y chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Current Account
Balance&nbsp; (Bil.Yen)&nbsp;</td>
<td>1113.2</td>
<td>920.5</td>
<td>2471.5</td>
<td>142.7</td>
<td>-1258.3</td>
<td>24971</td>
<td>20030</td>
<td>18353</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Balance on
Goods&nbsp; (Bil.Yen)&nbsp;</td>
<td>118.3</td>
<td>-76.6</td>
<td>1233.2</td>
<td>194.9</td>
<td>1114.9</td>
<td>12467</td>
<td>9430</td>
<td>10217</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Balance on
Income&nbsp; (Bil.Yen)&nbsp;</td>
<td>1266.1</td>
<td>1307.0</td>
<td>1471.7</td>
<td>-40.9</td>
<td>-205.6</td>
<td>16341</td>
<td>13960</td>
<td>11592</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Balance on
Services&nbsp; (Bil.Yen)&nbsp;&nbsp;</td>
<td>-136.8</td>
<td>-169.0</td>
<td>-135.4</td>
<td>32.2</td>
<td>-1.4</td>
<td>-2476</td>
<td>-2126</td>
<td>-2643</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Balance on
Transfers&nbsp; (Bil.Yen)&nbsp;</td>
<td>-134.3</td>
<td>-91.0</td>
<td>-97.9</td>
<td>-43.3</td>
<td>-36.4</td>
<td>-1362</td>
<td>-1234</td>
<td>-813</td>
</tr>
</tbody>
</table>

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German Industrial Output Trends isWeaker Than Expectedly

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205h.jpg" align="right" border="0" height="265" width="353">The
usage of consumer credit continued to fall as it never has before.
During October, consumer credit outstanding fell $3.6 billion m/m.
Though that lagged a $6.5B decline back in August, it still was one of
the largest in the series' postwar history. On a percentage basis,
credit outstanding over the last three months fell 0.1%, the first
decline since 1992.&nbsp;&nbsp;Before October, credit growth
averaged roughly 5% y/y after the rise of 5.5% during all of 2007. The
decline in y/y growth thru October to 3.1% was precipitated by less
spending on consumer durables. The annualized growth in nominal PCE for
durable goods during the last three months cycled down to -22.4% from
2.9% positive growth during all of last year.Non-revolving credit,
which accounts for nearly two-thirds of total consumer credit, led the
October decline in borrowing with a $3.4B drop. The dollar drop was
nearly unprecedented. On a three month basis, annualized growth fell to
-1.9% after a 4.4% rise last year and 3.6% growth during 2006.
Revolving credit outstanding dropped a more modest $0.2B during
October. Indeed, consumers were much more frugal using their credit
cards. Three month growth fell to 1.8%, down by more than two thirds
from the 7.4% growth last year.These figures are the major input to
the Fed's quarterly Flow of Funds accounts for the household sector.
For 4Q08 the data will be released later this month.&nbsp;These data are available in Haver's USECON
database.Delinquent Home Mortgages Up Sharply· For
the third quarter, 7% of all mortgages were past due. The increase in
lagged payments was up from 6.4% of loans during 2Q, 5.8% last year and
5.0% in 2006. Past due by 30 days were 3.4% of loans versus 3.2% last
year and 2.2% were past due by 90 days versus 1.5% during 2007.
Foreclosures were started on 1.1% of loans, down from 1.2% in 2Q. The
latest still was up, however, from 0.8% in 3Q of last year and from
0.5% in 3Q06. During all of last year, 2.8% of all mortgage loans went
into foreclosure, a record high and up from a norm of 0.2% to 0.4%. Of
conventional prime fixed rate mortgages 3.4% were past due, up from
2.6% last year. The news on ARMs, however, is far worse. The estimate
is that 8.2% were delinquent versus 5.5% last year and 3.4% in
2006.&nbsp;These data are available in Haver's MBAMTG
database.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205i.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205g.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Consumer
Credit (m/m Chg, SAAR)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-3.6B</td>
<td>&nbsp;$6.8B</td>
<td>3.1%</td>
<td>5.5%</td>
<td>4.5%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-0.2B</td>
<td>$2.5B</td>
<td>5.0%</td>
<td>7.4%</td>
<td>6.1%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-3.4B</td>
<td>$4.2B</td>
<td>1.9%</td>
<td>4.4%</td>
<td>3.6%</td>
<td>4.9%</td>
</tr>
</tbody>
</table>
</body></html>

The usage of consumer credit continued to fall as it never has before. During October, consumer credit outstanding fell $3.6 billion m/m. Though that lagged a $6.5B decline back in August, it still was one of the largest in the [...]

U.S. Consumer Credit Usage Down; Mortgage Delinquencies Surge

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205f.jpg" align="left" border="0" height="265" width="353">
German new MFG orders dropped 6.1% in October from September.
In September they fell 8.3% from August. The party is over.
Foreign orders are falling faster overall but in the month
domestic orders almost caught up in pace with foreign weakness: compare
-6.2% to -6.1%. In the new
quarter domestic orders are falling at a 40.1% pace while foreign
orders are falling at a 55.3% pace. Both are horrific numbers. Whatever
skepticism Europeans have had about this slowdown or its ability to
reach out and sting them too, those reservations should now be gone.
Europe is being led lower by Germany and at a very rapid pace.
Sales in Germany are now all on negative trends for the
quarter. Orders have been pared even more dramatically than sales
reflecting the forward-looking creatures that they are. The economy is
spiraling lower at a rapid pace. The ECB does have more room to cut
rates than the Fed but we have seen that amounts to pushing on a
string. The US is gearing up for more fiscal stimulus. Meanwhile, the
last we heard from German Chancellor Merkel, she was against getting
into a stimulus race. She may be right about that, but that is no
excuse not to &#8216;run&#8217; at all.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Aug-08</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-6.1%</td>
<td>-8.3%</td>
<td>3.5%</td>
<td>-36.8%</td>
<td>-20.5%</td>
<td>-17.3%</td>
<td>11.2%</td>
<td>-48.2%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>-6.2%</td>
<td>-11.6%</td>
<td>4.3%</td>
<td>-44.3%</td>
<td>-25.4%</td>
<td>-22.7%</td>
<td>17.0%</td>
<td>-55.3%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-6.1%</td>
<td>-4.7%</td>
<td>2.8%</td>
<td>-28.2%</td>
<td>-15.2%</td>
<td>-11.3%</td>
<td>5.2%</td>
<td>-40.1%</td>
</tr>
<tr>
<td class="firstcol">Real Sector Sales</td>
<td>&nbsp;</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">MFG/Mining</td>
<td>-0.2%</td>
<td>-4.3%</td>
<td>4.5%</td>
<td>-0.7%</td>
<td>-0.3%</td>
<td>-3.4%</td>
<td>6.9%</td>
<td>-9.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.1%</td>
<td>-1.2%</td>
<td>2.0%</td>
<td>2.8%</td>
<td>1.4%</td>
<td>-3.5%</td>
<td>2.3%</td>
<td>-1.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-0.6%</td>
<td>-6.2%</td>
<td>6.8%</td>
<td>-1.7%</td>
<td>-0.9%</td>
<td>-4.9%</td>
<td>-0.2%</td>
<td>-15.2%</td>
</tr>
<tr>
<td class="firstcol">Consumer Non-Durable</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>1.2%</td>
<td>4.0%</td>
<td>2.0%</td>
<td>-3.3%</td>
<td>2.9%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.7%</td>
<td>-5.4%</td>
<td>5.7%</td>
<td>2.8%</td>
<td>1.4%</td>
<td>-3.3%</td>
<td>9.7%</td>
<td>-7.0%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-1.2%</td>
<td>-4.5%</td>
<td>4.2%</td>
<td>-6.4%</td>
<td>-3.3%</td>
<td>-3.2%</td>
<td>6.1%</td>
<td>-15.9%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>-0.1%</td>
<td>-4.2%</td>
<td>4.4%</td>
<td>-0.3%</td>
<td>-0.2%</td>
<td>-3.3%</td>
<td>6.4%</td>
<td>-8.8%</td>
</tr>
</tbody>
</table>
</body></html>

German new MFG orders dropped 6.1% in October from September. In September they fell 8.3% from August. The party is over. Foreign orders are falling faster overall but in the month domestic orders almost caught up in pace with foreign [...]

German Orders Sink Fast – So Much for a Mild Impact on Europe

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205e.jpg" align="left" border="0" height="265" width="353">
The LEIs from the OECD are plunging and the outlook is not for
more severe slowdowns across the region and for many key members. The
Euro Area and the US figures show the most rapid descent while Japan &#8217;s
index is going down for the second time in this &#8216;cycle&#8217;.
India , China and Russia are showing signs of increased pain.
The Russian index is down especially sharply. This worldwide slowdown
is clobbering all those countries that had been expected to be
resilient. Russia is being hurt due to its status as a commodity
currency, especially as an oil producer.
The drops in the US and European indices are as severe, or
more severe, than in the last US business cycle.

<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="odd">
<td colspan="5">Growth Progression-SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>-9.2%</td>
<td>-6.7%</td>
<td>-3.8%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">OECD 7</td>
<td>-10.1%</td>
<td>-7.3%</td>
<td>-4.5%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">OECD Europe</td>
<td>-9.1%</td>
<td>-7.4%</td>
<td>-4.5%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">OECD Japan</td>
<td>-7.2%</td>
<td>-4.3%</td>
<td>-0.8%</td>
<td>-1.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>-11.4%</td>
<td>-7.7%</td>
<td>-5.3%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Six month readings at 6-Mo
Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>-6.7%</td>
<td>-0.9%</td>
<td>0.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">OECD 7</td>
<td>-7.3%</td>
<td>-1.6%</td>
<td>-0.5%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">OECD Europe</td>
<td>-7.4%</td>
<td>-1.5%</td>
<td>0.9%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">OECD Japan</td>
<td>-4.3%</td>
<td>2.8%</td>
<td>-3.5%</td>
<td>0.6%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>-7.7%</td>
<td>-2.8%</td>
<td>-0.4%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="5" class="firstcol">Slowdowns indicated by BOLD RED.</td>
</tr>
</tbody>
</table>
</body></html>

The LEIs from the OECD are plunging and the outlook is not for more severe slowdowns across the region and for many key members. The Euro Area and the US figures show the most rapid descent while Japan ’s index is going down for the [...]

OECD LEIs PLUNGE and It's Only September…

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205a.jpg" align="right" border="0" height="265" width="353">
Nonfarm payrolls were slashed during
November by the most during any one month since December 1974. The
533,000 decline followed shortfalls of 320,000 and 403,000 during
October and September, both of which were larger than reported earlier
by the Bureau of Labor Statistics. Also, the latest exceeded Consensus
expectations for a 323,000 drop. So far in 2008, nonfarm payrolls are
down 1.9 mil., or 1.4%.
During the last three months, payrolls fell at a 3.6% annual
rate. That is the quickest rate of decline since during the recession
of 1980.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205b.jpg" align="right" border="0" height="265" width="312">
Aggregate hours worked, which is employment times the length
of the average workweek, so far in 4Q are down at a 4.0% annual rate.
During the last thirty years there has been a 73% correlation between
the growth in aggregate hours worked and real GDP growth.
The unemployment rate rose further to
6.7% last month, the highest level since October 1993. The increase
fell short of Consensus expectations for a rise to 6.8%. The jump owed
to a 673,000 drop in employment (-1.6% y/y), as measured in the
household survey. The latest monthly drop in household sector
employment was the ninth this year and was the largest since the
recession of 2001.
The number of those who were unemployed last month rose
251,000 (43.9% y/y). The figure is up 2.676 million, or 35.0%, so far
this year. The November labor force fell 422,000 (+0.5% y/y) and the
y/y rate of increase dropped to near its slowest since 2004. The labor
force participation rate fell to 65.9% as the number of "discouraged"
workers, i.e. the number of people of who want a job but are not in the
labor force, jumped 398,000. The y/y increase of 15.2% is near the
strongest in over ten years.
The average duration of unemployment slipped to 18.8 weeks
after having increased during October by more than one full week. The
median duration of unemployment also slipped m/m to 10.0 weeks, up from
8.5 weeks during all of last year. The number of those unemployed for
more than 27 weeks also slipped m/m. Nevertheless it remained up by
more than one-half versus last November and at the highest since 1992.
From the establishment survey the number of private sector
jobs fell 540,000 (-1.8% y/y) after a 362,000 decline during October,
initially reported as down by 263,000. Private service sector
industries shed 377,000 jobs (-3.1% y/y) and that was the tenth decline
in the last eleven months. Employment in professional &amp;
business services fell 136,000 (-2.7% y/y) led by a 111,800 decline in
the administrative &amp; waste category which was off 6.2% y/y.
Temporary help services jobs, which often are a leading indicator of
employment growth, fell 78,200 (-15.4% y/y). That was the largest y/y
decline since 2001. Jobs in the leisure &amp; hospitality sector
fell 76,000 (-1.0% y/y) while employment in financial industries fell
32,000 (-1.8% y/y), a rate of decline that has more than doubled during
the last three months. Retail sector jobs fell another 91,300 (-3.0%
y/y) and the rate of decline also has doubled recently. Finally, motor
vehicle dealership jobs fell 27,100 (-6.6% y/y), off at a 14.0% rate
during the last three months. To the upside were jobs in the education
&amp; health industries, up 52,000 (3.0% y/y).
Construction sector employment fell by 82,000 (-7.6% y/y and
at a 10.8% rate during the last three months.
Factory sector jobs fell another 85,000 (-4.5% y/y). Motor
vehicle &amp; parts jobs dropped 13,100 (-14.9% y/y) while
furniture &amp; parts jobs declined by 6,600 (-11.7% y/y. In the
nondurables sector employment fell 23,000 (-3.0% y/y).
Government sector jobs moved higher again, last month by 7,000
(1.2% y/y). Local governments added 1,000 (1.0% y/y) workers and state
governments added 6,000 (1.6% y/y). The number of federal government
jobs was unchanged (1.6% y/y).
Comparing Current Payroll Employment Changes with
Past Recessions from the Federal Reserve Bank of Cleveland
is available <a href="http://www.clevelandfed.org/research/trends/2008/1108/04ecoact.cfm">here</a>.
The length of the average workweek fell to 33.5 hours, down
slightly from the 3Q average. That was the shortest workweek on record
Continuing to suggest continued declines in employment was the
one month diffusion index, which measures the
breadth of job gain or loss (50 is the break-even level). It fell to
its lowest level of this cycle (27.6%). The three-month index also was
at its cycle low at 27.0% and the three-month figure for the factory
sector was even weaker at 20.2%.
Average hourly earnings rose 0.4%. Earnings
the factory sector rose 0.3% (3.0% y/y) and private services wages rose
0.4% (3.8% y/y). Figures prior to November were revised up.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205c.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205d.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment:
000s</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</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">Payroll Employment</td>
<td>-533</td>
<td>-320</td>
<td>-403</td>
<td>-1.4%</td>
<td>1.1%</td>
<td>1.8%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-240</td>
<td>-244</td>
<td>--</td>
<td>1.3%</td>
<td>1.9%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-85</td>
<td>-104</td>
<td>-69</td>
<td>-4.5%</td>
<td>-1.9%</td>
<td>-0.5%</td>
<td>-0.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-82</td>
<td>-64</td>
<td>-55</td>
<td>-7.6%</td>
<td>-1.0%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-370</td>
<td>-153</td>
<td>-286</td>
<td>-0.6%</td>
<td>1.6%</td>
<td>1.8%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.5</td>
<td>33.6</td>
<td>33.6</td>
<td>33.8 (Nov. '07)</td>
<td>33.8</td>
<td>33.9</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.7%</td>
<td>4.0%</td>
<td>3.9%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>6.7%</td>
<td>6.5%</td>
<td>6.1%</td>
<td>4.7% (Nov. '07)</td>
<td>4.6%</td>
<td>4.6%</td>
<td>5.1%</td>
</tr>
</tbody>
</table>
</body></html>

Nonfarm payrolls were slashed during November by the most during any one month since December 1974. The 533,000 decline followed shortfalls of 320,000 and 403,000 during October and September, both of which were larger than reported [...]

U.S. Payrolls Slashed 533,000; 6.7% Jobless Rate Highest Since 1993

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205a.jpg" align="right" border="0" height="265" width="353">
Nonfarm payrolls were slashed during
November by the most during any one month since December 1974. The
533,000 decline followed shortfalls of 320,000 and 403,000 during
October and September, both of which were larger than reported earlier
by the Bureau of Labor Statistics. Also, the latest exceeded Consensus
expectations for a 323,000 drop. So far in 2008, nonfarm payrolls are
down 1.9 mil., or 1.4%.
During the last three months, payrolls fell at a 3.6% annual
rate. That is the quickest rate of decline since during the recession
of 1980.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205b.jpg" align="right" border="0" height="265" width="312">
Aggregate hours worked, which is employment times the length
of the average workweek, so far in 4Q are down at a 4.0% annual rate.
During the last thirty years there has been a 73% correlation between
the growth in aggregate hours worked and real GDP growth.
The unemployment rate rose further to
6.7% last month, the highest level since October 1993. The increase
fell short of Consensus expectations for a rise to 6.8%. The jump owed
to a 673,000 drop in employment (-1.6% y/y), as measured in the
household survey. The latest monthly drop in household sector
employment was the ninth this year and was the largest since the
recession of 2001.
The number of those who were unemployed last month rose
251,000 (43.9% y/y). The figure is up 2.676 million, or 35.0%, so far
this year. The November labor force fell 422,000 (+0.5% y/y) and the
y/y rate of increase dropped to near its slowest since 2004. The labor
force participation rate fell to 65.9% as the number of "discouraged"
workers, i.e. the number of people of who want a job but are not in the
labor force, jumped 398,000. The y/y increase of 15.2% is near the
strongest in over ten years.
The average duration of unemployment slipped to 18.8 weeks
after having increased during October by more than one full week. The
median duration of unemployment also slipped m/m to 10.0 weeks, up from
8.5 weeks during all of last year. The number of those unemployed for
more than 27 weeks also slipped m/m. Nevertheless it remained up by
more than one-half versus last November and at the highest since 1992.
From the establishment survey the number of private sector
jobs fell 540,000 (-1.8% y/y) after a 362,000 decline during October,
initially reported as down by 263,000. Private service sector
industries shed 377,000 jobs (-3.1% y/y) and that was the tenth decline
in the last eleven months. Employment in professional &amp;
business services fell 136,000 (-2.7% y/y) led by a 111,800 decline in
the administrative &amp; waste category which was off 6.2% y/y.
Temporary help services jobs, which often are a leading indicator of
employment growth, fell 78,200 (-15.4% y/y). That was the largest y/y
decline since 2001. Jobs in the leisure &amp; hospitality sector
fell 76,000 (-1.0% y/y) while employment in financial industries fell
32,000 (-1.8% y/y), a rate of decline that has more than doubled during
the last three months. Retail sector jobs fell another 91,300 (-3.0%
y/y) and the rate of decline also has doubled recently. Finally, motor
vehicle dealership jobs fell 27,100 (-6.6% y/y), off at a 14.0% rate
during the last three months. To the upside were jobs in the education
&amp; health industries, up 52,000 (3.0% y/y).
Construction sector employment fell by 82,000 (-7.6% y/y and
at a 10.8% rate during the last three months.
Factory sector jobs fell another 85,000 (-4.5% y/y). Motor
vehicle &amp; parts jobs dropped 13,100 (-14.9% y/y) while
furniture &amp; parts jobs declined by 6,600 (-11.7% y/y. In the
nondurables sector employment fell 23,000 (-3.0% y/y).
Government sector jobs moved higher again, last month by 7,000
(1.2% y/y). Local governments added 1,000 (1.0% y/y) workers and state
governments added 6,000 (1.6% y/y). The number of federal government
jobs was unchanged (1.6% y/y).
Comparing Current Payroll Employment Changes with
Past Recessions from the Federal Reserve Bank of Cleveland
is available <a href="http://www.clevelandfed.org/research/trends/2008/1108/04ecoact.cfm">here</a>.
The length of the average workweek fell to 33.5 hours, down
slightly from the 3Q average. That was the shortest workweek on record
Continuing to suggest continued declines in employment was the
one month diffusion index, which measures the
breadth of job gain or loss (50 is the break-even level). It fell to
its lowest level of this cycle (27.6%). The three-month index also was
at its cycle low at 27.0% and the three-month figure for the factory
sector was even weaker at 20.2%.
Average hourly earnings rose 0.4%. Earnings
the factory sector rose 0.3% (3.0% y/y) and private services wages rose
0.4% (3.8% y/y). Figures prior to November were revised up.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205c.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205d.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment:
000s</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</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">Payroll Employment</td>
<td>-533</td>
<td>-320</td>
<td>-403</td>
<td>-1.4%</td>
<td>1.1%</td>
<td>1.8%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-240</td>
<td>-244</td>
<td>--</td>
<td>1.3%</td>
<td>1.9%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-85</td>
<td>-104</td>
<td>-69</td>
<td>-4.5%</td>
<td>-1.9%</td>
<td>-0.5%</td>
<td>-0.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-82</td>
<td>-64</td>
<td>-55</td>
<td>-7.6%</td>
<td>-1.0%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-370</td>
<td>-153</td>
<td>-286</td>
<td>-0.6%</td>
<td>1.6%</td>
<td>1.8%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.5</td>
<td>33.6</td>
<td>33.6</td>
<td>33.8 (Nov. '07)</td>
<td>33.8</td>
<td>33.9</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.7%</td>
<td>4.0%</td>
<td>3.9%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>6.7%</td>
<td>6.5%</td>
<td>6.1%</td>
<td>4.7% (Nov. '07)</td>
<td>4.6%</td>
<td>4.6%</td>
<td>5.1%</td>
</tr>
</tbody>
</table>
OECD LEIs PLUNGE and It's Only
September&#8230; 
by <a href="/comment/Brsuca.html">Robert
Brsuca</a> December 5, 2008



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205e.jpg" align="left" border="0" height="265" width="353">
The LEIs from the OECD are plunging and the outlook is not for
more severe slowdowns across the region and for many key members. The
Euro Area and the US figures show the most rapid descent while Japan &#8217;s
index is going down for the second time in this &#8216;cycle&#8217;.
India , China and Russia are showing signs of increased pain.
The Russian index is down especially sharply. This worldwide slowdown
is clobbering all those countries that had been expected to be
resilient. Russia is being hurt due to its status as a commodity
currency, especially as an oil producer.
The drops in the US and European indices are as severe, or
more severe, than in the last US business cycle.

<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="odd">
<td colspan="5">Growth Progression-SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>-9.2%</td>
<td>-6.7%</td>
<td>-3.8%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">OECD 7</td>
<td>-10.1%</td>
<td>-7.3%</td>
<td>-4.5%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">OECD Europe</td>
<td>-9.1%</td>
<td>-7.4%</td>
<td>-4.5%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">OECD Japan</td>
<td>-7.2%</td>
<td>-4.3%</td>
<td>-0.8%</td>
<td>-1.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>-11.4%</td>
<td>-7.7%</td>
<td>-5.3%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Six
month readings at 6-Mo
Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>-6.7%</td>
<td>-0.9%</td>
<td>0.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">OECD 7</td>
<td>-7.3%</td>
<td>-1.6%</td>
<td>-0.5%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">OECD Europe</td>
<td>-7.4%</td>
<td>-1.5%</td>
<td>0.9%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">OECD Japan</td>
<td>-4.3%</td>
<td>2.8%</td>
<td>-3.5%</td>
<td>0.6%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>-7.7%</td>
<td>-2.8%</td>
<td>-0.4%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="5" class="firstcol">Slowdowns
indicated by BOLD RED.</td>
</tr>
</tbody>
</table>
German Orders Sink Fast &#8211; So Much
for a Mild Impact on Europe 
by <a href="/comment/Brsuca.html">Robert
Brsuca</a> December 5, 2008



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205f.jpg" align="left" border="0" height="265" width="353">
German new MFG orders dropped 6.1% in October from September.
In September they fell 8.3% from August. The party is over.
Foreign orders are falling faster overall but in the month
domestic orders almost caught up in pace with foreign weakness: compare
-6.2% to -6.1%. In the new
quarter domestic orders are falling at a 40.1% pace while foreign
orders are falling at a 55.3% pace. Both are horrific numbers. Whatever
skepticism Europeans have had about this slowdown or its ability to
reach out and sting them too, those reservations should now be gone.
Europe is being led lower by Germany and at a very rapid pace.
Sales in Germany are now all on negative trends for the
quarter. Orders have been pared even more dramatically than sales
reflecting the forward-looking creatures that they are. The economy is
spiraling lower at a rapid pace. The ECB does have more room to cut
rates than the Fed but we have seen that amounts to pushing on a
string. The US is gearing up for more fiscal stimulus. Meanwhile, the
last we heard from German Chancellor Merkel, she was against getting
into a stimulus race. She may be right about that, but that is no
excuse not to &#8216;run&#8217; at all.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Aug-08</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-6.1%</td>
<td>-8.3%</td>
<td>3.5%</td>
<td>-36.8%</td>
<td>-20.5%</td>
<td>-17.3%</td>
<td>11.2%</td>
<td>-48.2%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>-6.2%</td>
<td>-11.6%</td>
<td>4.3%</td>
<td>-44.3%</td>
<td>-25.4%</td>
<td>-22.7%</td>
<td>17.0%</td>
<td>-55.3%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-6.1%</td>
<td>-4.7%</td>
<td>2.8%</td>
<td>-28.2%</td>
<td>-15.2%</td>
<td>-11.3%</td>
<td>5.2%</td>
<td>-40.1%</td>
</tr>
<tr>
<td class="firstcol">Real Sector Sales</td>
<td>&nbsp;</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">MFG/Mining</td>
<td>-0.2%</td>
<td>-4.3%</td>
<td>4.5%</td>
<td>-0.7%</td>
<td>-0.3%</td>
<td>-3.4%</td>
<td>6.9%</td>
<td>-9.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.1%</td>
<td>-1.2%</td>
<td>2.0%</td>
<td>2.8%</td>
<td>1.4%</td>
<td>-3.5%</td>
<td>2.3%</td>
<td>-1.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-0.6%</td>
<td>-6.2%</td>
<td>6.8%</td>
<td>-1.7%</td>
<td>-0.9%</td>
<td>-4.9%</td>
<td>-0.2%</td>
<td>-15.2%</td>
</tr>
<tr>
<td class="firstcol">Consumer Non-Durable</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>1.2%</td>
<td>4.0%</td>
<td>2.0%</td>
<td>-3.3%</td>
<td>2.9%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.7%</td>
<td>-5.4%</td>
<td>5.7%</td>
<td>2.8%</td>
<td>1.4%</td>
<td>-3.3%</td>
<td>9.7%</td>
<td>-7.0%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-1.2%</td>
<td>-4.5%</td>
<td>4.2%</td>
<td>-6.4%</td>
<td>-3.3%</td>
<td>-3.2%</td>
<td>6.1%</td>
<td>-15.9%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>-0.1%</td>
<td>-4.2%</td>
<td>4.4%</td>
<td>-0.3%</td>
<td>-0.2%</td>
<td>-3.3%</td>
<td>6.4%</td>
<td>-8.8%</td>
</tr>
</tbody>
</table>
U.S. Consumer Credit Usage Down;
Mortgage Delinquencies Surge 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 5, 2008



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205h.jpg" align="right" border="0" height="265" width="353">The
usage of consumer credit continued to fall as it never has before.
During October, consumer credit outstanding fell $3.6 billion m/m.
Though that lagged a $6.5B decline back in August, it still was one of
the largest in the series' postwar history. On a percentage basis,
credit outstanding over the last three months fell 0.1%, the first
decline since 1992.&nbsp;&nbsp;
Before October, credit growth
averaged roughly 5% y/y after the rise of 5.5% during all of 2007. The
decline in y/y growth thru October to 3.1% was precipitated by less
spending on consumer durables. The annualized growth in nominal PCE for
durable goods during the last three months cycled down to -22.4% from
2.9% positive growth during all of last year.
Non-revolving credit,
which accounts for nearly two-thirds of total consumer credit, led the
October decline in borrowing with a $3.4B drop. The dollar drop was
nearly unprecedented. On a three month basis, annualized growth fell to
-1.9% after a 4.4% rise last year and 3.6% growth during 2006.
Revolving credit outstanding dropped a more modest $0.2B
during
October. Indeed, consumers were much more frugal using their credit
cards. Three month growth fell to 1.8%, down by more than two thirds
from the 7.4% growth last year.
These figures are the major input to
the Fed's quarterly Flow of Funds accounts for the household sector.
For 4Q08 the data will be released later this month.
&nbsp;These data are available in Haver's USECON
database.Delinquent Home Mortgages Up Sharply· For
the third quarter, 7% of all mortgages were past due. The increase in
lagged payments was up from 6.4% of loans during 2Q, 5.8% last year and
5.0% in 2006. Past due by 30 days were 3.4% of loans versus 3.2% last
year and 2.2% were past due by 90 days versus 1.5% during 2007.
Foreclosures were started on 1.1% of loans, down from 1.2% in
2Q. The
latest still was up, however, from 0.8% in 3Q of last year and from
0.5% in 3Q06. During all of last year, 2.8% of all mortgage loans went
into foreclosure, a record high and up from a norm of 0.2% to 0.4%.
 Of
conventional prime fixed rate mortgages 3.4% were past due, up from
2.6% last year. The news on ARMs, however, is far worse. The estimate
is that 8.2% were delinquent versus 5.5% last year and 3.4% in
2006.&nbsp;
These data are available in Haver's MBAMTG
database.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205i.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081205g.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Consumer
Credit (m/m Chg, SAAR)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-3.6B</td>
<td>&nbsp;$6.8B</td>
<td>3.1%</td>
<td>5.5%</td>
<td>4.5%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-0.2B</td>
<td>$2.5B</td>
<td>5.0%</td>
<td>7.4%</td>
<td>6.1%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-3.4B</td>
<td>$4.2B</td>
<td>1.9%</td>
<td>4.4%</td>
<td>3.6%</td>
<td>4.9%</td>
</tr>
</tbody>
</table>

</body></html>

U.S. Payrolls Slashed 533,000;6.7% Jobless Rate Highest Since 1993

<html>
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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081204e.jpg" width="353">
According to the Mortgage Bankers Association, the total number of mortgage applications more than doubled last week as borrowers rushed to take advantage of lower interest rates and when the Fed announced that it would buy GSE debt and MBS.
The index of applications to refinance a home mortgage tripled w/w due to the government&#39;s guarantee.
The effective interest rate on a conventional 15-year mortgage plummeted last week to 5.45%, down nearly a full percentage point from the October average. For a 30-year mortgage rates also fell sharply to 5.70%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10-year Treasury securities. For an adjustable rate 1-Year mortgage the rate dropped less to 6.74% after having averaged 6.89% during October.
Applications for a mortgage to purchase a home also surged by nearly one half due to lower rates.
During the last ten years there has been a (negative) 79% correlation between the level of applications for purchase and the effective interest rate on a 30-year mortgage. Moreover, during the last ten years there has been a 61% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
The figures for weekly mortgage applications are available in Haver&#39;s SURVEYW database.
Today&#39;s speech titled Housing, Mortgage Markets, and Foreclosures given by Fed Chairman Ben S. Bernanke can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20081204a.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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">11/28/08</th>
<th scope="col">11/21/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>857.7</td>
<td>404.4</td>
<td>8.3%</td>
<td>652.6</td>
<td>584.2</td>
<td>708.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>361.1</td>
<td>261.6</td>
<td>-22.2%</td>
<td>424.9</td>
<td>406.9</td>
<td>470.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>3,802.8</td>
<td>1,254.0</td>
<td>37.7%</td>
<td>1,997.9</td>
<td>1,634.0</td>
<td>2,092.3</td>
</tr>
</tbody>
</table>
</body>
</html>

According to the Mortgage Bankers Association, the total number of mortgage applications more than doubled last week as borrowers rushed to take advantage of lower interest rates and when the Fed announced that it would buy GSE debt [...]

U.S. Mortgage Applications Surged Last Week

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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250502A5.jpg

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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.

250502C5.jpg

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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.

250502X5.jpg

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

U.S. Job Growth Is Firm in April but March Gain Is Lessened

Winnie Tapasanun

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Total factory orders rose a slightly less-than-expected 4.3% m/m in March after rises of 0.5% in February and 1.8% in January, data from the U.S. Census Bureau showed. A 4.5% m/m March increase had been expected in the Action Economics Forecast Survey. The March reading was the third successive monthly rise and the largest since July 2024. The year-on-year rate accelerated to 6.0% in March, the highest since November 2022, from 2.3% in February. Notably, orders for nondefense aircraft & parts soared 139.0% in March following a 7.4% drop in February and a 92.9% surge in January. Factory orders excluding defense rose 4.8% (5.9% y/y), the largest of three straight m/m/ rises, after a 0.4% February increase. Factory orders excluding the transportation sector fell 0.2% (+1.1% y/y), the first m/m fall since August, after rising 0.3% in February, January and December.

Durable goods orders jumped 9.2% (11.9% y/y) in March, the third consecutive m/m gain and the biggest since July 2024, on top of a 0.8% increase in February (matching +9.2% m/m in the advance report on April 24). The March jump reflected m/m orders increases of 27.1% (the largest m/m surge since July 2024; 31.2% y/y) in transportation equipment, 1.1% (4.9% y/y) in primary metals, 0.5% (-0.4% y/y) in furniture & related products, 0.1% (2.5% y/y) in fabricated metal products, and 0.1% (0.9% y/y) in machinery. To the downside, durable goods orders for computers & electronic products (-1.3%; +2.7% y/y) and electrical equipment, appliances & components (-1.0%; +4.2% y/y) declined m/m in March.

Nondurable goods orders, which equal nondurable goods shipments, fell 0.3% (+0.4% y/y) in March, the first m/m fall since September, after a 0.1% uptick in February. The March fall reflected m/m drops of 2.4% (-9.3% y/y) in petroleum & coal products and 0.9% (-1.2% y/y) in apparel. To the upside, the following nondurable goods shipments rose m/m in March: leather & allied products (1.5%; 8.6% y/y), beverage & tobacco products (0.7%; 5.8% y/y), paper products (0.6%; 2.3% y/y), printing (0.3%; 3.8% y/y), textile mills (0.3%; 0.8% y/y), chemical products (0.2%; 5.4% y/y), plastics & rubber products (0.2%; 0.4% y/y), food products (0.1%; 1.8% y/y), and textile products (0.1%; 2.1% y/y).

Total shipments slipped 0.1% (+2.0% y/y) in March, the first m/m easing since October, after a 0.7% increase in February. Excluding transportation, shipments were virtually unchanged m/m (+1.1% y/y) in March following six straight m/m gains. Shipments of durable goods industries inched up 0.1% (3.8% y/y) in March, the smallest of four consecutive m/m increases, after a 1.3% advance in February. This reflected m/m durable goods shipments rises of 1.2% (5.6% y/y) in primary metals, 0.9% (0.1% y/y) in furniture & related products, 0.8% (-0.2% y/y) in nonmetallic mineral products, 0.4% (0.0% y/y) in machinery, 0.3% (1.8% y/y) in fabricated metal products, 0.2% (4.5% y/y) in computers & electronic products, 0.2% (-2.1% y/y) in wood products, and 0.1% (3.0% y/y) in electrical equipment, appliances & components. In contrast, durable goods shipments for transportation equipment (-0.5%; +7.3% y/y) and miscellaneous durable goods (-0.1%; +2.9% y/y) fell m/m in March following three successive m/m increases.

Unfilled orders rose 2.0% (2.3% y/y) in March, up for the eighth month in nine, after a 0.1% uptick in February. Excluding transportation, unfilled orders dipped 0.1% (+0.7% y/y) in March, the first m/m easing since May 2024, after holding steady in February. Backlogs of durable goods rose 2.0% (2.3% y/y) in March, reflecting m/m rises of 3.1% (3.1% y/y) in transportation equipment and 0.2% (2.4% y/y) in electrical equipment, appliances & components.

Inventories edged up 0.1% (0.9% y/y) in March, the fifth straight m/m increase, after rising at the same pace in the prior two months. Excluding transportation, inventories were up 0.1% (0.5% y/y) in March, the fifth consecutive m/m rise. Durable goods inventories ticked up 0.1% (1.0% y/y) in March after holding steady in February and January; nondurable goods inventories edged up 0.1% (0.8% y/y), the fifth successive m/m increase.

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

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- March manufacturers’ new orders +4.3% m/m; +6.0% y/y, highest since Nov. ’22.
- Durable goods orders (+9.2%) jump m/m, while nondurable goods orders (-0.3%) and shipments (-0.1%) decline m/m.
- Transportation equipt. orders +27.1% m/m, w/ a 139.0% m/m surge in nondefense aircraft & parts orders.
- Unfilled orders +2.0%, the eighth m/m rise in nine months.
- Inventories +0.1%, the fifth consecutive m/m increase.

U.S. Factory Orders Increase for the Third Straight Month in March

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The global manufacturing data showed broad weakening in April as conditions weakened across more than half of the contributing early reporters in the S&P survey of manufacturing. Of the 18 early reporting countries, more than half of them showed deceleration over six months and 12 months. Over three months, only 8 of 18 showed deterioration and that's about as good as it got in this report. In the current month, month-to-month changes showed more than half of the survey contributors showing weaker results than the month before. In the S&P framework, manufacturing improved month-to-month for the U.S.; however, looking at sequential averages for the U.S., U.K., European monetary union, Canada, and Japan, we see a steady weakening and results over 12 months, over six months versus 12 months, and for three months versus 6 months. The highly developed countries are not doing particularly well.

Asian economies are also showing slight deterioration but doing a little better than the developed countries in general.

Only five of the 18 reporting countries have queue percentile standings in their data back to January 2021 that are above their medians. Readings at or above the 50% mark are at or above the median standing. Canada is showing the weakest manufacturing result on record over this span, in terms of its queue percentile standing which is at 0 in the current month.

I showed the graphic for the Baltic dry goods index in this report rather than statistics on the manufacturing PMI data because the Baltic data, which reflect shipping volume for dry goods - that is excluding things like oil - is weak but it's only in the neighborhood where it's been for some time. There has been a great deal of talk about how tariffs may have impacted trade flows, expected trade flows, shipping, shipping rates, and the like. However, according to the Baltic dry goods index, there isn't much evidence that this is occurring right now and affecting the current data. That may still lie ahead but for now it's not baked in the cake.

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Globally Manufacturing Weakens

Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

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**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

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**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

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**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

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**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

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**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

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Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

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Charts of the Week: Tariff Truce, Tenuous Trust

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U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the I**NDUSTRY** database.

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- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

Economy in Brief: 2008

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