Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050308d.jpg" width="353">
The Economy Watchers Survey shows a less negative attitude toward current and future economic conditions in Japan.
The Economy Watchers Survey is a regional survey of some 2050 individuals actively engaged in various aspects of the economy. They are asked to quantify their opinions on the current and future state of the economy--assign a value of 1, if conditions are better; .75, if rather better; .50, if no change; .25, if rather worse and 0, if worse. A diffusion index is then calculated by multiplying the percentage of respondents to each answer by the point assigned to it. A value of 50 would indicate that those who think things are better or rather better are equal to those who think things are rather worse or worse. A value above 50 indicates an excess of optimists over pessimists, while a value below 50 indicates an excess of pessimists.
The economy watchers raised their appraisal of current conditions in the economy for a second month in February to 45.6 from 45.0 in January. Except for a rise in July, they had steadily reduced their appraisal from May to December, 2004. As for the future, the economy watchers became less negative last December and have increased their appraisal of future conditions in January and February. The February index rose from 48.3 January to 49.9 just barely below the 50.0 level where those with a positive outlook just match those with a negative outlook. Although both the appraisal of current conditions and that of the future are still below year ago levels, the recent turn around in the trends of the appraisals, shown in the attached chart, is encouraging.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/JAPAN.HTM">Japan: Economy Watchers Survey Diffusion Indexes</a></th>
<th scope="col">Feb 05</th>
<th scope="col">Jan 05</th>
<th scope="col">Feb 04</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp; 2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Current conditions</td>
<td>45.6</td>
<td>45.0</td>
<td>50.1</td>
<td>1.33</td>
<td>-8.98</td>
<td>50.0</td>
<td>43.5</td>
<td>40.4</td>
</tr>
<tr>
<td class="firstcol">Future conditions</td>
<td>49.9</td>
<td>48.3</td>
<td>53.6</td>
<td>3.31</td>
<td>-6.90</td>
<td>51.4</td>
<td>45.2</td>
<td>43.0</td>
</tr>
</tbody>
</table>
</body>
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The Economy Watchers Survey shows a less negative attitude toward current and future economic conditions in Japan. The Economy Watchers Survey is a regional survey of some 2050 individuals actively engaged in various aspects of the [...]

Economy Watchers in Japan become Less Negative

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050308b.jpg" width="353">
The Small Business Optimism Index for February reported by the National Federation of Independent Business (NFIB) was unchanged versus January. The percentage of firms expecting the economy to improve fell further to 20% versus 47% last November.
During the last ten years there has been a 64% correlation between the level of the NFIB index and the two quarter change in real GDP.
The percent of firms planning to raise employment rose slightly to 16%. During the last ten years there has been a 67% correlation between these hiring plans and the three month growth in nonfarm payrolls. The percentage of firms with one or more job openings rose to 24%, the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050308c.jpg" width="353">
The percentage of firms planning to raise capital spending fell slightly to 33% roughly the average during 2004 but still up versus 29% in 2003.
The percentage of firms raising average selling prices rose to 19%, the highest since October.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.

<table border="0" cellspacing="0" width="100%">
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<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">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>103.6</td>
<td>103.6</td>
<td>1.0%</td>
<td>104.6</td>
<td>101.3</td>
<td>101.2</td>
</tr>
</tbody>
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The Small Business Optimism Index for February reported by the National Federation of Independent Business (NFIB) was unchanged versus January. The percentage of firms expecting the economy to improve fell further to 20% versus 47% [...]

Small Business Optimism Unchanged

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050301a.jpg" width="353">
Chain store sales fell 0.4% last week. The slip followed a 1.5% surge the week prior according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales began March 0.7% ahead of the February average which rose 1.0% from January.
During the last ten years there has been a 59% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC was unchanged in the latest week (0.0% y/y), ending a six week stretch of erratic and mostly sideways movement. The indicator&#39;s February average rose 0.4% following a 0.6% January decline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">03/05/05</th>
<th scope="col">02/26/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>450.8</td>
<td>452.5</td>
<td>3.3%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
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Chain store sales fell 0.4% last week. The slip followed a 1.5% surge the week prior according to the International Council of Shopping Centers (ICSC)-UBS survey. Sales began March 0.7% ahead of the February average which rose 1.0% [...]

Chain Store Sales Off A Bit

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050308b.jpg" width="353">
The Small Business Optimism Index for February reported by the National Federation of Independent Business (NFIB) was unchanged versus January. The percentage of firms expecting the economy to improve fell further to 20% versus 47% last November.
During the last ten years there has been a 64% correlation between the level of the NFIB index and the two quarter change in real GDP.
The percent of firms planning to raise employment rose slightly to 16%. During the last ten years there has been a 67% correlation between these hiring plans and the three month growth in nonfarm payrolls. The percentage of firms with one or more job openings rose to 24%, the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050308c.jpg" width="353">
The percentage of firms planning to raise capital spending fell slightly to 33% roughly the average during 2004 but still up versus 29% in 2003.
The percentage of firms raising average selling prices rose to 19%, the highest since October.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat&#39;l Federation of Independent Business</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>103.6</td>
<td>103.6</td>
<td>1.0%</td>
<td>104.6</td>
<td>101.3</td>
<td>101.2</td>
</tr>
</tbody>
</table>
Chain Store Sales Off A Bit 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050301a.jpg" width="353">
Chain store sales fell 0.4% last week. The slip followed a 1.5% surge the week prior according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales began March 0.7% ahead of the February average which rose 1.0% from January.
During the last ten years there has been a 59% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC was unchanged in the latest week (0.0% y/y), ending a six week stretch of erratic and mostly sideways movement. The indicator&#39;s February average rose 0.4% following a 0.6% January decline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">03/05/05</th>
<th scope="col">02/26/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>450.8</td>
<td>452.5</td>
<td>3.3%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050307b.jpg" width="353">
Thailand&#39;s seasonally unadjusted Real Gross Domestic Product rose 5.05% in the fourth quarter of 2005 over the fourth quarter of 2004. The year over year rate of growth has decelerated during the year from the first quarter rate of 6,70%. For the year as a whole, GDP was up 6.05% in 2004, compared with 6.89% in 2003, 5.33% in 2002 and 2.17% in 2001.
A fall off in the year to year increase in private consumption and a much larger increase in imports than in exports largely offset increases in government consumption, inventories and gross fixed investment. The year to year changes in private consumption are compared with gross fixed investment in the first chart while the second chart compares the year to year changes in exports with those in imports.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050307c.jpg" width="353">
While real GDP growth, for the year as a whole, decelerated slightly in comparison with 2003, inflation as measured by the deflator more than doubled from 1.90% in 2003 to 4.55% in 2004.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Thailand: GDP</a> Year/Year % Changes&nbsp;</th>
<th scope="col">Q4 05</th>
<th scope="col">Q3&nbsp;05</th>
<th scope="col">Q2 05</th>
<th scope="col">Q1 05</th>
<th scope="col">2004</th>
<th scope="col">&nbsp;2003&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2002</th>
<th scope="col">&nbsp; 2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP (1988 Bahts)</td>
<td>5.05</td>
<td>6.09</td>
<td>6.44</td>
<td>6.70</td>
<td>6.05</td>
<td>6.89</td>
<td>5.33</td>
<td>2.17</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Private Consumption</td>
<td>5.14</td>
<td>5.63</td>
<td>5.68</td>
<td>6.17</td>
<td>5.65</td>
<td>6.44</td>
<td>5.28</td>
<td>4.12</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Government Consumption</td>
<td>5.18</td>
<td>0.27</td>
<td>4.94</td>
<td>7.03</td>
<td>4.13</td>
<td>2.00</td>
<td>1.78</td>
<td>2.49</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Gross Fixed Investment</td>
<td>16.16</td>
<td>12.01</td>
<td>12.86</td>
<td>16.65</td>
<td>14.35</td>
<td>11.88</td>
<td>6.54</td>
<td>1.13</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Inventories*</td>
<td>17.58</td>
<td>18.59</td>
<td>10.76</td>
<td>-27.31</td>
<td>19.63</td>
<td>9.04</td>
<td>6.15</td>
<td>10.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports</td>
<td>5.10</td>
<td>8.37</td>
<td>11.84</td>
<td>6.22</td>
<td>7.78</td>
<td>7.03</td>
<td>11.99</td>
<td>-4.21</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports</td>
<td>3.58</td>
<td>12.46</td>
<td>20.09</td>
<td>13.54</td>
<td>12.14</td>
<td>7.65</td>
<td>13.69</td>
<td>-5.50</td>
</tr>
<tr>
<td class="firstcol">Deflator</td>
<td>6.07</td>
<td>5.10</td>
<td>4.81</td>
<td>2.20</td>
<td>4.55</td>
<td>1.90</td>
<td>0.69</td>
<td>2.11</td>
</tr>
<tr class="odd">
<td class="firstcol">GDP (nominal)</td>
<td>11.42</td>
<td>11.51</td>
<td>11.55</td>
<td>9.05</td>
<td>10.89</td>
<td>6.09</td>
<td>6.09</td>
<td>4.28</td>
</tr>
</tbody>
</table>
</body>
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Thailand's seasonally unadjusted Real Gross Domestic Product rose 5.05% in the fourth quarter of 2005 over the fourth quarter of 2004. The year over year rate of growth has decelerated during the year from the first quarter rate of [...]

Thailand's Fourth Quarter GDP Shows Moderate Deceleration in Growth and Acceleration in Inflation During 2004

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050307a.jpg" width="353">
The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices surged in three out of the last four weeks. The gains lifted the latest reading 2.7% above the February average though the y/y gain was a low 1.2% due to pricing strength this time, last year.
During the last ten years there has been a 45% correlation between the JoC-ECRI commodity price index and the six month change in factory sector industrial production.
Petroleum prices were up 8.9% last week versus February as a 10.4% rise in crude oil prices to $52.70 bolstered a 3.0% (43.8% y/y) increase in the price of benzene.
Textile prices finally showed some lift and were 2.7% higher versus February led by a 9.7% jump in the price of cotton (-29.5% y/y). Lumber prices also rose a strong 4.4% (9.8% y/y) and prices for lengths of structural composite jumped 6.6% (-21.3% y/y).
Metals prices rose 1.8% in the latest week versus February. Higher aluminum prices led the strength with a 3.1% rise versus last month (15.0% y/y) and zinc prices also surged 3.8% (20.3% y/y).
The KR-CRB (Knight Ridder-Commodity Research Bureau) commodity price index also rose the first of March by 1.6% versus February and it rose further during last week. The index differs from the JoC-ECRI version in that roughly half of the weighting reflects agricultural prices. The latest gains reflect higher prices for foodstuffs (-11.6% y/y) which have offset lower livestock prices (-5.7% y/y).

<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.haver.com/COMMENT/www.haverselect.com/dlx/USECON/@E8/@E803/@E80304/@E80304.HTM">JoC-ECRI Industrial Price Index</a></th>
<th scope="col">03/04/05</th>
<th scope="col">12/31/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Items</td>
<td>116.00</td>
<td>111.60</td>
<td>1.2%</td>
<td>112.78</td>
<td>91.97</td>
<td>79.53</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Textiles</td>
<td>67.00</td>
<td>64.40</td>
<td>-3.0%</td>
<td>65.83</td>
<td>65.09</td>
<td>59.73</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Metals</td>
<td>125.60</td>
<td>124.60</td>
<td>6.2%</td>
<td>118.15</td>
<td>84.57</td>
<td>75.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Miscellaneous</td>
<td>104.40</td>
<td>103.90</td>
<td>-15.6%</td>
<td>114.03</td>
<td>102.89</td>
<td>85.81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Petroleum</td>
<td>264.40</td>
<td>216.50</td>
<td>53.5%</td>
<td>207.13</td>
<td>135.26</td>
<td>110.06</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">KR-CRB Spot Commodity Price Index</td>
<td>03/01/05</td>
<td>12/28/04</td>
<td>Y/Y</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">All Commodities</td>
<td>294.44</td>
<td>293.42</td>
<td>-2.4%</td>
<td>293.42</td>
<td>282.59</td>
<td>244.31</td>
</tr>
</tbody>
</table>
</body>
</html>

The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices surged in three out of the last four weeks. The gains lifted the latest reading 2.7% above the February average though the y/y [...]

Commodity Prices Broadly Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050207a.jpg" width="353">
The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices surged in three out of the last four weeks. The gains lifted the latest reading 2.7% above the February average though the y/y gain was a low 1.2% due to pricing strength this time, last year.
During the last ten years there has been a 45% correlation between the JoC-ECRI commodity price index and the six month change in factory sector industrial production.
Petroleum prices were up 8.9% last week versus February as a 10.4% rise in crude oil prices to $52.70 bolstered a 3.0% (43.8% y/y) increase in the price of benzene.
Textile prices finally showed some lift and were 2.7% higher versus February led by a 9.7% jump in the price of cotton (-29.5% y/y). Lumber prices also rose a strong 4.4% (9.8% y/y) and prices for lengths of structural composite jumped 6.6% (-21.3% y/y).
Metals prices rose 1.8% in the latest week versus February. Higher aluminum prices led the strength with a 3.1% rise versus last month (15.0% y/y) and zinc prices also surged 3.8% (20.3% y/y).
The KR-CRB (Knight Ridder-Commodity Research Bureau) commodity price index also rose the first of March by 1.6% versus February and it rose further during last week. The index differs from the JoC-ECRI version in that roughly half of the weighting reflects agricultural prices. The latest gains reflect higher prices for foodstuffs (-11.6% y/y) which have offset lower livestock prices (-5.7% y/y).

<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.haver.com/COMMENT/www.haverselect.com/dlx/USECON/@E8/@E803/@E80304/@E80304.HTM">JoC-ECRI Industrial Price Index</a></th>
<th scope="col">03/04/05</th>
<th scope="col">12/31/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Items</td>
<td>116.00</td>
<td>111.60</td>
<td>1.2%</td>
<td>112.78</td>
<td>91.97</td>
<td>79.53</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Textiles</td>
<td>67.00</td>
<td>64.40</td>
<td>-3.0%</td>
<td>65.83</td>
<td>65.09</td>
<td>59.73</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Metals</td>
<td>125.60</td>
<td>124.60</td>
<td>6.2%</td>
<td>118.15</td>
<td>84.57</td>
<td>75.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Miscellaneous</td>
<td>104.40</td>
<td>103.90</td>
<td>-15.6%</td>
<td>114.03</td>
<td>102.89</td>
<td>85.81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Petroleum</td>
<td>264.40</td>
<td>216.50</td>
<td>53.5%</td>
<td>207.13</td>
<td>135.26</td>
<td>110.06</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">KR-CRB Spot Commodity Price Index</td>
<td>03/01/05</td>
<td>12/28/04</td>
<td>Y/Y</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">All Commodities</td>
<td>294.44</td>
<td>293.42</td>
<td>-2.4%</td>
<td>293.42</td>
<td>282.59</td>
<td>244.31</td>
</tr>
</tbody>
</table>
 Thailand's Fourth Quarter GDP Shows Moderate Deceleration in Growth and Acceleration in Inflation During 2004 
by <a href="/comment/Curley.html">Louise Curley</a> March 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050307b.jpg" width="353">
Thailand&#39;s seasonally unadjusted Real Gross Domestic Product rose 5.05% in the fourth quarter of 2005 over the fourth quarter of 2004. The year over year rate of growth has decelerated during the year from the first quarter rate of 6,70%. For the year as a whole, GDP was up 6.05% in 2004, compared with 6.89% in 2003, 5.33% in 2002 and 2.17% in 2001.
A fall off in the year to year increase in private consumption and a much larger increase in imports than in exports largely offset increases in government consumption, inventories and gross fixed investment. The year to year changes in private consumption are compared with gross fixed investment in the first chart while the second chart compares the year to year changes in exports with those in imports.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050307c.jpg" width="353">
While real GDP growth, for the year as a whole, decelerated slightly in comparison with 2003, inflation as measured by the deflator more than doubled from 1.90% in 2003 to 4.55% in 2004.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Thailand: GDP</a> Year/Year % Changes&nbsp;</th>
<th scope="col">Q4 05</th>
<th scope="col">Q3&nbsp;05</th>
<th scope="col">Q2 05</th>
<th scope="col">Q1 05</th>
<th scope="col">2004</th>
<th scope="col">&nbsp;2003&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2002</th>
<th scope="col">&nbsp; 2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP (1988 Bahts)</td>
<td>5.05</td>
<td>6.09</td>
<td>6.44</td>
<td>6.70</td>
<td>6.05</td>
<td>6.89</td>
<td>5.33</td>
<td>2.17</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Private Consumption</td>
<td>5.14</td>
<td>5.63</td>
<td>5.68</td>
<td>6.17</td>
<td>5.65</td>
<td>6.44</td>
<td>5.28</td>
<td>4.12</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Government Consumption</td>
<td>5.18</td>
<td>0.27</td>
<td>4.94</td>
<td>7.03</td>
<td>4.13</td>
<td>2.00</td>
<td>1.78</td>
<td>2.49</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Gross Fixed Investment</td>
<td>16.16</td>
<td>12.01</td>
<td>12.86</td>
<td>16.65</td>
<td>14.35</td>
<td>11.88</td>
<td>6.54</td>
<td>1.13</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Inventories*</td>
<td>17.58</td>
<td>18.59</td>
<td>10.76</td>
<td>-27.31</td>
<td>19.63</td>
<td>9.04</td>
<td>6.15</td>
<td>10.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports</td>
<td>5.10</td>
<td>8.37</td>
<td>11.84</td>
<td>6.22</td>
<td>7.78</td>
<td>7.03</td>
<td>11.99</td>
<td>-4.21</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports</td>
<td>3.58</td>
<td>12.46</td>
<td>20.09</td>
<td>13.54</td>
<td>12.14</td>
<td>7.65</td>
<td>13.69</td>
<td>-5.50</td>
</tr>
<tr>
<td class="firstcol">Deflator</td>
<td>6.07</td>
<td>5.10</td>
<td>4.81</td>
<td>2.20</td>
<td>4.55</td>
<td>1.90</td>
<td>0.69</td>
<td>2.11</td>
</tr>
<tr class="odd">
<td class="firstcol">GDP (nominal)</td>
<td>11.42</td>
<td>11.51</td>
<td>11.55</td>
<td>9.05</td>
<td>10.89</td>
<td>6.09</td>
<td>6.09</td>
<td>4.28</td>
</tr>
</tbody>
</table>
</body>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050304e.jpg" width="353">
Prices are picking up in Argentina but remain quiescent in neighboring Chile, according to broad inflation gauges published today for February. Argentina&#39;s CPI rose 0.8% in the month, following increases of 1.4% in each December and January. The year-on-year rate reached 8.1%, the highest since June 2003. All of the broad categories of prices are contributing to the renewed uptrend: food, clothing, and, in particular, housing. Thus, higher food and/or energy costs are not the culprits, nor is the currency, which has stabilized after it was floated in 2002. Moreover, the central bank is doing its part, as it is constraining the growth of its monetary base.
Wholesale prices continue to rise, although they are not accelerating. But increases during much of 2004, particularly in imported products, can certainly be cited as pushing on consumer prices. No doubt energy prices are playing some part here, and other items as well.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050304f.jpg" width="353">
Almost the opposite situation exists in Chile, where there is only very modest inflation. In February, the total CPI was flat with January&#39;s and the ex-food-and-energy core subset fell 0.2%. Remarkably, both of these gauges are below the comparable measures for the US, as seen in the second graph.
However, inflation is somewhat firmer than its low early last year, when even the 12-month change was briefly below zero. As in Argentina, this upshift is evident in several price categories; however, in several, such as clothing, the move is from notable deflation back more toward price stability.
Beyond that, there is little basis for comparison of the two countries&#39; inflation conditions. Argentina faces re-accelerating inflation in spite of a stable currency. Chile is incurring quite limited inflation, even as its currency value has cycled up and down and up over the last two years. Monetary growth there is also rapid and accelerating. Its wholesale prices, noted in the table below, have risen markedly over the last year, but that may well be related to the recent surge in Chile&#39;s chief export item, copper, as well as to the energy sector.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Latin America</a></th>
Monthly Rates
12-Month Changes
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Feb 2005</td>
<td>Jan 2005</td>
<td>Dec 2004</td>
<td>Feb 2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Argentina CPI</td>
<td>0.8</td>
<td>1.4</td>
<td>1.4</td>
<td>8.1</td>
<td>6.1</td>
<td>3.7</td>
<td>41.0</td>
</tr>
<tr class="odd">
<td class="firstcol">WPI</td>
<td>1.0</td>
<td>-1.0</td>
<td>0.9</td>
<td>6.8</td>
<td>7.9</td>
<td>2.0</td>
<td>118.0</td>
</tr>
<tr>
<td class="firstcol">Memo: Pesos/US$</td>
<td>2.9179</td>
<td>2.9448</td>
<td>2.9708</td>
<td>2.9191</td>
<td>2.9403</td>
<td>2.9472</td>
<td>3.1389</td>
</tr>
<tr class="odd">
<td class="firstcol">Chile: CPI</td>
<td>0.0</td>
<td>-0.1</td>
<td>0.1</td>
<td>2.2</td>
<td>2.4</td>
<td>1.1</td>
<td>2.8</td>
</tr>
<tr>
<td class="firstcol">ex Food &amp; Energy &quot;Core&quot;</td>
<td>-0.2</td>
<td>0.0</td>
<td>0.4</td>
<td>1.7</td>
<td>1.8</td>
<td>1.6</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">WPI</td>
<td>-0.2</td>
<td>0.4</td>
<td>-1.4</td>
<td>8.7</td>
<td>7.8</td>
<td>-1.0</td>
<td>10.4</td>
</tr>
</tbody>
</table>
</body>
</html>

Prices are picking up in Argentina but remain quiescent in neighboring Chile, according to broad inflation gauges published today for February. Argentina's CPI rose 0.8% in the month, following increases of 1.4% in each December and [...]

Inflation Accelerates in Argentina, Remains Low in Chile

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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Winnie Tapasanun

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General business activity in Texas declined further in December, according to the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas. The overall measure, the general business activity index, fell to -10.9 in December, the lowest level since June, from -10.4 in November and -5.0 in October. The index, while above a low of -35.8 in April, was well below a high of +14.1 in January and +4.5 in December 2024. The index had been in negative territory from February through December 2025, except for a one-month positive reading of +0.9 in July. In December, 12.7% of respondents reported improved business activity, down from 18.9% in November, while 23.6% of respondents reported worsened business conditions, down from November's 29.3%. The company outlook index dropped to -11.9 in December, the fourth consecutive negative reading and the lowest since April, from -6.3 in November. Just 10.8% of respondents expected improved company outlook this month while 22.7% expected deterioration. Data were collected between December 15 and 23 from 74 Texas manufacturers.

The production index, a key measure of state manufacturing conditions, plunged to -3.2 in December after a 15.3-point jump to 20.5 in November, indicating production contracted for the first time since February. A lessened 17.2% of respondents reported higher production this month while an increased 20.4% reported a decline. The capacity utilization index plummeted to -4.5 in December, the lowest reading since February, following a four-year-high 19.4 in November; it was up from a low of -15.0 in January 2024 but well below a record-high 46.3 in March 2021.

The growth rate of orders index declined steeply to -16.0 in December from -1.3 in November, marking the weakest of four successive negative readings and the lowest level since June. The index was above a low of -22.0 in April and a low of -24.3 in November 2023 but significantly below a peak of 29.6 in April 2021. The new orders index fell to -6.4 this month after rising to 4.8 in November, indicating a decline in demand for the third time in four months and the lowest level since June. The index was above a low of -20.0 in April and a low of -21.8 in November 2022 but well below a high of 22.6 in February 2022 and a record-high 38.6 in April 2021. The shipments index plunged to -10.6 this month after jumping to 15.1 in November, marking its first negative reading since June and the lowest since July 2024. The unfilled orders index dropped to -13.5 in December from -6.6 in November, registering the 16th straight negative reading and the lowest since November 2024. The index was below a high of 1.4 in August 2024 but above a low of -26.3 in July 2024. Meanwhile, the delivery time index increased to 3.3 this month, the highest reading since March, from -8.4 in November.

Labor market indexes showed flat employment conditions and shorter workweeks in December. The employment index slipped to -1.1 this month from 1.2 in November, marking its first negative reading since September, with the near-zero level indicating little change in employment. The latest reading, while up from a low of -9.7 in January 2024, was far below a high of 17.9 in January 2023 and a record-high 31.8 in April 2021. A lessened 12.3% of respondents reported net hiring in December while 13.4% reported net layoffs. The hours worked index fell sharply to -7.5 this month, the lowest reading since June, after rising to 9.9 in November. Meanwhile, the wages & benefits index climbed to 21.8 in December, the highest level since October 2024 and near its series average of 21.0, up from 15.4 in November; nevertheless, having been trending downward since a peak of 55.0 in March 2022.

Inflationary pressures were little changed this month. The index for prices received for finished goods declined to 8.2 in December following a 3.1-point rise to 10.8 in November; it was up from a low of -7.0 in November 2023 but meaningfully below a high of 47.4 in March 2022 and a peak of 51.4 in October 2021. In December, 13.1% of respondents reported raising prices while only 4.9% reported lowering prices. The index of prices paid for raw materials rose to 36.0 this month, the highest reading since September, after a 1.9-point increase to 35.3 in November. The index was well above a low of 1.0 in June 2023 but significantly below 73.2 in March 2022 and a record-high 83.8 in November 2021.

Expectations on future manufacturing activity remained positive this month. The future general business activity index dipped to 10.8 in December after rising to 11.0 in November, registering the eighth straight positive reading. The future production index rose to a four-month-high 34.2 from November’s 33.7. Other indexes of future manufacturing activity also rose in December (vs. November), signaling increased activity six months ahead: company outlook (16.5 vs. 16.2), shipments (33.9 vs. 27.0), wages & benefits (42.5 vs. 39.1), and capital expenditures (17.7 vs. 12.9). Meanwhile, future indexes for capacity utilization (28.9 vs. 34.0), new orders (30.5 vs. 39.2), growth rate of new orders (24.9 vs. 27.8), and employment (20.9 vs. 22.3) declined in December (vs. November), but they remained in positive territory.

Each index is calculated by subtracting the percentage reporting a decrease in activity from the percentage reporting an increase. When all firms report rising activity, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase equals the number reporting a decrease. Data for the Texas Manufacturing Outlook, conducted by the Federal Reserve Bank of Dallas, can be found in Haver's **SURVEYS** database.

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- General Business Activity down in Dec. to -10.9, lowest level since June.
- Company Outlook (-11.9) negative for the fourth straight mth. and at an eight-month low; Production (-3.2) negative for the first time since Feb.
- New Orders Growth (-16.0) and New Orders (-6.4) at a six-month low.
- Employment (-1.1) negative for the first time since Sept.
- Prices Received down 2.6 pts. to 8.2; Prices Paid up 0.7 pts. to a three-month-high 36.0.
- Future General Business Activity down to 10.8, still positive for the eighth consecutive mth.

Texas General Business Activity Still Negative in December, But Expectations Remain Positive

251229F.jpg

251229G.jpg

The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, rose 3.3% m/m to 79.2 in November after increases of 2.4% in October (+1.9% initially) and 0.1% in September (unrevised), according to the National Association of Realtors (NAR). The November reading registered the fourth consecutive m/m gain after declining in July and June. The year-on-year growth rate accelerated to 2.6% in November, the highest since August, from 0.1% in October, though still below +6.0% y/y in November 2024. Despite recent gains, the PHSI had fallen 36.7% since its October 2021 high of 125.1.

The m/m rise in November pending home sales coincided with a decline in the average 30-year mortgage rate to 6.24% in November, the lowest since September 2024, down from 6.25% in October and 6.35% in September. These rates, while below a peak of 7.62% in October 2023, had remained higher than a low of 5.22% in August 2022 and more than double a record-low 2.68% in December 2020.

Pending home sales rose m/m in November across all four major regions. Sales in the West recovered 9.2% (2.4% y/y) in November, the first m/m increase since August, following a 1.4% decline in October. Sales in the South rose 2.4% (3.3% y/y), the fourth straight m/m rise, on top of a 2.7% October advance. Sales in the Northeast grew 1.8% (1.8% y/y), the third successive m/m increase, after a 2.3% October gain. Sales in the Midwest rose 1.3% (2.2% y/y), up for the third time in four months, after a 5.3% November rebound.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- PHSI +3.3% (+2.6% y/y) in Nov., driven by lower mortgage rates.
- Home sales m/m up in all four major regions, w/ the highest rate in the West (+9.2%).
- Home sales y/y up across all regions, w/ the highest rate in the South (+3.3%).

U.S. Pending Home Sales Rise for the Fourth Straight Month in November

Robert Brusca

251229E.jpg

Swedish exports advanced month-to-month for the second month in a row while imports continued on a losing streak declining by 0.9% in November.

Exports have gradually been firming with exports falling by 6.1% over 12 months, rising at an annual rate of 4.8% over six months, and then rising at a 3.9% annual rate over three months. Exports are not on a steady acceleration path, but they have transitioned from a year-over-year growth rate that's negative to moderate positive short-term rates of growth.

Swedish imports, on the other hand, are weakening relatively sharply. Imports were down 4.4% over 12 months, down at a 1.2% annual rate over six months, and falling at a 17% annual rate over three months.

The global trade picture remains somewhat mixed. The Baltic Dry goods index, which is an indicator of global trade volume, has backed off of its highs but continues to post relatively steady volume indications. However, the S&P global manufacturing survey has been showing weakness; when manufacturing is weak, typically international trade is weak as well. Swedish trade may be picking up some of that weakness as well.

251229.jpg

On balance, Sweden's trade surplus has continued to recover and hold to a relatively high level over recent months as exports have maintained momentum better than imports.

Swedish domestic barometers of economic growth have remained relatively upbeat including orders and industrial production as well as employment growth and GDP. There is no reason there to expect weak imports based on the recent data we have seen. But then sometimes trade data show economic weakness first.   

At this time, the yearend weakness in Sweden’s imports is without a specific cause. Year-end flows can be surprising. Domestic demand, however, does not appear to be weak. But there is a good deal of weakness in Europe and the Ukraine-Russia war is still a nagging factor – a cloud that hangs over all of Europe with no certain end date or result in sight.

Sweden

Sweden’s Trade; Exports Surge as Imports Recede

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance dropped 10,000 to 214,000 in the week of December 20, from 224,000 during the week of December 13. The four-week moving average of initial claims was 216,750, a decrease of 750 from the prior week’s unrevised 217,500.

Federal government employees initially filed 805 (NSA) jobless insurance claims in the week ended December 13, after filing 1091 claims in the week ended December 6.

Continuing claims for unemployment insurance rose 38,000 to 1.923 million in the week ending December 13, after rising 55,000 to 1.885 million, revised from 1.897 million in the week ending December 6. The four-week moving average was 1.894 million in the week ending December 13, down 5,250 from 1.899 million, revised from 1,902,000 in the week ending December 6. The insured unemployment rate stood at 1.3% in the week of December 13, up from 1.2% in the week of December 6.

Federal government employees’ continuing benefits claims were 12,887 (NSA) in the week ending December 6, from 14,077 (NSA) in the week of November 29. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 6, the highest unemployment rates were in New Jersey and Washington (both 2.40%), Massachusetts and Minnesota (both 2.10%), California and Rhode Island (both 2.00%). The lowest rates were in Florida (0.30%), and Alabama, Louisiana, North Carolina (all 0.40%). Rates in other notable states include New York (1.80%), Illinois and Pennsylvania (both 1.70%), and Texas (1.10%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.


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- Initial claims declined from the prior week.
- Continuing claims rose from the prior week.
- The insured unemployment rate edged up.


U.S. Initial Claims for Unemployment Insurance Dropped in Latest Week

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Mortgage applications dropped 5.0% w/w (+49.8% y/y) in the week of December 19, after a drop of 3.8% w/w (+40.9% y/y) in the week of December 12, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 3.7% w/w (+15.9% y/y) in the latest week, the third consecutive weekly decline, following a drop of 2.8% w/w (+12.3% y/y) in the December 12 week. Applications for loan refinancing dropped 5.6% w/w (+110.1% y/y) in the December 19 week after a decline of 3.6% w/w (+86.0% y/y) in the week of December 12. 

The effective interest rate on a 30-year fixed-rate loan fell 8bps to 6.48% in the week ending December 19 from 6.56% in the week ending December 12. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.86% in the latest week from 5.91% in the prior week. The 30-year Jumbo rate rose 8bps to 6.63% in the December 19 week from 6.55% in the December 12 week. The rate on a 5-year ARM jumped 20bps to 5.96% in the latest week from 5.76% in the December 12 week.

The share of applications for refinancing an existing loan edged up to 59.1% of total applications in the December19 week from 59.0% in the week ending December 12. The adjustable-rate mortgage (ARM) share of activity rose to 8.1% in the latest week from 7.2% in the December 12 week.

The average size of a mortgage loan edged down 0.1% w/w (+7.8% y/y) to $399,700 in the week ending December 19, following a rise of 1.5% w/w (6.4% y/y) to $400,000 in the December 12 week. The average size of a purchase loan rose 1.0% w/w (1.1% y/y) to $428,600 in the latest week, after rising 0.6% w/w (-0.3% y/y) to $424,200 in the prior week. The average size of a loan to refinance a mortgage declined 0.9% w/w (+24.9% y/y) to $379,700 in the December 19 week, following a rise of 2.3% w/w (19.8% y/y) to $383,300 in the week ending December 12.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.


- Both purchase applications and refinancing loan applications fell in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.48%.
- Average loan size edged down.


Economy in Brief: 2005

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