Tom Moeller

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<p>The value of construction put-in-place increased 0.8% during May following a
little-revised 2.1% April gain. Three-month growth of 18.1% (AR) was the
strongest since mid-2012. A 0.3% May rise had been expected in the Action
Economics Forecast Survey. Figures back to 2013 were revised.</p>

<p>Building activity in the private sector improved 0.9% (10.3% y/y) and
increased at an 18.7% rate during the last three months. Nonresidential building
activity jumped 1.5% (12.7% y/y) after firmer gains in the prior two months. Residential
construction activity improved 0.3% (7.8% y/y). Single-family building remained
unchanged (11.4% y/y) and multi-family construction gained 0.2% (19.5% y/y). Spending
on improvements improved 0.9% (-1.9% y/y) and reversed the prior month's decline.</p>

<p>Public sector building gained 0.7% (2.8% y/y) and rose at a 16.8% rate during
the last three months. Office construction strengthened 13.7% (14.2% y/y) while
highway &amp; street construction increased 2.1% but was unchanged y/y. Educational
building slipped 0.7% (+3.2% y/y). Power construction eased 0.2% (-33.5% y/y)
while health care building was little-changed (-5.0% y/y).</p>

<p>The construction spending figures are in Haver's <b>USECON</b> database and
the expectations figure is contained in the <b>AS1REPNA</b> database.</p>

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
  <thead>
    <tr>
      <th class="firstcol" scope="col" >Construction Put in Place (SA,
        s%)</th>
      <th scope="col" >May</th>
      <th scope="col" >Apr</th>
      <th scope="col" >Mar</th>
      <th scope="col" >May Y/Y</th>
      <th scope="col" >2014</th>
      <th scope="col" >2013</th>
      <th scope="col" >2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >Total</td>
      <td  >0.8</td>
      <td  >2.1</td>
      <td  >1.3</td>
      <td  >7.9</td>
      <td  >4.8</td>
      <td  >6.6</td>
      <td  >9.2</td>
    </tr>
  </tbody>
  <tbody>
    <tr class="odd">
      <td class="firstcol" >&nbsp; Private</td>
      <td  >0.9</td>
      <td  >2.2</td>
      <td  >1.2</td>
      <td  >10.3</td>
      <td  >6.9</td>
      <td  >11.1</td>
      <td  >16.0</td>
    </tr>
  </tbody>
  <tbody>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;&nbsp; Residential</td>
      <td  >0.3</td>
      <td  >0.3</td>
      <td  >-0.8</td>
      <td  >7.8</td>
      <td  >1.5</td>
      <td  >20.2</td>
      <td  >14.4</td>
    </tr>
  </tbody>
  <tbody>
    <tr class="odd">
      <td class="firstcol" >&nbsp;&nbsp;&nbsp; Nonresidential</td>
      <td  >1.5</td>
      <td  >4.0</td>
      <td  >3.3</td>
      <td  >12.7</td>
      <td  >12.7</td>
      <td  >2.7</td>
      <td  >17.5</td>
    </tr>
  </tbody>
  <tbody>
    <tr>
      <td class="firstcol" >&nbsp; Public</td>
      <td  >0.7</td>
      <td  >1.7</td>
      <td  >1.5</td>
      <td  >2.8</td>
      <td  >1.8</td>
      <td  >-3.1</td>
      <td  >-2.8</td>
    </tr>
              </tbody>
            </table>
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The value of construction put-in-place increased 0.8% during May following a little-revised 2.1% April gain. Three-month growth of 18.1% (AR) was the strongest since mid-2012. A 0.3% May rise had been expected in the Action Economics [...]

U.S. Construction Spending Growth Eases

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<p>The outplacement firm of Challenger, Gray &amp; Christmas reported that job
cut announcements during June increased to 44,842 (42.7% y/y) and added to May's
unrevised increase of 41,034. Layoffs increased in aerospace/defense, chemicals,
commodities, construction, consumer products, entertainment/leisure, insurance
and retail. Layoffs declined in apparel, automotive, computer, education,
electronics, energy, financial, food, government, health care, industrial goods,
legal, media, pharmaceutical, services, telecommunications and transportation.</p>

<p>During the last ten years there has been a 68% correlation between the level
of job cut announcements and the m/m change in payroll employment.</p>

<p>Challenger also samples firms' hiring plans. Hiring slipped last month to 11,176
(-28.0% y/y) from 12,598 in May. Hiring fell in the automotive, chemical,
computer, consumer products, food, retail, services and telecommunications
industries. Job creation occurred in the aerospace/defense, apparel,
construction, electronics, energy, financial, government/nonprofit, health care,
industrial goods and transportation industries.</p>

<p>The Challenger figures are available in Haver's <b>SURVEYS</b> database.</p>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

  <thead>
    <tr>
      <th class="firstcol" scope="col" >
        <p align="left">Challenger, Gray &amp; Christmas</p>
      </th>
      <th scope="col" ><b>Jun</b></th>
      <th scope="col" ><b>May</b></th>
      <th scope="col" ><b>Apr</b></th>
      <th scope="col" ><b>Y/Y %</b></th>
      <th scope="col" ><b>2014</b></th>
      <th scope="col" ><b>2013</b></th>
      <th scope="col" ><b>2012</b></th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >
        <p align="left">Announced Job Cuts</p>
      </td>
      <td  >44,842</td>
      <td  >41,034</td>
      <td  >61,582</td>
      <td  >42.7</td>
      <td  >483,171</td>
      <td  >509,051</td>
      <td  >523,362</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >
        <p align="left">Announced Hiring Plans</p>
      </td>
      <td  >11,176</td>
      <td  >12,598</td>
      <td  >13,898</td>
      <td  >-28,000</td>
      <td  >821,506</td>
      <td  >764,206</td>
      <td  >630,447</td>
          </tr>
              </tbody>
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The outplacement firm of Challenger, Gray & Christmas reported that job cut announcements during June increased to 44,842 (42.7% y/y) and added to May's unrevised increase of 41,034. Layoffs increased in aerospace/defense, chemicals, [...]

Challenger Job Cut Announcements Improve

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<p>Factory sector activity is strengthening. The Composite Index from the
Institute for Supply Management (ISM) rose to 53.5 following an unrevised
increase to 52.8 in May. It was the highest level in five months. Nevertheless,
the latest figure remained below the August 2014 high of 58.1. Improvement to 53.1
had been expected in the Action Economics Forecast Survey. During the last ten
years, there has been a 73% correlation between the level of the index and the
q/q change in real GDP.</p>

<p>Leading last month's rise was strength in the employment index as it rose to
the highest level since December. During the last ten years, there has been an
89% correlation between the index level and the m/m change in factory sector
payrolls. The inventories reading also was strong as it increased to the highest
level in twelve months. The new orders index improved slightly but the
production series backed off. The supplier deliveries index fell and indicted
the quickest product delivery speeds since April 2012.</p>

<p>The prices reading held steady at the highest level since October. Fourteen
percent of respondents indicated higher prices while 15 percent reported them
lower. During the last ten years, there has been an 85% correlation between the
index and the m/m change in the core intermediate PPI.</p>

<p>The export order index fell to the lowest level in three months while imports
also backpedaled. The orders backlog series declined to the lowest level since
January.</p>

<p>The figures from the Institute For Supply Management (ISM) are diffusion
indexes. A reading above 50 represents growth in factory sector activity. They
can be found in Haver's <b>USECON</b> database. The expectations number is in
the <b>AS1REPNA</b> database.</p>

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
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      <th class="firstcol" scope="col" >ISM Mfg (SA)</th>
      <th scope="col"  >Jun</th>
      <th scope="col"  >May</th>
      <th scope="col"  >Apr</th>
      <th scope="col"  >Jun '14</th>
      <th scope="col"  >2014</th>
      <th scope="col"  >2013</th>
      <th scope="col"  >2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >Composite Index</td>
      <td  >53.5</td>
      <td  >52.8</td>
      <td  >51.5</td>
      <td  >55.7</td>
      <td  >55.7</td>
      <td  >53.8</td>
      <td  >51.7</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;New Orders</td>
      <td  >56.0</td>
      <td  >55.8</td>
      <td  >53.5</td>
      <td  >59.1</td>
      <td  >59.0</td>
      <td  >56.9</td>
      <td  >52.9</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;Production</td>
      <td  >54.0</td>
      <td  >54.5</td>
      <td  >56.0</td>
      <td  >59.9</td>
      <td  >59.2</td>
      <td  >57.5</td>
      <td  >53.7</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;Employment</td>
      <td  >55.5</td>
      <td  >51.7</td>
      <td  >48.3</td>
      <td  >53.9</td>
      <td  >54.5</td>
      <td  >53.2</td>
      <td  >53.8</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;Supplier Deliveries</td>
      <td  >48.8</td>
      <td  >50.7</td>
      <td  >50.1</td>
      <td  >52.7</td>
      <td  >55.0</td>
      <td  >51.9</td>
      <td  >50.0</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;Inventories</td>
      <td  >53.0</td>
      <td  >51.5</td>
      <td  >49.5</td>
      <td  >53.0</td>
      <td  >50.8</td>
      <td  >49.4</td>
      <td  >48.2</td>
    </tr>
    <tr>
      <td class="firstcol" >Prices Paid Index (NSA)</td>
      <td  >49.5</td>
      <td  >49.5</td>
      <td  >40.5</td>
      <td  >58.0</td>
      <td  >55.6</td>
      <td  >53.8</td>
      <td  >53.2</td>
      </tr>
              </tbody>
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Factory sector activity is strengthening. The Composite Index from the Institute for Supply Management (ISM) rose to 53.5 following an unrevised increase to 52.8 in May. It was the highest level in five months. Nevertheless, the [...]

U.S. ISM Manufacturing Index Improves to Best Level Since January

Robert Brusca

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Globally, the manufacturing PMI picture is mixed. Of the 10 countries or areas (excluding Germany and France as they are part of the EMU), six are below 50 in June. Except for China, these weak reporters are also relatively small countries. But the picture of an irregular manufacturing sector is real. Although the large countries tend to be expanding, their PMI values are uniformly low. The highest manufacturing PMI value in the table is the 52.5 reading in the EMU, followed by 52.2 for Vietnam. Manufacturing is strong nowhere in this table.
</p><p>
That story is also told by the percentile standings. These are somewhat less meaningful, however, since many of the countries in the table have very short-time series of data on their manufacturing PMI measures. For comparability, we chronicle all these values from 2008 or even later (Indonesia and Vietnam from 2013). A longer time series gives the percentile standing more meaning. Even for this truncated set of measures, we are measuring performance since 2008, which is a period of extreme economic duress, and still we get, by and large, relatively weak contemporaneous readings!
</p><p>
We see weak values being reported currently with few exceptions. Vietnam, with a very short history, appears strong (92nd percentile), but this on a diffusion value of only 52.2, for which such a high standing should be suspect. It is the product or a poor history for comparisons (a history of weakness) and what is a really a moderate current reading. Indonesia is moderate at a 72nd percentile. France, Germany and the EMU are moderate or weakly moderate. For the rest, we see the U.K., Japan and China in the lower one third of their respective queues since 2008. Russia and Taiwan are at the border on their lower 10% standing. And South Korea and Turkey are even weaker. 
</p><p>
These are poor standings in absolute terms and extremely poor standings for the times, in what should be the recovery period from a major recession. On top of that, there is very little upward momentum.
</p><p>
Greece failed to make payments to the IMF, but the credit rating agencies do not call it a default. Greece has tried to propose another deal. While Germany has said the door is open, it has registered skepticism over reports of this new proposal from Greece. Angela Merkel has already said she would not negotiate with Greece as long as there is a referendum pending. And there is a referendum pending. 
</p><p>
There is no surprise that markets are confused about all of this. Markets are trading higher on news that Greece has a new proposal. Nevertheless, we can be sure that Europe is not interested in negotiating with Alex Tsipras any more. Some think Europe would torpedo any new negotiations just to make Greece vote in its referendum on a proposal that, if it is rejected, would send Greece out of the euro area and, if it is accepted, would likely result in the ejection of the Tsipras government from power.
</p><p>
While that view may be a bit cynical, it is true that Merkel has said she would not negotiate with a referendum pending. To that extent, the Tsipras offering is totally rejecting conditions that a key European country has put on further negotiations. 
</p><p>
To say that market conditions are a mess is to downplay the state of uncertainty. Markets are coming up from sold off levels on what they hope will be good news. At the end of the day, no one really thinks Greece wants to leave the EMU, but these negotiations have been full of misappraisals or we would not be where we are now. Be careful using logical in an intrinsically illogical situation.
</p>

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Globally, the manufacturing PMI picture is mixed. Of the 10 countries or areas (excluding Germany and France as they are part of the EMU), six are below 50 in June. Except for China, these weak reporters are also relatively small [...]

Markit Manufacturing Indices Are Mixed in June; Conditions Turn Up in EMU

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<p>The <b>ADP/Moody's National Employment Report</b> indicated that nonfarm
private sector payrolls improved 237,000 during June following a 203,000 May
increase, revised from 201,000. The latest rise was the firmest since December
and beat consensus expectations for a 218,000 increase in the Action Economics
Forecast Survey. During the last ten years there has been a 97% correlation
between the change in the ADP figure and the change in nonfarm private sector
payrolls.</p>

<p>The ADP survey is based on ADP's business payroll transaction system covering
411,000 companies and nearly 24 million employees. The data are processed by
Moody's Analytics Inc., then calibrated and aligned with the BLS establishment
survey data.</p>

<p>Small-sized payrolls improved another 120,000 (2.7% y/y), repeating the
firmest increase since December. Medium-sized payrolls rose an improved 86,000
(2.3% y/y). Large payrolls strengthened 12,000 (1.7% y/y), still down from the
80,000 increase nine months ago.</p>

<p>Employment in the goods-producing sector moved up 12,000 (1.9% y/y). Hiring
in construction remained firm and posted a 19,000 increase (5.0% y/y). Manufacturing
sector jobs rose 7,000 (1.0% y/y) following three straight months of decline.
Jobs in the service sector increased 225,000 (2.4% y/y), the strongest gain
since November. Jobs in professional &amp; business services improved 61,000
(2.8% y/y) and trade, transportation &amp; utilities employment increased 50,000
(2.0% y/y). Employment in the financial sector rose 18,000 (1.8% y/y), the
strongest increase since March 2006.</p>

<p>The ADP National Employment Report data are maintained in Haver's <b>USECON</b>
database; historical figures date back to April 2001. The figures in this report
cover jobs only in the private sector. The expectation figure is available in
Haver's <b>AS1REPNA</b> database.</p>

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      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

  <thead>
    <tr>
      <th class="firstcol" scope="col" >ADP/Moody's National
        Employment Report</th>
      <th scope="col" >Jun</th>
      <th scope="col" >May</th>
      <th scope="col" >Apr</th>
      <th scope="col" >Jun Y/Y</th>
      <th scope="col" >2014</th>
      <th scope="col" >2013</th>
      <th scope="col" >2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >Nonfarm Private Payroll Employment (m/m
        chg, 000s)</td>
      <td  >237</td>
      <td  >203</td>
      <td  >179</td>
      <td  >2.3%</td>
      <td  >2.3%</td>
      <td  >1.9%</td>
      <td  >2.3%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;Small Payroll (1-49)</td>
      <td  >120</td>
      <td  >120</td>
      <td  >102</td>
      <td  >2.7</td>
      <td  >2.1</td>
      <td  >1.9</td>
      <td  >2.5</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;Medium Payroll (50-499)</td>
      <td  >86</td>
      <td  >63</td>
      <td  >70</td>
      <td  >2.3</td>
      <td  >2.8</td>
      <td  >2.2</td>
      <td  >2.1</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;Large Payroll (&gt;500)</td>
      <td  >32</td>
      <td  >19</td>
      <td  >7</td>
      <td  >1.7</td>
      <td  >1.8</td>
      <td  >1.6</td>
      <td  >2.1</td>
    </tr>
    <tr>
      <td class="firstcol" >Goods-Producing</td>
      <td  >12</td>
      <td  >11</td>
      <td  >2</td>
      <td  >1.9</td>
      <td  >2.3</td>
      <td  >1.7</td>
      <td  >2.2</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp; Construction</td>
      <td  >19</td>
      <td  >28</td>
      <td  >25</td>
      <td  >5.0</td>
      <td  >4.6</td>
      <td  >3.5</td>
      <td  >2.5</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp; Manufacturing</td>
      <td  >7</td>
      <td  >-2</td>
      <td  >-6</td>
      <td  >1.0</td>
      <td  >1.2</td>
      <td  >0.9</td>
      <td  >1.6</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >Service-Producing</td>
      <td  >225</td>
      <td  >192</td>
      <td  >177</td>
      <td  >2.4</td>
      <td  >2.3</td>
      <td  >2.0</td>
      <td  >2.3</td>
      </tr>
              </tbody>
            </table>
            </span>
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The ADP/Moody's National Employment Report indicated that nonfarm private sector payrolls improved 237,000 during June following a 203,000 May increase, revised from 201,000. The latest rise was the firmest since December and beat [...]

U.S. ADP: Payroll Rise Is Strongest This Year

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<br>
<span id="byline0"><a href="http://haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp; June 30, 2015</span><span id="articletext">
<p>The Conference Board's Consumer Confidence Index increased 7.2% this month to
101.4 from 94.6 during May, revised from 95.4. It was the second firmest reading
during the economic expansion and stronger than forecasts for 96.8 in the Action
Economics Survey. During the last ten years, there has been a 45% correlation
between the level of confidence and the three-month change in real personal
consumption expenditures.</p>
<p>The consumer expectations component improved 9.7% to 94.6 (9.5% y/y) and
attained the highest level in three months. <span id="articletext">The
present situations figure gained 4.2% to 111.6 (29.3% y/y), the highest level in
four months.&nbsp;</span></p>
<p><span id="articletext">The percentage indicating that business conditions
would get better rose to 18.5%, the highest level since January. Eighteen
percent of respondents thought there would be more jobs, the most since last
August. The expected inflation rate ticked up to 5.1%, its highest level in
three months and 5.9% planned to buy a home, the most since November. Moving the
other way, 46.5% planned to purchase a major appliance, the fewest since
January.&nbsp;&nbsp;
<p>Respondents indicating that current business conditions were good rose to the
highest level in three months. Jobs were viewed as hard to get by a reduced
25.7% of respondents, just above the recovery low of 24.6%. Jobs were viewed as
not so plentiful by 52.9% of respondents, down from the high of 55.5 six months
ago.</p>
<p>Confidence rose in the two older age groups. Those over age 55 logged a 10.5%
improvement, 22.9% y/y. Respondents between the ages of 35 to 54 raised
confidence by 5.4% (15.7% y/y). In the younger age bracket 1.0% fewer
respondents (+10.0% y/y) were confident.&nbsp;&nbsp;&nbsp;</p>
<p>The Consumer Confidence data is available in Haver's <b>CBDB</b> database.
The total indexes appear in <b>USECON</b> and the market expectations are in <b>AS1REPNA.</b></p>
<p><b>The Simulative Effect of Redistribution </b>from the Federal Reserve Bank
of San Francisco can be found here <a href="http://www.frbsf.org/economic-research/publications/economic-letter/2015/june/income-redistribution-policy-economic-stimulus/">http://www.frbsf.org/economic-research/publications/economic-letter/2015/june/income-redistribution-policy-economic-stimulus/</a></p>
<table class="centered" border="0" cellspacing="0" width="1871">
  <thead>
    <tr>
      <th class="firstcol" scope="col" width="886">Conference Board (SA,
        1985=100)</th>
      <th scope="col" align="center" width="140">Jun</th>
      <th scope="col" align="center" width="140">May</th>
      <th scope="col" align="center" width="140">Apr</th>
      <th scope="col" align="center" width="140">Y/Y %</th>
      <th scope="col" align="center" width="140">2014</th>
      <th scope="col" align="center" width="140">2013</th>
      <th scope="col" align="center" width="141">2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" width="886">Consumer Confidence Index</td>
      <td align="center" width="140">101.4</td>
      <td align="center" width="140">94.6</td>
      <td align="center" width="140">94.3</td>
      <td align="center" width="140">17.4</td>
      <td align="center" width="140">86.9</td>
      <td align="center" width="140">73.2</td>
      <td align="center" width="141">67.1</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="886">&nbsp; Present Situation</td>
      <td align="center" width="140">111.6</td>
      <td align="center" width="140">107.1</td>
      <td align="center" width="140">105.1</td>
      <td align="center" width="140">29.3</td>
      <td align="center" width="140">87.3</td>
      <td align="center" width="140">67.6</td>
      <td align="center" width="141">49.8</td>
    </tr>
    <tr>
      <td class="firstcol" width="886">&nbsp; Expectations</td>
      <td align="center" width="140">94.6</td>
      <td align="center" width="140">86.2</td>
      <td align="center" width="140">87.1</td>
      <td align="center" width="140">9.5</td>
      <td align="center" width="140">86.6</td>
      <td align="center" width="140">77.0</td>
      <td align="center" width="141">78.6</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="886">Consumer Confidence By Age Group</td>
      <td align="center" width="140"></td>
      <td align="center" width="140"></td>
      <td align="center" width="140"></td>
      <td align="center" width="140"></td>
      <td align="center" width="140"></td>
      <td align="center" width="140"></td>
      <td align="center" width="141"></td>
    </tr>
    <tr>
      <td class="firstcol" width="886">&nbsp; Under 35 Years</td>
      <td align="center" width="140">116.1</td>
      <td align="center" width="140">117.3</td>
      <td align="center" width="140">115.1</td>
      <td align="center" width="140">10.0</td>
      <td align="center" width="140">106.6</td>
      <td align="center" width="140">93.1</td>
      <td align="center" width="141">86.5</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="886">&nbsp; Aged 35-54 Years</td>
      <td align="center" width="140">105.5</td>
      <td align="center" width="140">100.1</td>
      <td align="center" width="140">96.2</td>
      <td align="center" width="140">15.7</td>
      <td align="center" width="140">92.4</td>
      <td align="center" width="140">76.8</td>
      <td align="center" width="141">68.5</td>
    </tr>
    <tr>
      <td class="firstcol" width="886">&nbsp; Over 55 Years</td>
      <td align="center" width="140">90.3</td>
      <td align="center" width="140">81.7</td>
      <td align="center" width="140">80.7</td>
      <td align="center" width="140">22.9</td>
      <td align="center" width="140">73.8</td>
      <td align="center" width="140">61.2</td>
      <td align="center" width="141">56.7</td>
    </tr>
  </tbody>
</table>
</span>
</p><p>&nbsp;</p>
<span id="articletitle">Chicago Purchasing Managers Index Remains Below
Break-Even</span><br>
<span id="byline">by <a href="http://haver.com/comment/Moeller.html">Tom Moeller</a>&nbsp;&nbsp;June
30, 2015</span><span id="articletext">
<p>Chicago purchasing managers reported that their June Business Barometer Index
improved to 49.4 during June following an unrevised decline to 46.2 in May. It
was fourth month in the last five below 50, the break-even point between rising
and falling activity. It disappointed expectations for 50.0 in the Action
Economics Forecast Survey. <b>Haver Analytics </b>constructs an ISM-Adjusted
Index using the Chicago numbers, comparable to the overall ISM index to be released
tomorrow. Our figure deteriorated&nbsp; to 48.5, the third month below 50 this
year. During the last ten years, there has been a 61% correlation between the
adjusted Chicago Purchasing Managers index and real GDP growth.</p>
<p>Deterioration in the component series was all-inclusive this month. The
production series returned to nearly its lowest level of the recovery, as did
the employment reading. During the last ten years, there has been an 82%
correlation between the employment figure and the m/m change factory sector
employment. The new orders figure fell below break-even as did vendor delivery
speeds which indicated the quickest delivery speeds in just over two years.
Inventories accumulated at a slightly slower rate.</p>
<p>The index of prices paid recovered to the highest point this year. A slightly
higher 16 percent (NSA) of respondents paid higher prices but a sharply lower 10
percent reporting paying less, the least since December.</p>
<p>The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership
with ISM-Chicago. The survey covers a sample of over 200 purchasing
professionals in the Chicago area with a monthly response rate of about 50%. The
ISM-Adjusted headline index is calculated by Haver Analytics using these data to
construct a figure with the ISM methodology. The figures can be found in Haver's
<b>SURVEYS</b> database. The Consensus expectations figure is available in <b>AS1REPNA</b>.</p>
<table class="centered" border="0" cellspacing="0" width="1871">
  <thead>
    <tr>
      <th class="firstcol" width="1034">Chicago Purchasing Managers Index (%,
        SA)</th>
      <th scope="col" width="119">Jun</th>
      <th scope="col" width="119">May</th>
      <th scope="col" width="119">Apr</th>
      <th scope="col" width="119">Jun'14</th>
      <th scope="col" width="119">2014</th>
      <th scope="col" width="119">2013</th>
      <th scope="col" width="119">2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" width="1034">ISM-Adjusted General Business Barometer</td>
      <td align="center" width="119">48.5</td>
      <td align="center" width="119">48.8</td>
      <td align="center" width="119">53.6</td>
      <td align="center" width="119">60.5</td>
      <td align="center" width="119">59.4</td>
      <td align="center" width="119">54.3</td>
      <td align="center" width="119">54.8</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="1034">General Business Barometer</td>
      <td align="center" width="119">49.4</td>
      <td align="center" width="119">46.2</td>
      <td align="center" width="119">52.3</td>
      <td align="center" width="119">63.5</td>
      <td align="center" width="119">60.7</td>
      <td align="center" width="119">56.0</td>
      <td align="center" width="119">54.7</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;Production</td>
      <td align="center" width="119">49.8</td>
      <td align="center" width="119">45.8</td>
      <td align="center" width="119">52.7</td>
      <td align="center" width="119">69.6</td>
      <td align="center" width="119">64.5</td>
      <td align="center" width="119">58.2</td>
      <td align="center" width="119">57.6</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;New Orders</td>
      <td align="center" width="119">51.7</td>
      <td align="center" width="119">47.5</td>
      <td align="center" width="119">55.1</td>
      <td align="center" width="119">66.0</td>
      <td align="center" width="119">63.8</td>
      <td align="center" width="119">59.0</td>
      <td align="center" width="119">55.2</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;Order Backlogs</td>
      <td align="center" width="119">41.0</td>
      <td align="center" width="119">47.3</td>
      <td align="center" width="119">48.5</td>
      <td align="center" width="119">56.7</td>
      <td align="center" width="119">54.2</td>
      <td align="center" width="119">48.8</td>
      <td align="center" width="119">48.1</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;Inventories</td>
      <td align="center" width="119">46.9</td>
      <td align="center" width="119">53.3</td>
      <td align="center" width="119">54.2</td>
      <td align="center" width="119">56.4</td>
      <td align="center" width="119">56.0</td>
      <td align="center" width="119">45.7</td>
      <td align="center" width="119">51.4</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;Employment</td>
      <td align="center" width="119">45.7</td>
      <td align="center" width="119">48.0</td>
      <td align="center" width="119">54.0</td>
      <td align="center" width="119">57.1</td>
      <td align="center" width="119">56.1</td>
      <td align="center" width="119">55.5</td>
      <td align="center" width="119">55.4</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="1034">&nbsp;&nbsp;Supplier Deliveries</td>
      <td align="center" width="119">48.5</td>
      <td align="center" width="119">49.5</td>
      <td align="center" width="119">51.9</td>
      <td align="center" width="119">53.6</td>
      <td align="center" width="119">56.5</td>
      <td align="center" width="119">52.5</td>
      <td align="center" width="119">54.8</td>
    </tr>
    <tr>
      <td class="firstcol" width="1034">&nbsp;&nbsp;Prices Paid</td>
      <td align="center" width="119">53.3</td>
      <td align="center" width="119">51.2</td>
      <td align="center" width="119">43.1</td>
      <td align="center" width="119">64.5</td>
      <td align="center" width="119">61.0</td>
      <td align="center" width="119">59.8</td>
      <td align="center" width="119">62.3</td>
    </tr>
  </tbody>
</table>
</span>
<p>&nbsp;</p>
<span id="articletitle">U.S. Gasoline Prices Remain Up From January Low</span><br>
<span id="byline">by <a href="http://haver.com/comment/Moeller.html">Tom Moeller</a>&nbsp;&nbsp;June
30, 2015</span></span> 
<p><b>Gasoline prices</b> eased last week to an average $2.80 per gallon at the
pump (-24.4% y/y) but remained higher than the low of $2.04 late in January.
Haver Analytics constructs factors adjusting for the seasonal variation in pump
prices. The seasonally adjusted price moved 2 cents higher to $2.71 per gallon.
They remained, however, below the cost at the pump since prices typically are
stronger during the summer driving season. Spot market gasoline prices held w/w
at $2.10 per gallon (-28.9% y/y).</p>
<p><b>WTI crude oil costs</b> firmed to an average $60.13 per barrel (-43.6%
y/y), up versus the March low of $44.39. Yesterday, prices eased to $58.33 per
barrel. These prices compare to a June 2014 high of $107.95. The seasonally
adjusted price, generated by Haver Analytics, improved last week to $58.88 per
barrel. Brent crude oil prices were fairly stable at $60.84 per barrel but fell
to $59.03 yesterday.</p>
<p><b>Natural gas</b> prices fell to $2.79 per mmbtu last week (-38.0% y/y) and
were $2.80 yesterday.</p>
<b>Gasoline demand </b>improved 4.5% y/y and demand for all petroleum
products rose 7.2% y/y. <span id="articletext"><b>Gasoline inventories </b>grew
1.6% y/y and inventories of all petroleum products increased 7.2% y/y. 
<p>The energy price data are reported by the U.S. Department of Energy. The
petroleum demand and inventory figures are from the Oil &amp; Gas Journal
Weekly. These data can be found in Haver's <b>WEEKLY </b>database. The daily
figures are in <b>DAILY</b> and greater detail on prices, demand and production,
along with regional breakdowns, are in <b>OILWKLY.</b></p>
<table class="centered" border="0" cellspacing="0" width="1871">
  <thead>
    <tr>
      <th class="firstcol" scope="col" width="864">Weekly Energy Prices</th>
      <th scope="col" width="143">06/29/15</th>
      <th scope="col" width="143">06/22/15</th>
      <th scope="col" width="143">06/15/15</th>
      <th scope="col" width="143">Y/Y%</th>
      <th scope="col" width="143">2014</th>
      <th scope="col" width="144">2013</th>
      <th scope="col" width="144">2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" width="864">Retail Gasoline ($ per Gallon, Regular)</td>
      <td align="center" width="143">2.80</td>
      <td align="center" width="143">2.81</td>
      <td align="center" width="143">2.84</td>
      <td align="center" width="143">-24.4</td>
      <td align="center" width="143">2.30</td>
      <td align="center" width="144">3.33</td>
      <td align="center" width="144">3.30</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" width="864">Light Sweet Crude Oil, WTI ($ per bbl.,
        WSJ)</td>
      <td align="center" width="143">60.13</td>
      <td align="center" width="143">59.89</td>
      <td align="center" width="143">60.07</td>
      <td align="center" width="143">-43.6</td>
      <td align="center" width="143">93.64</td>
      <td align="center" width="144">97.96</td>
      <td align="center" width="144">94.20</td>
    </tr>
    <tr>
      <td class="firstcol" width="864">Natural Gas ($/mmbtu, LA, WSJ)</td>
      <td align="center" width="143">2.79</td>
      <td align="center" width="143">2.88</td>
      <td align="center" width="143">2.81</td>
      <td align="center" width="143">-38.0</td>
      <td align="center" width="143">4.37</td>
      <td align="center" width="144">3.73</td>
      <td align="center" width="144">2.7</td>
    </tr>
  </tbody>
</table>
</span>




</html>

The Conference Board's Consumer Confidence Index increased 7.2% this month to 101.4 from 94.6 during May, revised from 95.4. It was the second firmest reading during the economic expansion and stronger than forecasts for 96.8 in the [...]

U.S. Consumer Confidence Nears Expansion High

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      <span id="articletext">
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      <p><a href="/comment/150630j_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630j.png"></a>
      <a href="/comment/150630k_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630k.png"></a></p>
      
<p>Chicago purchasing managers reported that their June Business Barometer Index
improved to 49.4 during June following an unrevised decline to 46.2 in May. It
was fourth month in the last five below 50, the break-even point between rising
and falling business activity. It disappointed expectations for 50.0 in the
Action Economics Forecast Survey. <b>Haver Analytics </b>constructs an
ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM
index to be released tomorrow. Our figure deteriorated to 48.5, the third
month below 50 this year. During the last ten years, there has been a 61%
correlation between the adjusted Chicago Purchasing Managers index and real GDP
growth.</p>

<p>The production series improved slightly, as did new orders. Both remained
above the recovery low. Moving the other way, the employment reading declined
sharply to the lowest level since November 2009. During the last ten years,
there has been an 82% correlation between the employment figure and the m/m
change factory sector employment. The order backlog and inventory readings also
fell sharply. Finally, the vendor deliveries series fell, indicating the fastest
rate of product delivery in two years.</p>

<p>The index of prices paid improved to the highest level in six months. A
higher 21 percent (NSA) of respondents paid higher prices, more than an
increased 17 percent which paid less.</p>

<p>The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership
with ISM-Chicago. The survey covers a sample of over 200 purchasing
professionals in the Chicago area with a monthly response rate of about 50%. The
ISM-Adjusted headline index is calculated by Haver Analytics using these data to
construct a figure with the ISM methodology. The figures can be found in Haver's
<b>SURVEYS</b> database. The Consensus expectations figure is available in <b>AS1REPNA</b>.</p>

 <p><a href="/comment/150630l_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630l.png"></a>
      <a href="/comment/150630m_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630m.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

  <thead>
    <tr>
      <th class="firstcol" >Chicago Purchasing Managers Index (%,
        SA)</th>
      <th scope="col" >Jun</th>
      <th scope="col" >May</th>
      <th scope="col" >Apr</th>
      <th scope="col" >Jun'14</th>
      <th scope="col" >2014</th>
      <th scope="col" >2013</th>
      <th scope="col" >2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >ISM-Adjusted General Business Barometer</td>
      <td  >48.5</td>
      <td  >48.8</td>
      <td  >53.6</td>
      <td  >60.5</td>
      <td  >59.4</td>
      <td  >54.3</td>
      <td  >54.8</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >General Business Barometer</td>
      <td  >49.4</td>
      <td  >46.2</td>
      <td  >52.3</td>
      <td  >63.5</td>
      <td  >60.7</td>
      <td  >56.0</td>
      <td  >54.7</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;Production</td>
      <td  >49.8</td>
      <td  >45.8</td>
      <td  >52.7</td>
      <td  >69.6</td>
      <td  >64.5</td>
      <td  >58.2</td>
      <td  >57.6</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;New Orders</td>
      <td  >51.7</td>
      <td  >47.5</td>
      <td  >55.1</td>
      <td  >66.0</td>
      <td  >63.8</td>
      <td  >59.0</td>
      <td  >55.2</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;Order Backlogs</td>
      <td  >41.0</td>
      <td  >47.3</td>
      <td  >48.5</td>
      <td  >56.7</td>
      <td  >54.2</td>
      <td  >48.8</td>
      <td  >48.1</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;Inventories</td>
      <td  >46.9</td>
      <td  >53.3</td>
      <td  >54.2</td>
      <td  >56.4</td>
      <td  >56.0</td>
      <td  >45.7</td>
      <td  >51.4</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;Employment</td>
      <td  >45.7</td>
      <td  >48.0</td>
      <td  >54.0</td>
      <td  >57.1</td>
      <td  >56.1</td>
      <td  >55.5</td>
      <td  >55.4</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp;&nbsp;Supplier Deliveries</td>
      <td  >48.5</td>
      <td  >49.5</td>
      <td  >51.9</td>
      <td  >53.6</td>
      <td  >56.5</td>
      <td  >52.5</td>
      <td  >54.8</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp;&nbsp;Prices Paid</td>
      <td  >53.3</td>
      <td  >51.2</td>
      <td  >43.1</td>
      <td  >64.5</td>
      <td  >61.0</td>
      <td  >59.8</td>
      <td  >62.3</td>
       </tr>
              </tbody>
            </table>
            </span>
</body></html>

Chicago purchasing managers reported that their June Business Barometer Index improved to 49.4 during June following an unrevised decline to 46.2 in May. It was fourth month in the last five below 50, the break-even point between [...]

Chicago Purchasing Managers Index Remains Below Break-Even

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      <span id="articletext">
      <p></p>
      
      <p><a href="/comment/150630f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630f.png"></a>
      <a href="/comment/150630g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630g.png"></a></p>

<p>The Conference Board's Consumer Confidence Index increased 7.2% this month to
101.4 from 94.6 during May, revised from 95.4. It was the second firmest reading
during the economic expansion and stronger than forecasts for 96.8 in the Action
Economics Survey. During the last ten years, there has been a 45% correlation
between the level of confidence and the three-month change in real personal
consumption expenditures.</p>

<p>The consumer expectations component improved 9.7% to 94.6 (9.5% y/y) and
attained the highest level in three months. The present situations figure 
gained 4.2% to 111.6 (29.3% y/y), the highest level in four months.</p>

<p>The percentage indicating that business conditions
would get better rose to 18.5%, the highest level since January. Eighteen
percent of respondents thought there would be more jobs, the most since last
August. The expected inflation rate ticked up to 5.1%, its highest level in
three months and 5.9% planned to buy a home, the most since November. Moving the
other way, 46.5% planned to purchase a major appliance, the fewest since January.</p>

<p>Respondents indicating that current business conditions were good rose to the
highest level in three months. Jobs were viewed as hard to get by a reduced
25.7% of respondents, just above the recovery low of 24.6%. Jobs were viewed as
not so plentiful by 52.9% of respondents, down from the high of 55.5 six months ago.</p>

<p>Confidence rose in the two older age groups. Those over age 55 logged a 10.5%
improvement, 22.9% y/y. Respondents between the ages of 35 to 54 showed greater 
confidence by 5.4% (15.7% y/y). In the younger age bracket 1.0% fewer respondents 
(+10.0% y/y) were confident.</p>

<p>The Consumer Confidence data is available in Haver's <b>CBDB</b> database.
The total indexes appear in <b>USECON</b> and the market expectations are in <b>AS1REPNA.</b></p>

<p><b>The Simulative Effect of Redistribution </b>from the Federal Reserve Bank
of San Francisco can be found <a href="http://www.frbsf.org/economic-research/publications/economic-letter/2015/june/income-redistribution-policy-economic-stimulus/">here</a>.</p>

<p><a href="/comment/150630h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630h.png"></a>
      <a href="/comment/150630i_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/150630i.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
  <thead>
    <tr>
      <th class="firstcol" scope="col" >Conference Board (SA,
        1985=100)</th>
      <th scope="col"  >Jun</th>
      <th scope="col"  >May</th>
      <th scope="col"  >Apr</th>
      <th scope="col"  >Y/Y %</th>
      <th scope="col"  >2014</th>
      <th scope="col"  >2013</th>
      <th scope="col"  >2012</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td class="firstcol" >Consumer Confidence Index</td>
      <td  >101.4</td>
      <td  >94.6</td>
      <td  >94.3</td>
      <td  >17.4</td>
      <td  >86.9</td>
      <td  >73.2</td>
      <td  >67.1</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp; Present Situation</td>
      <td  >111.6</td>
      <td  >107.1</td>
      <td  >105.1</td>
      <td  >29.3</td>
      <td  >87.3</td>
      <td  >67.6</td>
      <td  >49.8</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp; Expectations</td>
      <td  >94.6</td>
      <td  >86.2</td>
      <td  >87.1</td>
      <td  >9.5</td>
      <td  >86.6</td>
      <td  >77.0</td>
      <td  >78.6</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >Consumer Confidence By Age Group</td>
      <td  ></td>
      <td  ></td>
      <td  ></td>
      <td  ></td>
      <td  ></td>
      <td  ></td>
      <td  ></td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp; Under 35 Years</td>
      <td  >116.1</td>
      <td  >117.3</td>
      <td  >115.1</td>
      <td  >10.0</td>
      <td  >106.6</td>
      <td  >93.1</td>
      <td  >86.5</td>
    </tr>
    <tr class="odd">
      <td class="firstcol" >&nbsp; Aged 35-54 Years</td>
      <td  >105.5</td>
      <td  >100.1</td>
      <td  >96.2</td>
      <td  >15.7</td>
      <td  >92.4</td>
      <td  >76.8</td>
      <td  >68.5</td>
    </tr>
    <tr>
      <td class="firstcol" >&nbsp; Over 55 Years</td>
      <td  >90.3</td>
      <td  >81.7</td>
      <td  >80.7</td>
      <td  >22.9</td>
      <td  >73.8</td>
      <td  >61.2</td>
      <td  >56.7</td>
   </tr>
              </tbody>
            </table>
            </span>
</body></html>

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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The Consumer Price Index increased 2.7% y/y during November, down from 2.8% in October. The 0.2% m/m increase fell short of the 0.3% gain expected in the Action Economics Forecast Survey. The y/y gain in the headline CPI was the weakest since April. It was down from September’s high of 3.0% and compared to 2.9% during 2024. The CPI excluding food & energy increased 0.1% (2.6% y/y) in November. Its y/y rise compared to 2.8% y/y in October and was the weakest rise since March 2021.	

Energy prices rose 1.6% (4.1% y/y in November. Gasoline prices strengthened 3.0% (0.9% y/y). Fuel oil prices increased 3.1% (11.3% y/y). Natural gas prices fell 2.1% (+9.1% y/y), and electricity prices strengthened 1.1% (6.9% y/y). 
Food prices rose 0.1% (2.6% y/y) during November. Egg prices declined 6.4% (-13.2% y/y). Meat, poultry & fish prices strengthened 0.8% (6.8% y/y), while dairy product prices fell 0.9% (-1.6% y/y). Cereal & bakery product costs held steady (+1.9% y/y). Fruit & vegetable prices fell 0.4% and were little changed y/y. Nonalcoholic beverage prices increased 0.9% and 4.3% y/y in November.

Goods prices less food and energy rose 0.2% and rose a steady 1.4% y/y during November. Prices of used cars and trucks increased 0.3% (3.6% y/y), and new vehicle costs rose 0.2% (0.6% y/y). Appliance prices fell 0.6% (+0.5% y/y) while home furnishings prices rose 0.4% (2.6% y/y). Recreation product costs fell 0.3% but increased 0.7% y/y in November. Apparel prices increased 0.6% (0.1% y/y) in November. Education & communication product costs declined 0.3% (-3.1% y/y). Medical care goods prices rose 0.1% (1.1% y/y) in November. 

Services prices less energy edged 0.1% higher but increased 3.0% y/y in November, down from 7.0% y/y in 2022. Shelter prices (35.5% of the CPI) rose 0.1% (3.0% y/y), as owners’ equivalent rent of primary residences also rose 0.1% (3.4% y/y). Transportation service prices fell 0.3% (1.7% y/y). The cost of medical services edged 0.1% and rose 3.3% y/y, and the cost of recreation services fell 0.3% (+2.4% y/y). Education & communication services prices increased 0.4% m/m and 2.2% y/y.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

For the release of CPI on December 18, 2025, the BLS was able to retroactively acquire most nonsurvey data for October and will publish October 2025 values where possible. However, the majority of the CPI series rely on survey data which was not collected for October 2025 due to the government shutdown. Accordingly, the BLS will not publish October values for those series. Haver Analytics has created a second set of CPI indexes and relative importance series in **USECON**. These series will contain any published BLS values for October and interpolated values for unpublished detailed indexes. We will then calculate higher aggregate series such as the All Items index and All Items less food and energy using any published indexes along with our interpolated indexes and relative importance. 


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- Year-to-year comparison is slowest in four months.
- Core price gain exhibits weakest y/y increase since 2021. 
- Services price inflation tumbles y/y; core goods price gain is stable.


U.S. Consumer Price Inflation Moderates in November

Sandy Batten

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Existing home sales rose 0.5% m/m (-1.0% y/y) in November to 4.13 million homes (SAAR) following a 1.5% monthly gain in October and a 1.3% monthly rise in September, according to the National Association of Realtors (NAR). It was the highest level of sales since February and matched expectations in the Action Economics Forecast Survey. The average effective 30-year mortgage interest rate was unchanged at 6.54% last month, but this is down markedly from 7.10% in May and accounts for some of the revival in home sales over the past several months. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales rose 0.8% m/m (-0.8% y/y) in November to 3.75 million units after a 1.1% m/m rise in October and a 1.4% monthly gain in September. Sales of condos and co-ops slumped 2.6% m/m (-2.6% y/y) to 380,000 in November following a 5.4% monthly jump in October.

Compared to a month ago, sales rose 4.1% m/m in the Northeast, increased 1.1% m/m in the South, were unchanged in the West and fell 2.0% m/m in the Midwest. Compared to a year ago, sales were unchanged in both the Northeast and the South, fell 3.0% y/y in the Midwest and declined 1.3% y/y in the West.

The median price of all existing homes (NSA) declined 1.4% m/m (+1.2% y/y) to $409,200 in November. The median price of an existing single-family home fell 1.4% m/m (+1.2% y/y) to $414,300 in November. Prices of single-family homes in the Northeast edged up 0.9% from a year ago. Prices in the Midwest jumped 5.8% y/y; prices in the South rose 1.0% y/y. In contrast, prices in the West declined 0.8% from a year ago.

Inventories of homes for sale continued to weaken in November. The number of existing homes for sale (NSA) slumped 5.9% m/m (+7.5% y/y) to 1.43 million units in November. The supply of homes on the market at the current selling rate (NSA) slid to 4.2 months, its lowest reading since March.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.


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- Existing home sales increased 0.5% m/m in November, the third consecutive monthly gain.
- Month-over-month sales increased in the Northeast and South, were unchanged in the West, and fell in the Midwest.
- Year-over-year sales were unchanged in the Northeast and South and decreased in the Midwest and West.


U.S. Existing Home Sales Edged Up in November

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The new UK Confederation of British Industry (CBI) survey on the distributive trades sector shows a sharp weakening of an already weak survey for December and for the outlook into January of 2026. 

The month-to-month deterioration from November was widespread across metrics for retailing as well as for wholesaling for the current month as well as for the outlook. The monthly degradation is without exception across the board - omitting the inventory metric which is a different animal in any event since inventory building is sometimes involuntary. 

**The Retail survey**
Current conditions: In December, the retail survey for sales compared to a year ago, orders compared to year ago, and sales for the time of year (a seasonal adjustment metric), all worsened month-to-month. The November readings were weak and in December sales compared to a year-ago worsened by 12 points, Orders compared to a year ago worsened by 17 points month-to-month and sales for the time of year worsened by 11 points. These metrics for December are below their respective 12-month average by 6 to 13 points, as well for these categories. The rankings tell a stark story, year-on-year sales have been lower only 5.3% of the time, Year-on-year orders have been weaker only 5.6% of the time, while time of the year sales have been lower only 13% of the time. These are all extremely low-ranking metrics.

Expected Conditions: In January expected conditions have weakened month-to-month by amounts ranging from 33 points to 16 points depending on the metric. And sales and orders compared to a year ago as well as sales for the time of year each are weaker than their respective 12-month average readings by amounts ranging from 4 points to 23 points. The rankings on expectations are even worse than for the current metrics. Expected sales compared to a year ago rank lower less than 1% of the time, the same is true of orders. While sales for the time of year have been weaker 7.7 percent of the time. 
 
**Wholesale survey** 
The rankings for wholesaling are even lower than for retailing across the current and expected metrics. The month-to-month degradation for the current readings ranges from 7 points to 17 points weaker while the reading degradation monthly ranges from 5 points to 16 points. Wholesale sales and orders compared to a year ago and sales for the time of year each rank below the 5% mark. The expectations for January shows expectations for the three categories each are at a 2.5 percentile standing or lower. 

**Summing up**
The distributive trades survey has all but crashed and burned in December. Over the last 26 years the average of the three current metrics’ rankings has been lower only 18 times. The average outlook ranking for the month ahead has been weaker only 5 times in the last 26 years (over 313 months). On a relative basis the expected sales/orders performance is more depressed than the Current results for January. The pooled rankings show current ranking over the past 26-years weaker only 5.8 percent of the time with expectations lower only 1.6 percent of the time. These are very weak metrics. It is surprising that the BOE is walking on eggshells to cut rates with mixed support for rate cuts amid such weakness. There is already a GDP decline in the monthly data for October. UK and inflation is still too high, but it is breaking lower at a relatively fast pace. Will the UK be the first economy down after Covid? 




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United Kingdom

CBI’s Distributive Trades Survey Weakens Sharply in December

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Belgian consumer confidence has been on the rise since early this year, however, in December the index has taken a step backwards with a reading of -1 compared to a November reading of +2 and then an October reading of zero. The confidence indicator, on data back to 1991 has a ranking in its 78.5 percentile, marking it as a reasonably strong reading on confidence compared to its values over that period. On the whole the trend is still solid, the month’s step-back is small. 

**The Economic Situation** 
Economic situation for the next 12 months is weaker in December on a reading of -28 compared to -26 in November. The assessment of the previous 12-months is weaker in December at -42 compared to a reading of -38 in November. The outlook is weaker and the recent legacy is assessed as being slightly weaker as well, than it was in November. The assessment of the economic situation for the next 12 months is weak at a 9.7 percentile standing and the assessment of the previous 12 months is also weak at a 23.4 percentile standing.

**Price Trends**
Price trends are seen as higher over the next 12-months at a reading of 38 compared to 27 in November. The backward-looking assessment of price trends also has them stronger in December than 
in November at a reading of 58 compared to 56 in November. Both of these price trend assessments 
are high with the outlook reading at its 94th percentile and the backward-looking assessment in its 81st percentile. Price expectations hit their low mid 2023-late 2023 and have been on the rise steadily ever since. The price metric of ‘12-months ahead’ was at zero in April of 2024 but climbed to +19 by February 2025 and currently sits at a level of 38. Price expectations are well in gear to the upside in Belgium despite relative price stability in the Euro-Area. 

**Unemployment**
Concerns about unemployment elevated slightly in December to -9 from -10 in November but these are significant readings compared to, say, the 12-month-ago reading which is at a level of +32. The sense of backtracking here is extremely weak. The sense of progress on the part of survey respondents becoming more confident about the future is clearly the prevalent feature here. The December reading for unemployment in fact has only a 2.5 percentile standing, indicating extremely weak concerns about the prospects of unemployment ahead despite the minor month-to-month step-back.

**Major Household purchase environment**
The environment for making major household purchases deteriorates slightly in December at -15 compared to -13 in November. This only puts the index back to where it was in October. The response to the question, ‘is it favorable to buy at present’ is unchanged from its November value at -19 and it has been stuck there for three months in a row. The outlook to make major household purchases in the next 12-months logs a weaker reading at -15 than its 12-month value of -13but is stronger than its 12-month level of -18. The reading for the ‘favorable to buy at present’ question, however, is weaker at a -19 compared to -14, logged 12-months ago. The environment for making a household purchase over the next 12-months has a 55.6 percentile ranking which is above its median, however, the assessment of ‘favorable to buy at present’ has only a 20th percentile standing significantly below its median reading (median readings occur at a ranking of 50%)..

**The Financial situation**
The financial situation for the next 12-months is assessed weaker at -3 in December, compared to zero in November; it compares to a - 2 in October. The assessment 12-months ago was also -2 so this is a very minor deterioration comparing the financial situation of households with the last 12-months produces another deterioration at -8 in December compared to -6 in November and that compares to 12-months ago at -5 another deterioration. However, the backward-looking assessment has a 52-percentile standing which is above its median while the outlook reading of -3 has a 23-percentile standing which puts it in the lower quarter of all expectations on data back to 1991. The current situation is appraised at 20 a step-back from November and October levels as well as from 12-months ago. But the current appraisal also has a queue standing in its 65.7 percentile which has a comfortable margin above its median reading. Households clearly have concerns about their financial situation even though their outlook for making household purchases is above median and their concerns about unemployment are low. Currently, conditions appear to be construed as solid.

**Savings**
Household savings over the next 12-months are weaker in December at a reading of 20 compared to 26 in November; they are closer to their 12-month ago reading of 21. December is still a relatively high reading, in any event, with a 91-percentile standing. The question, ‘is it favorable to save at present’ is unchanged in November compared to December at a reading of -28 although it is weaker than it was 12-months ago and the percentile standing at its 78th percentile, again, a firm reading for this metric.

**Summing up - assessment** 
The consumer confidence reading from the Belgian National Bank this month shows a slight set back month-to-month, however, there is a significant an improvement that has been underway that is quite clear from the chart. The concerns that consumers have seemed to be about their financial situation haven't translated into concerns about unemployment or their willingness to make major household purchases, with unemployment concerns very low and their willingness to make household purchases for the period ahead at essentially normal levels. Still, there is more concern about inflation that is percolating, which is interesting considering that overall inflation has been relatively stable and muted in the European monetary area. 




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Belgium

Belgian Consumer Confidence - On the Rise, but Weaker Month-to-Month

Andrew Cates

**Faster-than-Expected Monetary Easing**
Our first potential upside risk for 2026 is that monetary policy across most major advanced economies is loosened further and by more than markets and forecasters currently anticipate. Monetary policy cycles have a history of being underestimated in both length and magnitude—in large part because of the powerful feedback loops between interest rates, inflation, and economic behaviour. On the way up, higher policy rates feed into mortgage costs, debt-service burdens, rents, and the general cost of doing business, reinforcing wage pressures and inflation persistence. But these same channels work in reverse on the way down. As rates fall, debt servicing eases, housing and rental inflation softens, and cost pressures across the economy unwind more rapidly than expected—allowing inflation to decelerate faster and creating scope for further easing. A risk, therefore, is that if disinflation becomes self-reinforcing, central banks find themselves cutting rates more aggressively than currently priced, not because of economic distress, but because restrictive policy proves increasingly unnecessary.

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**Energy Supply Dynamics Prove More Supportive**
The second chart reinforces the message from the first: easing monetary policy may be accompanied—and amplified—by a more benign energy backdrop. Recent projections from the EIA point to a renewed build-up in OECD crude oil and liquids inventories over the year ahead, a dynamic that has historically been associated with downward pressure on oil prices. If inventories continue to rise as supply growth outpaces demand, spot prices for crude could undershoot current forecasts, keeping energy inflation subdued. That, in turn, would reinforce disinflationary forces already in play—lowering headline CPI, easing cost pressures for firms and households, and giving central banks greater confidence to loosen policy further. In that sense, softer oil prices would not just be a standalone positive shock, but part of a reinforcing feedback loop alongside rate cuts, supporting real incomes, financial conditions, and global growth into 2026.


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**AI-Driven Productivity Gains Materialise More Quickly** 
The third chart shows a clear pickup in US nonfinancial productivity growth, reviving the debate around whether AI-driven efficiency gains may arrive sooner than many forecasters expect. While the longer-term productivity potential of AI remains uncertain and uneven across sectors, there are reasons to think that at least some near-term gains could prove more tangible than currently assumed. Rather than transformative breakthroughs, early benefits are likely to come from incremental improvements—automation of routine processes, better scheduling and logistics, more efficient use of capital and labour, and modest reductions in overhead costs—areas where US firms are already well positioned to implement new technologies quickly. If these gains accumulate and diffuse more broadly, the implications would still be meaningful. Even a modest, sustained uplift in productivity would help contain unit labour costs, support real income growth, and raise the economy’s speed limit without generating renewed inflation pressure. In that scenario, productivity would not need to “revolutionise” the economy to matter: incremental efficiency gains could nonetheless provide a supportive backdrop for growth, earnings, and policy easing into 2026—representing a genuine upside risk to the outlook.


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**The US Economy Proves Resilient Again**
The next chart highlights a further upside risk to the 2026 outlook: the possibility that the US economy once again outperforms its peers. Unlike the typical pre-recession backdrop, there is little evidence of meaningful financial stress in the US private sector. After a prolonged period of balance-sheet repair, private-sector debt ratios have been trending lower in recent years, while the sector as a whole is running a healthy financial surplus. This stands in stark contrast to previous late-cycle episodes, which were characterised by rising leverage, widening deficits, and growing dependence on credit expansion. The absence of private-sector excesses reduces the economy’s vulnerability to higher rates and external shocks, and helps explain why growth has remained more durable than expected. If households and firms continue to prioritise balance-sheet strength rather than forced deleveraging, the usual mechanisms that tip the economy into recession may fail to materialise. In that environment, even modest easing in financial conditions could translate into renewed spending and investment, allowing the US to sustain above-trend growth into 2026—representing another upside risk to the global outlook.


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**India’s Growth Engine Accelerates Further** 
Chart 5 points to another potential upside risk for 2026 emanating from India’s economy. After a period of relative pessimism earlier in the year, consensus growth forecasts for 2026 have been revised modestly higher, even as inflation projections have continued to drift lower. This combination—firmer growth expectations alongside easing inflation pressures—creates scope for a more supportive policy backdrop than markets currently assume. With real interest rates no longer rising and financial conditions stabilising, India’s investment cycle, already underpinned by public infrastructure spending and improving corporate balance sheets, could prove more durable than forecast. If these trends persist, India may deliver growth that is both stronger and more internally driven than expected, providing a meaningful demand impulse to the broader global economy. Given India’s increasing weight in global growth, even small upside surprises would have outsized effects on trade, commodity demand, and regional activity—reinforcing the case that the global outlook for 2026 may be skewed to the upside.


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**The Global South Becomes a More Independent Source of Demand** 
The final chart points to a broader upside risk for the global economy in 2026: that economies across the so-called Global South generate more durable momentum than currently assumed. With a few notable exceptions—such as China and Thailand—many emerging economies continue to benefit from stronger growth in their working-age populations and/or faster real GDP per capita growth than their advanced-economy counterparts. These demographic and income dynamics are helping to underpin domestic consumption, support labour-force expansion, and attract capital inflows, as reflected in the pattern of net FDI across countries. In contrast, much of the advanced world faces binding demographic constraints and lower steady-state growth rates, limiting the scope for demand to re-accelerate organically. If growth in the Global South proves more resilient and internally driven—rather than overly dependent on exports to advanced economies—it could provide a more stable and geographically diversified source of global demand. In that scenario, global growth in 2026 would be less reliant on a narrow set of advanced economies, reinforcing the case that risks to the outlook may be skewed to the upside.


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_This marks our final Charts of the Week publication for 2025 The next edition will be released on Thursday 8 January._

Last week’s Charts of the Week focused on the darker tail risks hanging over the 2026 outlook: the possibility of monetary policy mis-calibration, that geopolitics and trade fragmentation further disrupt supply chains, and that elevated debt levels—particularly in the public sector—reassert themselves as a drag on growth. This week’s charts take a deliberately different tack. Taken together, they highlight a set of upside risks that are possibly underappreciated in current forecasts. For example, policy easing across advanced economies may extend further than expected as disinflation feeds on itself (chart 1); oil prices could surprise on the downside as inventories rebuild (chart 2); US productivity may deliver incremental but meaningful gains sooner than assumed (chart 3); the US economy itself could continue to benefit from an absence of private-sector financial stress (chart 4); India’s growth momentum might firm again as inflation pressures recede (chart 5); and, more broadly, parts of the Global South appear increasingly capable of generating their own demand impulse, supported by favourable demographics and income growth (chart 6). None of these forces is guaranteed, and each carries its own caveats—but together they suggest that, having spent much of the past year fixated on downside risks, the risks to global growth in 2026 may be more evenly balanced than is widely assumed.

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Economy in Brief

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U.S. Construction Spending Growth Eases

Challenger Job Cut Announcements Improve

U.S. ISM Manufacturing Index Improves to Best Level Since January

Markit Manufacturing Indices Are Mixed in June; Conditions Turn Up in EMU

U.S. ADP: Payroll Rise Is Strongest This Year

U.S. Consumer Confidence Nears Expansion High

Chicago Purchasing Managers Index Remains Below Break-Even

U.S. Consumer Confidence Nears Expansion High