Tom Moeller

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304e.jpg" style="width: 312px; height: 265px;">p<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304f.jpg" style="width: 312px; height: 265px;"></p>
<p>Improved demand has changed attitudes about holding inventory.
Factory inventories increased 0.2% during January and have risen during
three of the last four months. That compares with sharp declines during
the twelve months through September which lowered inventory levels by
11.9%. Even accounting for higher oil prices there has been a turn.
Without oil refineries factory inventories were roughly unchanged
during the last four months and the -0.6% three-month change compares
to -3.8% at its depth early last year.</p>
<p>Primary metals inventories during the last three months rose
3.1% after a 10.2% decline one-year ago. Electrical equipment
inventories fell 0.8% after a 7.2% decline at its deepest last March
and machinery inventories fell 1.8% versus at a 5.2% decline at the
deepest last Spring. Even furniture inventories went down at a slower
2.5% three-month rate. In the nondurable area apparel inventories fell
at a lessened 1.3% rate while paper products fell 1.7% versus -6.1% one
year ago.</p>
<p>Higher factory shipments have encouraged the turn. Shipments
rose 0.3% during January following four months of strength. Here again
rising oil prices played a role. But even excluding oil, an unchanged
January reading followed four months of strength. The three-month
change has shifted to positive 2.4% from -9.4% one year ago. Shipments
of machinery, electrical and transportation equipment have led the turn.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304h.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM" ="">Factory Survey</a>
(NAICS, %)</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>0.2</td>
<td>-0.2</td>
<td>0.2</td>
<td>-7.5</td>
<td>-8.7</td>
<td>2.2</td>
<td>3.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.1</td>
<td>-0.1</td>
<td>0.3</td>
<td>-8.1</td>
<td>-9.2</td>
<td>-0.5</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders</td>
<td>1.7</td>
<td>1.5</td>
<td>1.0</td>
<td>9.5</td>
<td>-17.2</td>
<td>0.0</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.1</td>
<td>1.5</td>
<td>2.1</td>
<td>8.9</td>
<td>-15.8</td>
<td>3.0</td>
<td>1.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>0.3</td>
<td>1.8</td>
<td>1.6</td>
<td>5.5</td>
<td>-15.2</td>
<td>1.6</td>
<td>1.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.8</td>
<td>1.3</td>
<td>1.7</td>
<td>6.2</td>
<td>-15.3</td>
<td>3.5</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Unfilled Orders</td>
<td>0.0</td>
<td>-0.9</td>
<td>-0.7</td>
<td>-8.5</td>
<td>-10.2</td>
<td>3.4</td>
<td>17.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding
Transportation</td>
<td>-0.0</td>
<td>0.4</td>
<td>0.2</td>
<td>-6.0</td>
<td>-8.4</td>
<td>-1.4</td>
<td>8.2</td>
</tr>
</tbody>
</table>
</body></html>

p Improved demand has changed attitudes about holding inventory. Factory inventories increased 0.2% during January and have risen during three of the last four months. That compares with sharp declines during the twelve months through [...]

U.S. Factory Inventories Turn Toward Accumulation

Robert Brusca

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304c.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>EMU GDP rose by 0.5% Saar in 2009-Q4. Private consumption in
the Zone fell at a -0.1% annual rate. Meanwhile exports and imports
surged at growth rates of 6% and 7%, respectively. Public consumption
also fell in Q4 at a -0.5% annual rate. Capital formation after rising
in Q3 retracted again in Q4. Domestic demand was a weak -0.8%.</p>
<p>France is closing in on positive GDP growth and is closer than
either Germany or EMU as of Q4. But Germany with a much deeper hole
that its GDP fell into is rising faster from its extreme depths.</p>
<p>Portugal&#8217;s numbers still aren&#8217;t in for Q4. But among those
countries we list in the table that have reported, Greece, Italy and
Spain are the only ones with falling GDP in Q4. These are the countries
with debt problems of various sorts in EMU. It is interesting that the
indebtedness seems to hold them back from recovery at the same pace as
fellow EU/EMU members.</p>
</span><span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">EMU GDP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Consumption</td>
<td>Capital Formation</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Domestic<br>
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td>GDP</td>
<td>Private</td>
<td>Public</td>
<td>Total</td>
<td>Exports</td>
<td>Imports</td>
<td></td>
</tr>
<tr class="even">
<td colspan="8" class="firstcol">% Change Q/Q
(saar) ;
X-M is Q/Q change in Blns of euros</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q4-09</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>-0.5%</td>
<td>-3.1%</td>
<td>6.2</td>
<td>7.0%</td>
<td>-0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q3-09</td>
<td>1.7%</td>
<td>-0.7%</td>
<td>3.1%</td>
<td>7.1%</td>
<td>0.7</td>
<td>11.9%</td>
<td>1.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q2-09</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>2.4%</td>
<td>-17.7%</td>
<td>13.1</td>
<td>-4.5%</td>
<td>-3.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q1-09</td>
<td>-9.6%</td>
<td>-1.9%</td>
<td>2.2%</td>
<td>-33.1%</td>
<td>-6.2</td>
<td>-29.3%</td>
<td>-8.7%</td>
</tr>
<tr class="even">
<td colspan="8" class="firstcol">% Change
Yr/Yr; X-M is
Yr/Yr change in Gap in Blns of euros</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q4-09</td>
<td>-2.1%</td>
<td>-0.6%</td>
<td>1.8%</td>
<td>-13.1%</td>
<td>13.8</td>
<td>-5.2%</td>
<td>-2.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q3-09</td>
<td>-4.1%</td>
<td>-1.1%</td>
<td>2.5%</td>
<td>-14.9%</td>
<td>-15.1</td>
<td>-13.5%</td>
<td>-3.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q2-09</td>
<td>-4.9%</td>
<td>-1.0%</td>
<td>2.2%</td>
<td>-16.2%</td>
<td>-27.1</td>
<td>-17.0%</td>
<td>-3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q1-09</td>
<td>-5.1%</td>
<td>-1.4%</td>
<td>2.4%</td>
<td>-14.1%</td>
<td>-34.5</td>
<td>-16.4%</td>
<td>-3.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; 5-Yrs</td>
<td>0.7%</td>
<td>0.8%</td>
<td>2.1%</td>
<td>-1.0%</td>
<td>0.5</td>
<td>1.4%</td>
<td>0.7%</td>
</tr>
</tbody>
</table>
<p>As of Q4 only Greece is seeing its Yr/Yr GDP growth continue
to slip at a faster pace than in earlier quarters. The UK has a larger
Yr/Yr drop in Q4 but it has improved its Yr/Yr growth rate from -5.3%
in Q3 to -3.3% in Q4. Only the US has a positive Yr/Yr rate of growth
in Q4; Switzerland is at zero.</p>
<p>The quarterly growth rates are already turning positive and
have been doing so for two quarters in a row in most countries. Clearly
recovery is afoot. But we are reminded that domestic demand is lagging
in the Zone and that it is a sector that is very important to recovery.
Every nation cannot recover with export-led growth; that defies the
rules of GDP and balance of payments accounting. At some point the
recovery has to become home-grown. With the US economy looking like its
recovery may not shift into overdrive it is even more important than
ever for each country to elevate its own domestic demand.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro-Area Retail
Sales </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.2%</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>-0.4%</td>
<td>-3.1%</td>
<td>1.1%</td>
<td>-9.4%</td>
<td>-0.8%</td>
<td>20.8%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.9%</td>
<td>-1.2%</td>
<td>-1.2%</td>
<td>-0.6%</td>
<td>-0.2%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>-1.8%</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-9.3%</td>
<td>-3.4%</td>
<td>0.8%</td>
</tr>
</tbody>
</table>
</body></html>

EMU GDP rose by 0.5% Saar in 2009-Q4. Private consumption in the Zone fell at a -0.1% annual rate. Meanwhile exports and imports surged at growth rates of 6% and 7%, respectively. Public consumption also fell in Q4 at a -0.5% annual [...]

EMU GDP Stays Put – No Revision

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304a.jpg" style="width: 353px; height: 265px;" align="right">Today's
Labor Department report indicated that initial claims for jobless
insurance fell 29,000 last week to 469,000 from an upwardly revised
498,000 during the prior week. Claims rose slightly for the full month
but remained down from the recession peak of 674,000 hit last March.
Moreover, claims remained near the lowest level since January 2009. The
weekly decline in claims slightly exceeded Consensus expectations for a
drop to 475,000. The four-week moving average of initial claims slipped
to 470,750.</p><p> Continuing claims for unemployment insurance during the
latest week fell to a new cycle-low and were down by one-third since
late-June. The overall decline is a function of the improved job market
but also reflects the exhaustion of 26 weeks of unemployment benefits.
Continuing claims provide an indication of workers' ability to find
employment. The four-week average of continuing claims fell to a cycle
low of 4,575,750. This series dates back to
1966.&nbsp;</p><p>&nbsp;Extended benefits for unemployment insurance
dropped sharply to another cycle low of 178,469. They were down by
two-thirds from a peak of 597,688 reached in November.&nbsp;</p><p> The
insured rate of unemployment slipped to 3.5% from an upwardly revised
3.6% during the prior week. The rate reached a high of 5.2% during
late-June. During the last ten years, there has been a 93% correlation
between the level of the insured unemployment rate and the overall rate
of unemployment published by the Bureau of Labor Statistics.&nbsp;</p><p>The highest insured unemployment rates in the week ending February 14
were in Alaska (7.4% percent), Oregon (6.4), Idaho (6.3), Montana
(6.3), Wisconsin (6.2), Michigan (5.8), Nevada (5.7), Pennsylvania
(6.4), and North Carolina (5.4). The lowest insured unemployment rates
were in Virginia (2.3), Texas (2.4), Florida (3.2), Georgia (3.4),
Mississippi (3.6), Wyoming (3.7), Ohio (3.8), Maryland (3.9), Indiana
(4.0), New York (4.1) and Maine (4.4). These data are not seasonally
adjusted but the overall insured unemployment rate is.</p><p>The
unemployment insurance claims data is available in Haver's <b>WEEKLY</b>
database and the state data is in the <b>REGIONW</b>
database.</p><p><b>Changes in the Aggregate Labor Force Participation
Rate</b> from the Federal Reserve Bank of Atlanta is available <a href="http://www.frbatlanta.org/documents/pubs/economicreview/er09no4_Hotchkiss.pdf">here</a>.&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: black;">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>2/27/10</b></th>
<th scope="col"><b>2/20/10</b></th>
<th scope="col"><b>2/13/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>469</td>
<td>498</td>
<td>474</td>
<td>-27.1%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,500</td>
<td>4,634</td>
<td>-11.3%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.6</td>
<td>4.3 (3/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</span></body></html>

Today's Labor Department report indicated that initial claims for jobless insurance fell 29,000 last week to 469,000 from an upwardly revised 498,000 during the prior week. Claims rose slightly for the full month but remained down [...]

U.S. Initial Claims For Insurance Fall Back

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304a.jpg" style="width: 353px; height: 265px;" align="right">Today's
Labor Department report indicated that initial claims for jobless
insurance fell 29,000 last week to 469,000 from an upwardly revised
498,000 during the prior week. Claims rose slightly for the full month
but remained down from the recession peak of 674,000 hit last March.
Moreover, claims remained near the lowest level since January 2009. The
weekly decline in claims slightly exceeded Consensus expectations for a
drop to 475,000. The four-week moving average of initial claims slipped
to 470,750.</p>
<p> Continuing claims for unemployment insurance during the
latest week fell to a new cycle-low and were down by one-third since
late-June. The overall decline is a function of the improved job market
but also reflects the exhaustion of 26 weeks of unemployment benefits.
Continuing claims provide an indication of workers' ability to find
employment. The four-week average of continuing claims fell to a cycle
low of 4,575,750. This series dates back to
1966.&nbsp;</p>
<p>&nbsp;Extended benefits for unemployment insurance
dropped sharply to another cycle low of 178,469. They were down by
two-thirds from a peak of 597,688 reached in November.&nbsp;</p>
<p> The
insured rate of unemployment slipped to 3.5% from an upwardly revised
3.6% during the prior week. The rate reached a high of 5.2% during
late-June. During the last ten years, there has been a 93% correlation
between the level of the insured unemployment rate and the overall rate
of unemployment published by the Bureau of Labor Statistics.&nbsp;</p>
<p>The highest insured unemployment rates in the week ending
February 14
were in Alaska (7.4% percent), Oregon (6.4), Idaho (6.3), Montana
(6.3), Wisconsin (6.2), Michigan (5.8), Nevada (5.7), Pennsylvania
(6.4), and North Carolina (5.4). The lowest insured unemployment rates
were in Virginia (2.3), Texas (2.4), Florida (3.2), Georgia (3.4),
Mississippi (3.6), Wyoming (3.7), Ohio (3.8), Maryland (3.9), Indiana
(4.0), New York (4.1) and Maine (4.4). These data are not seasonally
adjusted but the overall insured unemployment rate is.</p>
<p>The
unemployment insurance claims data is available in Haver's <b>WEEKLY</b>
database and the state data is in the <b>REGIONW</b>
database.</p>
<p><b>Changes in the Aggregate Labor Force Participation
Rate</b> from the Federal Reserve Bank of Atlanta is available <a href="http://www.frbatlanta.org/documents/pubs/economicreview/er09no4_Hotchkiss.pdf">here</a>.&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: black;">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>2/27/10</b></th>
<th scope="col"><b>2/20/10</b></th>
<th scope="col"><b>2/13/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>469</td>
<td>498</td>
<td>474</td>
<td>-27.1%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,500</td>
<td>4,634</td>
<td>-11.3%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.6</td>
<td>4.3 (3/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">EMU GDP Stays Put &#8211; No Revision</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> March 4, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304c.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>EMU GDP rose by 0.5% Saar in 2009-Q4. Private consumption in
the Zone fell at a -0.1% annual rate. Meanwhile exports and imports
surged at growth rates of 6% and 7%, respectively. Public consumption
also fell in Q4 at a -0.5% annual rate. Capital formation after rising
in Q3 retracted again in Q4. Domestic demand was a weak -0.8%.</p>
<p>France is closing in on positive GDP growth and is closer than
either Germany or EMU as of Q4. But Germany with a much deeper hole
that its GDP fell into is rising faster from its extreme depths.</p>
<p>Portugal&#8217;s numbers still aren&#8217;t in for Q4. But among those
countries we list in the table that have reported, Greece, Italy and
Spain are the only ones with falling GDP in Q4. These are the countries
with debt problems of various sorts in EMU. It is interesting that the
indebtedness seems to hold them back from recovery at the same pace as
fellow EU/EMU members.</p>
</span><span>
<table border="0" cellspacing="0" width="100%"> <colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">EMU GDP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Consumption</td>
<td>Capital Formation</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Domestic<br>
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td>GDP</td>
<td>Private</td>
<td>Public</td>
<td>Total</td>
<td>Exports</td>
<td>Imports</td>
<td></td>
</tr>
<tr class="even">
<td colspan="8" class="firstcol">% Change Q/Q
(saar) ;
X-M is Q/Q change in Blns of euros</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q4-09</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>-0.5%</td>
<td>-3.1%</td>
<td>6.2</td>
<td>7.0%</td>
<td>-0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q3-09</td>
<td>1.7%</td>
<td>-0.7%</td>
<td>3.1%</td>
<td>7.1%</td>
<td>0.7</td>
<td>11.9%</td>
<td>1.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q2-09</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>2.4%</td>
<td>-17.7%</td>
<td>13.1</td>
<td>-4.5%</td>
<td>-3.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q1-09</td>
<td>-9.6%</td>
<td>-1.9%</td>
<td>2.2%</td>
<td>-33.1%</td>
<td>-6.2</td>
<td>-29.3%</td>
<td>-8.7%</td>
</tr>
<tr class="even">
<td colspan="8" class="firstcol">% Change
Yr/Yr; X-M is
Yr/Yr change in Gap in Blns of euros</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q4-09</td>
<td>-2.1%</td>
<td>-0.6%</td>
<td>1.8%</td>
<td>-13.1%</td>
<td>13.8</td>
<td>-5.2%</td>
<td>-2.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q3-09</td>
<td>-4.1%</td>
<td>-1.1%</td>
<td>2.5%</td>
<td>-14.9%</td>
<td>-15.1</td>
<td>-13.5%</td>
<td>-3.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; Q2-09</td>
<td>-4.9%</td>
<td>-1.0%</td>
<td>2.2%</td>
<td>-16.2%</td>
<td>-27.1</td>
<td>-17.0%</td>
<td>-3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Q1-09</td>
<td>-5.1%</td>
<td>-1.4%</td>
<td>2.4%</td>
<td>-14.1%</td>
<td>-34.5</td>
<td>-16.4%</td>
<td>-3.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; 5-Yrs</td>
<td>0.7%</td>
<td>0.8%</td>
<td>2.1%</td>
<td>-1.0%</td>
<td>0.5</td>
<td>1.4%</td>
<td>0.7%</td>
</tr>
</tbody>
</table>
<p>As of Q4 only Greece is seeing its Yr/Yr GDP growth continue
to slip at a faster pace than in earlier quarters. The UK has a larger
Yr/Yr drop in Q4 but it has improved its Yr/Yr growth rate from -5.3%
in Q3 to -3.3% in Q4. Only the US has a positive Yr/Yr rate of growth
in Q4; Switzerland is at zero.</p>
<p>The quarterly growth rates are already turning positive and
have been doing so for two quarters in a row in most countries. Clearly
recovery is afoot. But we are reminded that domestic demand is lagging
in the Zone and that it is a sector that is very important to recovery.
Every nation cannot recover with export-led growth; that defies the
rules of GDP and balance of payments accounting. At some point the
recovery has to become home-grown. With the US economy looking like its
recovery may not shift into overdrive it is even more important than
ever for each country to elevate its own domestic demand.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro-Area Retail
Sales </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.2%</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>-0.4%</td>
<td>-3.1%</td>
<td>1.1%</td>
<td>-9.4%</td>
<td>-0.8%</td>
<td>20.8%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.9%</td>
<td>-1.2%</td>
<td>-1.2%</td>
<td>-0.6%</td>
<td>-0.2%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>-1.8%</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-9.3%</td>
<td>-3.4%</td>
<td>0.8%</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Factory Inventories Turn
Toward Accumulation</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> March 4, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304e.jpg" style="width: 312px; height: 265px;">p<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304f.jpg" style="width: 312px; height: 265px;"></p>
<p>Improved demand has changed attitudes about holding inventory.
Factory inventories increased 0.2% during January and have risen during
three of the last four months. That compares with sharp declines during
the twelve months through September which lowered inventory levels by
11.9%. Even accounting for higher oil prices there has been a turn.
Without oil refineries factory inventories were roughly unchanged
during the last four months and the -0.6% three-month change compares
to -3.8% at its depth early last year.</p>
<p>Primary metals inventories during the last three months rose
3.1% after a 10.2% decline one-year ago. Electrical equipment
inventories fell 0.8% after a 7.2% decline at its deepest last March
and machinery inventories fell 1.8% versus at a 5.2% decline at the
deepest last Spring. Even furniture inventories went down at a slower
2.5% three-month rate. In the nondurable area apparel inventories fell
at a lessened 1.3% rate while paper products fell 1.7% versus -6.1% one
year ago.</p>
<p>Higher factory shipments have encouraged the turn. Shipments
rose 0.3% during January following four months of strength. Here again
rising oil prices played a role. But even excluding oil, an unchanged
January reading followed four months of strength. The three-month
change has shifted to positive 2.4% from -9.4% one year ago. Shipments
of machinery, electrical and transportation equipment have led the turn.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304h.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM" ="">Factory Survey</a>
(NAICS, %)</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>0.2</td>
<td>-0.2</td>
<td>0.2</td>
<td>-7.5</td>
<td>-8.7</td>
<td>2.2</td>
<td>3.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.1</td>
<td>-0.1</td>
<td>0.3</td>
<td>-8.1</td>
<td>-9.2</td>
<td>-0.5</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders</td>
<td>1.7</td>
<td>1.5</td>
<td>1.0</td>
<td>9.5</td>
<td>-17.2</td>
<td>0.0</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.1</td>
<td>1.5</td>
<td>2.1</td>
<td>8.9</td>
<td>-15.8</td>
<td>3.0</td>
<td>1.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>0.3</td>
<td>1.8</td>
<td>1.6</td>
<td>5.5</td>
<td>-15.2</td>
<td>1.6</td>
<td>1.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding
Transportation</td>
<td>0.8</td>
<td>1.3</td>
<td>1.7</td>
<td>6.2</td>
<td>-15.3</td>
<td>3.5</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Unfilled Orders</td>
<td>0.0</td>
<td>-0.9</td>
<td>-0.7</td>
<td>-8.5</td>
<td>-10.2</td>
<td>3.4</td>
<td>17.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding
Transportation</td>
<td>-0.0</td>
<td>0.4</td>
<td>0.2</td>
<td>-6.0</td>
<td>-8.4</td>
<td>-1.4</td>
<td>8.2</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Pending Home Sales Decline
Sharply</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> March 4, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304i.jpg" style="width: 353px; height: 265px;" align="right">Bad
weather
had a noticeable effect on January housing activity. However, the
National Association of Realtors (NAR) reported an outsized effect on
pending home sales which fell 7.6% m/m from December to their lowest
level since March of last year. Nevertheless, home sales remained up
12.3% from the January low. The latest decline compares with Consensus
expectations for a modest increase. The data were revised starting in
2008.</p>
<p> Sharp monthly gains in home sales were recorded across the
country but the largest was out West.</p>
<p>These home sales figures are
analogous to the new home sales data from the Commerce Department in
that they measure existing home sales when the sales contract is
signed, not at the time the sale is closed. The series dates back to
2001 and the data is available in Haver's <b>PREALTOR </b>database.</p>
<p>The Fed's latest <b>Beige Book </b>covering
regional
economic conditions can be found&nbsp; <a href="http://www.federalreserve.gov/fomc/beigebook/2010/20100303/default.htm">here</a>.&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304j.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100304k.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending
Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>90.4</td>
<td>97.8</td>
<td>97.0</td>
<td>&nbsp;&nbsp;12.3%</td>
<td>95.1</td>
<td>86.9</td>
<td>95.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>71.3</td>
<td>78.1</td>
<td>77.4</td>
<td>20.4</td>
<td>76.7</td>
<td>73.0</td>
<td>86.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>81.2</td>
<td>89.2</td>
<td>84.8</td>
<td>11.8</td>
<td>88.8</td>
<td>80.7</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>98.1</td>
<td>100.2</td>
<td>98.5</td>
<td>18.1</td>
<td>98.9</td>
<td>90.3</td>
<td>107.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>102.9</td>
<td>118.5</td>
<td>122.8</td>
<td>1.5</td>
<td>109.9</td>
<td>99.2</td>
<td>92.1</td>
</tr>
</tbody>
</table>
</span>
</body></html>

U.S. Initial Claims For InsuranceFall Back

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100303d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Retail Sales in the Zone edged higher in January at the same
pace as in December and November. The growth rate for e-Zone retail
sales is improving Yr/Yr but it is still falling. The sequential growth
rates show steady if snail&#8217;s pace improvement.</p>
<p>Auto registrations bolstered by some government incentive
programs made a strong recovery from crisis lows but have fallen over
the past two months. Still the level of sales remains strongly higher
Yr/Yr.</p>
<p>Europe&#8217;s consumer is improving but doing so at a very slow
pace. The consumer sector is not leading but following the trade block
into recovery. Two of the larger EU countries that have reported sales
at this point, Germany and the UK, are laggards when it comes to retail
sales improvement.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro-Area Retail
Sales </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="3">M/M</td>
<td style="font-weight: bold;" colspan="3">Saar</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">Dec-09</td>
<td style="font-weight: bold;">Nov-09</td>
<td style="font-weight: bold;">3-Mo</td>
<td style="font-weight: bold;">6-MO</td>
<td style="font-weight: bold;">12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.2%</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>-0.4%</td>
<td>-3.1%</td>
<td>1.1%</td>
<td>-9.4%</td>
<td>-0.8%</td>
<td>20.8%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.9%</td>
<td>-1.2%</td>
<td>-1.2%</td>
<td>-0.6%</td>
<td>-0.2%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>-1.8%</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-9.3%</td>
<td>-3.4%</td>
<td>0.8%</td>
</tr>
</tbody>
</table>
</body></html>

Retail Sales in the Zone edged higher in January at the same pace as in December and November. The growth rate for e-Zone retail sales is improving Yr/Yr but it is still falling. The sequential growth rates show steady if snail’s pace [...]

EMU Retail Sales And Car Registrations Show Some Gains

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The EMU inflation chart tells a quick and dirty story of this
business cycle without all the embellishments over banks lending,
not-lending and financial crisis.</p>
<p>Once upon a time, inflation was steady. Then prices
overheated. Economic activity subsequently plunged bringing inflation
down sharply &#8211; it even negative turned Yr/Yr. All was not well. But
then, weakness subsided and inflation crept back up. Now prices show
signs of stabilizing with inflation around the 1% mark, well below the
2%-plus level where it had resided in the pre-crisis period. So is the
inflation scare over? Will they all now live happily ever after?</p>
<p>Inflation fighting is no fairy tale. The recent urging of the
IMF staff sho9uld make that clear; it said a higher inflation target
might be &#8216;good for&#8217; the US and Europe. It&#8217;s a stunning piece of work
from an organization that has stepped on its own tail more than once
too often. Fortunately Europe has been indignant about the suggestion
and the US seems simply to have ignored it.</p>
<p>Inflation is very much like toothpaste out of the tube. It
becomes a mess that cannot be controlled and leads to waste. Only the
waste caused by excess inflation is much worse than a little excess
toothpaste down the drain. In this financial crisis, however, we may
have learned something that is a bit dangerous: that is that very low
inflation leaves an economy less room for maneuver.</p>
<p>Under the leadership of former Fed Chairman Alan Greenspan all
we heard was how price stability and zero inflation should be our goal
and how the prices indices were biased up and so on. The lesson once
again is, be careful what you wish for. Europe may fare better under
lower inflation because of the breadth of its social welfare system.
The US has had a harder, more stressful, time. But admitting that is
not to say that US inflation should be higher or that the Fed should
notch up its idea of its inflation target. It is simply to face the
facts.</p>
<p>The ECB continues to be fixated on low inflation and, of
course, has its inflation ceiling mandate. The Bank of England is
similarly positioned but it has admitted to an inflation overshoot in
the post crisis period that it says is not serious or lasting and
contends it will ignore the temporary overshoot. The policy angle on
inflation no one has really gotten their arms around is the impact of
commodity prices - especially oil - on headline inflation. The ECB&#8217;s
headline inflation ceiling put it in difficult straights when oil
prices surged and drove headline inflation higher as the economy was
weakening. The Fed&#8217;s focus on core inflation left it more flexibility
to act.</p>
<p>Inflation is one of those peculiar things that we can all
agree upon yet we find reasons to divert our attention and policy from
the task at hand. It&#8217;s a bit like agreeing on what is a healthy diet
yet periodically finding we are overweight and having to do something
about it. The EU inflation situation appears to coming into a soft
landing of sorts. That, of course, is aided and abetted by what looks
like a poor growth result in the recovery. The US is in the same boat.
So while the inflation situation seems in hand for now there will
probably be no happily ever after here. Inflation fighting always
involves pain, vigilance and sacrifice.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"><b>Trends in EMU HICP; Flash Index</b> </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="3">% Mo/Mo</td>
<td style="font-weight: bold;" colspan="4">SAAR</td>
</tr>
<tr class="even">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">Dec-09</td>
<td style="font-weight: bold;">3-Mo</td>
<td style="font-weight: bold;">6-Mo</td>
<td style="font-weight: bold;">12-Mo</td>
<td style="font-weight: bold;">Yr Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">EMU-13</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>1.2%</td>
<td>1.4%</td>
<td>0.9%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Core</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods</td>
<td>#N/A</td>
<td>-0.9%</td>
<td>-0.1%</td>
<td>-2.4%</td>
<td>1.4%</td>
<td>0.7%</td>
<td>0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.8%</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>1.4%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">HICP</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>0.2%</td>
<td>0.3%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>#N/A</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>2.5%</td>
<td>1.2%</td>
<td>0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>#N/A</td>
<td>0.9%</td>
<td>0.4%</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>#N/A</td>
<td>0.0%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>0.8%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="8" class="firstcol">Core:xFE&amp;A</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>0.2%</td>
<td>0.9%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>#N/A</td>
<td>-0.2%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.9%</td>
<td>1.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>1.9%</td>
<td>1.5%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>#N/A</td>
<td>0.4%</td>
<td>0.2%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>3.1%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>0.3%</td>
<td>1.9%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Blue shaded area data
trail by one month</td>
</tr>
</tbody>
</table>
</body></html>

The EMU inflation chart tells a quick and dirty story of this business cycle without all the embellishments over banks lending, not-lending and financial crisis. Once upon a time, inflation was steady. Then prices overheated. Economic [...]

Progress- No Happily Ever After Euro-Area Inflation In February Stays Under Wraps

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302c.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Weekly chain store sales gave back a piece of their prior
week's improvement with a 0.8% slip. Since the spring of last year,
sales have gyrated around a sideways trend.<span></span></p>
<p><span style="color: black;">The ICSC-Goldman
Sachs retail chain-store sales index is constructed using the
same-store sales (stores open for one year) reported by 78 stores of
seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney,
Sears and Wal-Mart.</span></p>
</span> During the last ten years there has been a 69%
correlation between the year-to-year growth in chain store sales and
the growth in general merchandise retail sales.<span> The weekly
figures are available in Haver's <b>SURVEYW </b>database.</span>
<p></p>
<p>The leading indicator of chain store sales has been somewhat
weaker and last week moved to the low end of its year-long range. This
composite leading economic indicator is compiled from four series: (1)
the MBA's volume index of mortgage applications for home purchase (2)
the ABC News/Money magazine's survey of consumer buying conditions (3)
new filings for jobless benefits and (4) the 30-year government bond
yield.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM"><span>ICSC-UBS (SA, 1977=100)</span></a></b></th>
<th scope="col"><b>02/20/10</b></th>
<th scope="col"><b>02/13/10</b></th>
<th scope="col"><b>02/06/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>490.4</td>
<td>479.5</td>
<td>487.1</td>
<td>0.9%</td>
<td>0.1%</td>
<td>1.4%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
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Weekly chain store sales gave back a piece of their prior week's improvement with a 0.8% slip. Since the spring of last year, sales have gyrated around a sideways trend. The ICSC-Goldman Sachs retail chain-store sales index is [...]

U.S. Weekly Chain Store Sales Slip

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302b.jpg" style="width: 312px; height: 265px;"></p>
<p>A modest uptick in the <b>pump price for regular
gasoline </b>last week to $2.70 took it to the highest level
since January. This continued a trend of rising prices since
early-2009, which followed a recession-related downturn. Yesterday, the
spot market price for a gallon of regular gasoline retraced some of
that increase with a 3 cent decline. The figures are reported by the
U.S. Department of Energy and can be found in Haver's <b>WEEKLY
&amp; DAILY </b>databases.</p>
<p>The price for a barrel of light sweet crude (WTI) fell last
week to $79.26 and left it down from the early-January high of $82.59.
However, crude oil prices have fueled the same rising trend for
gasoline. Prices have risen from $71.53 early this past December and
are more than double the December 2008 low of $32.37. Yesterday, the
spot price fell moderately to $78.70.</p>
<p>Demand for gasoline fell 2.7% last week versus one year ago.
That decline compared to a 3.9% increase at the beginning of October.
The demand for residual fuel oil fell 3.5% y/y though the decline has
eased from -40.4% in February. Distillate demand fell 11.3% y/y, a
decline more moderate than the 21.6% y/y shortfall at the beginning of
last July. Inventories of crude oil and petroleum products slipped in
February but were up 1.1% from one year ago.</p>
<p>U.S. natural gas prices fell last week to an average $4.88 per
mmbtu (+17.3% y/y) from the high of $6.50 early in January.
Nevertheless they remained double the September low.</p>
<p>The energy price data can be found in Haver's <b>WEEKLY
</b>database while the daily figures are in <b>DAILY</b>.
The gasoline demand figures are in <b>OILWKLY</b>.</p>
<p>Outside of energy, commodity prices also have been strong.
Copper has led the gain as scrap prices have more-than doubled since
early last year. Scrap steel prices also have doubled during the same
period. Not far behind in the metals area are aluminum prices, up by
two-thirds. With improved housing activity has come strength in lumber
prices which have risen more than 50% since early-2009. Cotton prices
also have nearly doubled with improvement in consumer spending. In the
agricultural area, foodstuffs including wheat, corn &amp; butter,
as well as livestock prices have risen by one-half. Finally, gold
prices near $1,100 pounce have risen 50% since the fall of '08 and have
roughly tripled since 2001.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM"><b>Weekly
Prices</b></a></th>
<th scope="col"><b>03/01/10</b></th>
<th scope="col"><b>02/22/10</b></th>
<th scope="col"><b>02/15/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.70</td>
<td>2.66</td>
<td>2.61</td>
<td>39.7%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>79.26</td>
<td>78.30</td>
<td>73.91</td>
<td>89.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>

</body></html>

A modest uptick in the pump price for regular gasoline last week to $2.70 took it to the highest level since January. This continued a trend of rising prices since early-2009, which followed a recession-related downturn. Yesterday, [...]

U.S. Petroleum & Other Commodity Prices Move Higher

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

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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250902J20.jpg

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The ISM U.S. manufacturing PMI improved to 48.7 in August after falling to 48.0 during July, according to the Institute for Supply Management. The June	 reading was 49.0. These figures are below the 50 expansion-contraction dividing line. As a result, they indicate U.S. manufacturing sector contraction for the sixth consecutive month. They remain above, however, a low of 46.9 in October of last year. An August reading of 48.8 had been expected in the Action Economics Forecast Survey.

The new orders component improved to 51.4 last month after rising to 47.1 in July. It was increased from a March low of 45.2. A higher 24.7% (NSA) of respondents reported higher new orders while a lessened 22.7% reported lower. The employment reading edged up to 43.8 from 43.4. Nine percent (NSA) of respondents reported more hiring while 22.4% reported less. The supplier deliveries component rose to 51.3 after falling to 49.3 in July. Nine percent (NSA) of respondents indicated slower delivery speeds while 6.6% reported faster speeds. The inventories index increased to 49.4 from 48.9. It was the highest level in four months, up from a 46.7 May low. An increased 19.5% of respondents indicated higher inventories while 18.6% reported lower.

Offsetting these increases, the production index fell to 47.8 in August from 51.4 in July. It remained up, however, from a 44.0 April low. Seventeen percent (NSA) of respondents indicated higher production while 21.1% reported lower. The order backlog index fell to 44.7 (NSA) after rising to 46.8 in July. A lessened 16.3% of respondents reported higher order backlogs while 27.0% indicated lower.

The prices index eased to 63.7 last month from 64.8 in July, remaining below a high of 69.8 in April, but above its low of 39.4 in December 2022. A lessened 33.5% of respondents reported higher prices while a slightly increased 6.1% reported lower.

In other series, the export orders index rose to a seasonally adjusted 47.6 in August from 46.1 in July. It was the highest level in five months, up from a 40.1 May low. The imports index fell to 46.0 last month from 47.6 in July. The index is below a high of 52.6 in February.

The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

250902L20.jpg

250902M20.jpg

- Improvement fails to recover all of July decline.
- New orders gain offsets production decline.
- Price index falls to six-month low.

U.S. ISM Manufacturing PMI Increases in August; Prices Ease

Winnie Tapasanun

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The value of construction put in place dipped 0.1% m/m in July after declines of 0.4% in June (unrevised) and 0.2% in May (-0.4% previously), data from the U.S. Census Bureau showed. The July reading was the third successive m/m fall and the eighth in nine months. A 0.2% m/m July decline had been expected in the Action Economics Forecast Survey. The year-on-year rate was -2.8% July following -2.7% in June, registering the sixth consecutive y/y decline. The latest y/y number compared to a positive 5.5% in July 2024; thus, having remained well below its recent high of 12.9% in December 2023 and a peak of 18.4% in April 2022.

Private construction fell 0.2% (-4.6% y/y) in July, the 11th straight m/m fall, after decreases of 0.5% in June (unrevised) and 0.3% in May (-0.6% previously). Residential private construction edged up 0.1% (-5.3% y/y) in July, the first m/m rise since December, following a 0.6% decline in June (-0.7% initially). Single-family building increased 0.1% (-2.1% y/y), up for the first time since February, after a 1.2% June decrease; it was 47.3% of the residential private construction. Home improvement building ticked up 0.1% (-7.6% y/y), the third m/m gain in four months, following a 0.3% June drop; it was 40.0% of the residential private construction. Meanwhile, multi-family building slid 0.4% (-9.4% y/y), the third m/m slide in four months, reversing a 0.1% June uptick; it was 12.8% of the residential private construction.

Nonresidential private construction fell 0.5% (-3.7% y/y) in July, the third straight m/m fall and the fourth in five months, on top of a 0.4% decline in June (-0.3% initially). The July fall reflected m/m declines in the following nonresidential private constructions. These included amusement & recreation (-1.0%; +0.6% y/y), commercial (-0.9%; -9.9% y/y), manufacturing (-0.7%; -6.7% y/y), utilities (-0.7%; +2.6% y/y), religious (-0.3%; +19.2% y/y), and office (-0.2%; -0.4% y/y). To the upside, the following nonresidential private constructions rose m/m in July: transportation (0.6%; -2.8% y/y), health care (0.3%; -1.3% y/y), lodging (0.3%; -5.1% y/y), and educational (0.2%; -5.7% y/y). Meanwhile, communication private construction was virtually unchanged (-0.8% y/y) in July following two successive m/m increases.

The value of public construction rose 0.3% (3.4% y/y) in July, up for the fourth month in five, after holding steady in June (+0.1% initially), reflecting rises of 1.8% (17.4% y/y) in residential public construction and 0.3% (3.1% y/y) in nonresidential public construction. The following nonresidential public construction subcategories rose m/m in July. These included conservation & development (1.8%; 5.7% y/y), utilities (1.7%; -2.1% y/y), health care (1.3%; 14.2% y/y), office (1.3%; 0.3% y/y), water supply (1.2%; 2.8% y/y), amusement & recreation (0.4%; 3.8% y/y), transportation (0.3%; 6.2% y/y), commercial (0.1%; 27.0% y/y), and public safety (0.1%; 3.0% y/y). In contrast, sewage & waste disposal public construction (-0.3%; +11.2% y/y) and educational public construction (-0.1%; -1.2% y/y) declined m/m in July. Notably, spending on highways & streets, which made up 27.7% of public construction spending, eased 0.1% (+0.9% y/y) in July following a 0.3% rebound in June.

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

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- Headline: -0.1% m/m, the third straight m/m fall; -2.8% y/y, the sixth straight y/y slide.
- Residential private construction +0.1% m/m, up for the first time since December.
- Nonresidential private construction -0.5% m/m, the third consecutive m/m decline.
- Public sector construction +0.3% m/m, led by a 1.8% rebound in residential public building.


U.S. Construction Spending Eases in July

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Inflation in August was well behaved; the headline series with the monetary union posted a gain of 0.2% after 0.3% gains in each of the previous months. Still those increases mean that the three-month inflation rate is at 3% compared to 2.1% over 12 months. Stop headline inflation has grown moderately hot in the monetary union.

Across countries the largest EMU members has so well-behaved inflation in August, with Germany up 0.2%, France up 0.1%, and Italy and Spain both unchanged. However, inflation in the previous two months was a bit stronger leaving three-month inflation rates for France, Italy, and Spain over 2%. Over six months only Italy is over 2% and that's barely, and over 12 months only Spain is substantially above the 2% mark.

Core inflation in the monetary union is where the elusiveness and stubbornness is for the three large economies that report core inflation. Germany actually reports ex-energy inflation. Italy and Spain report core inflation. They're all showing increases of 0.3 and 0.2 over the last two months. Over three months German ex-energy inflation is running at a 2.4% annual rate with Italy's core at 2.7% and Spain's core at 3.8%. Over 12 months German ex-energy inflation is up at a 2.6% annual rate, compared to a 2.4% annual rate for Spain’s core and Italy’s core that that is nearly on the money at a 2.1% annual rate.

The 12-monht inflation rate is marginally worse for headline and core rates across this group of countries in August compared to July. For the EMU, the headline is the same at 2.1%. Even though shorter measures show some pressure building, 12-month inflation is marginally lower in August 2025 than in August 2024 for headline and core measures in the large countries.

However, there has been no sense of controlled inflation recently as all averages are clearly excessive with the average five-year reading at a low of 3% for core inflation in Italy to a five-year average high of 4.5% in Germany. This legacy for inflation is still a problem for some although central bankers around the world are trying to dismiss it as a past event; however, no one's quite sure whether inflation is really over the hump and going back to normal for good.

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This keeps monetary policy somewhat complicated; at the same time the global geopolitical scene is in turmoil, and it's always hard to make monetary and fiscal policy when there are national security risks especially when there's a war percolating at your border. Internationally the goods sectors – manufacturing- remain weak although there's evidence that global trade has showed some spunk at least in terms of the Baltic dry index which is undergoing some moderate firmness. In the United States, despite the fact that the Fed has not hit its inflation target in 4 ¼ years, the central bank still seems to be finding its way to rate cuts possibly as soon as this month. All that simply points out that it's a very different world than what it has been with central banks willing to cut rates with inflation over the top of the target having been over the top of its target for an extended period of time. This suggests to me that central bank credibility means something different or possibly that there is such a perception of the global economic environment that investors don't really feel that central banks are that important… sort of like deciding that your neighborhood is so safe; it doesn't matter if you lock the doors at night until of course it does matter. But then it’s too late.

Inflation in Europe Shows Mild Pressure

Tian Yong Woon

This week, we dive deeper into developments concerning India and China, while noting the recently improving relationship between the world’s two most populous countries. In India, market sentiment understandably soured (chart 1) after US President Trump followed through on earlier threats to raise additional tariffs to 50%, in response to its purchases of Russian oil. While these tariffs would render much of its exports to the US uncompetitive, a small source of interim relief comes from current exemptions, such as for pharmaceuticals and electronics, India’s major export categories to the US (chart 2).

Turning to China, overcapacity remains a concern for many of its major Western trading partners. Persistently rising export volumes amid falling export prices can signal overcapacity, though they are not definitive evidence. Nonetheless, indications of overcapacity — for example, in China’s transportation exports (chart 3) — continue to raise concerns. Europe has responded with significant tariffs on Chinese EVs, but Chinese producers have offset these by onshoring production in Europe or switching to hybrid vehicles, while continuing to expand export volumes despite declining prices (chart 4).

Amid rising US trade pressure, China and India have drawn closer as partners of circumstance despite their often-thorny history. Prime Minister Modi’s attendance at China’s Shanghai Cooperation Organization (SCO) summit, starting Sunday — his first visit to China in seven years — is a strong signal of improving ties. While this engagement may help foster trade and investment between the two countries, underlying challenges remain. India’s substantial trade deficit with China (chart 5) could worsen if imports increase, and mutual direct investment — which has been subdued in recent years, perhaps due to previously frosty relations — may require further policy support to rebound (chart 6).

**India**
President Trump followed through on his earlier threats by imposing an additional 25% tariff on India, raising the total additional tariff rate to 50% as of last week and in response to India’s purchases of Russian oil. Indian markets reacted sharply, with equities falling and the rupee weakening, as shown in chart 1. Given the scale of the new tariffs — which render much of India’s exports to the US uncompetitive — calls for government and monetary policy support have intensified. Authorities are already bracing for the immediate impact, including first-round effects such as rushed efforts to re-route trade, seek alternative markets, and limit losses through layoffs. On the fiscal side, Prime Minister Modi announced consumption tax cuts last week to cushion the blow, and the crisis may also present an opportunity to finally reform India’s notoriously complex tax system.

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Given India’s heavy reliance on the US for export revenue — and with US importers already pressuring Indian producers to cut prices — profits on both sides are likely to suffer under the newly imposed tariffs. As a partial reprieve, the US has temporarily exempted pharmaceuticals and electronics, two of India’s major export categories, as shown in chart 2. Moreover, significant front-loading of shipments ahead of the tariff hike may temporarily buoy trade data and near-term growth, though India’s longer-term prospects now face renewed headwinds.

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**China**
Moving on to China, the economy remains under scrutiny for signs of industrial overcapacity, a concern raised by several Western trading partners. While not conclusive on their own, some common hallmarks of industrial overcapacity include persistently falling prices — often driven by price wars — and a turn to higher exports as producers offload surplus output when domestic demand cannot absorb it. In this context, chart 3 compares year-to-date changes in both export volumes and unit values across major goods categories, offering suggestive — though not definitive — evidence of overcapacity. Notably, sectors such as transportation stand out, which we examine in greater detail in the next section.

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Focusing on a more concrete case of China’s overcapacity, electric-vehicle (EV) exports to Europe remain a key flashpoint. Export volumes continue to climb even as unit prices fall year-on-year (chart 4), suggesting that overcapacity persists, with low-cost Chinese EVs pressuring European automakers. This surge has continued despite EU tariffs of up to 45% on battery EVs. Chinese carmakers have offset the impact by promoting plug-in hybrids and onshoring production in Europe to sidestep duties and defend market share. Beijing, however, is not standing idle. Measures to rein in excess capacity and curb destructive price competition — or “break involution” — are underway. These include crackdowns on price wars across multiple sectors and even a dedicated fund to acquire and shutter roughly one-third of China’s loss-making polysilicon industry. Early signs of traction appear in China’s latest industrial profits data, where year-on-year declines narrowed to 1.7% in July as cut-throat pricing eased.

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**China & India relations**
China and India, facing rising trade pressure from the US, have drawn closer together as partners of circumstance despite their often-thorny history. A clear sign of warming ties was Prime Minister Modi’s attendance at the Shanghai Cooperation Organization (SCO) summit, which began on Sunday in Tianjin — his first visit to China in seven years after skipping last year’s meeting in Kazakhstan. Following talks at the summit, President Xi and Prime Minister Modi affirmed that China and India are partners rather than rivals, pledging to improve trade ties while easing tensions over their Himalayan border dispute. Modi also announced that direct India-China flights will resume after a five-year suspension. Even so, it remains uncertain how much India can expand imports from China without worsening its already sizable trade deficit, as shown in chart 5.

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The Xi-Modi meeting also raised prospects for renewed investment flows between the two countries. In recent years, mutual direct investment has slowed sharply, likely reflecting strained relations and caution. Stronger political engagement — including Foreign Minister Wang Yi’s earlier visit to India, a precursor to the summit — could help reverse this trend. As shown in chart 6, cross-border investment remains subdued. However, improving ties could pave the way for new projects, joint ventures, and deeper economic integration, potentially unlocking the combined economic potential of both countries given their large populations and other significant factors.

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Asia

Economic Letter from Asia: A Friend in Need

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The **PCE chain price index** increased 0.2% (2.6% y/y) after rising an unrevised 0.3% in June and an unrevised 0.2% in May. The y/y gain steadied at 2.6%. It was increased from 2.2% y/y in April. Energy prices fell 1.1% (-2.7% y/y) after rising 0.9%, while food & beverage prices eased 0.1% (+1.9% y/y) following a 0.3% rise. The price index excluding food & energy rose a steady 0.3%, after two straight 0.2% increases. The y/y gain edged up to 2.9% last month from 2.8% in June. It was increased from a low of 2.6% in April.

Durable goods prices eased 0.1% (+1.1% y/y) in July, after rising 0.5% in June. Home furnishings & appliance prices edged 0.1% higher (2.5% y/y), after increasing 1.3%. Recreational goods & vehicle costs declined 0.9% (-0.3% y/y) and reversed the 0.9% June strengthening. Motor vehicle & parts prices rose 0.2% (1.6% y/y), after a 0.4% June decline.

Prices of nondurable goods eased 0.1% (+0.2% y/y) last month after rising 0.4% in June. Clothing prices held steady both m/m and y/y after rising 0.3% in June. Food & beverage prices eased 0.1% (+1.9% y/y), following a 0.4% June increase. Gasoline & other energy prices fell 1.7% (-9.6% y/y), after rising 0.9% in June.

Services prices in July rose 0.3% (3.6% y/y), after four straight 0.2% increases. Housing & utility prices rose 0.2% (4.3% y/y), after two consecutive 0.3% increases, and services prices excluding energy & healthcare gained 0.4% (3.7% y/y) after two 0.2% gains. Healthcare prices rose 0.2% (2.7% y/y), after rising 0.4%. The cost of financial services & insurance jumped 1.2% (5.5% y/y) after rising 0.4% in June. Recreation services costs rose 0.3% (3.2% y/y) after rising 0.1%. Transportation prices gained 0.2% (4.4% y/y), following a 0.1% rise, while hotel & restaurant prices improved 0.1% (2.8% y/y) after a slight June decline.

**Personal consumption expenditures (PCE)** rose 0.5% (4.7% y/y) last month after increasing 0.4% in June, revised from 0.3%, after holding steady in May. The July rise matched expectations in the Action Economics Forecast Survey. When adjusted for price changes, PCE improved 0.3% in July (2.1% y/y) after rising 0.1% in June.

Real spending on durable goods increased 2.0% (3.2% y/y) in July, after falling for three straight months. Real spending on motor vehicles jumped 4.5% (3.5% y/y), after falling sharply in both June and May. Real outlays on furnishings & appliances improved 0.2% (0.9% y/y), after falling in each of the prior month. Real spending on recreational goods & vehicles increased 1.5% (4.9% y/y) last month, after falling 0.4% in June. Spending on “other” durable goods improved 0.4% (2.6% y/y) after rising 0.2% in June.

Nondurable goods spending in real terms rose 0.3% (2.7% y/y) in July after gaining 0.6% in June. Real clothing & footwear purchases rose 0.6% (4.9% y/y) last month, following a 0.5% rise during June. Real food & beverage purchases strengthened 0.7% (1.7% y/y) after rising 0.4%. Real outlays on gasoline & other energy products fell 1.3% (-1.5% y/y), after rising 1.5%. Real spending on “other” nondurable goods edged 0.1% higher (4.1% y/y) last month, following a 0.6% rise in June.

Real spending on services improved 0.1% (1.7% y/y) in July for the second straight month. Real spending on housing & utilities rose 0.1% (1.1% y/y) in July, for a second consecutive month, while real health care spending also rose 0.1% (3.9% y/y) after rising 0.2%. Real spending on food services & accommodations eased 0.2% (+1.7% y/y), after rising 0.4% in June. Real spending on financial services & insurance rose 0.2% (2.4% y/y) after increasing 0.4% in June. Real spending on transportation services rose 0.3% (-0.0% y/y) in July, after falling 0.6% in June. Recreation spending slipped 0.1% (+1.0% y/y), the same as in June. Spending on “other” services rose 0.3% (2.7% y/y) for the second straight month.

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**Personal income** rose 0.4% last month (5.0% y/y) after increasing 0.3% in June. A 0.5% gain was expected. Wages & salaries moved 0.6% higher (5.3% y/y), following a 0.1% increase during June. Rental income increased 0.5% (4.0% y/y) in July, after falling for three straight months. Proprietors’ income improved 0.7% (2.3% y/y), after a minimal 0.1% increase. Income from assets rose 0.1% (1.4% y/y), after holding steady in June, and current transfer receipts were unchanged (8.3% y/y) following a 1.1% June increase.

Disposable personal income increased 0.4% (4.6% y/y) during July following a 0.3% June rise. After adjusting for price changes, disposable income improved 0.2% (2.0% y/y) after holding steady in June.

The personal saving rate held steady in July at 4.4%, after falling from 5.0% in April. It still stands well above low of 3.5% in December of last year. Personal saving fell 1.7% (+5.8% y/y) in July, after declining 0.9% in June.

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

**Let’s Get On with It** from Fed Governor Christopher J. Waller is available [here](https://www.federalreserve.gov/newsevents/speech/waller20250828a.htm).

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- Core price increase y/y matches highest since February.
- Real spending moderation centers on services.
- Real disposable income improves; personal savings rate steadies.

Economy in Brief: March 2010

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