Tom Moeller

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On the
surface, the 431,000 gain in May payrolls after an unrevised 290,000
April rise looks strong but, in fact, it was not. First, the increase
was raised by the one-time hiring of 411,000 Census workers. Second,
the gain actually fell short of Consensus expectations for a 508,000
rise in the total. Lastly, the 41,000 gain in private sector payrolls
was the weakest since January.
The shortfall in private sector was broad-based.
Construction sector hiring fell 35,000 and reversed the increases in
the prior two months. Private service-sector hiring rose just 37,000
following firmer gains during five of the prior six months. The
weakness reflected a 6,600 decline (-0.8% y/y) in retail sector hiring,
a 12,000 shortfall (-2.2% y/y) in financial sector employment and a
soft 2,000 increase (-0.3% y/y) in leisure &amp; hospitality
jobs.<a href="/comment/100604f_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100604f.png" align="right" height="265" width="312"></a>
There were some bright spots in the hiring
figures. The 29,000 rise in factory payrolls was the fifth in a row.
Health care jobs rose 13,100 (1.9% y/y) though that was the weakest
increase since April of last year. Finally, temporary jobs rose 31,000,
on a par with the prior three months' increases but off from the
earlier gains. Perhaps also salvaging the sense of disappointment in
the overall payroll employment figures was the one-month diffusion
index. The 54.1 figure showed that hiring was positive in more
industries than not. Yet another caveat is that this was the lowest
figure since January.
Also countering some sense of
labor-market softness was a decline in the civilian unemployment rate to 9.7%,
although that just reversed the April increase. Moreover, the decline was all
due to a 322,000 shrinkage (-0.4% y/y) in the labor force, the first drop since
December. Household sector employment, in fact, also declined 35,000 (-0.7% y/y)
which was the first drop this year. Of note should be that the unemployment rate
for ages 20-24 fell sharply to 14.7% from 17.2%. The rate for those 25 and over
rose to 8.4%, its highest this year, due to expansion in the labor force. The
number of employed rose a respectable 129,000 (3.8% y/y).&nbsp;Finally, the
broadest measure of unemployment which adds marginally attached workers and
those working part-time for economic reasons to the unemployed slipped to 16.6%
from the 4Q '09 high of 17.3%.
Back to the establishment survey, the gain in the
length of the average workweek to 34.2 hours also was encouraging. It
raised the average 2Q index of aggregate hours worked (employment times
hours) by 3.7% (AR) from 1Q after that quarter's 2.3% increase. That
could suggest faster real GDP growth versus 3.0% in 1Q. Finally,
average hourly earnings rose 0.2% and that lifted the y/y increase to
2.4% from its 2.1% low in March.
The figures referenced above are available in
Haver's USECON database. Additional detail can be
found in the LABOR and in the EMPL
databases.
Subsidizing Job
Creation in the Great Recession from the Federal Reserve
Bank of New York is available&nbsp; <a href="http://www.newyorkfed.org/research/staff_reports/sr451.pdf">here</a>.
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<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col">Employment: 000s

</th><th scope="col">May
</th><th scope="col">April
</th><th scope="col">March
</th><th scope="col">Y/Y
</th><th scope="col">2009
</th><th scope="col">2008
</th><th scope="col">2007
</th></tr></thead>
<tr>
<td class="firstcol">Payroll Employment</td>
<td>431</td>
<td>290</td>
<td>208</td>
<td>-0.4%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Previous</td>
<td>--</td>
<td>290</td>
<td>230</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>49</td>
<td>40</td>
<td>19</td>
<td>-2.1%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-35</td>
<td>14</td>
<td>27</td>
<td>-8.6%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr>
<td class="firstcol">Private Service Producing</td>
<td>37</td>
<td>156</td>
<td>101</td>
<td>-0.2%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>390</td>
<td>72</td>
<td>50</td>
<td>-1.5%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>34.2</td>
<td>34.1</td>
<td>34.0</td>
<td>33.9 (May '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.1%</td>
<td>0.0%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>3.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.9%</td>
<td>9.7%</td>
<td>9.4%(May '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>

</table>

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On the surface, the 431,000 gain in May payrolls after an unrevised 290,000 April rise looks strong but, in fact, it was not. First, the increase was raised by the one-time hiring of 411,000 Census workers. Second, the gain actually [...]

U.S. Payroll Gain Is Propelled by 2010 Census Hiring, But Private-Sector Hiring Remains Soft

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On the
surface, the 431,000 gain in May payrolls after an unrevised 290,000
April rise looks strong but, in fact, it was not. First, the increase
was raised by the one-time hiring of 411,000 Census workers. Second,
the gain actually fell short of Consensus expectations for a 508,000
rise in the total. Lastly, the 41,000 gain in private sector payrolls
was the weakest since January.
The shortfall in private sector was broad-based.
Construction sector hiring fell 35,000 and reversed the increases in
the prior two months. Private service-sector hiring rose just 37,000
following firmer gains during five of the prior six months. The
weakness reflected a 6,600 decline (-0.8% y/y) in retail sector hiring,
a 12,000 shortfall (-2.2% y/y) in financial sector employment and a
soft 2,000 increase (-0.3% y/y) in leisure &amp; hospitality
jobs.<a href="/comment/100604f_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100604f.png" align="right" height="265" width="312"></a>
There were some bright spots in the hiring
figures. The 29,000 rise in factory payrolls was the fifth in a row.
Health care jobs rose 13,100 (1.9% y/y) though that was the weakest
increase since April of last year. Finally, temporary jobs rose 31,000,
on a par with the prior three months' increases but off from the
earlier gains. Perhaps also salvaging the sense of disappointment in
the overall payroll employment figures was the one-month diffusion
index. The 54.1 figure showed that hiring was positive in more
industries than not. Yet another caveat is that this was the lowest
figure since January.
Also countering some sense of
labor-market softness was a decline in the civilian unemployment rate to 9.7%,
although that just reversed the April increase. Moreover, the decline was all
due to a 322,000 shrinkage (-0.4% y/y) in the labor force, the first drop since
December. Household sector employment, in fact, also declined 35,000 (-0.7% y/y)
which was the first drop this year. Of note should be that the unemployment rate
for ages 20-24 fell sharply to 14.7% from 17.2%. The rate for those 25 and over
rose to 8.4%, its highest this year, due to expansion in the labor force. The
number of employed rose a respectable 129,000 (3.8% y/y).&nbsp;Finally, the
broadest measure of unemployment which adds marginally attached workers and
those working part-time for economic reasons to the unemployed slipped to 16.6%
from the 4Q '09 high of 17.3%.
Back to the establishment survey, the gain in the
length of the average workweek to 34.2 hours also was encouraging. It
raised the average 2Q index of aggregate hours worked (employment times
hours) by 3.7% (AR) from 1Q after that quarter's 2.3% increase. That
could suggest faster real GDP growth versus 3.0% in 1Q. Finally,
average hourly earnings rose 0.2% and that lifted the y/y increase to
2.4% from its 2.1% low in March.
The figures referenced above are available in
Haver's USECON database. Additional detail can be
found in the LABOR and in the EMPL
databases.
Subsidizing Job
Creation in the Great Recession from the Federal Reserve
Bank of New York is available&nbsp; <a href="http://www.newyorkfed.org/research/staff_reports/sr451.pdf">here</a>.
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<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col">Employment: 000s

</th><th scope="col">May
</th><th scope="col">April
</th><th scope="col">March
</th><th scope="col">Y/Y
</th><th scope="col">2009
</th><th scope="col">2008
</th><th scope="col">2007
</th></tr></thead>
<tr>
<td class="firstcol">Payroll Employment</td>
<td>431</td>
<td>290</td>
<td>208</td>
<td>-0.4%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Previous</td>
<td>--</td>
<td>290</td>
<td>230</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>49</td>
<td>40</td>
<td>19</td>
<td>-2.1%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-35</td>
<td>14</td>
<td>27</td>
<td>-8.6%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr>
<td class="firstcol">Private Service Producing</td>
<td>37</td>
<td>156</td>
<td>101</td>
<td>-0.2%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>390</td>
<td>72</td>
<td>50</td>
<td>-1.5%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>34.2</td>
<td>34.1</td>
<td>34.0</td>
<td>33.9 (May '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.1%</td>
<td>0.0%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>3.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.9%</td>
<td>9.7%</td>
<td>9.4%(May '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>

</table>
U.S. Worker Productivity Revised Down But Cost Decline Still near Record
 
by <a href="/comment/Moeller.html">Tom
Moeller</a> June 4, 2010

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Slower
growth in real GDP last quarter accompanied more of a slowdown in
worker productivity than reported last month. Nonfarm business sector
grew 2.8% (AR) versus the initial estimate of 3.6%, down from 6.3%
during 4Q. Nevertheless, the 6.1% surge in U.S. worker productivity
during the last four quarters matched the strongest since early-1962.
New technologies, improved work techniques and improved labor
skill-sets have paid off. Productivity last quarter fell short of
Consensus expectations for a 3.4% rise.p
The
slowdown in 1Q productivity occurred as real output growth slowed to
4.0% (3.0% y/y) from 7.0% during 4Q. That was met by an
upwardly-revised gain in hours worked of&nbsp; 1.1% (-3.0% y/y)
from 0.7% in 4Q.&nbsp;Growth in compensation costs also accelerated
to 1.5% (1.6% y/y) after declines in three of the prior four quarters.
Four-quarter growth in compensation was nearly the slowest since 1995.
The
rate of decline in 1Q unit labor costs eased to 1.3% as compensation
picked up. Regardless, the four-quarter decline in costs of
4.2% was near the largest on record.

In
the factory sector alone, worker productivity growth also slowed
sharply to a downwardly-revised 1.5% (7.2% y/y) versus 6.5% during 4Q
'09. The slowdown occurred as output rose an accelerated 7.2% (3.2%
y/y) but growth in hours-worked picked up to 5.6% (-3.8% y/y) following
a slight 4Q decline. Compensation fell negligibly but the y/y change of
1.8% was stronger than reported initially. It remained, however, near
the weakest since 2006. The combination of the rise in productivity and
the slip in compensation dropped unit labor costs by a lessened
1.5%.
The
productivity &amp; cost figures are available in Haver's USECON
database.
Yesterday's comments by Fed Chairman Ben S. Bernanke on Small
Business Financing can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20100603a.htm">here</a>.
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<colgroup><col><col><col><col><col><col><col><col></colgroup>
<a href="http://www.haverselect.com/dlx/USECON/@EC/@EC02/@EC02.HTM" ;="">Nonfarm
Business Sector</a><a href="http://www.haverselect.com/dlx/USECON/@EC/@EC02/@EC02.HTM">
</a>(SAAR,%)

<th scope="col">1Q '10</th>
<th scope="col">4Q '09</th>
<th scope="col">3Q '09</th>
<th scope="col">1Q Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>

<tr>
<td class="firstcol">Output per Hour (Productivity)</td>
<td>2.8</td>
<td>6.3</td>
<td>7.8</td>
<td>6.1</td>
<td>3.7</td>
<td>2.1</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>1.5</td>
<td>-1.9</td>
<td>-0.4</td>
<td>1.6</td>
<td>1.8</td>
<td>3.1</td>
<td>4.2</td>
</tr>
<tr>
<td class="firstcol">Unit Labor Costs
</td>
<td>-1.3</td>
<td>-7.8</td>
<td>-7.6</td>
<td>-4.2</td>
<td>-1.9</td>
<td>1.0</td>
<td>2.3</td>
</tr>
<tr class="even">
<td class="firstcol" colspan=8>Manufacturing Sector</td>
</tr>
<tr>
<td class="firstcol">Output per Hour</td>
<td>1.5</td>
<td>6.5</td>
<td>14.8</td>
<td>7.2</td>
<td>1.8</td>
<td>1.1</td>
<td>3.4</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>-0.0</td>
<td>2.0</td>
<td>-1.0</td>
<td>1.8</td>
<td>4.5</td>
<td>3.2</td>
<td>4.3</td>
</tr>
<tr>
<td class="firstcol">Unit Labor Costs</td>
<td>-1.5</td>
<td>-4.2</td>
<td>-13.7</td>
<td>-5.1</td>
<td>2.7</td>
<td>2.1</td>
<td>0.9</td>
</tr>


GDP Edges Higher In EMU GDP Revision 
 
by <a href="/comment/Brusca.html">Robert Brusca</a> June 4, 2010


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EMU GDP performed slightly better than expected in 2010-Q1. GDP is now
up by 0.6% Yr/Yr the first positive Yr/Yr result since the downturn
began. Austria and Italy post the strongest Q/Q numbers in 2010-Q1.
Germany and France show the strongest Yr/Yr growth in Q1. The best of
the Euro-Area, on this score, trail the US, Japan and Switzerland. 
Consumption in Europe continues to falter. Growth
in Q1 is substantially about exports. Quite apart from the GDP figure
itself Europe needs to get more balanced growth and it needs more
home-grown growth. Exports rose at a 10% pace in Q1 as private
consumption fell by 0.4%. Domestic demand was up mostly on government
spending initiatives.
As the table shows Greece is still under
pressure. The hardest thing for Greece is to have to endure a period of
fiscal austerity right on the heels of a difficult recession. 
Spain has posted positive growth for 2010-Q1 but
it too faces fiscal austerity in the quarters ahead plus a lingering
problem with its construction sector and the banking problems that have
been connected with that. Portugal has not released its Q1 GDP result
yet, nor has Ireland. 
f there are to be synergies in the Euro-Area its
member countries will have to brew home grown prosperity instead of
taking it from abroad with export growth. Europe is lacking balance in
a number of ways as this financial crisis and its aftermath, the
euro-debt crisis, clearly demonstrate. Balance in growth is another
factor lacking in the Euro-Area. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col" colspan="8">Euro-Area
and main G-10 country GDP Results
</th></tr></thead>
<tbody>
<tr class="even">
<td>&nbsp;</td>
<td colspan="3">Quarter Over Quarter-Saar</td>
<td colspan="4">Year/Year</td>
</tr>
<tr class="even">
<td class="firstcol">GDP</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q2-09</td>
</tr>
<tr>
<td class="firstcol">EMU</td>
<td>0.8%</td>
<td>0.5%</td>
<td>1.6%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>-4.1%</td>
<td>-4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Austria</td>
<td>3.5%</td>
<td>1.3%</td>
<td>2.8%</td>
<td>0.8%</td>
<td>-1.5%</td>
<td>-3.6%</td>
<td style="color: red;">-5.0%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.5%</td>
<td>2.2%</td>
<td>1.0%</td>
<td>1.2%</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-3.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>0.6%</td>
<td>0.7%</td>
<td>2.9%</td>
<td>1.5%</td>
<td>-2.2%</td>
<td>-4.8%</td>
<td>-5.8%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td>-3.1%</td>
<td>-3.1%</td>
<td>-1.9%</td>
<td>-2.3%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy </td>
<td>2.1%</td>
<td>-0.2%</td>
<td>1.5%</td>
<td>0.6%</td>
<td>-2.8%</td>
<td>-4.7%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">The Netherlands</td>
<td>1.0%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td>-4.0%</td>
<td style="color: red;">-5.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>0.3%</td>
<td>-0.6%</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>-3.1%</td>
<td>-4.0%</td>
<td style="color: red;">-4.2%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>1.2%</td>
<td>2.0%</td>
<td>-1.2%</td>
<td>-0.2%</td>
<td>-3.1%</td>
<td>-5.3%</td>
<td style="color: red;">-5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">US</td>
<td>3.0%</td>
<td>5.6%</td>
<td>2.2%</td>
<td>2.5%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td style="color: red;">-3.8%</td>
</tr>
<tr>
<td class="firstcol">Japan</td>
<td>4.9%</td>
<td>4.2%</td>
<td>0.5%</td>
<td>4.2%</td>
<td>-1.4%</td>
<td>-4.8%</td>
<td>-6.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Switzerland</td>
<td>1.6%</td>
<td>3.5%</td>
<td>2.2%</td>
<td>1.7%</td>
<td>0.2%</td>
<td>-1.4%</td>
<td style="color: red;">-2.5%</td>
</tr>
</tbody>
</table>
</html>

Robert Brusca

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<a href="/comment/100603k_big.png" name="modal"><img style="width: 353px; height: 265px;" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603k.png"></a>
Euro-Area Retail sales broke off from their strong upswing and fell
sharply in April. The 1.2% drop cut the Yr/Yr growth rate for sales to
1.0%. Meanwhile motor vehicle sales continued to plummet in the Zone
and have fallen at a 22% pace over three-months and by 5.7% Yr/Yr.
Motor Vehicle registrations dropped by 11.4% in April. 
Germany and the UK among the early reporters show
their sales in April each were up. Germany still shows a Yr/Yr sales
decline, however, while UK sales are up by 1.7% Yr/Yr. Overall e-Zone
sales have had their upward momentum cut. 
Also on the day the revised Services PMI indices
were released. The EMU index rose more strongly on revision while the
UK index showed a meager increase from the previous month.
On one hand the weakness in retail sales suggests
that all the problems in Greece and the knock-on effect on worries may
have damaged consumer willingness to spend. We have seen the more
topical consumer sentiment indices drop off already. But the services
sector numbers tell us that economic improvement is still in train –and
in the important job-creating services sector. The reality of the
improvement should dominate the ephemeral worries except in those
countries where real events are under strain such as Greece and
possibly in Spain where the fiscal measures will have some bite. We are
still waiting on the actions in other nations. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope=col" colspan=7>Euro-Area Retail Sales 
</th></tr>
<tr class="even">
<td>&nbsp;</td>
<td colspan=3>M/M</td>
<td colspan=3>Saar</td>
</tr></thead>
<tr>
<td class="firstcol">&nbsp;</td>
<td>Apr-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone
Total Volume</td>
<td>-1.2%</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>-3.1%</td>
<td>1.8%</td>
<td>1.0%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan=7>Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor
Vehicle Reg</td>
<td>-11.4%</td>
<td>3.3%</td>
<td>2.4%</td>
<td>-22.8%</td>
<td>-16.5%</td>
<td>-5.7%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan=7>NonFood Country detail: Volume</td>
</tr>
<tr>
<td class="firstcol">Germany
Value</td>
<td>1.0%</td>
<td>-1.6%</td>
<td>1.6%</td>
<td>3.8%</td>
<td>-0.6%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">UK(EU)
Volume</td>
<td>0.2%</td>
<td>0.5%</td>
<td>2.4%</td>
<td>13.1%</td>
<td>-2.4%</td>
<td>1.7%</td>
</tr>

</table>

</html>

Euro-Area Retail sales broke off from their strong upswing and fell sharply in April. The 1.2% drop cut the Yr/Yr growth rate for sales to 1.0%. Meanwhile motor vehicle sales continued to plummet in the Zone and have fallen at a 22% [...]

EMU Retail Sales Tail Off Sharply

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<a href="/comment/100603h_big.png" name="modal"><img style="width: 353px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603h.png" align="left"></a>
 Employment gains continued last month. The latest
report from the payroll processor ADP, in their National Employment
Report, indicated that private nonfarm payroll levels rose in May by
55,000. The increase followed upwardly revised gains during the prior
two months and was the fourth consecutive monthly rise. 
ADP
compiled the estimate from its database of individual companies'
payroll information. Macroeconomic Advisers, LLC, the St. Louis
economic consulting firm, developed the methodology for transforming
the raw data into an economic indicator.The U.S. Bureau of Labor
Statistics will report May payroll employment tomorrow. As a comparison, the April increase of
65,000 in ADP's measure of private nonfarm payrolls was accompanied by
a rise of 231,000 jobs in the BLS measure of private sector payrolls.
According to ADP and Macro-Advisers, the correlation between the
monthly percentage change in the ADP estimate and that in the BLS data
is 0.90.
ADP reported that private service-producing
industry employment rose for the fourth&nbsp; consecutive month
with a gain of 78,000 (-0.5% y/y). Small-sized payrolls grew 37,000
(-0.3% y/y) while medium-sized payrolls grew 37,000 (-0.5% y/y). These
increases were accompanied by a modest 4,000 gain (-1.2% y/y) in large
service producing payrolls.
 Goods producing employment fell another
23,000 during May though the three-month change eased to -1.4% (AR)
versus -15.8% one year ago. In the manufacturing sector alone, however,
payrolls rose 15,000 (-3.7% y/y) for the fourth consecutive monthly
rise. Large goods producing payrolls slipped 1,000 (-6.3% y/y) while
small-sized payrolls fell 24,000 (-7.5% y/y). New figures provided for
construction employment indicated a moderating decline of 41,000 jobs.
The greatest drop, 120,000, was logged during March of 2009. Financial
activities jobs rose 5,000. 
The ADP National Employment Report
data is maintained in Haver's USECON
database; historical figures date back to December 2000. The figures in
this report cover only private sector jobs and exclude employment in
the public sector. The
full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_May_10.pdf">here</a>
and the ADP
methodology is explained <title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" >here.

<a href="/comment/100603i_big.png" name="modal"><img style="width: 312px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603i.png"></a><a href="/comment/100603j_big.png" name="modal"><img style="width: 312px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603j.png"></a>


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>

<th scope="col"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM">ADP
National Employment Report</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead>
<tbody>
<tr>
<td class="firstcol">Total Nonfarm Private Payroll
Employment (m/m Chg., 000s)</td>
<td>55</td>
<td>65</td>
<td>32</td>
<td>-1.5%</td>
<td>-4.9%</td>
<td>-0.7%</td>
<td>1.1%</td>
</tr>

<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>13</td>
<td>18</td>
<td>8</td>
<td>-1.3</td>
<td>-4.1</td>
<td>-0.1</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>39</td>
<td>31</td>
<td>19</td>
<td>-1.4</td>
<td>-5.7</td>
<td>-0.9</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>3</td>
<td>16</td>
<td>5</td>
<td>-2.2</td>
<td>-5.6</td>
<td>-1.8</td>
<td>-0.2</td>
</tr>

<tr>
<td class="firstcol">&nbsp;&nbsp; Goods
Producing</td>
<td>-23</td>
<td>-10</td>
<td>-28</td>
<td>-6.2</td>
<td>-12.3</td>
<td>-3.7</td>
<td>-1.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Manufacturing</td>
<td>15</td>
<td>31</td>
<td>7</td>
<td>-3.7</td>
<td>-11.1</td>
<td>-3.0</td>
<td>-1.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Service
Producing</td>
<td>78</td>
<td>75</td>
<td>60</td>
<td>-0.5</td>
<td>-3.3</td>
<td>0.0</td>
<td>1.7</td>
</tr>
</tbody>
</table>

</html>

Employment gains continued last month. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payroll levels rose in May by 55,000. The increase followed upwardly revised [...]

ADP Report: Moderate Job Growth Continues

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<a href="/comment/100603e_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603e.png" p align="left" height="265" width="353"></a>
The Bureau of Labor Statistics indicated that
initial claims for jobless insurance slipped another 10,000 to 453,000.
That followed last week's 11,000 decline which was less than initially
reported. The latest number matched Consensus expectations and claims
remained near this cycle's lowest. Last week's figure was down from the
recession peak of 651,000 reached in March of 2009 but the four-week
moving average of initial claims ticked up to 459,000.

A 31,000 increase in continuing claims for
unemployment insurance during the latest week reversed the declines
during the prior two weeks. Nevertheless, claims remained near the
cycle low and down by one-third from the June '09 peak. 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 at 4.654M remained near the
cycle low. This series dates back to 1966.

Extended benefits for unemployment
insurance rose further w/w to 314,311 with recent changes to the
duration benefits paid. However, they were down sharply from a peak of
597,688 reached in November.

The insured unemployment rate remained at 3.6%
where it has been since mid-February. The rate reached a high of 4.9%
during May of 2009. During the last ten years, there has been a 96%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.

The highest insured unemployment rates in the
week ending May 15 were in Puerto Rico (5.9 percent), Alaska (5.8),
Oregon (5.2), Nevada (4.8), California (4.6), Pennsylvania (4.5),
Wisconsin (4.4), North Carolina (4.3), Connecticut (4.1), Michigan
(4.0), Montana (4.0), New Jersey (4.0), Rhode Island (4.0), and South
Carolina (4.0). The lowest insured unemployment rates were in Virginia
(1.8), Texas (2.2), Tennessee (2.6), Wyoming (2.7), Georgia (2.8),
Maryland (2.8), Ohio (2.9), Maine (3.0) Florida (3.2) and New York
(3.3). These data are not seasonally adjusted but the overall insured
unemployment rate is.

The unemployment insurance
claims data is available in Haver's WEEKLY database
and the state data is in the REGIONW database.


<a href="/comment/100603f_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603f.png" height="265" width="314"></a><a href="/comment/100603g_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603g.png" height="265" width="314"></a>
<table border="0" cellspacing="0" width="100%">
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<thead><tr>

 
 <th scope="col"><a 
 href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM"
 ;="">Unemployment Insurance (000s)</a>
 </th><td scope="col"> 05/29/10</td>
 <td scope="col">05/22/10</td>
 <td scope="col">05/15/10</td>
 <td scope="col">Y/Y</td>
 <td scope="col">2009</td>
 <td scope="col">2008</td>
 <td scope="col">2007</td>
 </tr>
 </thead>
 <tr class"grey2">
 <td class="firstcol">Initial
Claims</td>
 <td>453</td>
 <td>463</td>
 <td>474</td>
 <td>-26.5%</td>
 <td>572</td>
 <td>419</td>
 <td>321</td>
 </tr>
 <tr>
 <td class="firstcol">Continuing
Claims</td>
 <td>--</td>
 <td>4,666</td>
 <td>4,635</td>
 <td>-28.4</td>
 <td>5,809</td>
 <td>3,340</td>
 <td>2,549</td>
 </tr>
 <tr>
 <td class="firstcol">Insured
Unemployment Rate (%)</td>
 <td>--</td>
 <td>3.6</td>
 <td>3.6</td>
 <td>4.9
(5/2009)</td>
 <td>4.4</td>
 <td>2.5</td>
 <td>1.9</td>
 </tr>
 
</table>


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The Bureau of Labor Statistics indicated that initial claims for jobless insurance slipped another 10,000 to 453,000. That followed last week's 11,000 decline which was less than initially reported. The latest number matched Consensus [...]

U.S. Initial Unemployment Insurance Claims Are Lower Again

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<a href="/comment/100603a_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603a.png" height="265" width="314"></a><a href="/comment/100603b_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603b.png" height="265" width="314"></a>

The
rate of expansion in service sector
activity has been steady this Spring. The Institute for Supply
Management's (ISM) Composite Index for the service &amp;
construction sectors during May held at 55.4 for the third month,
though that still was the highest level since early-2006. In addition,
the series has risen considerably from a low of 37.2 late in 2008. The
latest figure roughly matched Consensus expectations for a reading of
55.7. Since the series' inception in 1997 there has been a 65%
correlation between the level of the composite index in the
nonmanufacturing sector and the q/q change in real GDP for the services
and the construction sectors.

The
employment index posted a gain to 50.4, its
first month above the break-even level since December 2007. Twenty-two
percent of respondents reported increased hiring while 13% reported
fewer jobs. Since the series' inception in 1997 there has been an 80%
correlation between the level of the ISM nonmanufacturing employment
index and the m/m change in payroll employment in the service-producing
plus the construction industries.&nbsp;The business activity index
also rose m/m but new orders fell. Thirty-five percent of respondents
reported higher orders while only 13% reported them lower. Vendor
delivery speeds sped up
marginally m/m but they're much slower than early last year.

The
pricing power index slipped to 60.6 but
remained up sharply from the 2008 low. Thirty-five percent of
respondents reported higher prices while 5% reported them lower. At the
worst, late in 2008, 41% reported lower prices. Since its inception ten
years ago, there has been a 73% correlation between the price index and
the q/q change in the GDP services chain price index.

Beginning with the January 2008 Nonmanufacturing <cite>Report
On
Business &#174;, </cite>the composite index is calculated as an
indication of overall economic conditions for the non-manufacturing
sector. It is a composite index based on the diffusion indices of four
of the indicators (business activity, new orders, employment and
supplier deliveries) with equal weights. The latest report from the ISM
can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.


<a href="/comment/100603c_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603c.png" height="265" width="314"></a><a href="/comment/100603d_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603d.png" height="265" width="314"></a>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM" ;="">ISM
Nonmanufacturing Survey</a>
</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">May
'09
</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead>
<tr>
<td class="firstcol">Composite Index</td>
<td>55.4</td>
<td>55.4</td>
<td>55.4</td>
<td>44.5</td>
<td>46.2</td>
<td>47.3</td>
<td>53.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Business Activity</td>
<td>61.1</td>
<td>60.3</td>
<td>60.0</td>
<td>43.6</td>
<td>48.0</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
New Orders</td>
<td>57.1</td>
<td>58.2</td>
<td>62.3</td>
<td>45.4</td>
<td>47.9</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Employment</td>
<td>50.4</td>
<td>49.5</td>
<td>49.8</td>
<td>38.9</td>
<td>39.9</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Supplier Deliveries (NSA)</td>
<td>53.0</td>
<td>53.5</td>
<td>49.5</td>
<td>50.0</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="grey1">
<td class="firstcol">Prices
Index
</td>
<td>60.6</td>
<td>64.7</td>
<td>62.9</td>
<td>
47.4
</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>

</table>
</body></html>

The rate of expansion in service sector activity has been steady this Spring. The Institute for Supply Management's (ISM) Composite Index for the service & construction sectors during May held at 55.4 for the third month, though that [...]

U.S. ISM Nonmanufacturing Index Is Unchanged But Job Growth At New High

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The
rate of expansion in service sector
activity has been steady this Spring. The Institute for Supply
Management's (ISM) Composite Index for the service &amp;
construction sectors during May held at 55.4 for the third month,
though that still was the highest level since early-2006. In addition,
the series has risen considerably from a low of 37.2 late in 2008. The
latest figure roughly matched Consensus expectations for a reading of
55.7. Since the series' inception in 1997 there has been a 65%
correlation between the level of the composite index in the
nonmanufacturing sector and the q/q change in real GDP for the services
and the construction sectors.

The
employment index posted a gain to 50.4, its
first month above the break-even level since December 2007. Twenty-two
percent of respondents reported increased hiring while 13% reported
fewer jobs. Since the series' inception in 1997 there has been an 80%
correlation between the level of the ISM nonmanufacturing employment
index and the m/m change in payroll employment in the service-producing
plus the construction industries.&nbsp;The business activity index
also rose m/m but new orders fell. Thirty-five percent of respondents
reported higher orders while only 13% reported them lower. Vendor
delivery speeds sped up
marginally m/m but they're much slower than early last year.

The
pricing power index slipped to 60.6 but
remained up sharply from the 2008 low. Thirty-five percent of
respondents reported higher prices while 5% reported them lower. At the
worst, late in 2008, 41% reported lower prices. Since its inception ten
years ago, there has been a 73% correlation between the price index and
the q/q change in the GDP services chain price index.

Beginning with the January 2008 Nonmanufacturing <cite>Report
On
Business &#174;, </cite>the composite index is calculated as an
indication of overall economic conditions for the non-manufacturing
sector. It is a composite index based on the diffusion indices of four
of the indicators (business activity, new orders, employment and
supplier deliveries) with equal weights. The latest report from the ISM
can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.


<a href="/comment/100603c_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603c.png" height="265" width="314"></a><a href="/comment/100603d_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603d.png" height="265" width="314"></a>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM" ;="">ISM
Nonmanufacturing Survey</a>
</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">May
'09
</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead>
<tr>
<td class="firstcol">Composite Index</td>
<td>55.4</td>
<td>55.4</td>
<td>55.4</td>
<td>44.5</td>
<td>46.2</td>
<td>47.3</td>
<td>53.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Business Activity</td>
<td>61.1</td>
<td>60.3</td>
<td>60.0</td>
<td>43.6</td>
<td>48.0</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
New Orders</td>
<td>57.1</td>
<td>58.2</td>
<td>62.3</td>
<td>45.4</td>
<td>47.9</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Employment</td>
<td>50.4</td>
<td>49.5</td>
<td>49.8</td>
<td>38.9</td>
<td>39.9</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Supplier Deliveries (NSA)</td>
<td>53.0</td>
<td>53.5</td>
<td>49.5</td>
<td>50.0</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="grey1">
<td class="firstcol">Prices
Index
</td>
<td>60.6</td>
<td>64.7</td>
<td>62.9</td>
<td>47.4</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>

</table>
U.S. Initial Unemployment
Insurance Claims Are Lower Again
 
by <a href="/comment/Moeller.html">Tom
Moeller</a> June 3, 2010


<a href="/comment/100603e_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603e.png" p align="left" height="265" width="353"></a>
The Bureau of Labor Statistics indicated that
initial claims for jobless insurance slipped another 10,000 to 453,000.
That followed last week's 11,000 decline which was less than initially
reported. The latest number matched Consensus expectations and claims
remained near this cycle's lowest. Last week's figure was down from the
recession peak of 651,000 reached in March of 2009 but the four-week
moving average of initial claims ticked up to 459,000.

A 31,000 increase in continuing claims for
unemployment insurance during the latest week reversed the declines
during the prior two weeks. Nevertheless, claims remained near the
cycle low and down by one-third from the June '09 peak. 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 at 4.654M remained near the
cycle low. This series dates back to 1966.

Extended benefits for unemployment
insurance rose further w/w to 314,311 with recent changes to the
duration benefits paid. However, they were down sharply from a peak of
597,688 reached in November.

The insured unemployment rate remained at 3.6%
where it has been since mid-February. The rate reached a high of 4.9%
during May of 2009. During the last ten years, there has been a 96%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.

The highest insured unemployment rates in the
week ending May 15 were in Puerto Rico (5.9 percent), Alaska (5.8),
Oregon (5.2), Nevada (4.8), California (4.6), Pennsylvania (4.5),
Wisconsin (4.4), North Carolina (4.3), Connecticut (4.1), Michigan
(4.0), Montana (4.0), New Jersey (4.0), Rhode Island (4.0), and South
Carolina (4.0). The lowest insured unemployment rates were in Virginia
(1.8), Texas (2.2), Tennessee (2.6), Wyoming (2.7), Georgia (2.8),
Maryland (2.8), Ohio (2.9), Maine (3.0) Florida (3.2) and New York
(3.3). These data are not seasonally adjusted but the overall insured
unemployment rate is.

The unemployment insurance
claims data is available in Haver's WEEKLY database
and the state data is in the REGIONW database.


<a href="/comment/100603f_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603f.png" height="265" width="314"></a><a href="/comment/100603g_big.png" name="modal"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603g.png" height="265" width="314"></a>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>

 
 <th scope="col"><a 
 href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM"
 ;="">Unemployment Insurance (000s)</a>
 </th><td scope="col"> 05/29/10</td>
 <td scope="col">05/22/10</td>
 <td scope="col">05/15/10</td>
 <td scope="col">Y/Y</td>
 <td scope="col">2009</td>
 <td scope="col">2008</td>
 <td scope="col">2007</td>
 </tr>
 </thead>
 <tr class"grey2">
 <td class="firstcol">Initial
Claims</td>
 <td>453</td>
 <td>463</td>
 <td>474</td>
 <td>-26.5%</td>
 <td>572</td>
 <td>419</td>
 <td>321</td>
 </tr>
 <tr>
 <td class="firstcol">Continuing
Claims</td>
 <td>--</td>
 <td>4,666</td>
 <td>4,635</td>
 <td>-28.4</td>
 <td>5,809</td>
 <td>3,340</td>
 <td>2,549</td>
 </tr>
 <tr>
 <td class="firstcol">Insured
Unemployment Rate (%)</td>
 <td>--</td>
 <td>3.6</td>
 <td>3.6</td>
 <td>4.9
(5/2009)</td>
 <td>4.4</td>
 <td>2.5</td>
 <td>1.9</td>
 </tr>
 
</table>
ADP Report: Moderate Job Growth Continues
 
by <a href="/comment/Moeller.html">Tom
Moeller</a> June 3, 2010


<a href="/comment/100603h_big.png" name="modal"><img style="width: 353px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603h.png" align="left"></a>
 Employment gains continued last month. The latest
report from the payroll processor ADP, in their National Employment
Report, indicated that private nonfarm payroll levels rose in May by
55,000. The increase followed upwardly revised gains during the prior
two months and was the fourth consecutive monthly rise. 
ADP
compiled the estimate from its database of individual companies'
payroll information. Macroeconomic Advisers, LLC, the St. Louis
economic consulting firm, developed the methodology for transforming
the raw data into an economic indicator.The U.S. Bureau of Labor
Statistics will report May payroll employment tomorrow. As a comparison, the April increase of
65,000 in ADP's measure of private nonfarm payrolls was accompanied by
a rise of 231,000 jobs in the BLS measure of private sector payrolls.
According to ADP and Macro-Advisers, the correlation between the
monthly percentage change in the ADP estimate and that in the BLS data
is 0.90.
ADP reported that private service-producing
industry employment rose for the fourth&nbsp; consecutive month
with a gain of 78,000 (-0.5% y/y). Small-sized payrolls grew 37,000
(-0.3% y/y) while medium-sized payrolls grew 37,000 (-0.5% y/y). These
increases were accompanied by a modest 4,000 gain (-1.2% y/y) in large
service producing payrolls.
 Goods producing employment fell another
23,000 during May though the three-month change eased to -1.4% (AR)
versus -15.8% one year ago. In the manufacturing sector alone, however,
payrolls rose 15,000 (-3.7% y/y) for the fourth consecutive monthly
rise. Large goods producing payrolls slipped 1,000 (-6.3% y/y) while
small-sized payrolls fell 24,000 (-7.5% y/y). New figures provided for
construction employment indicated a moderating decline of 41,000 jobs.
The greatest drop, 120,000, was logged during March of 2009. Financial
activities jobs rose 5,000. 
The ADP National Employment Report
data is maintained in Haver's USECON
database; historical figures date back to December 2000. The figures in
this report cover only private sector jobs and exclude employment in
the public sector. The
full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_May_10.pdf">here</a>
and the ADP
methodology is explained <title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" >here.

<a href="/comment/100603i_big.png" name="modal"><img style="width: 312px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603i.png"></a><a href="/comment/100603j_big.png" name="modal"><img style="width: 312px; height: 265px;" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603j.png"></a>


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>

<th scope="col"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM">ADP
National Employment Report</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead>
<tbody>
<tr>
<td class="firstcol">Total Nonfarm Private Payroll
Employment (m/m Chg., 000s)</td>
<td>55</td>
<td>65</td>
<td>32</td>
<td>-1.5%</td>
<td>-4.9%</td>
<td>-0.7%</td>
<td>1.1%</td>
</tr>

<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>13</td>
<td>18</td>
<td>8</td>
<td>-1.3</td>
<td>-4.1</td>
<td>-0.1</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>39</td>
<td>31</td>
<td>19</td>
<td>-1.4</td>
<td>-5.7</td>
<td>-0.9</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>3</td>
<td>16</td>
<td>5</td>
<td>-2.2</td>
<td>-5.6</td>
<td>-1.8</td>
<td>-0.2</td>
</tr>

<tr>
<td class="firstcol">&nbsp;&nbsp; Goods
Producing</td>
<td>-23</td>
<td>-10</td>
<td>-28</td>
<td>-6.2</td>
<td>-12.3</td>
<td>-3.7</td>
<td>-1.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Manufacturing</td>
<td>15</td>
<td>31</td>
<td>7</td>
<td>-3.7</td>
<td>-11.1</td>
<td>-3.0</td>
<td>-1.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Service
Producing</td>
<td>78</td>
<td>75</td>
<td>60</td>
<td>-0.5</td>
<td>-3.3</td>
<td>0.0</td>
<td>1.7</td>
</tr>
</tbody>
</table>
EMU Retail Sales Tail Off Sharply
 
by <a href="/comment/Brusca.html">Robert Brusca</a> June 3, 2010




<a href="/comment/100603k_big.png" name="modal"><img style="width: 353px; height: 265px;" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100603k.png"></a>
Euro-Area Retail sales broke off from their strong upswing and fell
sharply in April. The 1.2% drop cut the Yr/Yr growth rate for sales to
1.0%. Meanwhile motor vehicle sales continued to plummet in the Zone
and have fallen at a 22% pace over three-months and by 5.7% Yr/Yr.
Motor Vehicle registrations dropped by 11.4% in April. 
Germany and the UK among the early reporters show
their sales in April each were up. Germany still shows a Yr/Yr sales
decline, however, while UK sales are up by 1.7% Yr/Yr. Overall e-Zone
sales have had their upward momentum cut. 
Also on the day the revised Services PMI indices
were released. The EMU index rose more strongly on revision while the
UK index showed a meager increase from the previous month.
On one hand the weakness in retail sales suggests
that all the problems in Greece and the knock-on effect on worries may
have damaged consumer willingness to spend. We have seen the more
topical consumer sentiment indices drop off already. But the services
sector numbers tell us that economic improvement is still in train –and
in the important job-creating services sector. The reality of the
improvement should dominate the ephemeral worries except in those
countries where real events are under strain such as Greece and
possibly in Spain where the fiscal measures will have some bite. We are
still waiting on the actions in other nations. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope=col" colspan=7>Euro-Area Retail Sales 
</th></tr>
<tr class="even">
<td>&nbsp;</td>
<td colspan=3>M/M</td>
<td colspan=3>Saar</td>
</tr></thead>
<tr>
<td class="firstcol">&nbsp;</td>
<td>Apr-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone
Total Volume</td>
<td>-1.2%</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>-3.1%</td>
<td>1.8%</td>
<td>1.0%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan=7>Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor
Vehicle Reg</td>
<td>-11.4%</td>
<td>3.3%</td>
<td>2.4%</td>
<td>-22.8%</td>
<td>-16.5%</td>
<td>-5.7%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan=7>NonFood Country detail: Volume</td>
</tr>
<tr>
<td class="firstcol">Germany
Value</td>
<td>1.0%</td>
<td>-1.6%</td>
<td>1.6%</td>
<td>3.8%</td>
<td>-0.6%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">UK(EU)
Volume</td>
<td>0.2%</td>
<td>0.5%</td>
<td>2.4%</td>
<td>13.1%</td>
<td>-2.4%</td>
<td>1.7%</td>
</tr>

</table>
</html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100602e.jpg" align="left" height="265" width="353">
Producer price trends have been rising sharply in EMU over the
past few months. The PPI has taken a decided and sharp turn for the
worse. Prices are accelerating in two of the three main sectors of the
PPI. Only consumer prices fail to show acceleration from three-months
to six months. Consumer prices and intermediate prices are still lower
Yr/Yr but their trends are nonetheless rising sharply. Intermediate
goods prices are up very strongly from past weakness.
Germany and France show manufacturing prices ex-energy or
ex-energy and ex-food trends (the former for Germany, the latter for
France) with accelerations in train. UK manufactures prices are
accelerating (the UK is an EU member). Italy&#8217;s prices are actually
decelerating over three months compared to stronger pressures earlier.
While the PPI is not the price a gauge of choice for the ECB,
having such pressures stirred up will not be good news. The dropping
euro undoubtedly has something to do with this.
Still Yr/Yr prices are contained for consumer goods and
capital goods. Intermediate goods prices are the biggest problem. There
the rise in the dollar price of oil and the dropping euro form a
double-whammy on prices. If these trends develop in the HICP they will
put the ECB on the spot since growth in the Zone is not doing well and
the ECB will not want inflation trends like this to take hold in
consumer prices.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro-Area and UK
PPI Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Area</td>
<td>Apr-10</td>
<td>Mar-10</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">TotalxConstruct</td>
<td>0.7%</td>
<td>0.6%</td>
<td>5.8%</td>
<td>6.4%</td>
<td>2.8%</td>
<td>-4.7%</td>
</tr>
<tr>
<td class="firstcol">Capital Gds</td>
<td>0.2%</td>
<td>0.1%</td>
<td>1.1%</td>
<td>0.4%</td>
<td>-0.2%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Consurmer Gds</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.5%</td>
<td>0.7%</td>
<td>-0.3%</td>
<td>-1.7%</td>
</tr>
<tr>
<td class="firstcol">Intermediate&amp;Cap
Gds</td>
<td>1.0%</td>
<td>0.8%</td>
<td>8.1%</td>
<td>6.8%</td>
<td>2.7%</td>
<td>-5.1%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.4%</td>
<td>0.6%</td>
<td>3.9%</td>
<td>6.2%</td>
<td>3.7%</td>
<td>-5.9%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Germany</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Gy
ExEnergy</td>
<td>0.5%</td>
<td>0.2%</td>
<td>4.3%</td>
<td>3.1%</td>
<td>1.1%</td>
<td>-1.9%</td>
</tr>
<tr class="odd">
<td colspan="7">France:Tot</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Fr
ExF&amp;Energy</td>
<td>0.6%</td>
<td>0.3%</td>
<td>4.2%</td>
<td>3.3%</td>
<td>1.0%</td>
<td>-1.6%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.5%</td>
<td>0.5%</td>
<td>3.7%</td>
<td>6.7%</td>
<td>4.1%</td>
<td>-6.2%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>0.9%</td>
<td>0.6%</td>
<td>8.1%</td>
<td>7.1%</td>
<td>5.8%</td>
<td>1.3%</td>
</tr>
<tr class="even">
<td colspan="7" class="firstcol">Euro-Area
Harmonized
PPI ex construction</td>
</tr>
</tbody>
</table>
</body></html>

Producer price trends have been rising sharply in EMU over the past few months. The PPI has taken a decided and sharp turn for the worse. Prices are accelerating in two of the three main sectors of the PPI. Only consumer prices fail [...]

Euro-Area PPI Takes Off Slowly I Turn... Err Scratch That

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Expected tariff hikes have boosted inflation expectations

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Andrew Cates

**The US labour market**
The latest data highlight a growing sense of fragility in the US labour market. The unemployment rate, while still relatively low by historical standards, has been edging higher through the course of this year. More telling, however, is the signal from this week’s consumer confidence survey from Conference Board and specifically the labour market differential — the gap between the share of consumers saying jobs are plentiful versus those saying jobs are hard to get. That balance has narrowed sharply, moving back toward levels historically associated with softer labour demand and rising unemployment.

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**Goods and services inflation** 
Haver’s breakdown of goods and services CPI inflation in the advanced economies highlights where fresh risks are emerging. Goods inflation, which had been receding sharply after the pandemic supply shocks, has recently shown signs of firming again. Some of this probably reflects the impact of US tariff policies, which are raising import costs and putting renewed upward pressure on traded goods prices. While services inflation remains the more stubborn component in most advanced economies, the risk is that tariffs could reintroduce stickiness into goods prices, slowing the overall disinflation process.

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**China, Europe and US trade policy**
A consequence of US tariff policies has been a sharp contraction in Chinese exports to the US market, with much of the surplus redirected elsewhere. Europe in particular has recorded near double-digit import growth in recent months, raising concerns that Beijing is deflecting its industrial overcapacity problem rather than resolving it, effectively transferring the pressure onto trading partners. China’s authorities, however, have begun to push back, introducing measures to curb excess supply and rein in so-called “involution,” including clampdowns on price wars across several industries.

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**China’s excess capacity and Europe**
A closer look at Europe–China trade shows that electric vehicles remain a key flashpoint. Import volumes from China have continued to rise even as per-unit prices fall sharply from a year ago —evidence suggesting that industrial overcapacity persists, with low-cost Chinese EVs increasingly challenging European automakers. The surge has carried on despite EU tariffs of up to 45% on battery EVs, as Chinese producers have adapted by pushing plug-in hybrids and expanding onshore production in Europe to bypass duties and defend market share.

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**Wage growth in the US and Europe** 
Turning back to inflation dynamics, the UK stands out for its persistent wage pressures. While posted wage growth has cooled across the US and euro area, the UK measure has remained elevated at around 6% year-on-year, well above pre-pandemic norms. This stickiness reflects a still-tight labour market in key service sectors, even as broader activity has slowed and unemployment has edged higher. For the Bank of England, it underscores the dilemma: headline inflation is easing, but underlying pay growth risks keeping services inflation uncomfortably high, complicating the timing and scale of policy easing.

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**The UK economy**
The UK’s net international investment position has deteriorated noticeably in recent years, with both direct investment and portfolio flows showing persistent weakness. The latest data underline how net FDI has turned increasingly negative, while the portfolio investment balance has also eroded, leaving the UK more reliant on volatile short-term funding sources. This deterioration comes against a backdrop of heightened investor unease about the riskiness of UK debt markets, where elevated gilt yields and rising debt-servicing costs have amplified concerns over fiscal sustainability. Taken together, these trends underscore the vulnerability of the UK’s external position at a time when global capital is arguably proving more selective and risk sensitive.

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Global markets have continued to rally into late summer, buoyed by AI optimism, dovish signals from central bankers at Jackson Hole, and expectations of easier policy ahead. Yet beneath the surface, risks to the world economy are accumulating. In the US, labour market indicators point to softening conditions (chart 1), while tariff-driven pressures are beginning to push goods prices higher (chart 2). Global trade flows are being reshaped by US policy, with China’s excess capacity increasingly diverted toward Europe, most visibly through surging exports of electric vehicles (EVs) (charts 3 and 4). At the same time, wage growth remains stubbornly elevated in the UK, complicating disinflation (chart 5), while concerns are mounting over the country’s external vulnerabilities as net FDI and portfolio positions weaken against the backdrop of jittery debt markets (chart 6). Together, these dynamics highlight the tension between buoyant market performance and a global economy still grappling with structural fragilities.

Charts of the Week: Riskbusters

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Real GDP grew 3.3% (SAAR) during the second quarter of 2025, revised from a 3.0% gain reported initially. The increase followed an unrevised 0.5% decline in Q1. A 3.1% rise had been expected in the Action Economics Forecast Survey. Growth during the last four quarters of 2.1% compared to 2.0% y/y in Q1, and remained below its most recent high of 3.2% in Q4 2023.

After-tax corporate profits without IVA & CCA adjustment increased 1.4% (7.0% y/y) last quarter after easing 0.8% in Q1. Before-tax earnings with IVA & CCA rose 1.7% (4.3% y/y) after falling 2.3% in Q1. Financial sector earnings rose 1.4% (15.3% y/y) after rising 2.3% in Q1. Nonfinancial corporate profits rose 2.2% (2.5% y/y) after falling 2.5% in Q1. Earnings from abroad eased 0.7% (-0.4% y/y) following a 7.3% Q1 decline.

Foreign trade balance improvement added 4.95 percentage points to growth last quarter after subtracting 4.61 percentage points in Q1. Imports fell 29.8% (+1.3% y/y) after surging 38.0% in Q1. Exports declined 1.3% (+2.0% y/y) after improving 0.4% in Q1. Inventories subtracted 3.29 percentage points from growth after adding 2.59 percentage point to Q1 growth.

Real final sales to domestic purchasers grew 1.6% (2.4% y/y), revised from 1.1%, in Q2 after rising 1.5% in Q1. Personal consumption expenditures rose 1.6% (2.4% y/y), revised from 1.4%, following a 0.5% gain. Durable goods spending rose 2.6% (4.6% y/y) after falling 3.7% in Q1. Motor vehicle purchases strengthened 11.7% (6.7% y/y) after declining 11.2% in Q1. Spending on home furnishings & appliances weakened 2.1% (+3.5% y/y) following a 1.5% rise. Recreational goods & vehicle outlays fell 3.5% (+4.3% y/y) last quarter after a 0.4% Q1 gain.

Nondurable goods outlays in constant dollars rose 2.3% (3.0% y/y) following 2.1% growth in Q1. Apparel spending increased 5.4% (4.8% y/y) following a 7.0% rise. Food & beverage buying gained 0.3% (1.5% y/y) after a 1.0% increase. Gasoline & fuel oil purchases weakened 1.4% (+0.9% y/y) after gaining 3.6% in Q1.

Real spending on services increased 1.2% (1.9% y/y) after a 0.6% gain. Outlays on housing & utilities eased 0.4% (+1.1% y/y) after rising 2.9% in Q1. Health care expenditures rose 4.2% (4.8% y/y) after a 3.1% increase. Transportation outlays declined 2.9% (-0.6% y/y) after a 1.4% rise, while recreation spending rose 3.6% (0.7% y/y) following a 5.1% decline. Restaurant & hotel expenditures increased 5.1% (1.9% y/y) after falling 1.8%. Financial services expenditures rose 1.9% (2.3% y/y) following a 0.1% Q1 increase.

Business fixed investment in constant dollars increased 5.7% last quarter (4.2% y/y), revised from 1.9%, following a 10.3% surge in Q1. Expenditures on structures declined 8.9% (-3.4% y/y), after falling 2.4% in Q1. Expenditures on producers’ durable equipment increased 7.4% (7.7% y/y), revised from 4.8%, after surging 23.7% in Q1. Outlays on information processing equipment rose 10.1% (20.1% y/y), revised from 5.5%, after soaring 72.8% during Q1. Industrial equipment investment rose 6.7% (4.0% y/y) after a 4.7% rise. Transportation equipment investment surged 20.4% (6.8% y/y) after a 6.9% gain. Intellectual property product spending rose 12.8% last quarter (5.2% y/y) following a 6.0% rise.

Residential structures investment in real terms declined a little-revised 4.7% (-1.3% y/y), the fourth decline in the last five quarters.

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Government spending eased 0.2%, revised from up 0.5% in Q2 (+1.8% y/y) after a 0.6% decline. Federal government expenditures declined 4.7% (+0.7% y/y) after falling 4.6% in Q1. National defense expenditures increased 1.4% (3.0% y/y) after declining 7.1% in Q1. State & local government spending rose 2.6% (2.5% y/y) following a 2.0% rise.

The GDP chain price index rose an unrevised and expected 2.0% last quarter (2.5% y/y) after increasing 3.8% in Q1. The PCE chain price index increased 2.0% (2.4% y/y) following a 3.7% rise. The PCE price index excluding food and energy rose 2.5% (2.7% y/y) after increasing 3.5% in Q1. The business fixed investment price index edged 0.5% lower (+1.1% y/y) after a 0.4% rise. The residential price index rose 1.1% (2.6% y/y) after a 4.1% rise while the government price index increased 3.3% (3.1% y/y) following a 4.6% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Business investment strengthens & consumer spending firms.
- U.S. business earnings reverse Q1 decline.
- Increase in price index is unrevised, remaining roughly half of Q1’s gain.

U.S. GDP Q2’25 Growth Revised Up; Profits Improve

Sandy Batten

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The Kansas City Fed manufacturing composite index was unchanged at 1 in August from July. This was the second consecutive month that the index has been positive, indicating the manufacturing in the KC Fed district continue to inch up in August. Prior to the positive reading in July, the index had been negative for 22 consecutive months. The index’s most recent high was 31 reached in both April 2021 and October 2021. The durable manufacturing sector was mostly flat in August, while nondurable manufacturing activity declined slightly driven by printing activities and paper and chemical manufacturing. 

The August survey was open for a six-day period from August 20-25, 2025 and included 103 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

The ISM-adjusted index calculated by Haver Analytics rose to 51.1 (NSA) in August from 50.2 in July. This was the fifth reading above the critical 50 level that separates expansion from contraction in the past six months, a further indication of expanding manufacturing activity.

For the major component indexes, the production index was 0 in August, but this was up from -3 in July. The new orders index rose to 5 in August, its highest reading since May 2022, from 2 in July. The shipments index increased to 6 in August from 3 in July. The employment index was 0 in August, but this was up from -11 in July. Also, the average workweek index rebounded to 3 in August after having been in negative territory for the previous four months. Supplier delivery times were unchanged at 7 in August. The elevation of this index since April may indicate some incipient supply-chain disruptions from higher tariffs. In contrast, raw materials inventories fell to -7 in August from 8 in July.

On the inflation front, the prices paid for raw materials index remained elevated but fell to 43 in August from 47 in July and a local high of 51 in June. Forty-four percent of respondents reported an increase in raw materials prices in August, down from 48% in July and 53% in June, while only 4% reported a decrease, down from 5% in July and 6% in June. The prices received for finished products index increased to 21 in August from 18 in July. This index has fluctuated in a range between 17 and 21 for the past four months.

Expectations for future activity remained positive, with the composite index rising to 11 from 8, as firms anticipate an improvement in production and new orders. While expectations have been trending up over the past several months, they remain depressed relative to the recent high reading of 17 last December. Capital expenditures expectations remained in negative territory in August for the second consecutive month but edged up to -3 from -4 in July.

The series dates back to July 2001. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Data for the Kansas City Fed Survey can be found in Haver’s **SURVEYS** database.

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- Index remained (though barely) in positive territory for the second consecutive month, indicating that manufacturing activity was inching up.
- Prior to last month, the index had been negative for 22 consecutive months.
- Positive readings across most key components.

FRB Kansas City Manufacturing Index Unchanged in August

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The Pending Home Sales Index weakened 0.4% in July (+0.7% y/y) to 71.7 after falling an unrevised 0.8% in June and rising an unrevised 1.8% in May, according to the National Association of Realtors (NAR). The Index remained 42.7% below its most recent peak of 125.1 in October 2021. The index is a forward-looking measure of home sales based on contract signings.

The fall in pending home sales occurred as the average rate on a 30-year mortgage rose to 6.72% in July after holding steady m/m at 6.82% in June. These rates remained well above a low of 5.22% in August 2022 and more than double a record-low 2.68% in December 2020.

Pending home sales were mixed last month in the four major regions of the country. Sales in the Midwest declined 4.0% (+1.3% y/y) in July after easing 0.8% in June. Sales in the Northeast fell 0.6% both m/m and y/y, after holding steady in June. In the South, sales eased 0.1% (+1.8% y/y) following a 0.6% June decline, but sales in the West increased 3.7% (-1.9% y/y), reversing a 3.9% June drop.

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

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

- Decline adds to June weakness.
- Regional changes are mixed.


U.S. Pending Home Sales Decline in July

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance declined to 229,000 during the week of August 23, after rising to 234,000 in the week of August 16, revised from 235,000. The Action Economics Forecast Survey expected 230,000 initial claims for last week. The four-week moving average of initial claims increased to 228,500 from 226,000, revised from 226,250. It was the highest level since the second week of July.

In the week ended August 16, the total number of unemployment insurance beneficiaries – also known as “continuing claims” – decreased by 7,000 to 1.954 million from 1.961 million in the prior week, revised down by 11,000 from 1.972 million. The four-week moving average rose to 1.956 million in the week ending August 16, the highest level in six weeks, and up from 1.952 million in the prior week, revised from 1.955 million.

In the week ending August 16, the insured rate of unemployment (the number of beneficiaries as a percent of covered employment) was 1.3% for the twelfth consecutive week.

The insured unemployment rate varied greatly across individual states and territories. In the week ended August 9, the highest unemployment rates were in New Jersey (2.75%), Rhode Island (2.58%), Massachusetts (2.18%), Minnesota (2.17%), California (2.11%), Washington (2.08%), District of Columbia (2.04%), and Puerto Rico (2.02%). The lowest were in South Dakota (0.28%), Florida (0.42%), and Alabama and North Carolina (both 0.47%). Rates in other notable states include Pennsylvania (1.92%), New York (1.73%), Illinois (1.72%), and Texas (1.24%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Initial claims declined in latest week after a surge in the prior week.
- Continuing claims declined.
- Insured unemployment rate holds steady.

Economy in Brief: June 2010

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