Tom Moeller

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202f.jpg" align="right" border="0" height="265" width="353"><b>U.S.
unit sales of&nbsp; light vehicles</b> during November showed
that consumers' interest in making big-ticket purchases is recovering
from the recession lows. Sales rose 4.5% m/m to 10.93M units according
to the Autodata Corporation. November sales were stronger than
Consensus expectations for 10.5M and sales have risen 19.2% from the
February low. (Seasonal adjustment of the figures is provided by the
U.S. Bureau of Economic Analysis).</p><p>Sales of <b>domestically
made vehicles</b> rose 5.4% last month to 8.17M units. They now
have recovered 28.2% from the February low. Sales of fuel efficient
cars rose 3.7% and have risen 27.9% from the low. Light truck sales
increased 6.8% m/m and were 28.4% above the low. · <b>Imported
light vehicle</b> sales rose a modest 1.9% to 2.76M but were up
9.7% from the recession low in April. Sales of imported autos inched up
0.6% m/m and 11.2% from the low while imported light truck sales rose
4.8% and 6.7% from the low.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202g.jpg" align="right" border="0" height="265" width="353">
Overall,<b>
import's share </b>of the U.S. light vehicle market fell to
25.2% last month from 25.9% in October. It reached 26.5% during all of
last year. (Imported vehicles are those produced outside the United
States.) Imports' share of the U.S. car market totaled 33.2% versus
34.3% during all of last year while the share of the light truck market
was 16.7%, down from 18.3% last year.</p><p>The U.S.
vehicle sales figures can be found in Haver's<b> USECON </b>database.</p><p><b>The price of gasoline and the demand for fuel
economy: evidence from monthly new vehicles sales data </b>from
the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/workingpapers/wp2009_15.pdf">
here</a>.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Nov. Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>10.93</td>
<td>10.46</td>
<td>9.22</td>
<td>4.9%</td>
<td>13.17</td>
<td>16.16</td>
<td>16.54</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.65</td>
<td>5.50</td>
<td>5.02</td>
<td>9.7</td>
<td>6.71</td>
<td>7.58</td>
<td>7.77</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>3.77</td>
<td>3.64</td>
<td>3.25</td>
<td>12.7</td>
<td>4.42</td>
<td>5.07</td>
<td>5.31</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.88</td>
<td>1.87</td>
<td>1.77</td>
<td>4.2</td>
<td>2.29</td>
<td>2.52</td>
<td>2.45</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.28</td>
<td>4.96</td>
<td>4.20</td>
<td>0.2</td>
<td>6.47</td>
<td>8.60</td>
<td>8.78</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.40</td>
<td>4.12</td>
<td>3.37</td>
<td>2.6</td>
<td>5.29</td>
<td>7.10</td>
<td>7.42</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>0.88</td>
<td>0.84</td>
<td>0.83</td>
<td>-10.3</td>
<td>1.18</td>
<td>1.47</td>
<td>1.37</td>
</tr>
</tbody>
</table>
</span></body></html>

U.S. unit sales of light vehicles during November showed that consumers' interest in making big-ticket purchases is recovering from the recession lows. Sales rose 4.5% m/m to 10.93M units according to the Autodata Corporation. [...]

U.S. Vehicle Sales Move Slightly Higher During November

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202c.jpg" align="right" border="0" height="265" width="353">
Payroll
employment fell again last month, but the rate of decline slowed
further. The latest report from the payroll processor ADP, in their
National Employment Report, indicated that private nonfarm payrolls
fell 169,000 during November. That followed a revised 195,000 October
decline which was shallower than reported initially. The latest reading
was the twenty-second consecutive monthly decline. The monthly drop,
however, was the smallest decline since July of last year and
three-quarters the size of the worst reading last March. The
three-month annualized rate of decline in payrolls also eased to 2.1%
from its March record of 7.1%.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202d.jpg" align="right" border="0" height="265" width="353">
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.</p><p>The U.S. Bureau of
Labor Statistics will report November payroll employment this Friday. For comparison, the October decline of
195,000 in ADP's measure of private nonfarm payrolls was accompanied by
a loss of 190,000 jobs in the BLS measure of private sector payrolls.</p><p>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.</p><p>
ADP reported that the decline in small-sized payrolls moderated to
68,000 (-4.1% y/y). Medium-sized payrolls fell 57,000 (-5.1% y/y) and
large payrolls fell by 44,000 (-5.3% y/y). The decline in
service-producing industry employment continued. The November drop of
81,000 (-2.9% y/y) was the twenty-first consecutive monthly decline but
in percentage terms the three-month rate of change moderated to -1.1%,
less than three-quarters, the worst from January through March. The
decline in medium-sized service payrolls amounted to 30,000 (-3.2% y/y)
and small-sized payrolls declined 32,000 (-2.6% y/y). Large service
producing payrolls decreased 19,000 and the y/y decline eased slightly
to -3.2%.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202e.jpg" align="right" border="0" height="265" width="353">
In the goods
producing sector employment fell 88,000 during November (-12.6% y/y)
but the October decline was revised shallower. Here, the three-month
rate of decline eased again to -7.3% versus -17.3% at its worst.
Small-sized payrolls fell 36,000 (-12.4% y/y) followed by a 27,000
(-12.6% y/y) drop in medium-sized payrolls. Large payrolls fell 25,000
(-13.0% y/y). In the manufacturing sector alone, payrolls fell 44,000
(-11.8% y/y) but the three-month change moderated to -5.8% from -17.4%
at its worst.</p><p>The
ADP National Employment Report data is maintained in Haver's </p></span><strong>USECON</strong><span class="style1" style="font-family: Verdana; font-size: 10pt;">
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, which rose an average 11,083 during the last twelve
months.
<p></p><p>The full ADP
National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_November_09.pdf">here
</a> and the
ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.</p><p>
<b>The Estimated Impact of the American Recovery and
Reinvestment Act on Employment and Economic Output as of September 2009</b>
from the Congressional Budget Office can be found <a href="http://cbo.gov/ftpdocs/106xx/doc10682/11-30-ARRA.pdf">here</a>.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><strong><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM" style="color: rgb(255, 255, 255);">ADP National Employment
Report</a></strong></th>
<th scope="col"><strong>November</strong></th>
<th scope="col"><strong>October</strong></th>
<th scope="col"><strong>September</strong></th>
<th scope="col"><strong>Y/Y</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
<th scope="col"><strong>2006</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Nonfarm Private
PayrollEmployment (m/m Chg., 000s)</td>
<td>-169</td>
<td>-195</td>
<td>-220</td>
<td>-4.7%</td>
<td>-0.5%</td>
<td>1.2%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>-68</td>
<td>-77</td>
<td>-88</td>
<td>-4.1</td>
<td>-0.0</td>
<td>1.6</td>
<td>2.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>-57</td>
<td>-70</td>
<td>-78</td>
<td>-5.1</td>
<td>-0.5</td>
<td>1.2</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>-44</td>
<td>-48</td>
<td>-54</td>
<td>-5.3</td>
<td>-1.6</td>
<td>-0.1</td>
<td>0.4</td>
</tr>
</tbody>
</table>
</span></body></html>

Payroll employment fell again last month, but the rate of decline slowed further. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 169,000 during [...]

ADP Report: U.S. Payroll Employment Decline Moderates Further

It's the same story as in prior months, only more-so. October construction spending was unchanged after revisions lowered earlier months' activity. September outlays now are reported down 1.6%, double last months' estimate. Consensus [...]

U.S. Construction Flat In OctoberWith Downward Revisions To Prior Months

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201i.jpg" align="right" border="0" height="265" width="353">
Home sales
continued to rebound in October, spurred by low interest rates and a
tax credit. The National Association of Realtors (NAR) reported that
October pending home sales increased 3.7%. It was the ninth consecutive
monthly gain and sales are up 41.9% from the low. Consensus
expectations had been for a slight m/m sales decline. The index level
of 114.1 was at its highest since March 2006. The base for the index is
2001=100.</p><p>October sales likely were boosted by the
pending expiration of an $8,000 first-time home buyers tax credit. The
credit has since been extended into next year.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201j.jpg" align="right" border="0" height="265" width="353">
Only the Western region
of the country failed to participate in the October sales gain. Sales
reversed the September increase but were still up by nearly one-quarter
from last year. Elsewhere, sales in the Northeast more-than made up a
September decline with a 19.9% jump. Sales in the Midwest rose 11.6% to
the highest level since early-2006. Sales in the South were the
laggards again with just a 5.4% gain but they also were up one-third
from the January trough. </p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201k.jpg" align="right" border="0" height="265" width="353">
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.</p><p>The pending home sales data are available in Haver's <b>PREALTOR
</b>database. The number of homes on the market and prices
are in the <b>REALTOR </b>database.</p><p><b>How
Rigid Are Producer Prices?</b> from the Federal Reserve Bank of
New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr407.pdf">here</a>.</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/WEEKLY/@W5/@W507/@W507.HTM" style="color: white;">Pending Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>August</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>114.1</td>
<td>110.0</td>
<td>103.8</td>
<td>&nbsp;&nbsp; 31.8%</td>
<td>86.8</td>
<td>95.8</td>
<td>112.1&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>100.2</td>
<td>83.6</td>
<td>85.3</td>
<td>44.2</td>
<td>73.1</td>
<td>85.9</td>
<td>98.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>109.6</td>
<td>98.2</td>
<td>90.8</td>
<td>36.5</td>
<td>80.6</td>
<td>89.5</td>
<td>101.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>115.4</td>
<td>109.5</td>
<td>104.6</td>
<td>31.6</td>
<td>89.6</td>
<td>107.3</td>
<td>127.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>127.7</td>
<td>143.8</td>
<td>130.5</td>
<td>22.0</td>
<td>99.5</td>
<td>92.3</td>
<td>109.6</td>
</tr>
</tbody>
</table>
<p></p>
</span>
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Home sales continued to rebound in October, spurred by low interest rates and a tax credit. The National Association of Realtors (NAR) reported that October pending home sales increased 3.7%. It was the ninth consecutive monthly gain [...]

U.S. Pending Home Sales Rise Further

Louise Curley

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201g.jpg" align="right" border="0" height="265" width="353">The
Bundesbank announced today that the Registered unemployment rate in
Germany declined in November to 8.1% from 8.2% in the preceding three
months.&nbsp; At the same time, Eurostat reported harmonized
unemployment rates for October.&nbsp; On that basis, the German
unemployment rate began to decline a month earlier, to 7.5% in October
from 7.6% in September.&nbsp; (Germany's national measure of
unemployment is typically greater than that of the harmonized measure
of Eurostat as can be seen in the first chart.&nbsp; Part of the
difference is due to the fact that the national measure includes only
registered workers while the Eurostat measure includes the whole labor
force. In addition there are differences in the unemployment
concept.)</p>
<p>Except for Japan where the
unemployment rate declined to 5.1% in October from 5.3% in September,
most other industrial countries are still experiencing rises in
unemployment.&nbsp; In addition, the rise in the unemployment rate
in Germany during the recession was more muted than that in other
industrial countries--even Japan--as can be seen in the second
chart.&nbsp; (To insure comparability we have used harmonized
unemployment rates.&nbsp; These may be found in Haver's&nbsp;
EUROSTAT data base.)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201h.jpg" align="right" border="0" height="265" width="353">
</p>
<p>Germany's lower unemployment rate has
been due largely to the "short-term work program" part of its stimulus
program.&nbsp; To encourage companies to maintain employees when
production falls off, the German government has set up a fund which can
be drawn upon to help pay the wages of the employees who have been kept
on.&nbsp; On November 25, the Cabinet agreed to extend the program
for another year beginning in January.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug&nbsp; 09</b></th>
<th scope="col"><b>Jul 09</b></th>
<th scope="col">Jun 09&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany:&nbsp; Registered
Unemployment Rate&nbsp; (%)</td>
<td>8.1</td>
<td>8.2</td>
<td>8.2</td>
<td>8.2</td>
<td>8.3</td>
<td>8.3</td>
</tr>
<tr>
<td colspan="7"><b>Harmonized Unemployment
Rates (%) </b></td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>-</td>
<td>7.5</td>
<td>7.6</td>
<td>7.6</td>
<td>7.6</td>
<td>7.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Japan</td>
<td>-</td>
<td>5.1</td>
<td>5.3</td>
<td>5.5</td>
<td>5.7</td>
<td>5.4</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>-</td>
<td>10.1</td>
<td>10.0</td>
<td>9.8</td>
<td>9.7</td>
<td>9.5</td>
</tr>
<tr class="odd">
<td class="firstcol">United States</td>
<td>-</td>
<td>10.2</td>
<td>9.8</td>
<td>9.7</td>
<td>9.4</td>
<td>9.5</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The Bundesbank announced today that the Registered unemployment rate in Germany declined in November to 8.1% from 8.2% in the preceding three months. At the same time, Eurostat reported harmonized unemployment rates for October. On [...]

German Unemployment Rate Declines

Robert Brusca

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201f.jpg" align="left" border="0" height="265" width="353"></p>
<p>German retail sales rose in October, reversing a drop in
September, but sales continue to show negative momentum. The sequential
nominal rates of growth from 12-months to 6-months to 3-months all are
clustered around a minus 3% growth rate. For real retail sales the
sequential growth rates show a move to more weakness despite the bump
up in sales in October. Real retail sales sequential growth rates are
getting to be more severe negative numbers.</p>
<p>Only clothing and footwear sales are showing any kind of
strength. Footwear and clothing sales are now up Yr/Yr along with car
registrations. Government programs have skewed spending toward car
purchases by offering incentives. Clothing and footwear are just
beginning to pick up. Still there is nothing upbeat about the German
consumer in this report. The rise in spending in October sure beats a
drop. But trends are not reversed or even blunted by this rise after
two months of steep drops.</p><p></p>
</span>
<b><br>
</b>
<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr>
<th scope="col" colspan="8"> <b>German
Real and Nominal Retail Sales</b></th>
<th><b>QTR</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>&nbsp;Nominal</b></td>
<td><b>Oct-09</b></td>
<td><b>Sep-09</b></td>
<td><b>Aug-09</b></td>
<td><b>3-MO</b></td>
<td><b>6-MO</b></td>
<td><b>12-MO</b></td>
<td><b>YrAgo</b></td>
<td><b>Saar</b></td>
</tr>
<tr class="odd">
<td class="firstcol">Retaill Ex auto</td>
<td>0.6%</td>
<td>-0.5%</td>
<td>-0.9%</td>
<td>-3.2%</td>
<td>-3.3%</td>
<td>-2.5%</td>
<td>2.0%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">MV and Parts</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>-1.5%</td>
<td>-4.8%</td>
<td>-3.0%</td>
<td>-1.7%</td>
<td>0.2%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>-1.6%</td>
<td>-3.4%</td>
<td>3.7%</td>
<td>-6.0%</td>
<td>-7.0%</td>
<td>-5.0%</td>
<td>1.4%</td>
<td>-15.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Clothing footwear</td>
<td>8.5%</td>
<td>2.9%</td>
<td>-7.4%</td>
<td>14.5%</td>
<td>9.9%</td>
<td>7.1%</td>
<td>1.6%</td>
<td>56.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Car Registrations (units)</td>
<td>-0.1%</td>
<td>-2.7%</td>
<td>-9.5%</td>
<td>-40.1%</td>
<td>-31.4%</td>
<td>24.0%</td>
<td>-8.3%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="9"><b>Real</b></td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Ex auto</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>-1.5%</td>
<td>-4.8%</td>
<td>-3.0%</td>
<td>-1.7%</td>
<td>0.2%</td>
<td>-0.8%</td>
</tr>
</tbody>
</table>
</body></html>

German retail sales rose in October, reversing a drop in September, but sales continue to show negative momentum. The sequential nominal rates of growth from 12-months to 6-months to 3-months all are clustered around a minus 3% growth [...]

German Retail Sales Rise But Amass No Momentum

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201d.jpg" align="right" border="0" height="265" width="353">
Gasoline
prices continued their sideways movement last week. The <b>pump
price for regular gasoline </b>of $2.63 per gallon equaled the
June average. Moreover, during the six months, prices moved in a tight
range between $2.47 and $2.69. Nevertheless, gasoline prices remain up
from the December low of $1.61. Yesterday, wholesale gasoline prices
began the week roughly equal to last week's average. 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>Breaking away from the recently
firm pricing pattern, the price for a barrel of light sweet crude (WTI)
oil moved down last week to $76.10 which was the lowest level in one
month. Still, prices were up from the December low of $32.37.
Yesterday, the spot market price for light sweet crude oil moved
slightly higher to $77.28 per barrel.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201e.jpg" align="right" border="0" height="265" width="353">
Behind the stabilization in
gasoline prices is a leveling of past gains in gasoline demand. Last
week, demand posted a 0.2% increase versus one year ago versus a 3.9%
increase at the beginning of last month. Breaking away from earlier y/y
strength, the demand for residual fuel oil fell 0.4% y/y while
distillate demand continued weak and fell 10.7% y/y.· Natural gas
prices remained weak last week at an average $3.62 per mmbtu (-45.7%
y/y). They remained down by two-thirds from the high reached in
early-July of last year of $13.19/mmbtu.</p><p> The weekly energy price data
can be found in Haver's <b>WEEKLY </b>database while the
daily figures are in <b>DAILY</b>. The gasoline demand
figures are in <b>OILWKLY</b>.</p><p><b>Small business
lending</b> is yesterday's House testimony by Jon D. Greenlee,
Associate Director, Division of Banking Supervision and Regulation at
the Federal Reserve Board and it can be found <a href="http://www.federalreserve.gov/newsevents/testimony/greenlee20091130a.htm">here</a>.&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM" style="color: rgb(255, 255, 255);"><b>Weekly Prices</b></a></th>
<th scope="col"><b>11/30/09</b></th>
<th scope="col"><b>11/23/09</b></th>
<th scope="col"><b>11/16/09</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.63</td>
<td>2.64</td>
<td>2.63</td>
<td>45.2%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>76.10</td>
<td>78.36</td>
<td>78.21</td>
<td>45.0%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
</span></body></html>

Gasoline prices continued their sideways movement last week. The pump price for regular gasoline of $2.63 per gallon equaled the June average. Moreover, during the six months, prices moved in a tight range between $2.47 and $2.69. [...]

Weekly Gasoline Prices Are Flat Again

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<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201a.jpg" align="right" border="0" height="265" width="353">The pace of
this economic recovery has lagged of late as the strength of inventory
rebuilding has disappointed. The National Association of Purchasing
Management reported that the November composite index unexpectedly
slipped to 53.6 from 55.7 during October. A more modest decline to 54.7
had been the Consensus expectation. (Any reading above the break-even
point of 50 suggests rising activity .) Despite the November decline,
the reading was up from the low of 32.9 reached last December. The ISM
data is available in Haver's <b>USECON </b>database.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201b.jpg" align="right" border="0" height="265" width="353">While just
above the break-even level of 50, the positive
factory-sector growth rate suggested by the ISM index is in-line with
recoveries accompanying past upturns from severe recessions. To mirror
the strength of those recoveries, however, the index still needs to
rise to a level near or above the level of 60.</p>
<p>Holding back any
improvement in the total index was a decline in the inventory component
to 41.3 from 46.9 in October. The latest was the lowest level since
August. An increased 19% (NSA) of respondents indicated that they were
raising inventory levels versus 16% last November. However, during the
strong 2005 inventory accumulation 26% of firms indicated that they
were raising inventories.</p><p> A decline in the production component to
59.9 from the cycle high of 63.3 also was part of the decline in the
November composite index. During the last ten years there has been an
84% correlation between the level of the production component of the
composite index and the three-month growth in factory sector industrial
production. <i>It is appropriate to correlate the ISM index <b>level</b>
with factory sector output <b>growth </b>because the ISM
index is a diffusion index. It measures growth by using all of the
positive changes in activity added to one half of the zero change in
activity measures. </i>The pace of supplier deliveries sped up
last month with the easing of production.</p>
<p>Finally, the employment
index fell to 50.8 from 53.1 during October. Still, the level indicated
positive growth in factory-sector payrolls. It has increased from a low
reading of 26.1 this past February. Twenty percent of respondents
indicated higher payrolls versus only seven percent last November. Just
sixteen percent indicated a lower level of hiring versus forty percent
last November. During the last ten years there has been a 90%
correlation between the index level and the three-month change in
manufacturing payrolls.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201c.jpg" align="right" border="0" height="265" width="353">The new
orders index was the only component
series to improve m/m during November. The modest gain to 60.3,
however, left it below the August high. Working the other way, the
export order index improved modestly m/m to 56.0 which was the highest
level since August of last year and up from 35.5 last December. During
the last ten years there has been a 53% correlation between the index
and the q/q change in real exports of goods in the GDP accounts.· The
separate index of prices paid fell ten points to its lowest level since
July. Still, the figure was up from the December low of 18.0. During
the last twenty years there has been a 79% correlation between the
price index and the three-month change in the PPI for intermediate
goods.</p>
<p> The ISM data are available in Haver's <b>USECON</b>
database.</p>
<p> <b>Do Alternative Measures of GDP Affect Its
Interpretation?</b> from the Federal Reserve Bank of New York can
be found <a href="http://www.newyorkfed.org/research/current_issues/ci15-7.pdf">here
</a>.</p>
<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/SURVEYS/@S2/@S201/@S201.HTM"><b>ISM
Mfg</b></a></th>
<th scope="col"><strong>November</strong></th>
<th scope="col"><strong>October</strong></th>
<th scope="col"><strong>September</strong></th>
<th scope="col"><strong>November '08</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
<th scope="col"><strong>2006</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>53.6</td>
<td>55.7</td>
<td>52.6</td>
<td>36.6</td>
<td>45.5</td>
<td>51.1</td>
<td>53.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>60.3</td>
<td>58.5</td>
<td>60.8</td>
<td>28.1</td>
<td>42.1</td>
<td>54.3</td>
<td>55.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Employment</td>
<td>50.8</td>
<td>53.1</td>
<td>46.2</td>
<td>34.3</td>
<td>43.2</td>
<td>50.5</td>
<td>51.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Production</td>
<td>59.9</td>
<td>63.3</td>
<td>55.7</td>
<td>32.0</td>
<td>45.2</td>
<td>54.1</td>
<td>55.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Supplier Deliveries</td>
<td>55.7</td>
<td>56.9</td>
<td>58.0</td>
<td>48.6</td>
<td>51.6</td>
<td>51.2</td>
<td>54.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventories</td>
<td>41.3</td>
<td>46.9</td>
<td>42.5</td>
<td>40.1</td>
<td>45.5</td>
<td>45.4</td>
<td>48.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>55.0</td>
<td>65.0</td>
<td>63.5</td>
<td>25.5</td>
<td>66.5</td>
<td>64.6</td>
<td>65.0</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The pace of this economic recovery has lagged of late as the strength of inventory rebuilding has disappointed. The National Association of Purchasing Management reported that the November composite index unexpectedly slipped to 53.6 [...]

ISM Factory Index Disappoints As Inventory Rebuilding Lags

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.8% in April from 7.9% in March.

In the **establishment survey**, private-sector employment rose 167,000 (1.2% y/y) after a 170,000 March increase. Factory sector jobs edged 1,000 lower (-0.7% y/y) following a 3,000 gain. Construction sector employment increased 11,000 (1.7% y/y), after rising 7,000 in March.

Private service-producing sector employment increased 156,000 (1.4% y/y) in April after improving 161,000 in March. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 70,000 (3.4% y/y) last month following a 74,000 March increase. Leisure & hospitality employment rose 24,000 (1.3% y/y) after a 38,000 gain. Trade, transportation & utilities rose 32,000 (0.9% y/y) in April following a 25,000 March increase. Professional & business services employment rose 17,000 (-0.1% y/y) following a 3,000 rise while temporary help employment rose 3,600 (-3.9% y/y) following a 2,700 decline. Financial activities employment improved 14,000 (1.2% y/y) after a 6,000 gain. The number of information sector jobs held steady (-0.4% y/y) last month after falling 2,000 in March.

Government sector payrolls rose 10,000 (1.3% y/y) last month after increasing 15,000 in March. The number of local government jobs increased 13,000 (1.4% y/y) following a 17,000 gain. State government employment rose 6,000 (1.8% y/y) following a 2,000 March increase but federal government payrolls fell 9,000 (-0.3% y/y), the third consecutive monthly decline.

Private-sector average hourly earnings rose 0.2% (3.8% y/y) in April after increasing 0.3% in March. Earnings in the goods-producing sector eased 0.1% (+4.0% y/y) following a 0.6% gain. Earnings in construction rose 0.3% (3.6% y/y), after a 0.2% rise but factory sector earnings declined 0.3% (+4.3% y/y) after surging 0.8% in March. In the private services-sector, earnings rose 0.2% (3.7% y/y) in April for the third straight month. Information sector pay increased 1.0% (5.2% y/y) last month after easing 0.1%, and financial activities earnings rose 0.5% (4.3% y/y) for the second straight month. Trade, transportation & utilities sector pay increased 0.4% (3.4% y/y) after 0.6%. Professional & business sector earnings increased 0.1% (4.4% y/y) after 0.2% in March. Leisure & hospitality earnings held steady (+3.8% y/y) following a 0.6% March increase.

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The length of the average workweek held steady at 34.3 hours in April. The workweek in the goods-producing sector eased to 39.8 hours from 40.0 hours. The construction sector average workweek eased to 39.0 hours from 39.3 hours while the factory sector workweek moved lower to 40.0 hours from 40.2. The average workweek in the private service sector held at 33.2 hours. Professional & business service hours fell to 36.3 hours from 36.4 while trade, transportation & utilities hours improved to 34.3 from 34.0 hours. Private education hours rose slightly to 32.8, but leisure & hospitality held steady at 25.5 hours.

In the **household survey**, the unemployment rate held at 4.2% in April as employment rose 436,000 and the size of the labor force increased 518,000. The labor force participation rate edged up to 62.6% last month from 62.5% in March. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.9%. For workers aged 20-24, the rate held steady at 72.1%, up from 71.8% six months earlier. For workers aged 25-54 the rate rose to 83.6%, a five-month high. For individuals 55 and over, the rate improved to 38.4% in April.

The employment/population ratio for all workers in April rose to 60.0%. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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

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

Winnie Tapasanun

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

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

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

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

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

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

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

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

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

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

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

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

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

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Globally Manufacturing Weakens

Andrew Cates

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

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

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

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

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

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

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

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Charts of the Week: Tariff Truce, Tenuous Trust

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

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

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

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

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

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

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

Economy in Brief: 2009

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