Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224b.jpg" width="353">
Durable goods orders fell 0.9% in January following an upwardly revised gain in December of 1.4%. Consensus expectations had been for no change.
Orders for transportation equipment weakened during the last two months, down 5.3% in January and 2.2% in December due to huge declines in commercial and defense aircraft orders. Less transportation, durable goods orders rose 0.8% (13.2% y/y) last month following an upwardly revised 2.8% December increase.
Nondefense capital goods orders rose 0.2% but less aircraft orders rose 2.9% after an upwardly revised 3.3% December spurt.
Orders for computers &amp; electronic products fell 1.2% (+11.1% y/y) following the upwardly revised 8.3% surge in December. Electrical equipment orders jumped 13.1% (14.6% y/y) and machinery orders rose 0.3% (18.3% y/y). Primary metals orders logged a third consecutive month of strength with a 1.6% rise (27.2% y/y) and orders for fabricated metals rose 1.2% as well (+7.6% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224a.jpg" width="353">
Inventories of durable goods jumped 0.9% (8.6% y/y). Combined with a 1.5% (12.4% y/y) surge in shipments, which followed a 2.8% December jump, the I/S ratio fell to the lowest level since last May.
Unfilled orders slipped 0.2%, the first monthly decline in a year (+8.9% y/y). As shipments surged during the last two months, the ratio of backlogs to shipments reversed nearly all of last year&#39;s gains.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.9%</td>
<td>1.4%</td>
<td>11.6%</td>
<td>10.8%</td>
<td>2.6%</td>
<td>-1.7%</td>
</tr>
<tr>
<td class="firstcol">Nondefense Capital Goods</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>18.8%</td>
<td>13.7%</td>
<td>5.6%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Excluding Aircraft</td>
<td>2.9%</td>
<td>3.3%</td>
<td>17.0%</td>
<td>11.7%</td>
<td>6.6%</td>
<td>-7.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

Durable goods orders fell 0.9% in January following an upwardly revised gain in December of 1.4%. Consensus expectations had been for no change. Orders for transportation equipment weakened during the last two months, down 5.3% in [...]

U.S. Durable Goods Orders Lower in January, Trend Strong

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224b.jpg" width="353">
Durable goods orders fell 0.9% in January following an upwardly revised gain in December of 1.4%. Consensus expectations had been for no change.
Orders for transportation equipment weakened during the last two months, down 5.3% in January and 2.2% in December due to huge declines in commercial and defense aircraft orders. Less transportation, durable goods orders rose 0.8% (13.2% y/y) last month following an upwardly revised 2.8% December increase.
Nondefense capital goods orders rose 0.2% but less aircraft orders rose 2.9% after an upwardly revised 3.3% December spurt.
Orders for computers &amp; electronic products fell 1.2% (+11.1% y/y) following the upwardly revised 8.3% surge in December. Electrical equipment orders jumped 13.1% (14.6% y/y) and machinery orders rose 0.3% (18.3% y/y). Primary metals orders logged a third consecutive month of strength with a 1.6% rise (27.2% y/y) and orders for fabricated metals rose 1.2% as well (+7.6% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224a.jpg" width="353">
Inventories of durable goods jumped 0.9% (8.6% y/y). Combined with a 1.5% (12.4% y/y) surge in shipments, which followed a 2.8% December jump, the I/S ratio fell to the lowest level since last May.
Unfilled orders slipped 0.2%, the first monthly decline in a year (+8.9% y/y). As shipments surged during the last two months, the ratio of backlogs to shipments reversed nearly all of last year&#39;s gains.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.9%</td>
<td>1.4%</td>
<td>11.6%</td>
<td>10.8%</td>
<td>2.6%</td>
<td>-1.7%</td>
</tr>
<tr>
<td class="firstcol">Nondefense Capital Goods</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>18.8%</td>
<td>13.7%</td>
<td>5.6%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Excluding Aircraft</td>
<td>2.9%</td>
<td>3.3%</td>
<td>17.0%</td>
<td>11.7%</td>
<td>6.6%</td>
<td>-7.1%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Modestly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 24, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224c.jpg" width="353">
Initial claims for unemployment insurance 9,000 to 312,000 last week following three weeks of sharp decline. The prior week&#39;s level was little revised and Consensus expectations had been for 309,000 claims.
Despite the increase, claims in February are 7.8% below the January average. The four week moving average of initial claims fell to 308,750 (-14.6% y/y).
Continuing claims for unemployment insurance fell 62,000 following a deepened 19,000 decline the prior week.
During the last ten years there has been a (negative) 75% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 66% correlation with the level of continuing claims.
The insured rate of unemployment was stable at a low 2.1%.
The February 2005 Minutes of the Federal Open Market Committee meeting are available <a href="http://www.federalreserve.gov/fomc/minutes/20050202.htm"> here</a>.
Expectations and the Monetary Policy Transmission Mechanism from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/Publicat/econrev/Pdf/4Q04sell.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">02/19/05</th>
<th scope="col">02/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>312</td>
<td>303</td>
<td>-11.4%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,650</td>
<td>-15.8%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
Help-Wanted Advertising: An Upside Breakout 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 24, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224d.jpg" width="353">
The Conference Board&#39;s National Index of Help-Wanted Advertising rose to 41 in January, the highest level in nearly two years.
During the last ten years there has been an 88% correlation between the level of help-wanted advertising and the year-to-year change in non-farm payrolls.
The proportion of labor markets with rising want-ad volume held at a high 71%, indicative of broad based gains.
The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month.
The latest help wanted report from the Conference Board is available <a href="http://www.conference-board.org/economics/helpwanted.cfm">here</a>.
Help-Wanted Advertising and Job Vacancies from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-02.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Jan&nbsp; &#39;04</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">National Help Wanted Index</td>
<td>41</td>
<td>38</td>
<td>38</td>
</tr>
</tbody>
</table>
Energy Prices Firm 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 24, 2005


The average price for unleaded regular gasoline rose to $1.91 per gallon last week and the average price this month of $1.90 is up versus the low of $1.83 in January.
The price of oil firmed even more with the price of West Texas Intermediate crude rising over $50.00 per barrel.
Wholesale natural gas prices moderated last week to $6.02/mmbtu (+11.1% y/y).
For the latest Short Term Energy Outlook from the US Department of Energy click <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224e.jpg" width="353"><img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050224f.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/daily/@D3/@D306/@D306.HTM">Energy Prices</a></th>
<th scope="col">02/21/05</th>
<th scope="col">12/31/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">US Retail Gasoline, Regular ($/Gal.)</td>
<td>$1.91</td>
<td>$1.79</td>
<td>12.9%</td>
<td>$1.85</td>
<td>$1.56</td>
<td>$1.35</td>
</tr>
<tr>
<td class="firstcol">Domestic Spot Market Price: West Texas Intermediate ($/Barrel)</td>
<td>$51.16</td>
<td>$41.78</td>
<td>41.8%</td>
<td>$41.78</td>
<td>$32.78</td>
<td>$31.23</td>
</tr>
</tbody>
</table>
</body>
</html>

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223d.jpg" width="353">
Has Japan fallen into yet another recession? Last week&#39;s GDP report, with a third consecutive decline in Q4, was read by some analysts as indicating just such a renewed slump. Wednesday in Tokyo, the Ministry of Economy, Trade and Industry (METI) published industry activity data for December that might be seen casting a somewhat brighter light on the Japanese economy.
The All-Industry Activity Index (2000=100) fell 0.3% in December after a 0.2% rise in November. The graph shows that it was strong but erratic in the spring and has softened in the last several months, basically stagnating over the second half of the year.
Among its components, construction activity has been in a long downtrend since the outset of its index in 1993 and it remains on that path. The most favorable observation on this series is that the 3.8% year-on-year decline in December is the smallest since July 2003.
The industrial production index, reported about a week ago, fell 0.8% in December, but that followed a 1.7% jump in November, tracing an erratic month-to-month pattern. The trend, indicated by the December-to-December growth, saw a 1.8% advance, which is slower than the gains for 2003 and 2004 overall.
Tertiary activity, that is, services, was flat in December, but it too had risen in November, and in December was 2.2% ahead of a year earlier. In contrast to other sectors, services seem to be picking up somewhat. This tendency varied widely among service sectors, however, as wholesale and retail trade held some gains, while restaurants and accommodations stumbled. Information services sagged markedly early in 2004, but firmed noticeably late in the year.
Thus, it&#39;s difficult to put a single characterization on the Japanese economy at this time. &quot;Fragile&quot; might fit, with an easy potential to weaken. But service industries, as in other nations&#39; economies, may be providing some stability, helping to diminish cyclical tendencies.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Dec 2004</th>
<th scope="col">Nov 2004</th>
<th scope="col">Q4/Q3</th>
<th scope="col">Dec 04/ Dec 03</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All- Industry Activity</td>
<td>-0.3</td>
<td>+0.2</td>
<td>-0.1</td>
<td>+1.7</td>
<td>+2.3</td>
<td>+0.9</td>
<td>-0.4</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>-1.6</td>
<td>-1.0</td>
<td>-0.9</td>
<td>-3.8</td>
<td>-5.7</td>
<td>-5.3</td>
<td>-4.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Industrial Production</td>
<td>-0.8</td>
<td>+1.7</td>
<td>-0.7</td>
<td>+1.8</td>
<td>+5.6</td>
<td>+3.2</td>
<td>-1.2</td>
</tr>
<tr>
<td class="firstcol">Tertiary Activity</td>
<td>0</td>
<td>+0.4</td>
<td>+0.5</td>
<td>+2.2</td>
<td>+2.1</td>
<td>+0.8</td>
<td>0</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: GDP</td>
<td>--</td>
<td>--</td>
<td>-0.1</td>
<td>+0.6 (Q4/Q4)</td>
<td>+2.6</td>
<td>+1.4</td>
<td>-0.3</td>
</tr>
</tbody>
</table>
</body>
</html>

Has Japan fallen into yet another recession? Last week's GDP report, with a third consecutive decline in Q4, was read by some analysts as indicating just such a renewed slump. Wednesday in Tokyo, the Ministry of Economy, Trade and [...]

Mixed Trends in Japanese Sectoral Activity

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223c.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications fell another 0.6% last week but slight decline during the last two weeks only tempered earlier gains which lifted the average in February 11.1% above January.
Last week&#39;s decline was due to a 1.3% drop in purchase applications. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales. Purchase applications in February are down 0.3% versus January.
Applications to refinance ticked up 0.1% following several weeks of strong gain and in February are 25.6% higher than in January.
The effective interest rate on a conventional 30-year mortgage rose to 5.92% versus 5.75% the prior week. The effective rate on a 15-year mortgage also rose to 5.52% last week.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">02/18/05</th>
<th scope="col">02/11/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>727.9</td>
<td>732.3</td>
<td>-14.8%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>417.8</td>
<td>423.3</td>
<td>-1.3%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,532.0</td>
<td>2,530.1</td>
<td>-24.7%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

The Mortgage Bankers Association reported that mortgage applications fell another 0.6% last week but slight decline during the last two weeks only tempered earlier gains which lifted the average in February 11.1% above January. Last [...]

Mortgage Applications Off Again

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223b.jpg" width="353">
Chain store sales dipped 0.1% last week and reversed the prior week&#39;s up tick according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales in February are 0.7% ahead of the January average which rose 0.9% from December.
During the last ten years there has been a 58% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC fell 0.2 in the latest week (+0.5% y/y).
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">02/19/05</th>
<th scope="col">02/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>445.6</td>
<td>446.2</td>
<td>1.8%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales dipped 0.1% last week and reversed the prior week's up tick according to the International Council of Shopping Centers (ICSC)-UBS survey. Sales in February are 0.7% ahead of the January average which rose 0.9% from [...]

Chain Store Sales Dipped

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223a.jpg" width="353">
Consumer Prices (CPI-U) rose a modest 0.1% in January following an upwardly revised no change the month earlier. Consensus expectations had been for a 0.2% increase for last month.
Prices less food &amp; energy rose the same 0.2% in January as during the prior three months and the gain matched expectations
&quot;Core&quot; commodities prices posted a 0.3% increase, one of the larger increases of the last three years, led by a 1.9% (4.4% y/y) spurt in tobacco prices and a 0.7% (1.3% y/y) gain in new vehicle prices. Apparel prices rose 0.3% (+0.2% y/y) and furniture prices rose 0.1% (0.6% y/y). Personal computer prices rose 0.7% (NSA, -13.6% y/y).
Services prices less energy rose 0.2% for the fourth consecutive month. Shelter prices rose a stable 0.2% (2.7% y/y), medical care services inflation also was stable at a firm 0.4% (5.0% y/y) but public transportation prices fell for the second consecutive month (-1.0% y/y). School tuition rose 0.3% (6.5% y/y).
Energy prices fell for the second consecutive month, pulled lower by a 2.1% (+14.3% y/y) decline in gasoline prices. In February gasoline prices are 4.0% higher than in January and have reversed about half of the decline since November. Fuel oil prices fell 4.9% last month (+20.9% y/y) and natural gas &amp; electricity prices rose 0.1% (+5.9% y/y).
Food prices rose 0.1%, the gain held back by a 4.6% drop (+4.6% y/y) in fruit &amp; vegetable prices.
The chained CPI, which adjusts for shifts in the mix of consumer purchases, rose 0.2% and offset the revised 0.2% December decline. Core chain prices rose for the first time since October.
Real Effects of Inflation Through the Redistribution of Nominal Wealth from the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/research/sr/sr355.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.1%</td>
<td>0.0%</td>
<td>2.9%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.0%</td>
<td>0.9%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>10.5%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.1%</td>
<td>0.0%</td>
<td>2.8%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a></td>
<td>0.2%</td>
<td>-0.2%</td>
<td>2.8%</td>
<td>2.2%</td>
<td>1.9%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>2.1%</td>
<td>1.4%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer Prices (CPI-U) rose a modest 0.1% in January following an upwardly revised no change the month earlier. Consensus expectations had been for a 0.2% increase for last month. Prices less food & energy rose the same 0.2% in [...]

Consumer Prices Rose As Expected

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223a.jpg" width="353">
Consumer Prices (CPI-U) rose a modest 0.1% in January following an upwardly revised no change the month earlier. Consensus expectations had been for a 0.2% increase for last month.
Prices less food &amp; energy rose the same 0.2% in January as during the prior three months and the gain matched expectations
&quot;Core&quot; commodities prices posted a 0.3% increase, one of the larger increases of the last three years, led by a 1.9% (4.4% y/y) spurt in tobacco prices and a 0.7% (1.3% y/y) gain in new vehicle prices. Apparel prices rose 0.3% (+0.2% y/y) and furniture prices rose 0.1% (0.6% y/y). Personal computer prices rose 0.7% (NSA, -13.6% y/y).
Services prices less energy rose 0.2% for the fourth consecutive month. Shelter prices rose a stable 0.2% (2.7% y/y), medical care services inflation also was stable at a firm 0.4% (5.0% y/y) but public transportation prices fell for the second consecutive month (-1.0% y/y). School tuition rose 0.3% (6.5% y/y).
Energy prices fell for the second consecutive month, pulled lower by a 2.1% (+14.3% y/y) decline in gasoline prices. In February gasoline prices are 4.0% higher than in January and have reversed about half of the decline since November. Fuel oil prices fell 4.9% last month (+20.9% y/y) and natural gas &amp; electricity prices rose 0.1% (+5.9% y/y).
Food prices rose 0.1%, the gain held back by a 4.6% drop (+4.6% y/y) in fruit &amp; vegetable prices.
The chained CPI, which adjusts for shifts in the mix of consumer purchases, rose 0.2% and offset the revised 0.2% December decline. Core chain prices rose for the first time since October.
Real Effects of Inflation Through the Redistribution of Nominal Wealth from the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/research/sr/sr355.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.1%</td>
<td>0.0%</td>
<td>2.9%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.0%</td>
<td>0.9%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>10.5%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.1%</td>
<td>0.0%</td>
<td>2.8%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a></td>
<td>0.2%</td>
<td>-0.2%</td>
<td>2.8%</td>
<td>2.2%</td>
<td>1.9%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>2.1%</td>
<td>1.4%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
Chain Store Sales Dipped 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 23, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223b.jpg" width="353">
Chain store sales dipped 0.1% last week and reversed the prior week&#39;s up tick according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales in February are 0.7% ahead of the January average which rose 0.9% from December.
During the last ten years there has been a 58% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC fell 0.2 in the latest week (+0.5% y/y).
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">02/19/05</th>
<th scope="col">02/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>445.6</td>
<td>446.2</td>
<td>1.8%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Mortgage Applications Off Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 23, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050223c.jpg" width="353">
The Mortgage Bankers Association reported that mortgage applications fell another 0.6% last week but slight decline during the last two weeks only tempered earlier gains which lifted the average in February 11.1% above January.
Last week&#39;s decline was due to a 1.3% drop in purchase applications. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales. Purchase applications in February are down 0.3% versus January.
Applications to refinance ticked up 0.1% following several weeks of strong gain and in February are 25.6% higher than in January.
The effective interest rate on a conventional 30-year mortgage rose to 5.92% versus 5.75% the prior week. The effective rate on a 15-year mortgage also rose to 5.52% last week.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">02/18/05</th>
<th scope="col">02/11/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>727.9</td>
<td>732.3</td>
<td>-14.8%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>417.8</td>
<td>423.3</td>
<td>-1.3%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,532.0</td>
<td>2,530.1</td>
<td>-24.7%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050222d.jpg" width="353">
Data released today show that Russian Gross Domestic Product rose 7.14% in real terms in 2004, marginally less than the 7.35% rise in 2003.
Growth in consumption accelerated to a 9.20% increase from a 6.24% rise in 2003. Imports, perhaps in part at least, due to the rise in consumption, rose sharply. They were up 23.92 % from the 17.66% rise in 2003. The 13.14% rise in exports in 2004 was little changed from the 12.47% of 2003. The year to year growth in exports and imports is shown in the first chart. The growth in Gross fixed investment was 10.83% last year compared to 12.47% in the previous year. Inventory accumulation was a positive, if relatively small, factor in the rise of GDP. Total GDP for the year amounted to 16,779 billion rubles or $535.billion. Per capita GDP in dollar terms was a little more than $4000 in 2004.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050222c.jpg" width="353">
Although inflation has come down from extremely high levels of 2000, it continues to be high. The GDP deflator rose 18.64% in 2004, up from 13.67% in 2003. The second chart shows the rate of increase in real GDP and in the GDP deflator.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/EMERGECW/@EB/@EB.HTM">GDP (Bil. 2000 Rubles)</a></th>
<th scope="col">Q4 04</th>
<th scope="col">Q3&nbsp;04</th>
<th scope="col">Q4 03</th>
<th scope="col">Q/Q %</th>
<th scope="col">Y/Y &nbsp;%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col"> 2002&nbsp;</th>
<th scope="col">&nbsp; 2001&nbsp; &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Gross Domestic Product</td>
<td>2371.8</td>
<td>2307.2</td>
<td>2224.9</td>
<td>2.80</td>
<td>9.60</td>
<td>7.14</td>
<td>7.35</td>
<td>4.74</td>
<td>5.09</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumption</td>
<td>1541.5</td>
<td>1498.6</td>
<td>1402.9</td>
<td>2.86</td>
<td>9.88</td>
<td>9.20</td>
<td>6.24</td>
<td>7.02</td>
<td>6.83</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Household</td>
<td>1225.3</td>
<td>1184.3</td>
<td>1093.0</td>
<td>3.46</td>
<td>12.10</td>
<td>11.26</td>
<td>7.51</td>
<td>8.50</td>
<td>9.50&nbsp;&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Government</td>
<td>295.6</td>
<td>294.2</td>
<td>289.2</td>
<td>0.48</td>
<td>5.21</td>
<td>2.35</td>
<td>2.47</td>
<td>2.60</td>
<td>-0.78</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Non Profit Institutions Serving Households</td>
<td>20.6</td>
<td>20.1</td>
<td>20.7</td>
<td>2.49</td>
<td>-0.48</td>
<td>-0.49</td>
<td>1.11</td>
<td>0.74</td>
<td>1.90</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Gross Capital Formation</td>
<td>448.3</td>
<td>435.2</td>
<td>414.9</td>
<td>2.99</td>
<td>8.05</td>
<td>10.83</td>
<td>12.94</td>
<td>2.78</td>
<td>10.25</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Inventory Change</td>
<td>91.9</td>
<td>36.3</td>
<td>76.6</td>
<td>55.6*</td>
<td>15.3*</td>
<td>73.9*</td>
<td>26.1*</td>
<td>-79.5*</td>
<td>102.3*</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Exports</td>
<td>291.7</td>
<td>292.0</td>
<td>324.5</td>
<td>-0.3*</td>
<td>-32.8*</td>
<td>-125.9*</td>
<td>39.8*</td>
<td>10.4*</td>
<td>-192.9*</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Exports</td>
<td>1237.0</td>
<td>1185.8</td>
<td>1080.0</td>
<td>3.90</td>
<td>14.07</td>
<td>13.14</td>
<td>12.47</td>
<td>10.26</td>
<td>4.22</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imports</td>
<td>940.3</td>
<td>893.8</td>
<td>755.5</td>
<td>5.20</td>
<td>24.46</td>
<td>23.92</td>
<td>17.66</td>
<td>14.58</td>
<td>18.72</td>
</tr>
<tr class="odd">
<td class="firstcol">Deflator (2000=100)</td>
<td>194.6</td>
<td>180.33</td>
<td>161.03</td>
<td>7.9</td>
<td>20.86</td>
<td>18.64</td>
<td>13.67</td>
<td>15.47</td>
<td>19.49</td>
</tr>
</tbody>
</table>
</body>
</html>

Data released today show that Russian Gross Domestic Product rose 7.14% in real terms in 2004, marginally less than the 7.35% rise in 2003. Growth in consumption accelerated to a 9.20% increase from a 6.24% rise in 2003. Imports, [...]

Russia Chalks Up Another 7+% Real Growth in 2004: Inflation Accelerates

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

251230J46.jpg

251230K46.jpg

U.S. house prices rose 0.4% m/m in October following a 0.1% dip in September (0.0% initially) and a 0.4% rise in August (unrevised), according to the Federal Housing Finance Agency (FHFA) House Price Index. October marked the second m/m increase in three months after no change in July. The HPI reached a record high of 436.75 in October, up 13.4% from its August 2022 low of 384.98. The year-on-year rate of increase eased to 1.7% in October from 1.8% in September—the slowest pace since March 2012—down from 4.7% in October 2024 and well below a high of 18.6% in February 2022.

House prices increased m/m in October (vs. September) across seven of the nine census divisions. Gains were led by West South Central (+1.0% vs. -1.6%), followed by New England (+0.9% vs. -0.3%), East North Central (+0.6% vs. +0.7%), Mountain (+0.6% vs. -0.8%), West North Central (+0.6% vs. +0.6%), Middle Atlantic (+0.4% vs. +0.2%), and Pacific (+0.2% vs. +0.3%). In contrast, house prices fell m/m in two census divisions in October (vs. September): East South Central (-0.4% vs. +0.7%) and South Atlantic (-0.2% vs. -0.2%).

Year-on-year house prices continued to rise in October across most regions, except West South Central and South Atlantic. The y/y pace accelerated in October (vs. September) in four of the nine census divisions: West North Central (+3.8% vs. +3.2%), New England (+3.7% vs. +3.2%), Mountain (+0.3% vs. -0.8%), and Pacific (+0.2% vs. -0.6%). Meanwhile, house price growth decelerated y/y in October (vs. September) in East South Central (+1.5% vs. +2.7%), East North Central (+5.1% vs. +5.4%), and Middle Atlantic (+5.3% vs. +5.4%). To the downside, West South Central (-0.7% vs. -1.0%) and South Atlantic (-0.5% vs. +0.4%) were the only regions posting y/y declines in October (vs. September).

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

The minutes to the December 9–10 **FOMC** meeting can be found [here](https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20251210.pdf).

251230L46.jpg

251230M46.jpg

- FHFA HPI +0.4% m/m (+1.7% y/y) in Oct.; second m/m gain in three months.
- House prices up m/m in seven of nine census divisions but down in East South Central (-0.4%) and South Atlantic (-0.2%).
- House prices up y/y in seven of nine regions, led by Middle Atlantic (+5.3%), but down in West South Central (-0.7%) and South Atlantic (-0.5%).

U.S. FHFA House Prices Rebound in October Following September’s Easing

Robert Brusca

251230E.jpg

When inflation numbers come hot off the griddle, some part of them might stick to the pan. That's the case this month with Spain’s release of inflation in December. It provides us with the headline for the HICP measure, a headline to the domestic measure, and the domestic measure excluding energy. But it does not release the sector detail for the rest of the report.

However, based upon what's been released, it’s clear that inflation in Spain has picked up. The part of the core that we have in-hand, which is just the portion excluding energy, still appears to be fairly well behaved; however, its gain is still slightly excessive.

**HICP trend**
Spain’s HICP measure in December rose 0.4% after rising by 0.5% in both October and November; those are hot numbers. That translates into a 5.7% annual rate over three months which is hotter than its pace of 4.5% over six months which in turn is hotter than the 12-month increase of 3%. The HCP headline for Spain has clearly been accelerating, the year-over-year rise is too-hot, and the shorter-term metrics are hotter still. This is not good news, and this is not a welcome progression.

**Domestic inflation**
Looking at Spain’s domestic CPI conditions, we find that they are still on the hot side with December showing a headline gain of 0.3% but gains in October and November of 0.5% each, producing a three-month annual rate of 5.4%, which is hotter than its 4.2% over six months, which, in turn, is hotter than the year-over-year gain at 2.9%. And these patterns/results are very similar to the pattern and the readings for the HICP. The domestic inflation picture is too hot over 12 months and accelerating over the shorter periods.

**Domestic inflation ex-energy:** The CPI excluding energy is not as bloated as the HICP or the domestic headline, but it is still a reading on rough terrain. Over 12 months, inflation excluding energy rises at a 2.6% annual rate; that's above the 2% pace sought by the ECB for the community as a whole. Over six months, the reading ramps up to a 3.1% annual rate, again moving the wrong direction and a reading at 3.1% is simply too hot. Over three months, there's a slight deceleration compared to six months but still a rate that is too hot, at 2.9%, and stronger than the 12-month pace. Core inflation is better behaved than headline inflation and both the domestic and the HICP frameworks, but inflation is unruly overall and, for the most part, showing either acceleration or at least a 3-month pace stronger than its 12-month pace. None of this is what the ECB is looking for or trying to achieve.

**Beyond the missing details**
The details of the Spanish report are missing for December because the data are too preliminary for the authorities to post. However, if we look at the sequential pace of inflation over 12 months, six months, and three months on a lagged basis, it is looking at data that are up-to-date through November rather than through December what's the numbers that are generally excessive and they show too much acceleration moving from 12-months to 6-months to 3-months. Over 12 months compared to a year ago, five of nine categories show inflation accelerating. Over 6 months compared to 12 months, four categories are accelerating. Over 3 months compared to 6 months, six of the nine categories are accelerating. These acceleration tendencies are worrisome.

In addition, over 12 months, six of nine categories have a pace above 2%. Over 6 months, six of nine categories have annualized gains above 2%, and over 3 months, the lagged data show six of nine categories with gains above 2%. Only apparel shows inflation tempered on all horizons (at or below 2%). Food, housing, transport, education and other all show above 2% inflation on all horizons.

251230.jpg

**Summing up-challenging times ahead?**
Is Spain past its best inflation performance? Is the inflation worm going to begin to turn more broadly? These are trends we will need to watch. Inflation broadly has slowed or stopped its declines and largely done that in Europe as well as in the United States. Inflation is now hovering at a pace that is too strong- maybe tolerable or maybe not. Central banks need to decide and tell us what a 2% target means. Then, the question of what’s next hangs in the air. U.K. inflation remains excessive but has stepped down as the economy has begun to experience some significantly weaker economic data. Is that the future? Is it stagflation? Is it recovering from a slowdown and higher rates of interest and inflation? Or will there be continued inflation progress? Open the door on 2026…the envelope… please.

Spain

Spanish Inflation Flares at Year-End

251229A23.jpg

251229B23.jpg

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

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

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

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

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

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

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

251229C23.jpg

251229D23.jpg

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

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

251229F.jpg

251229G.jpg

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

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

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

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

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

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

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

251229E.jpg

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

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

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

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

251229.jpg

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

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

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

Economy in Brief: 2005

Jump to:

U.S. Durable Goods Orders Lower in January, Trend Strong

U.S. Durable Goods Orders Lower in January, Trend Strong

Mixed Trends in Japanese Sectoral Activity

Mortgage Applications Off Again

Chain Store Sales Dipped

Consumer Prices Rose As Expected

Consumer Prices Rose As Expected

Russia Chalks Up Another 7+% Real Growth in 2004: Inflation Accelerates