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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003b.jpg" width="353">
The International Council of Shopping Centers (ICSC)-UBS indicated that chain store sales fell last week. The 0.3% decline was the fourth drop in as many weeks and pulled the average of sales in September 0.5% below August.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The retail price for a gallon of regular unleaded gasoline also fell last week. The seven cent w/w decline to an average $2.31 (-21.1% y/y) was to the lowest level since late February. 
The earlier decline in spot market prices, however, recently stabilized. In trading yesterday, the NY harbor price for regular unleaded gasoline was $1.55 per gallon versus an average $1.54 last week and $1.53 the prior period. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003a.jpg" width="353">
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.
The leading indicator of chain store sales from ICSC-UBS reversed all of the prior week&#39;s decline with a 0.7% rise, the third gain in the last four weeks. The indicator in September rose 0.7% from the August average, the first m/m rise since June.
The latest Short-Term Energy Outlook from the U.S. Energy Information Administration is available <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.
Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/br/br_q3-2006-1_consumer_confidence.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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">09/30/06</th>
<th scope="col">09/23/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>463.0</td>
<td>464.2</td>
<td>3.3%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Challenger Layoffs Up Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003c.jpg" width="353">
For September, announced job cuts reported by Challenger, Grey &amp; Christmas jumped for the second month. The 35,037 increase to 100,315 was to the highest level since January. The three month moving average of layoff announcements also rose 19.5% to its highest level since April.
During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.
A sharply higher level of layoffs in automotive (464.2% y/y), commodities (77.2% y/y), consumer goods (9.5% y/y), industrial goods (-16.1% y/y), and insurance (396.0% y/y) boosted the total. These were offset by declines in retail (-82.7% y/y), financial (-26.5% y/y), real estate and transportation (-90.8% y/y).
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Challenger also reported that announced hiring plans more than tripled m/m (87.9% y/y).
Remarks by Fed Governor Randall S. Kroszner titled What Drives Productivity Growth? Implications for the Economy and Prospects for the Future can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2006/20060927/default.htm"> 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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>100,315</td>
<td>65,278</td>
<td>39.6%</td>
<td>1,072,054</td>
<td>1,039,935</td>
<td>1,236,426</td>
</tr>
</tbody>
</table>
 Avoiding Pitfalls in Comparing Retail Sales Among Countries   
by <a href="/comment/Curley.html">Louise Curley</a> October 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003d.jpg" width="353">
Comparisons of retail sales among countries are beset by different definitions and by different units. Some countries report sales only in index form, others only in their national currencies. Some countries include sales of motor vehicle and parts; others do not. Some counties report sales both including and excluding motor vehicles and parts.
Today three countries--France, Australia and Hong Kong--reported retail sales. Yesterday Germany reported. The easiest comparison to make is between Germany and France. The volume of retail sales is reported in the EUROSTAT data base where concepts are harmonized. One can be reasonably certain that the difference in trends of retail sales in the two countries, shown in Chart 1, is a substantive one and not due to statistical quirks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003f.jpg" width="353">
If one wishes to compare retail sales in Germany with those in Hong Kong one should note that the German concept excludes motor vehicles and parts while the Hong Kong concept includes them. Fortunately, however in the GERMANY data base, there is a memorandum item--Retail Sales including motor vehicle and parts. This series has a base of 2003 and the retail sales series in Hong Kong from the EMERGEPR data base has a base of October, 2004-September, 2005. One could change the Hong Kong index to base 2003=100 or, as we did change both to 2000=100 to be comparable with the other charts. The two series with base 2000=100 are shown in Chart 2.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003e.jpg" width="353">
Another problem comes up when one series is in local currency and another in index form. Such is the case if one want to compare retail sales in France and Australia. The Australian data are given in millions of Australian Dollars, while the French data are given in terms of value and volume indexes. Both concepts, fortunately, exclude motor vehicles and parts. One simple approach is to take the Australian data from the ANZ data base, and, by using the advanced function, put the data in index form with 2000=100, the same base as the French value index that is found in the FRANCE data base.This comparison is shown in Chart 3.
The second and third charts, like the first show comparisons that reflect substantive differences and not statistical quirks. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Retail Sales</th>
<th scope="col">Aug&nbsp; 06</th>
<th scope="col">Jul 06</th>
<th scope="col">Aug 05</th>
<th scope="col">M/M %&nbsp;&nbsp;</th>
<th scope="col">Y/Y %&nbsp;&nbsp;&nbsp;</th>
<th scope="col">2005&nbsp;&nbsp;</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GERMANY&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>104.3</td>
<td>104.3</td>
<td>104.1</td>
<td>0.00</td>
<td>0.19</td>
<td>103.2</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Val Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)</td>
<td>105.6</td>
<td>105.5</td>
<td>104.5</td>
<td>0.09</td>
<td>1.05</td>
<td>103.7</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales, incl&nbsp; motor vehicles &amp; pts (2000=100)</td>
<td>107.1</td>
<td>106.3</td>
<td>104.4</td>
<td>0.75</td>
<td>2.59</td>
<td>103.9</td>
<td>101.8</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol"> FRANCE</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Val Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>116.3</td>
<td>116.1</td>
<td>114.1</td>
<td>0.68</td>
<td>2.25</td>
<td>114.7</td>
<td>113.2</td>
<td>109.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)&nbsp;</td>
<td>n.a.</td>
<td>123.5</td>
<td>120.6</td>
<td>n.a</td>
<td>n.a</td>
<td>121.3</td>
<td>119.3</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">AUSTRALIA</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Retail Sales (Mil A$)</td>
<td>18.176</td>
<td>18031</td>
<td>17212.3</td>
<td>0.25</td>
<td>5.60</td>
<td>217396</td>
<td>198214</td>
<td>175956</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Retail Sales 2000=100)</td>
<td>146.4</td>
<td>146.0</td>
<td>138.6</td>
<td>0.25</td>
<td>5.60</td>
<td>137.2</td>
<td>133.1</td>
<td>124.5 vA</td>
</tr>
<tr class="odd">
<td class="firstcol">HONG KONG</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales (2000=100)</td>
<td>118.8</td>
<td>117.4</td>
<td>109.4</td>
<td>1.20</td>
<td>8.61</td>
<td>109.6</td>
<td>102.7</td>
<td>92.6</td>
</tr>
</tbody>
</table>


</html>

The International Council of Shopping Centers (ICSC)-UBS indicated that chain store sales fell last week. The 0.3% decline was the fourth drop in as many weeks and pulled the average of sales in September 0.5% below August.

Chain Store Sales & Gasoline Prices Fell Again

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/061002j.jpg" width="353">
The Bank of Japan&#39;s Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers&#39; current conditions) from 21% in June to 24% in September and was 5 percentage points above June, 2005. A weakening of the yen and a fall in oil prices since the June survey has contributed to the increase in economic activity. Confidence in current conditions also improved for medium sized manufactures--from 13% to 14%--while that for small manufacturers declined--from 7% to 6%. The trends of the diffusion indexes of actual conditions in the large and small manufacturers are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002g.jpg" width="353">
While Japanese manufacturers were more confident in their appraisal of current conditions, they were less confident in their appraisal of the future. The diffusion index for large manufacturers&#39; appraisal of the future fell from 22% to 21%, that for medium manufacturers fell from 13% to 11% while that for small firms remained unchanged at 7%. The contrast between the optimistic appraisal of current conditions and less sanguine appraisal of the future for large corporations is shown in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002i.jpg" width="353">
The IFO Survey of German business released last week showed the same general trends as the Tankan Survey--an improved appraisal of current conditions and less sanguine view of the outlook. We suggested, in that in case of Germany, that the decline in the appraisal of the future was more likely to reflect caution rather than alarm as current conditions had rec<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002h.jpg" width="353">ently been much better than anticipated. (See Chart 3) In the case of Japan, actual business conditions for all industries have been better than expectations since the series began in 2004 until the second and third quarters of this year when they equaled expectations. (See Chart 4)
With the economy in the United States slowing, attention is being brought to bear on the prospects for growth in the next two largest industrial economies. While these surveys suggest some deceleration in growth may be in the cards for Japan and Germany, the trend of growth in both countries continues to recover from the depressed years of the recent past. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J809/@J809.HTM">Japan TANKAN (%)</a></th>
<th scope="col">3Q 06</th>
<th scope="col">2Q 06</th>
<th scope="col">3Q&nbsp; 05</th>
<th scope="col">Q/Q Dif&nbsp;&nbsp;</th>
<th scope="col">Y/Y&nbsp; Dif&nbsp;</th>
<th scope="col">2006&nbsp;&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">ACTUAL CONDITIONS&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>24</td>
<td>21</td>
<td>19</td>
<td>3</td>
<td>5</td>
<td></td>
<td>18</td>
<td>21</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>14</td>
<td>13</td>
<td>5</td>
<td>1</td>
<td>9</td>
<td></td>
<td>7</td>
<td>10</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>6</td>
<td>7</td>
<td>3</td>
<td>-1</td>
<td>3</td>
<td></td>
<td>3</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">FORECASTS</td>
<td>4Q 06</td>
<td>3Q 06</td>
<td>4Q&nbsp; 05</td>
<td>Q/Q Dif&nbsp;&nbsp;</td>
<td>Y/Y&nbsp; Dif&nbsp;</td>
<td>2006&nbsp;&nbsp;</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>21</td>
<td>22</td>
<td>18</td>
<td>-1</td>
<td>3</td>
<td>21</td>
<td>16</td>
<td>15</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>11</td>
<td>13</td>
<td>6</td>
<td>-2</td>
<td>7</td>
<td>11</td>
<td>4</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>7</td>
<td>7</td>
<td>1</td>
<td>0</td>
<td>6</td>
<td>7</td>
<td>1</td>
<td>-2</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bank of Japan's Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers' current conditions) from 21% in June to 24% in September and was 5 [...]

Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future

<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/061002d.jpg" width="353">
The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% below 2Q.
Residential building dropped another 1.4%, the fifth sharp slide in as many months. New single family building dropped 2.7% (-9.3% y/y) and the August level was down 12.5% from the peak in February. Moving in the other direction the value of spending on improvements rose 1.1%% (0.8% y/y).
During the last twenty years there has been an 84% correlation between the q/q change in the value of residential building and its contribution to growth in real GDP.
Nonresidential building jumped 3.4% after an upwardly revised 1.3% July rise. Office construction surged 3.1% (27.5% y/y) while multi-retail building jumped 10.8% (51.1% y/y). Building by the factory sector surged 8.2% (28.4% y/y) to the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002e.jpg" width="353">
Public construction spending reversed all of the prior month&#39;s revised decline with a 1.1% increase due to across the board gains. Construction activity on highways &amp; streets, nearly one third of the value of public construction spending, rose 0.4% (17.6% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.
Are Investors More Risk-Averse During Recession? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20061001/cover.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/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3%</td>
<td>-1.0%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>11.5%</td>
<td>5.6%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>-1.0%</td>
<td>2.9%</td>
<td>12.0%</td>
<td>14.3%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-1.4%</td>
<td>-2.2%</td>
<td>-5.1%</td>
<td>13.9%</td>
<td>18.6%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>3.4%</td>
<td>1.3%</td>
<td>23.8%</td>
<td>7.4%</td>
<td>5.3%</td>
<td>-4.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>-1.2%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% [...]

U.S. Construction Spending Up Unexpectedly

<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/061002a.jpg" width="353">
The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five points from the year ago peak of 58.1 Consensus expectations had been for a more moderate decline m/m to 53.5.
During the last ten years there has been a 67% correlation between the level of the ISM index and three month growth in factory sector industrial production.
At 61.0 the price index, which is not included in the composite, dropped to its lowest level since last November. During the last ten years there has been an 89% correlation between the level of the price index and the three month change in the PPI for intermediate goods less food &amp; energy.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002c.jpg" width="353">
The percentage of respondents reporting higher prices fell to its lowest level (36%) since February.
A lower employment component, which fell to 49.4 from a four month high of 54.0 in August, accounted for much of the m/m decline in the composite. During the last ten years there has been a 77% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.
The inventories index also fell sharply m/m while all of the other component series fell modestly with the exception of new orders which was unchanged m/m. The new orders index, however, at 54.2 is down sharply from the December 2003 high of 71.6.
The new export orders index fell modestly m/m to 55.3 and is down roughly three points from the recent high in January of 58.5. The series peak was in early 2004 near 60. During the last ten years there has been a 69% correlation between the level of the export order index and the q/q growth in goods exports from the GDP accounts. The imports index rose back to the middle of its range since early 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002b.jpg" width="353">
Explaining Cyclical Movements in Employment: Creative Destruction or Changes in Utilization from the Board of Governors of the Federal Reserve System is available <a href="http://www.federalreserve.gov/pubs/feds/2006/200623/200623abs.html">here</a>.
Economic Revitalization Through the Arts: The Creative Economy from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/commdev/c&amp;b/2006/spring/revitalization.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/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>52.9</td>
<td>54.5</td>
<td>58.0</td>
<td>55.5</td>
<td>60.5</td>
<td>53.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index (NSA)</td>
<td>61.0</td>
<td>73.0</td>
<td>78.0</td>
<td>66.4</td>
<td>79.8</td>
<td>59.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five [...]

ISM Composite & Price Indexes Down

<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/061002a.jpg" width="353">
The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five points from the year ago peak of 58.1 Consensus expectations had been for a more moderate decline m/m to 53.5.
During the last ten years there has been a 67% correlation between the level of the ISM index and three month growth in factory sector industrial production.
At 61.0 the price index, which is not included in the composite, dropped to its lowest level since last November. During the last ten years there has been an 89% correlation between the level of the price index and the three month change in the PPI for intermediate goods less food &amp; energy.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002c.jpg" width="353">
The percentage of respondents reporting higher prices fell to its lowest level (36%) since February.
A lower employment component, which fell to 49.4 from a four month high of 54.0 in August, accounted for much of the m/m decline in the composite. During the last ten years there has been a 77% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.
The inventories index also fell sharply m/m while all of the other component series fell modestly with the exception of new orders which was unchanged m/m. The new orders index, however, at 54.2 is down sharply from the December 2003 high of 71.6.
The new export orders index fell modestly m/m to 55.3 and is down roughly three points from the recent high in January of 58.5. The series peak was in early 2004 near 60. During the last ten years there has been a 69% correlation between the level of the export order index and the q/q growth in goods exports from the GDP accounts. The imports index rose back to the middle of its range since early 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002b.jpg" width="353">
Explaining Cyclical Movements in Employment: Creative Destruction or Changes in Utilization from the Board of Governors of the Federal Reserve System is available <a href="http://www.federalreserve.gov/pubs/feds/2006/200623/200623abs.html">here</a>.
Economic Revitalization Through the Arts: The Creative Economy from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/commdev/c&amp;b/2006/spring/revitalization.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/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>52.9</td>
<td>54.5</td>
<td>58.0</td>
<td>55.5</td>
<td>60.5</td>
<td>53.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index (NSA)</td>
<td>61.0</td>
<td>73.0</td>
<td>78.0</td>
<td>66.4</td>
<td>79.8</td>
<td>59.6</td>
</tr>
</tbody>
</table>
U.S. Construction Spending Up Unexpectedly 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002d.jpg" width="353">
The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% below 2Q.
Residential building dropped another 1.4%, the fifth sharp slide in as many months. New single family building dropped 2.7% (-9.3% y/y) and the August level was down 12.5% from the peak in February. Moving in the other direction the value of spending on improvements rose 1.1%% (0.8% y/y).
During the last twenty years there has been an 84% correlation between the q/q change in the value of residential building and its contribution to growth in real GDP.
Nonresidential building jumped 3.4% after an upwardly revised 1.3% July rise. Office construction surged 3.1% (27.5% y/y) while multi-retail building jumped 10.8% (51.1% y/y). Building by the factory sector surged 8.2% (28.4% y/y) to the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002e.jpg" width="353">
Public construction spending reversed all of the prior month&#39;s revised decline with a 1.1% increase due to across the board gains. Construction activity on highways &amp; streets, nearly one third of the value of public construction spending, rose 0.4% (17.6% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.
Are Investors More Risk-Averse During Recession? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20061001/cover.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/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3%</td>
<td>-1.0%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>11.5%</td>
<td>5.6%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>-1.0%</td>
<td>2.9%</td>
<td>12.0%</td>
<td>14.3%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-1.4%</td>
<td>-2.2%</td>
<td>-5.1%</td>
<td>13.9%</td>
<td>18.6%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>3.4%</td>
<td>1.3%</td>
<td>23.8%</td>
<td>7.4%</td>
<td>5.3%</td>
<td>-4.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>-1.2%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future  
by <a href="/comment/Curley.html">Louise Curley</a> October 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002j.jpg" width="353">
The Bank of Japan&#39;s Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers&#39; current conditions) from 21% in June to 24% in September and was 5 percentage points above June, 2005. A weakening of the yen and a fall in oil prices since the June survey has contributed to the increase in economic activity. Confidence in current conditions also improved for medium sized manufactures--from 13% to 14%--while that for small manufacturers declined--from 7% to 6%. The trends of the diffusion indexes of actual conditions in the large and small manufacturers are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002g.jpg" width="353">
While Japanese manufacturers were more confident in their appraisal of current conditions, they were less confident in their appraisal of the future. The diffusion index for large manufacturers&#39; appraisal of the future fell from 22% to 21%, that for medium manufacturers fell from 13% to 11% while that for small firms remained unchanged at 7%. The contrast between the optimistic appraisal of current conditions and less sanguine appraisal of the future for large corporations is shown in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002i.jpg" width="353">
The IFO Survey of German business released last week showed the same general trends as the Tankan Survey--an improved appraisal of current conditions and less sanguine view of the outlook. We suggested, in that in case of Germany, that the decline in the appraisal of the future was more likely to reflect caution rather than alarm as current conditions had rec<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002h.jpg" width="353">ently been much better than anticipated. (See Chart 3) In the case of Japan, actual business conditions for all industries have been better than expectations since the series began in 2004 until the second and third quarters of this year when they equaled expectations. (See Chart 4)
With the economy in the United States slowing, attention is being brought to bear on the prospects for growth in the next two largest industrial economies. While these surveys suggest some deceleration in growth may be in the cards for Japan and Germany, the trend of growth in both countries continues to recover from the depressed years of the recent past. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J809/@J809.HTM">Japan TANKAN (%)</a></th>
<th scope="col">3Q 06</th>
<th scope="col">2Q 06</th>
<th scope="col">3Q&nbsp; 05</th>
<th scope="col">Q/Q Dif&nbsp;&nbsp;</th>
<th scope="col">Y/Y&nbsp; Dif&nbsp;</th>
<th scope="col">2006&nbsp;&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">ACTUAL CONDITIONS&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>24</td>
<td>21</td>
<td>19</td>
<td>3</td>
<td>5</td>
<td></td>
<td>18</td>
<td>21</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>14</td>
<td>13</td>
<td>5</td>
<td>1</td>
<td>9</td>
<td></td>
<td>7</td>
<td>10</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>6</td>
<td>7</td>
<td>3</td>
<td>-1</td>
<td>3</td>
<td></td>
<td>3</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">FORECASTS</td>
<td>4Q 06</td>
<td>3Q 06</td>
<td>4Q&nbsp; 05</td>
<td>Q/Q Dif&nbsp;&nbsp;</td>
<td>Y/Y&nbsp; Dif&nbsp;</td>
<td>2006&nbsp;&nbsp;</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>21</td>
<td>22</td>
<td>18</td>
<td>-1</td>
<td>3</td>
<td>21</td>
<td>16</td>
<td>15</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>11</td>
<td>13</td>
<td>6</td>
<td>-2</td>
<td>7</td>
<td>11</td>
<td>4</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>7</td>
<td>7</td>
<td>1</td>
<td>0</td>
<td>6</td>
<td>7</td>
<td>1</td>
<td>-2</td>
</tr>
</tbody>
</table>
</body>
</html>

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

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

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

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

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

250829H.jpg

250829I.jpg

The advance estimate of the U.S. international trade deficit in goods widened to a larger-than-expected $103.57 billion in July after narrowing to $84.85 billion in June, data from the U.S. Census Bureau showed. The July reading, the second widening in the goods trade deficit in three months, was slightly smaller than a $103.92 billion shortfall in July 2024. A deficit of $90.2 billion for July had been expected by the Action Economics Forecast Survey. The deficit reached a record $161.95 billion in March. In Q2'25, the goods trade deficit narrowed to $266.96 billion, the smallest since Q4'23, after ballooning to a record $465.035 billion in Q1'25; the monthly deficit averaged $88.99 billion in Q2'25, down from a record $155.01 billion in Q1'25.

Total goods exports dipped 0.1% m/m (+3.0% y/y), the third consecutive monthly decline, to $177.97 billion in July, the lowest level since January, after a 0.7% decrease to $178.08 billion in June. April registered a record high of $190.08 billion. Exports were up 9.6% from a June 2023 low but down 2.1% from a July 2022 high. The m/m decline in exports in July reflected exports m/m drops of 2.4% (+16.3% y/y) in other goods, 0.9% (+5.1% y/y) in nonfood consumer goods excluding autos, and 0.8% (-1.2% y/y) in industrial supplies & materials. To the upside, exports for the following end-use categories rose m/m in July: automotive vehicles & parts (2.2%; -4.0% y/y), capital goods excluding autos (0.7%; 7.0% y/y), and foods, feeds & beverages (0.5%; 1.4% y/y).

Total goods imports rebounded 7.1% m/m (1.7% y/y), the first monthly increase since March, to a four-month-high $281.54 billion in July following a 4.6% drop to $262.94 billion in June. March registered a record high of $344.59 billion. Imports were up 11.9% from a June 2023 low but down 2.6% from a March 2022 high. The m/m rebound in imports in July reflected m/m rises in most imports end-use categories. These included a 25.4% surge (the first m/m increase and the largest since January; 4.9% y/y) in industrial supplies & materials as well as rises of 11.5% (23.5% y/y) in other goods, 4.8% (14.7% y/y) in capital goods excluding autos, 2.4% (4.9% y/y) in foods, feeds & beverages, and 2.1% (-12.2% y/y) in nonfood consumer goods excluding autos. In contrast, imports of automotive vehicles & parts, the only end-use category with a monthly decline in July, fell 3.2% (-14.1% y/y), the third m/m fall in four months, on top of a 3.6% June decrease.

The advance international trade data can be found in Haver's **USECON** database. The expectation figure is from the Action Economics Forecast Survey, which is in **AS1REPNA**.

- Deficit: $103.57 bil. in July, jumping 22.1% from June’s $84.85 bil.
- Exports -0.1%, down for the third straight month, led by a 2.4% decline in exports of other goods.
- Imports +7.1%, up for the first time since March, led by a 25.4% surge in imports of industrial supplies & materials.

U.S. Goods Trade Deficit Balloons in July; Largest Since March’s Record High

250828N8.jpg

250828C8.jpg

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

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

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

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

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

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

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

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

250828O8.jpg

250828P8.jpg

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

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

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

250828Q8.jpg

250828S8.jpg

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

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

Sandy Batten

250828J2.jpg

250828K2.jpg

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

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

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

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

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

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

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

250828L2.jpg

250828M2.jpg

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

FRB Kansas City Manufacturing Index Unchanged in August

250828F0.jpg

250828G0.jpg

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

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

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

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

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

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


U.S. Pending Home Sales Decline in July

Kathleen Stephansen, CBE

250828A5.jpg

250828B5.jpg

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

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

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

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

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

250828C5.jpg

250828D5.jpg

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

Economy in Brief: October 2006

Jump to:

Chain Store Sales & Gasoline Prices Fell Again

Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future

U.S. Construction Spending Up Unexpectedly

ISM Composite & Price Indexes Down

ISM Composite & Price Indexes Down