Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302b.jpg" style="width: 312px; height: 265px;">
A modest uptick in the pump price for regular
gasoline last week to $2.70 took it to the highest level
since January. This continued a trend of rising prices since
early-2009, which followed a recession-related downturn. Yesterday, the
spot market price for a gallon of regular gasoline retraced some of
that increase with a 3 cent decline. The figures are reported by the
U.S. Department of Energy and can be found in Haver's WEEKLY
&amp; DAILY databases.
The price for a barrel of light sweet crude (WTI) fell last
week to $79.26 and left it down from the early-January high of $82.59.
However, crude oil prices have fueled the same rising trend for
gasoline. Prices have risen from $71.53 early this past December and
are more than double the December 2008 low of $32.37. Yesterday, the
spot price fell moderately to $78.70.
Demand for gasoline fell 2.7% last week versus one year ago.
That decline compared to a 3.9% increase at the beginning of October.
The demand for residual fuel oil fell 3.5% y/y though the decline has
eased from -40.4% in February. Distillate demand fell 11.3% y/y, a
decline more moderate than the 21.6% y/y shortfall at the beginning of
last July. Inventories of crude oil and petroleum products slipped in
February but were up 1.1% from one year ago.
U.S. natural gas prices fell last week to an average $4.88 per
mmbtu (+17.3% y/y) from the high of $6.50 early in January.
Nevertheless they remained double the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.
Outside of energy, commodity prices also have been strong.
Copper has led the gain as scrap prices have more-than doubled since
early last year. Scrap steel prices also have doubled during the same
period. Not far behind in the metals area are aluminum prices, up by
two-thirds. With improved housing activity has come strength in lumber
prices which have risen more than 50% since early-2009. Cotton prices
also have nearly doubled with improvement in consumer spending. In the
agricultural area, foodstuffs including wheat, corn &amp; butter,
as well as livestock prices have risen by one-half. Finally, gold
prices near $1,100 pounce have risen 50% since the fall of '08 and have
roughly tripled since 2001.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">03/01/10</th>
<th scope="col">02/22/10</th>
<th scope="col">02/15/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.70</td>
<td>2.66</td>
<td>2.61</td>
<td>39.7%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>79.26</td>
<td>78.30</td>
<td>73.91</td>
<td>89.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>
U.S. Weekly Chain Store Sales Slip 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 2, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302c.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Weekly chain store sales gave back a piece of their prior
week's improvement with a 0.8% slip. Since the spring of last year,
sales have gyrated around a sideways trend.
The ICSC-Goldman
Sachs retail chain-store sales index is 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.
 During the last ten years there has been a 69%
correlation between the year-to-year growth in chain store sales and
the growth in general merchandise retail sales. The weekly
figures are available in Haver's SURVEYW database.

The leading indicator of chain store sales has been somewhat
weaker and last week moved to the low end of its year-long range. This
composite leading economic indicator is compiled from four series: (1)
the MBA's volume index of mortgage applications for home purchase (2)
the ABC News/Money magazine's survey of consumer buying conditions (3)
new filings for jobless benefits and (4) the 30-year government bond
yield.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></th>
<th scope="col">02/20/10</th>
<th scope="col">02/13/10</th>
<th scope="col">02/06/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>490.4</td>
<td>479.5</td>
<td>487.1</td>
<td>0.9%</td>
<td>0.1%</td>
<td>1.4%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
Progress- No Happily Ever
After Euro-Area Inflation In February Stays Under Wraps 
by <a href="/comment/Brusca.html">Robert
Brusca</a> March 2, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The EMU inflation chart tells a quick and dirty story of this
business cycle without all the embellishments over banks lending,
not-lending and financial crisis.
Once upon a time, inflation was steady. Then prices
overheated. Economic activity subsequently plunged bringing inflation
down sharply &#8211; it even negative turned Yr/Yr. All was not well. But
then, weakness subsided and inflation crept back up. Now prices show
signs of stabilizing with inflation around the 1% mark, well below the
2%-plus level where it had resided in the pre-crisis period. So is the
inflation scare over? Will they all now live happily ever after?
Inflation fighting is no fairy tale. The recent urging of the
IMF staff sho9uld make that clear; it said a higher inflation target
might be &#8216;good for&#8217; the US and Europe. It&#8217;s a stunning piece of work
from an organization that has stepped on its own tail more than once
too often. Fortunately Europe has been indignant about the suggestion
and the US seems simply to have ignored it.
Inflation is very much like toothpaste out of the tube. It
becomes a mess that cannot be controlled and leads to waste. Only the
waste caused by excess inflation is much worse than a little excess
toothpaste down the drain. In this financial crisis, however, we may
have learned something that is a bit dangerous: that is that very low
inflation leaves an economy less room for maneuver.
Under the leadership of former Fed Chairman Alan Greenspan all
we heard was how price stability and zero inflation should be our goal
and how the prices indices were biased up and so on. The lesson once
again is, be careful what you wish for. Europe may fare better under
lower inflation because of the breadth of its social welfare system.
The US has had a harder, more stressful, time. But admitting that is
not to say that US inflation should be higher or that the Fed should
notch up its idea of its inflation target. It is simply to face the
facts.
The ECB continues to be fixated on low inflation and, of
course, has its inflation ceiling mandate. The Bank of England is
similarly positioned but it has admitted to an inflation overshoot in
the post crisis period that it says is not serious or lasting and
contends it will ignore the temporary overshoot. The policy angle on
inflation no one has really gotten their arms around is the impact of
commodity prices - especially oil - on headline inflation. The ECB&#8217;s
headline inflation ceiling put it in difficult straights when oil
prices surged and drove headline inflation higher as the economy was
weakening. The Fed&#8217;s focus on core inflation left it more flexibility
to act.
Inflation is one of those peculiar things that we can all
agree upon yet we find reasons to divert our attention and policy from
the task at hand. It&#8217;s a bit like agreeing on what is a healthy diet
yet periodically finding we are overweight and having to do something
about it. The EU inflation situation appears to coming into a soft
landing of sorts. That, of course, is aided and abetted by what looks
like a poor growth result in the recovery. The US is in the same boat.
So while the inflation situation seems in hand for now there will
probably be no happily ever after here. Inflation fighting always
involves pain, vigilance and sacrifice.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Trends in
EMU HICP; Flash Index </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="3">%
Mo/Mo</td>
<td style="font-weight: bold;" colspan="4">SAAR</td>
</tr>
<tr class="even">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">Dec-09</td>
<td style="font-weight: bold;">3-Mo</td>
<td style="font-weight: bold;">6-Mo</td>
<td style="font-weight: bold;">12-Mo</td>
<td style="font-weight: bold;">Yr Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">EMU-13</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>1.2%</td>
<td>1.4%</td>
<td>0.9%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Core</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods</td>
<td>#N/A</td>
<td>-0.9%</td>
<td>-0.1%</td>
<td>-2.4%</td>
<td>1.4%</td>
<td>0.7%</td>
<td>0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.8%</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>1.4%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">HICP</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-0.4%</td>
<td>0.2%</td>
<td>0.3%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>#N/A</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>2.5%</td>
<td>1.2%</td>
<td>0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>#N/A</td>
<td>0.9%</td>
<td>0.4%</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>#N/A</td>
<td>0.0%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>0.8%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="8" class="firstcol">Core:xFE&amp;A</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>0.2%</td>
<td>0.9%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>#N/A</td>
<td>-0.2%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.9%</td>
<td>1.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>1.9%</td>
<td>1.5%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK</td>
<td>#N/A</td>
<td>0.4%</td>
<td>0.2%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>3.1%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>#N/A</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>0.3%</td>
<td>1.9%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Blue shaded
area data
trail by one month</td>
</tr>
</tbody>
</table>
More Favorable Data From Japan 
by <a href="/comment/Curley.html">Louise
Curley</a> March 2,2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302g.jpg" style="width: 353px; height: 265px;" align="right">So
far
releases of January activity in Japan suggest continued good growth for
the economy as a whole in the first quarter.&nbsp; Last week,
foreign trade and industrial production reports were positive and
today's employment and workers' household spending data are further
evidence of increased good news for Japan.&nbsp;&nbsp;
The
unemployment rate in Japan fell to 4.9% from 5.2% in December largely
as a result of an almost unprecedented increase of 540 million
jobs.&nbsp; One has to go back to October 1973, to find a higher
monthly increase in jobs. The changed in the number of employed persons
represents the changes in jobs and is shown in the first
chart.&nbsp; The rise in Active Openings/Applications, though
small, is encouraging as this measure is thought to be a good
indication of future employment.&nbsp; (Active
Openings/Applications,&nbsp; JAOR@JAPAN,&nbsp;
is found in Employment Referral Statistics in Haver's Japan data
base.)&nbsp;&nbsp;
Japan's 4.9% unemployment rate compares
with 9.7% in the United States and 9.9% in the Euro Area.&nbsp;
Japan's <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100302h.jpg" style="width: 353px; height: 265px;" align="right">
tradition of lifetime employment has tended to keep its
unemployment rate low relative to American and European standards, but
the lifetime employment commitment is beginning to erode and many
Japanese firms find they are overstaffed.&nbsp; As a result further
dramatic increases in jobs may be limited.&nbsp;&nbsp;
Disposable income in Workers' Households increased 3.4% in
January from
December.&nbsp; Although the increase in living expenditures was
only 0.42%, it was larger than the 0.31% increase in
December.&nbsp; But with the larger increase in income than in
expenditures, the propensity to consume of these households declined
2.1 percentage points from 75.6% in December to 73.5% in
January.&nbsp; The propensity to consume has shown considerable
volatility, but within a fairly narrow range from 68.7% to 77.5% since
January 2000 when the data first became available.&nbsp; The
propensity to consume since 2001 is shown in the second chart.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN</th>
<th scope="col">Jan 10&nbsp;</th>
<th scope="col">Dec 09</th>
<th scope="col">Jan 09</th>
<th scope="col">M/M Chg</th>
<th scope="col">Y/Y Chg</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Employed Persons
(1000)</td>
<td>63030</td>
<td>62490</td>
<td>63830</td>
<td>540</td>
<td>-800</td>
<td>62820</td>
<td>63850</td>
<td>64120</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployed
Persons&nbsp; (1000)</td>
<td>3280</td>
<td>3440</td>
<td>2810</td>
<td>-160</td>
<td>470</td>
<td>3360</td>
<td>2650</td>
<td>2570</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate
(%)</td>
<td>4.9</td>
<td>5.2</td>
<td>4.2</td>
<td>-0.3</td>
<td>0.7</td>
<td>5.1</td>
<td>4.0</td>
<td>3.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Active
Openings/Applications (ratio)</td>
<td>0.46</td>
<td>0.43</td>
<td>0.65</td>
<td>0.3</td>
<td>-0.19</td>
<td>0.48</td>
<td>0.88</td>
<td>1.04</td>
</tr>
<tr>
<td colspan="9" class="firstcol">Workers'
Households&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Disposable Income
(2005=100)</td>
<td>97.3</td>
<td>94.1</td>
<td>99.1</td>
<td>3.40%</td>
<td>-1.82%</td>
<td>97.0</td>
<td>99.9</td>
<td>99.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Living
Expenditures (2005=100</td>
<td>96.3</td>
<td>95.9</td>
<td>97.2</td>
<td>0.42%</td>
<td>-0.93%</td>
<td>96.9</td>
<td>98.7</td>
<td>98.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Propensity to
Consume (%)</td>
<td>73.5</td>
<td>75.6</td>
<td>72.8</td>
<td>-2.1</td>
<td>0.7</td>
<td>74.2</td>
<td>73.4</td>
<td>73.3</td>
</tr>
</tbody>
</table>
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A modest uptick in the pump price for regular gasoline last week to $2.70 took it to the highest level since January. This continued a trend of rising prices since early-2009, which followed a recession-related downturn. Yesterday, [...]

U.S. Petroleum & OtherCommodity Prices Move Higher

Louise Curley

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301k.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The Canadian economy grew at a 5% annual rate in the fourth of
last year. It was the second quarter of growth following the three
quarter recession and represented a substantial acceleration from the
0.94% seasonally adjusted annual rate of the third quarter, as can be
seen in the attached chart.
In addition to the rate of growth, the composition of the
growth is particularly important for monetary policy decisions.
Statistics Canada provides a table showing the composition of the
quarter to quarter changes in real GDP. This table can be found in the
National Accounts section of the Haver Analytics data base, CANSIM.
The components of the table are listed below.
The acceleration in growth in the fourth quarter was due
largely to trends in foreign trade. Exports of goods and services were
greater and imports of goods and services were sharply lower than those
in the third quarter. As imports detract from growth, a reduction in
imports from one quarter to the next leads to a higher GDP. The
contribution of domestic demand was much smaller than it was in the
third quarter. Personal and government consumption and business and
government investment all showed lower growth in the fourth quarter
than in the third. Thus in spite of the 5% annual rate of increase in
the fourth quarter, there is little evidence that the economy is
overheating.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Contribution
to Q/Q Percent Change in GDP</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q3 09</th>
<th scope="col">Q4 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"> Q/Q
Percent Change in GDP</td>
<td>1.233</td>
<td>0.235</td>
<td>-0.875</td>
<td>-1.785</td>
<td>-0.940</td>
</tr>
<tr>
<td class="firstcol">
Personal Consumption Expenditures</td>
<td>0.517</td>
<td>0.530</td>
<td>0.238</td>
<td>-0.191</td>
<td>-0.443</td>
</tr>
<tr class="odd">
<td class="firstcol"> Govt.
Current Expenditures</td>
<td>0.309</td>
<td>0.332</td>
<td>0.181</td>
<td>0.104</td>
<td>0.121</td>
</tr>
<tr>
<td class="firstcol">Govt.
Investment in Inventory</td>
<td>0.002</td>
<td>0.001</td>
<td>0.000</td>
<td>-0.007</td>
<td>0.012</td>
</tr>
<tr class="odd">
<td class="firstcol"> Govt.
Fixed Investment</td>
<td>0.155</td>
<td>0.223</td>
<td>0.154</td>
<td>0.07</td>
<td>0.072</td>
</tr>
<tr>
<td class="firstcol">
Business Investment in Inventory</td>
<td>-0.181</td>
<td>0.329</td>
<td>0.082</td>
<td>-1.193</td>
<td>-0.305</td>
</tr>
<tr class="odd">
<td class="firstcol">
Business Fixed Investment</td>
<td>0.188</td>
<td>0.323</td>
<td>-0.505</td>
<td>-1.909</td>
<td>-0.992</td>
</tr>
<tr>
<td class="firstcol">Exports
of Goods and Services</td>
<td>1.027</td>
<td>0.804</td>
<td>-1.526</td>
<td>-2.863</td>
<td>-1.707</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports
of Goods and Services</td>
<td>-0.653</td>
<td>-2.313</td>
<td>0.443</td>
<td>4.035</td>
<td>2.292</td>
</tr>
<tr>
<td class="firstcol">
Statistical Discrepancy</td>
<td>-0.131</td>
<td>0.007</td>
<td>0.058</td>
<td>0.131</td>
<td>0.003</td>
</tr>
<tr class="odd">
<td class="firstcol"> Final
Domestic Demand</td>
<td>0.952</td>
<td>5.352</td>
<td>7.944</td>
<td>-2.700</td>
<td>-5.420</td>
</tr>
</tbody>
</table>
</body></html>

The Canadian economy grew at a 5% annual rate in the fourth of last year. It was the second quarter of growth following the three quarter recession and represented a substantial acceleration from the 0.94% seasonally adjusted annual [...]

Canada's Q4 GDP Rise Due Mainly To Foreign Trade Trends

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301j.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The unemployment rate in the Euro-Area has flattened out just
under 10%. And while the number of unemployed continues to rise the
increase is at a decreasing pace- a good sign or at least a logical
first step. In the larger EU area the pace of the increase in
unemployment over three months is 1.9% well below the 5.4% pace over
six months and 19.8% annual rate over the last 12-monhts.
EMU is doing better still. While all EMU countries are in the
EU, the EMU set is a smaller group that shares a common currency, the
euro. For this group the number of unemployed is rising at a 1.1% pace
over three-months a 4.2% pace over six-months and a 16.4% pace over
twelve-months. EMU unemployment is rising more slowly than in the EU
over all these horizons.
Still the EMU&#8217;s Spain continues with a horrific 18.8 percent
rate of unemployment as Spain&#8217;s property market boom and bust has
proved to be very difficult to remedy.
The focus of attention in the Zone continues to be Greece with
its ongoing problems. Talk from Germany and from the EU Commission
continues to be tough. Greece says it needs help, not money. But the
markets are improving and the euro itself is rising on rumors that some
deal has been cooked up. It is hard to see how Greece can re-group
without financial aid and perhaps some added credit backing. German and
French banks already are greatly exposed to the Greek credit making
them likely participants in a bail our or &#8216;assistance package&#8217; for
Greece. In any event it is clear that Europe does not want Greece to be
the Lehman Brothers of Europe but they do want Greece to do more for
itself so the pain is obvious to any other euro-member that might
contemplate the same path that Greece took. Still, Europe does not want
to let Greece go down and see what else is dragged into the resulting
whirlpool. There are too many other potentially weak euro-members,
enough that it could really stretch the ability of the monetary union&#8217;s
strongest members to help them all. Holding the line on Greece is what
makes the most sense. So look for a deal.
It is easier to do this in an environment, in which the
economies are improving. With the slight nudge up to the market MFG PMI
for the Zone today there is a new cycle high for the MFG index and
reason for hope that he dig-out from recession continues. Sometime this
week we should get some clearer news on the fate of Greece. The fat is
in the fire and it is sizzling.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col">Unemployment rate and changes </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Rate</td>
<td style="font-weight: bold;" colspan="3">Level</td>
<td style="font-weight: bold;" colspan="3">Simple Changes</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">Dec-09</td>
<td style="font-weight: bold;">Nov-09</td>
<td style="font-weight: bold;">3-Mo</td>
<td style="font-weight: bold;">6-Mo</td>
<td style="font-weight: bold;">12-Mo</td>
</tr>
<tr>
<td class="firstcol">EU-Urate</td>
<td>9.5</td>
<td>9.5</td>
<td>9.4</td>
<td>0.1</td>
<td>0.4</td>
<td>1.5</td>
</tr>
<tr>
<td class="firstcol">EMU-Urate</td>
<td>9.9</td>
<td>9.9</td>
<td>9.9</td>
<td>0.1</td>
<td>0.4</td>
<td>1.4</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Unemployment rate
and changes</td>
<td style="font-weight: bold;" colspan="3">m/m%</td>
<td style="font-weight: bold;" colspan="3">Changes (ar)</td>
</tr>
<tr>
<td class="firstcol">EU-U 000s</td>
<td>0.6%</td>
<td>0.7%</td>
<td>0.6%</td>
<td>1.9%</td>
<td>5.4%</td>
<td>19.8%</td>
</tr>
<tr>
<td class="firstcol">EMU-U 000s</td>
<td>0.2%</td>
<td>0.4%</td>
<td>0.4%</td>
<td>1.1%</td>
<td>4.2%</td>
<td>16.4%</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">U-Rates</td>
<td style="font-weight: bold;" colspan="3">Level</td>
<td style="font-weight: bold;" colspan="3">Simple Changes</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>7.5</td>
<td>7.5</td>
<td>7.5</td>
<td>0</td>
<td>-0.1</td>
<td>0.3</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>10.1</td>
<td>10</td>
<td>10</td>
<td>0.2</td>
<td>0.6</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>18.8</td>
<td>18.9</td>
<td>18.9</td>
<td>-0.2</td>
<td>0.4</td>
<td>3</td>
</tr>
<tr>
<td class="firstcol">USA</td>
<td>9.7</td>
<td>10</td>
<td>10</td>
<td>-0.4</td>
<td>0.3</td>
<td>2</td>
</tr>
<tr>
<td class="firstcol">Japan</td>
<td>#N/A</td>
<td>5.1</td>
<td>5.2</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
</tr>
</tbody>
</table>
</body></html>

The unemployment rate in the Euro-Area has flattened out just under 10%. And while the number of unemployed continues to rise the increase is at a decreasing pace- a good sign or at least a logical first step. In the larger EU area [...]

Unemployment Rate Steadies In The Euro-Area .... But Not Much Else

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301g.jpg" style="width: 353px; height: 265px;" align="right">Construction
activity continued to move lower in January to the lowest level since
2003. Construction outlays fell 0.6% following an unrevised 1.2%
December decline but the November drop was doubled. The latest decline
roughly equaled the Consensus estimate.Although the level of total
private construction activity continued lower in January, residential
building activity increased for the first time in three months. All of
the gain was, however, due to a 4.7% rise (10.6% y/y) in spending on
home improvements. Single-family construction activity slipped 0.2%
(-8.6% y/y) while multi-family building dropped a sharp 11.1% and was
off one-half from the year ago level.&nbsp; Nonresidential building
activity fell another 2.1% during January and was off 19.9% during the
last twelve months. Since the 2008 peak, activity has fallen by
one-quarter. Spending on lodging fell 9.8% during January (-46.0% y/y)
while office construction dropped 1.6% (-34.25 y/y). Health care
construction fell a lesser 0.5% (-10.6% y/y) and educational building
also slipped just 0.7% (-15.8% y/y).In the public sector, building
activity slipped 0.7% as commercial building fell 9.6% (+9.9% y/y).
Spending on highways &amp; streets offset that decline with a 1.2%
increase (5.5% y/y). Public spending on health care facilities fell a
sharp 8.2% m/m but remained up modestly. Building in the education
sector was unchanged for the month and down 6.2% from last January.
The construction put-in-place figures are available in Haver's USECON
database.&nbsp;&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301h.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301i.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Construction
Put In Place (%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Total</td>
<td>-0.6</td>
<td>-1.2</td>
<td>-2.5</td>
<td>-9.3</td>
<td>-12.4</td>
<td>-6.9</td>
<td>-1.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Private</td>
<td>-0.6</td>
<td>-1.7</td>
<td>-2.6</td>
<td>-14.3</td>
<td>-18.7</td>
<td>-11.1</td>
<td>-5.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>1.3</td>
<td>-2.8</td>
<td>-2.5</td>
<td>-6.4</td>
<td>-27.9</td>
<td>-29.1</td>
<td>-19.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-2.1</td>
<td>-0.7</td>
<td>-2.7</td>
<td>-19.9</td>
<td>-10.9</td>
<td>13.2</td>
<td>23.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>-0.7</td>
<td>-0.4</td>
<td>-2.2</td>
<td>2.1</td>
<td>3.6</td>
<td>5.6</td>
<td>13.1</td>
</tr>
</tbody>
</table>
</body></html>

Construction activity continued to move lower in January to the lowest level since 2003. Construction outlays fell 0.6% following an unrevised 1.2% December decline but the November drop was doubled. The latest decline roughly equaled [...]

U.S. Construction Activity Falls To Lowest Since 2003

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301d.jpg" style="width: 353px; height: 265px;" align="right">The rate of
factory sector improvement eased slightly last month, according to the
Institute for Supply Management. Perhaps due to cold weather, the
February composite index slipped to 56.5 from January's 58.4. The
latest remained the second highest reading of the economic recovery. It
was up from the low of 32.9 reached in December '08. The latest figure
fell short of Consensus expectations for a reading of 57.8. (Any figure
above the break-even point of 50 suggests rising activity.) The ISM
data is available in Haver's USECON database.Declines in the production and new orders components accounted for the
decline in the composite index. During the last ten years there has
been an 84% correlation between the level of the production component
of the composite index and the three-month growth in factory sector
industrial production. It is appropriate to correlate the ISM
index level with factory sector output growth
because the ISM index is a diffusion index. It measures
growth by using all of the positive changes in activity added to one
half of the zero change in activity measures. Finally, the
export order index fell to 56.5 and reversed half of its January
increase. It still was up, however, from the low of 35.5 in December
'08. During the last ten years there has been a 53% correlation between
the index and the q/q change in real exports of goods in the GDP
accounts.To the upside was the employment index with a gain to 56.1,
the highest level since 2005. It's up from a low reading of 25.9 last
February. Twenty-two percent of firms indicated a higher level of
payrolls versus 6% last February. Ten percent showed a lower level
versus 54% last February. During the last ten years there has been a
90% correlation between the index level and the three-month change in
manufacturing payrolls.The rise in the inventory component to 47.3
brought it back to the October high. Nineteen percent of respondents
reported lower inventories versus 43 percent last February. Seventeen
percent (NSA) of respondents indicated that they were raising inventory
levels versus 19% last February. During the strong 2005 inventory
accumulation 26% of firms indicated that they were raising inventories.
The vendor performance indicator, which measures the speed of
deliveries, rose and indicated the slowest speed since 2005.The
separate index of prices paid fell from its cycle-high to 67.0. That
still was up from the December '08 low of 18.0. During the last twenty
years there has been a 79% correlation between the price index and the
three-month change in the PPI for intermediate goods.
Thirty-nine&nbsp; percent of respondents reported higher prices
while only 5 percent indicated lower prices.The ISM data are
available in Haver's USECON database.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S2/@S201/@S201.HTM">ISM
Mfg</a></th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Feb. '09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>56.5</td>
<td>58.4</td>
<td>54.9</td>
<td>35.7</td>
<td>46.2</td>
<td>45.5</td>
<td>51.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>59.5</td>
<td>65.9</td>
<td>64.8</td>
<td>33.9</td>
<td>51.6</td>
<td>42.1</td>
<td>54.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Employment</td>
<td>56.1</td>
<td>53.3</td>
<td>50.2</td>
<td>25.9</td>
<td>40.5</td>
<td>43.3</td>
<td>50.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Production</td>
<td>58.4</td>
<td>66.2</td>
<td>59.7</td>
<td>35.6</td>
<td>50.4</td>
<td>45.2</td>
<td>54.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Supplier Deliveries</td>
<td>61.1</td>
<td>60.1</td>
<td>56.8</td>
<td>46.6</td>
<td>51.4</td>
<td>51.6</td>
<td>51.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventories</td>
<td>47.3</td>
<td>46.5</td>
<td>43.0</td>
<td>36.7</td>
<td>37.1</td>
<td>45.5</td>
<td>45.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>67.0</td>
<td>70.0</td>
<td>61.5</td>
<td>29.0</td>
<td>48.3</td>
<td>66.5</td>
<td>64.6</td>
</tr>
</tbody>
</table>
</body></html>

The rate of factory sector improvement eased slightly last month, according to the Institute for Supply Management. Perhaps due to cold weather, the February composite index slipped to 56.5 from January's 58.4. The latest remained the [...]

ISM Manufacturing Index Fell From January High

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301a.jpg" style="width: 353px; height: 265px;" align="right">Overall personal
income ticked up just 0.1% in January following downwardly
revised increases during the prior two months. The latest weak increase
disappointed Consensus expectations for a 0.4% rise.&nbsp; Declines spread
through much of the income spectrum. The weak housing market pulled
proprietors' income down 0.3% (+1.6% y/y) and rental income fell 0.3%,
the first decline since 2007. Lower interest rates caused interest
income also to fall 0.3% though the y/y change of -2.7% was improved
from the worst of&nbsp; last September (-8.2% y/y). Dividend income
fell 3.0% (-13.3% y/y) though that y/y change was half its worst.
Finally, the improved job market and the expiration of long-term
benefits caused a 2.2% decline in unemployment insurance payments, the
fourth consecutive monthly decline (+36.6% y/y).&nbsp;&nbsp;To the
upside, wages &amp; salaries improved 0.4% after an unrevised 0.1%
December increase. Year-to-year growth was still a negative 1.0% but
improved from -4.9% during last summer. Wages in the factory sector
rose 0.8% but still remained 5.8% lower than last year. In the private
service sector wages rose 0.3% following a downwardly revised 0.1%
December reading. Government sector wages did increase 0.5% but weak
hiring cut the y/y increase to 2.4%, its lowest since early
1994.&nbsp;Disposable income fell 0.4% and reversed the prior
month's increase as tax payments jumped 5.5%. The income decline caused
the savings rate to decline to 3.3%, its lowest since late-2008. The
rate still was up, however, from the 1.0% low at the beginning of the
last recession.Personal spending rose 0.5% last
month following little-revised increases of 0.3%-to-0.5% during the
prior three periods. A 7.0% m/m rise in spending on gasoline (41.5%
y/y) led the increase as prices spiked, but the real gain was just 2.1%
(0.8% y/y). Nominal apparel spending gained 0.6% (1.6% y/y) while
outlays on services rose a weakened 0.2% (2.1% y/y). To the downside,
spending on motor vehicles &amp; parts fell 1.2% (+5.6% y/y)
and&nbsp; spending on home furnishings fell for the third month in
the last four (-0.4% y/y).&nbsp; The PCE chain price index
ticked up just 0.2% during January and 2.1% y/y with higher gasoline
prices. The core PCE price deflator was unchanged during January and
that reflected weakness throughout the categories.The personal income
&amp; consumption figures are available in Haver's USECON
and USNA databases.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100301c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a>
(%)&nbsp;</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.1</td>
<td>0.3</td>
<td>0.4</td>
<td>1.1</td>
<td>-1.7</td>
<td>2.9</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp;Disposable Personal Income</td>
<td>-0.4</td>
<td>0.4</td>
<td>0.5</td>
<td>2.1</td>
<td>1.1</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption
Expenditures</td>
<td>0.5</td>
<td>0.3</td>
<td>0.5</td>
<td>3.5</td>
<td>-0.4</td>
<td>3.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>3.3</td>
<td>4.2</td>
<td>4.1</td>
<td>4.4 (Jan.'09)</td>
<td>4.3</td>
<td>2.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.2</td>
<td>0.1</td>
<td>0.2</td>
<td>2.1</td>
<td>0.2</td>
<td>3.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Less food &amp; energy</td>
<td>0.0</td>
<td>0.1</td>
<td>0.1</td>
<td>1.4</td>
<td>1.5</td>
<td>2.4</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</body></html>

Overall personal income ticked up just 0.1% in January following downwardly revised increases during the prior two months. The latest weak increase disappointed Consensus expectations for a 0.4% rise. Declines spread through much of [...]

U.S. Personal Income Remains Weak

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

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

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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U.S. light vehicle sales declined 3.0% (+6.9% y/y) to 16.36 million units (SAAR) in August after rising 7.6% to 16.87 million units in July. The decline was the fourth in the last five months. So far in Q3, sales have averaged 16.62 million after averaging 16.21 million in Q2. The improvement in August vehicle sales accompanied a 2.0% y/y rise in real disposable income through July, which compared to 2.1% growth last year.

Sales were uneven last month. Light truck sales declined 4.0% (+10.0% y/y) in August to 13.47 million units, after rising 7.8% to 14.03 million in July and easing 0.2% to 13.02 million in June. Purchases of domestically-made light trucks declined 4.1% (+11.4% y/y) to 10.35 million units, after rising 7.1% in July to 10.79 million. Sales of imported light trucks fell 3.7% (+5.8% y/y) to 3.12 million units, following a 9.8% rise in July.

Trucks’ 82.3% share of the light vehicle market last month compared to 83.2% in July and 80.1% in August of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales rose 1.8% (-5.6% y/y) last month to 2.89 million, following a 6.4% July increase. Purchases of domestically-produced cars rose 1.4% (-0.5% y/y) last month to 2.21 million units, after rising 10.1% in July. Sales of imported autos increased 3.0% (-19.0% y/y) to 0.68 million units and reversed the 2.9% July decline.

Imports' 23.2% share of the U.S. light vehicle market was little changed from 23.1% in July. These compare to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market edged up to 23.5% last month and compared to 27.5% in August of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market of 23.2% last month was roughly steady with 23.1% in July.

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

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- Light truck sales decline while auto purchases improve.
- Domestic and import sales decline.
- Imports' market share steadies.

U.S. Light Vehicle Sales Ease in August

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Job openings declined 176,000 (-4.3% y/y) to 7.181 million in July after falling 355,000 in June to 7.357 million, revised from -275,000, according to the Job Openings and Labor Turnover Survey. The change in job openings in May was unrevised at +317,000. The job openings rate fell to 4.3% in July from 4.4% in June. This was the lowest rate in four months and matched the lowest rate since September, down from a 4.8% November high. The record high was 7.4% reached in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

Private sector openings declined 138,000 (-2.8% y/y) in July to 6.398 million after falling 340,000 from 6.536 million in June. The private openings rate fell to 4.5% in July from 4.6% in June. The number of job openings declined month-to-month in mining & logging (-48.0% y/y), trade, transportation & utilities (+12.2% y/y), professional & business services (-4.2% y/y), private education & health services (-18.0% y/y), leisure & hospitality (+4.2% y/y) and arts, entertainment & recreation (-19.4% y/y). The number of job openings increased m/m in construction (33 .6% y/y), information (75.7% y/y) and financial activities (-4.8% y/y).

Total hiring rose 41,000 (-2.6% y/y) to 5.308 million in July after falling 198,000 to 5.267 million in June. The hiring rate held steady m/m at 3.3%, the second lowest since the pandemic. Private sector hiring rose 57,000 (-1.6% y/y) in July after falling 174,000 in June. Weakness in hiring during the last year has centered in manufacturing (-9.8% y/y), trade, transportation & utilities (-7.5% y/y), financial services (-7.4% y/y) and education & health (-10.8% y/y).

Total separations declined 52,000 (-2.7% y/y) to 5.289 million in July. The separation rate held at 3.3%, where it’s been since last August. Private separations fell 39,000 (-2.5% y/y) while government separations dropped 13,000 (-5.5% y/y). Total quits fell 1,000 (-5.4% y/y) to 3.208 million in July, the third monthly decline in the past four months, with the quits rate unchanged at 2.0%. Private sector quits rose 5,000 (5.5% y/y) in July. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. In contrast, layoffs and discharges are involuntary separations initiated by the employer. Layoffs and discharges rose 12,000 (3.6% y/y) to 1.808 million in July with private layoffs increasing 14,000 (4.4% y/y) while government layoffs declined 1,000 (-10.3% y/y).

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings fall for second straight month.
- Hiring improves after two consecutive months of sharp decline.
- Separations fall, quits ease but layoffs rise slightly.

U.S. JOLTS – Job Openings Decline While Hiring Improves in July

Winnie Tapasanun

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Total factory orders fell 1.3% m/m in July after a 4.8% drop in June and an 8.3% gain in May, data from the U.S. Census Bureau showed. A 1.4% m/m July decline had been expected in the Action Economics Forecast Survey. The July reading marked the third m/m fall in four months following a string of m/m gains between December 2024 and March 2025. The year-on-year rate of increase decelerated to 1.6% in July from 5.6% in June, registering the smallest y/y rate in three months but higher than 1.2% y/y in July 2024. Notably, orders for nondefense aircraft & parts dropped 32.7% m/m in July following a 52.7% plunge in June and an exceptional 231.6% spike in May. Factory orders excluding defense fell 1.1% (+1.5% y/y), down for the third month in four, after a 4.7% June decrease. Factory orders excluding the transportation sector grew 0.6% (1.5% y/y), the largest of three straight m/m increases, after a 0.4% June rise.

Durable goods orders fell 2.8% (+3.4% y/y) in July, down for the third month in four, after a 9.4% decrease in June (matching -2.8% m/m in the advance report on August 26). The July fall reflected m/m orders drops of 9.5% (the third m/m decline in four months; +2.5% y/y) in transportation equipment and 0.3% (+0.4% y/y) in furniture & related products. To the upside, the following durable goods orders rose m/m in July: electrical equipment, appliances & components (1.9%; 8.5% y/y), machinery (1.9%; 5.7% y/y), primary metals (1.6%; 4.2% y/y), fabricated metal products (0.7%; 3.5% y/y), and computers & electronic products (0.5%; 4.7% y/y).

Nondurable goods orders, which equal nondurable goods shipments, rose 0.3% (-0.1% y/y) in July, the third successive m/m rise, after a 0.4% gain in June. The July rise reflected m/m increases of 2.3% (2.9% y/y) in textile mills, 0.8% (-3.6% y/y) in apparel, 0.5% (0.6% y/y) in plastics & rubber products, 0.4% (-6.1% y/y) in petroleum & coal products, 0.3% (3.3% y/y) beverage & tobacco products, 0.3% (3.1% y/y) in chemical products, 0.2% (0.4% y/y) in paper products, and 0.1% (0.1% y/y) in food products. To the downside, the following nondurable goods shipments declined m/m in July: leather & allied products (-3.2%; -7.0% y/y), textile products (-0.3%; +1.7% y/y), and printing (-0.1%; +0.4% y/y).

Total shipments grew 0.9% (1.8% y/y) in July, the largest of three consecutive m/m gains, after a 0.6% increase in June. Excluding transportation, shipments rose 0.6% (1.5% y/y) in July after a 0.5% June rise. Shipments of durable goods industries advanced 1.5% (3.7% y/y) in July, the biggest of eight straight m/m increases, on top of a 0.7% rise in June. This reflected m/m durable goods shipments increases of 2.5% (3.7% y/y) in transportation equipment, 1.6% (3.4% y/y) in fabricated metal products, 1.4% (6.4% y/y) in electrical equipment, appliances & components, 1.4% (4.3% y/y) in machinery, 1.3% (5.4% y/y) in primary metals, 0.9% (2.5% y/y) in miscellaneous durable goods, 0.7% (1.1% y/y) in nonmetallic mineral products, and 0.2% (5.8% y/y) in computers & electronic products. Durable goods shipments for furniture & related products were the only category with a monthly decline in July; they slid 0.5%, the third m/m slide in four months, after a 0.3% June decline. Meanwhile, durable goods shipments for wood products were virtually unchanged m/m (-1.7% y/y) following a 0.1% June uptick.

Unfilled orders held steady m/m (7.0% y/y) in July after rises of 0.9% in June and 3.4% in May. Excluding transportation, unfilled orders were virtually unchanged m/m (0.8% y/y) for the second successive month. Backlogs of durable goods held steady m/m (7.0% y/y) in July, reflecting m/m increases of 0.4% (1.5% y/y) in primary metals and 0.3% (1.7% y/y) in electrical equipment, appliances & components, partly offset by a 0.3% decline (-0.1% y/y) in furniture & related products.

Inventories rose 0.3% (1.5% y/y) in July, up for the third straight month, after a 0.2% increase in June. Excluding transportation, inventories rose 0.3% (1.4% y/y) after a 0.3% June rise. Durable goods inventories were up 0.3% (1.9% y/y) in July after rising 0.2% in June and May, while nondurable goods inventories grew 0.2% (0.8% y/y) following a 0.2% June increase and two successive m/m declines.

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

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- Headline: -1.3% m/m; +1.6% y/y, the smallest y/y gain in three months.
- Durable goods orders (-2.8%) down, but nondurable goods orders (+0.3%) and shipments (+0.9%) both up three straight months.
- Transportation equipt. orders -9.5% m/m, w/ a 32.7% drop in nondefense aircraft & parts orders.
- Unfilled orders unchanged after two successive m/m increases.
- Inventories +0.3%, the third consecutive m/m rise.

U.S. Factory Orders Fall in July, the Third M/M Decline in Four Months

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Retail gasoline prices for all grades, on average, rose to $3.30 per gallon (-3.2% y/y) last week after rising to $3.27 one week earlier. Prices had been moving sideways for two months. Gasoline prices are above their low of $3.13 in the week of December 9. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel edged up to $3.73 per gallon (3.0% y/y) last week after holding steady at $3.71 in the prior week. The latest diesel price stood well below a high of $4.63 in the week ending September 18, 2023 and a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil increased to $64.16 per barrel (-15.5% y/y) in the week ended August 29 after falling in the prior week to $63.23 per barrel. Prices remained below a high of a $74.17 during the third week of June. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $65.59 per barrel. The price of European Brent crude eased to $67.59 per barrel (-16.4% y/y) in the week of August 29 from $67.82 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. The price yesterday was $68.09 per barrel.

Natural gas prices were unchanged at an average $2.85/mmbtu (+46.9% y/y) in the week ended August 22, after falling from an average $2.94/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $2.70 per mmbtu.

Gasoline demand declined 1.1% y/y in the four weeks ending August 22, following a 1.2% y/y decline in the prior four weeks. Demand for all petroleum products rose 2.5% y/y in the four weeks ending August 22, after a 3.3% y/y increase in the previous four-week period. Crude oil input to refineries rose 3.0% y/y in the four weeks ending August 22, after a 4.1% y/y gain in the prior four weeks.

Gasoline inventories rose 1.8% y/y in the week ending August 22 after a 1.3% y/y in the prior week. Residual fuel oil inventories fell 23.8% y/y in the week of August 22, after falling 25.5% y/y in the prior week. Crude oil inventories rose 2.4% y/y in the week of August 22 after a 2.6% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories stood at 24.6 days in the week of August 22 versus 24.8 days in the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil eased to 24.5 days in the week of August 22 from 24.6 days in the prior week and remained below a high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** & **USENERGY** database.

- Gasoline prices increase to highest level in four weeks.
- Crude oil prices recover after earlier declines.
- Natural gas prices at early-June low.

U.S. Gasoline & Crude Oil Prices Rise Last Week

Kathleen Stephansen, CBE

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Mortgage applications declined by 1.2% (+18.2% y/y) in the week ending August 29, after easing 0.5% (+21.6% y/y) in the week ending August 22, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans dropped 3.1% (+16.6% y/y) last week, following a gain of 2.2% (24.3% y/y) in the prior week. Applications to refinance a home loan edged up 0.9% (20.1% y/y) last week, after declining 3.5% (+18.6% y/y) in the week of August 22.

The effective interest rate on a 30-year fixed-rate loan edged down 5bps to 6.81% in the week ending August 29 from 6.86% in the week ending August 22. It had been at 6.86% for three consecutive weeks. The recent high of 7.28% was reached in the second week of January. The rate on 15-year fixed-rate mortgages declined by 18bps to 6.04% in the latest week from 6.22% in the prior week. The rate on 30-year Jumbo loans dropped 11bps to 6.69% in the week ending August 29 from 6.80% one week earlier. The rate on a 5-year ARM fell 16bps to 6.03% in the latest week from 6.19% in the week of August 22.

The share of applications for refinancing an existing loan rose to 46.9% of total applications in the week ending August 29 after easing to 45.3% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity rose to 8.80% in the latest week from 8.40% in the week of August 22.

The average size of a mortgage loan rose 0.5% (1.8% y/y) to $384,800 in the week ending August 29, after falling 1.2% (+2.9% y/y) to $383,000 in the week of August 22. The average size of a purchase loan fell 1.6% (-0.2% y/y) to $426,400 in the latest week after rising 1.0% (1.5% y/y) to $433,400 in the prior week. The average size of a loan to refinance a mortgage rose 4.8% (5.1% y/y) to $337,700 in the week ending August 29 after falling 5.2% (+4.2% y/y) to $322,200 in the prior week. It was increased from a low of $277,900 in the last week of May.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Purchase applications dropped while loan refinancing edged up.
- Fixed-interest rate on 30-year loan holds at a 4-month low.
- Average loan size edged up.

Economy in Brief: March 2010

Jump to:

U.S. Petroleum & OtherCommodity Prices Move Higher

Canada's Q4 GDP Rise Due Mainly To Foreign Trade Trends

Unemployment Rate Steadies In The Euro-Area .... But Not Much Else

U.S. Construction Activity Falls To Lowest Since 2003

ISM Manufacturing Index Fell From January High

U.S. Personal Income Remains Weak

U.S. Personal Income Remains Weak