Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060123c.jpg" width="353">
The Composite Index of Leading Economic Indicators from the Conference Board rose 0.1% last month following an upwardly revised 0.9% November increase. Consensus expectations had been for a 0.2% gain.
The breadth of one month gain amongst the 10 components of the leading index slipped to 60% in December, though over six months the breadth of gain in the leaders rose to 80%, its best since last September. Easier vendor performance subtracted 0.3 percentage points from last month&#39;s rise in the leading index.
The .03 percentage point contribution from the spread between yields on the 10 year Treasury Note and the Fed funds rate was the smallest since a .38 point contribution last June. The method of calculating the contribution to the index from the interest rate yield spread has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found <a href="http://www.conference-board.org/pdf_free/economics/bci/lei0705.pdf">here</a>.
The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated.
The coincident indicators rose 0.2% following an upwardly revised 0.4% increase in November. During the last ten years there has been a 64% correlation between the change in the coincident indicators and real GDP.
The lagging indicators rose 0.1% following two months of strong gain. The ratio of coincident to lagging indicators, a measure of actual economic performance versus excess, increased for only the second month in the last five.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world. 

<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/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">6 Month Chg., AR</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">Leading</td>
<td>0.1%</td>
<td>0.9%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>7.7%</td>
<td>5.1%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.2%</td>
<td>0.4%</td>
<td>1.3%</td>
<td>2.2%</td>
<td>2.7%</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.1%</td>
<td>0.5%</td>
<td>4.1%</td>
<td>3.6%</td>
<td>-0.1%</td>
<td>-0.1%</td>
</tr>
</tbody>
</table>
</body>
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The Composite Index of Leading Economic Indicators from the Conference Board rose 0.1% last month following an upwardly revised 0.9% November increase. Consensus expectations had been for a 0.2% gain. The breadth of one month gain [...]

Leading Economic Indicators' Gain Light

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060123c.jpg" width="353">
The Composite Index of Leading Economic Indicators from the Conference Board rose 0.1% last month following an upwardly revised 0.9% November increase. Consensus expectations had been for a 0.2% gain.
The breadth of one month gain amongst the 10 components of the leading index slipped to 60% in December, though over six months the breadth of gain in the leaders rose to 80%, its best since last September. Easier vendor performance subtracted 0.3 percentage points from last month&#39;s rise in the leading index.
The .03 percentage point contribution from the spread between yields on the 10 year Treasury Note and the Fed funds rate was the smallest since a .38 point contribution last June. The method of calculating the contribution to the index from the interest rate yield spread has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found <a href="http://www.conference-board.org/pdf_free/economics/bci/lei0705.pdf">here</a>.
The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated.
The coincident indicators rose 0.2% following an upwardly revised 0.4% increase in November. During the last ten years there has been a 64% correlation between the change in the coincident indicators and real GDP.
The lagging indicators rose 0.1% following two months of strong gain. The ratio of coincident to lagging indicators, a measure of actual economic performance versus excess, increased for only the second month in the last five.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world. 

<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/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">6 Month Chg., AR</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">Leading</td>
<td>0.1%</td>
<td>0.9%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>7.7%</td>
<td>5.1%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.2%</td>
<td>0.4%</td>
<td>1.3%</td>
<td>2.2%</td>
<td>2.7%</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.1%</td>
<td>0.5%</td>
<td>4.1%</td>
<td>3.6%</td>
<td>-0.1%</td>
<td>-0.1%</td>
</tr>
</tbody>
</table>
Energy Prices Mixed 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 23, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060123a.jpg" width="353">
Crude oil prices strengthened last week on market worry that supplies from Iran could be disrupted. Iran produces roughly 4 million barrels of crude oil per day, a bit more than 15% of the OPEC&#39;s total and about 6% of the world&#39;s total.
Concerns about supplies from Nigeria and Venezuela added further to the rise in the price of Brent Crude Oil to nearly $65 per barrel on Friday. The latest was the highest level since last year&#39;s record daily high of $66.99 reached in early September.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060123b.jpg" width="353">
The spot market price for regular unleaded gasoline rose in sympathy to $1.75 per gallon, up 22% from the weekly average low of $1.43 in mid-November of last year.
Warm winter weather, conversely, eased the earlier pressure which had lifted the price of natural gas to a record high of $15/mmbtu in early December. At $8.45 prices were off 40% from that high but still were up roughly one third from last year.
Oil Prices, Monetary Policy and the Macroeconomy from the Federal Reserve Bank of Cleveland is available <a href="http://www.clevelandfed.org/Research/Com2005/July.pdf"> here</a>.
Do Oil Futures Prices Help Predict Future Oil Prices? from the federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-38.pdf"> here</a>. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/DAILY/@D3/@D306/@D306.HTM">Daily Energy Prices</a></th>
<th scope="col">1/20/06</th>
<th scope="col">Y/Y Chg.</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Brent Crude Oil ($/bbl.)</td>
<td>$64.91</td>
<td>42%</td>
<td>$54.75</td>
<td>$38.33</td>
<td>$28.76</td>
</tr>
<tr>
<td class="firstcol">Natural Gas ($/mmbtu)</td>
<td>$8.45</td>
<td>31%</td>
<td>$8.68</td>
<td>$5.90</td>
<td>$5.48</td>
</tr>
</tbody>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120e.jpg" width="353">
Consumers in several countries are maintaining a rather firm spending pace, judged by new data on Total and purchases of goods. In fact, in Holland, the last few months have seen a smart rebound from a weak performance in 2003 and 2004. At the same time, some spending in France and New Zealand has tapered down recently. 
In the Netherlands, weakness plagued Total through the middle of 2005. A usual vacation-related drop in August did not materialize this year, though. So by November, the latest figures reported just this morning by the Central Bureau of Statistics show sales volume up 5.1% from a year earlier. The so-called headline portion excludes pharmacies and repair services; this subset was up 5.2%. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120f.jpg" width="353">
A good gain was also apparent in the UK. In December, the ONS reported today, December sales rose 0.5% from November, putting the month 4.8% ahead of a year earlier, the best 12-month performance since November 2004. As seen in the second chart here, household goods are a contributing factor, although other store groups enjoyed sales expansions since about mid-2005.
In New Zealand, Total have been flat overall for the past three months ending November, but prior to that time, they trended higher pretty consistently at about 0.5%/month from the middle of 2004.The very latest pattern reflected a wide swing in demand for motor vehicles, which was strong in August and November, but fell steeply in between.In the months when car sales were up, other spending paused. This is a change for New Zealand retailers; these auto and non-auto sales have generally moved together, not in opposition. <img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120g.jpg" width="353">
Finally in France, sales have also slowed in recent months. And as in New Zealand, this reflects a reallocation of purchases.The measure we have is purchases of manufactured goods, and it does not represent all of Total. What we see is a firm advance in durable goods, led by automobiles.As people have made those big-ticket purchases, they have pulled back on electronics, which had previously been growing. Purchases of &#147;other manufactured goods&#148; and &#147;textiles and leather&#148; have been erratic but largely flat for the last three years. 
We are somewhat surprised by the increases that are evident in all these countries since 2003. Anecdotal evidence has suggested that consumers have been restrained perhaps by poor labor market conditions or rising energy costs, but in these particular countries, hard data indicate that people have still been able to expand their purchases, with durable goods in particular being in good demand. 

<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">Latest Level </th>
<th scope="col">Dec 2005 </th>
<th scope="col">Nov 2005 </th>
<th scope="col">Oct 2005 </th>
<th scope="col">Year Ago </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">Netherlands:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total&nbsp;&nbsp; (2000=100) </td>
<td>101 </td>
<td>-- </td>
<td>5.1** </td>
<td>1.2** </td>
<td>&nbsp;-- </td>
<td>&nbsp;-- </td>
<td>-0.6 </td>
<td>-2.2 </td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Headline* </td>
<td>101 </td>
<td>-- </td>
<td>5.2** </td>
<td>1.3** </td>
<td>&nbsp;-- </td>
<td>&nbsp;-- </td>
<td>-0.6 </td>
<td>-2.1 </td>
</tr>
<tr>
<td class="firstcol">France:&nbsp; </td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufactured Goods <span style="font-size:10.0pt;mso-bidi-font-size:12.0pt;
font-family:Verdana;mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:
&quot;Times New Roman&quot;;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA">(Bil.2000.Euros) </td>
<td>19.7 </td>
<td>-1.0 </td>
<td>0.7 </td>
<td>0.1 </td>
<td>1.4 </td>
<td>2.5 </td>
<td>3.3 </td>
<td>1.9 </td>
</tr>
<tr>
<td class="firstcol">&nbsp; Durable Goods <span style="font-size:10.0pt;mso-bidi-font-size:12.0pt;
font-family:Verdana;mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:
&quot;Times New Roman&quot;;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA">(Bil.2000.Euros) </td>
<td>7.5 </td>
<td>1.2 </td>
<td>0.4 </td>
<td>0.2 </td>
<td>6.9 </td>
<td>7.0 </td>
<td>8.4 </td>
<td>2.0 </td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Other Manufactured Goods <span style="font-size:10.0pt;mso-bidi-font-size:12.0pt;
font-family:Verdana;mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:
&quot;Times New Roman&quot;;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA">(Bil.2000.Euros)</td>
<td>8.5 </td>
<td>-1.5 </td>
<td>-0.6 </td>
<td>1.1 </td>
<td>-0.5 </td>
<td>0.4 </td>
<td>0.5 </td>
<td>1.8 </td>
</tr>
<tr>
<td class="firstcol">UK:&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total&nbsp; (2000=100) </td>
<td>129.0 </td>
<td>0.5 </td>
<td>0.9 </td>
<td>0.4 </td>
<td>4.8 </td>
<td>1.9 </td>
<td>6.0 </td>
<td>3.2 </td>
</tr>
<tr>
<td class="firstcol">New Zealand:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total (Bil.NZ$) </td>
<td>5.0 </td>
<td>-- </td>
<td>0.9 </td>
<td>-0.3 </td>
<td>5.6 </td>
<td>&nbsp;-- </td>
<td>7.9 </td>
<td>5.3 </td>
</tr>
<tr>
<td class="firstcol">&nbsp; Ex Auto Items (Bil.NZ$)</td>
<td>3.6 </td>
<td>-- </td>
<td>-0.1 </td>
<td>1.0 </td>
<td>6.1 </td>
<td>&nbsp;-- </td>
<td>7.4 </td>
<td>5.6 </td>
</tr>
</tbody>
</table>
</body>
</html>

Consumers in several countries are maintaining a rather firm spending pace, judged by new data on Total and purchases of goods. In fact, in Holland, the last few months have seen a smart rebound from a weak performance in 2003 and [...]

Retail Demand Holds Up in Several Countries, Especially for Durable Goods

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120b.jpg" width="353">
Worry that some potential bursting of the &quot;bubble&quot; in housing market valuations at least in part rests on the idea that homeowners are borrowing against those &quot;inflated&quot; values to support current spending.
In fact, real spending growth of 3.8% over the last year vastly exceeded the growth in real disposable income of 0.8%; prima fascia evidence of unaffordable profligate spending? And Freddie Mac (FMAC) reported that in 3Q05, mortgage &quot;cash out&quot; refinancing activity rose to the highest level (72%) since 2000. An increased percentage of homeowners increased their loan amounts by 5%.
Over the last twenty years, however, it didn&#39;t take some real estate bubble to generate these conditions. Today&#39;s cash out refinancing may be nothing other than what previously was termed a second mortgage. And this pejorative terminology was used when economic times were about to weaken.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120a.jpg" width="353">
Since 1985, the correlation between the level of cash out refinancing and the change in real consumer spending has been a statistically significant negative 40%. The correlation with spending on durables has been an even higher -57%. A piece of that spending surely was supported by the second mortgage, but the more likely rationale for spending growth has been income.
Real compensation growth has suffered due to the latest rise in inflation and also the comparison to what was heady growth late in 2004. Most recent growth in compensation, however, has been encouraging as improved job creation has held nominal compensation growth at 5%, and inflation pressure has abated somewhat.
Will that be enough to forestall a crash in spending tied to burst housing market valuations? For many, no, but for most the future decision to spend will depend on the fundamentals of income and employment.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120c.jpg" width="353">
House of Cards from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/economic_research/region_focus/fall_2005/feature2.cfm">here</a>.
Cash-Out Refinancing: Check It Out Carefully from the Federal Reserve Bank of St. Louis is available <a href="http://stlouisfed.org/publications/re/2005/c/pages/cash-out.html">here</a>.
Has the Housing Boom Increased Mortgage Risk? from the Federal Reserve Bank of Dallas can be found <a href="http://dallasfed.org/research/swe/2005/swe0505a.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/@E1/@E104/@E10412/@E10412.HTM">Freddie-Mac Cash Out Refinance Activity</a></th>
<th scope="col">3Q05</th>
<th scope="col">2Q05</th>
<th scope="col">3Q04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">5% Higher Loan Amount</td>
<td>72%</td>
<td>72%</td>
<td>59%</td>
<td>50%</td>
<td>38%</td>
<td>52%</td>
</tr>
<tr>
<td class="firstcol">Median Appreciation of Refinanced Property</td>
<td>23%</td>
<td>23%</td>
<td>17%</td>
<td>11%</td>
<td>7%</td>
<td>16%</td>
</tr>
</tbody>
</table>
</body>
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Worry that some potential bursting of the "bubble" in housing market valuations at least in part rests on the idea that homeowners are borrowing against those "inflated" values to support current spending. In fact, real spending [...]

Second Mortgages

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060120d.jpg" width="353">
The University of Michigan reported that consumer sentiment in January rose another 2.1% to 93.4. The rise was the third off the October low which has totaled 25.9% and the gain surpassed Consensus expectations for an increase to 92.5.
During the last ten years there has been a 76% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
The current conditions index rose 2.7% as the reading of buying conditions for large household goods rose sharply back to last year&#39;s high, though the reading of personal finances fell slightly (-4.1% y/y). Consumers&#39; assessment of gov&#39;t economic policy (-12.2% y/y) improved to the highest level since October.
Consumers&#39; expectations increased a moderate 1.6% following the 15.2% December spurt. Expected business conditions during the next year and during the net five years rose but expectations for personal finances gave back most of a December surge.
The mean expected inflation rate for the next twelve months fell to 3.5% from 4.1% and was below the 5.5% expected in October &amp; September.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Jan&nbsp;</th>
<th scope="col">Dec</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">Consumer Sentiment</td>
<td>93.4</td>
<td>91.5</td>
<td>-2.2%</td>
<td>88.6</td>
<td>95.2</td>
<td>87.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>112.0</td>
<td>109.1</td>
<td>1.0%</td>
<td>105.9</td>
<td>105.6</td>
<td>97.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Expectations</td>
<td>81.5</td>
<td>80.2</td>
<td>-4.9%</td>
<td>77.4</td>
<td>88.5</td>
<td>81.4</td>
</tr>
</tbody>
</table>
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The University of Michigan reported that consumer sentiment in January rose another 2.1% to 93.4. The rise was the third off the October low which has totaled 25.9% and the gain surpassed Consensus expectations for an increase to [...]

U.S. Consumer Sentiment Rose Further

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060119e.jpg" width="353">
Industrial sales and orders rebounded markedly in Italy in November after pausing in October, according to data reported today by Istat, the Italian national statistical agency. Total orders gained 1.8% and stand 4.0% above a year ago, while sales (often called &#147;turnover&#148; there) were up 1.6% in the month and 4.4% on the year.
As the case in much of Europe, the foreign sector is tending to run ahead of the domestic economy. For the entire period since the index base year of 2000, foreign orders are up 14.5%, while domestic orders have been virtually flat. In the past year, foreign orders are up 5.8% and foreign sales by 7.6%, compared with somewhat over 3% for domestic orders and sales.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060119f.jpg" width="353">
Individual industries are experiencing mixed fortunes, with electrical equipment, furniture and chemicals advancing in the last year. Metals and machinery see slowing growth, and transportation equipment and wood products have been flat. Finally, textiles and paper products are declining.
By type, consumer goods turnover seems recently to have the most consistent growth, albeit less dramatic expansion. Capital goods are tending to expand, but very unevenly from month-to-month, so there is little identifiable momentum. Energy products are very strong, but other intermediate goods have been erratic and trendless.
A reminder that these data appear in several Haver databases: most obviously in ITALY, our comprehensive and detailed country-source database. But also, a summary is presented in G10, a collection of major industrial countries in Europe plus the US, Canada, and Japan. And EUROSTAT, compiled from Eurostat, the EU statistical agency, contains an array of industrial orders throughout Europe. <span style="font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Verdana;
mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:&quot;Times New Roman&quot;;
mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> 

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<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ITALY/@I06/@I06.HTM">Italy Industry</a> </th>
Nov 2005 
<th scope="col">Oct 2005 </th>
<th scope="col">Year Ago </th>
<th scope="col">2004 </th>
<th scope="col">2003 </th>
<th scope="col">2002 </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Index* </td>
<td>% Chg </td>
</tr>
<tr>
<td class="firstcol"><h1>Sales </h1></td>
<td>109.6 </td>
<td>1.6 </td>
<td>-0.6 </td>
<td>4.4 </td>
<td>3.1 </td>
<td>-1.0 </td>
<td>1.1 </td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Domestic </td>
<td>108.2 </td>
<td>1.4 </td>
<td>-0.3 </td>
<td>3.3 </td>
<td>2.9 </td>
<td>-0.6 </td>
<td>0.8 </td>
</tr>
<tr>
<td class="firstcol">&nbsp; Foreign </td>
<td>113.5 </td>
<td>2.0 </td>
<td>-1.4 </td>
<td>7.6 </td>
<td>3.6 </td>
<td>-2.3 </td>
<td>1.7 </td>
</tr>
<tr class="odd">
<td class="firstcol">Orders </td>
<td>104.1 </td>
<td>1.8 </td>
<td>-0.9 </td>
<td>4.0 </td>
<td>4.7 </td>
<td>-3.8 </td>
<td>2.3 </td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic </td>
<td>99.5 </td>
<td>2.1 </td>
<td>-1.3 </td>
<td>3.1 </td>
<td>3.9 </td>
<td>-3.5 </td>
<td>1.0 </td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Foreign </td>
<td>114.5 </td>
<td>1.1 </td>
<td>-0.1 </td>
<td>5.8 </td>
<td>6.3 </td>
<td>-4.2 </td>
<td>5.1 </td>
</tr>
</tbody>
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Industrial sales and orders rebounded markedly in Italy in November after pausing in October, according to data reported today by Istat, the Italian national statistical agency. Total orders gained 1.8% and stand 4.0% above a year [...]

Italian Industry Moves Unevenly Higher Through November

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060119g.jpg" width="353">
The Index of General Business Conditions in the manufacturing sector for January from the Philadelphia Fed fell sharply to 3.3 from 10.9 in December. Consensus expectations had been for improvement to 13.1. It was the lowest level for the index since last June.
During the last ten years there has been a 68% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 50% correlation with q/q growth in real GDP.
The business conditions index reflects a separate survey question, not the sub indexes, and most of the sub indexes improved this month versus December.
The sub index measuring new orders rose to 11.1, its highest since October, from 5.8. Shipments also rose to 18.6 from 9.4 while the index covering the number of employees advanced to 11.7 from 7.9. During the last ten years there has been a 64% correlation between the employment index and the three month growth in factory payrolls.
The separate index of expected business conditions in six months fell moderately, reversing most of the revised rise in December. Expectations for employment also backpedaled after sharp improvement during December.
The prices paid index fell moderately and the index of future prices fell to its lowest level since last June. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it&#39;s been 43%.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.phil.frb.org/files/bos/bos0106.html">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/@S5/@S504/@S504.HTM">Philadelphia Fed Business Outlook</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Jan &#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">General Activity Index</td>
<td>3.3</td>
<td>10.9</td>
<td>11.0</td>
<td>12.4</td>
<td>28.0</td>
<td>10.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>44.9</td>
<td>47.1</td>
<td>64.1</td>
<td>43.5</td>
<td>51.2</td>
<td>16.8</td>
</tr>
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The Index of General Business Conditions in the manufacturing sector for January from the Philadelphia Fed fell sharply to 3.3 from 10.9 in December. Consensus expectations had been for improvement to 13.1. It was the lowest level for [...]

Philadelphia Fed Business Activity Off Sharply

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

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Sandy Batten

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Industrial production (IP) rose a much larger-than-expected 0.7% m/m in April, rebounding from an upwardly revised 0.3% m/m decline in March (previously -0.5% m/m), according to data released by the Federal Reserve Board. The Action Economics Survey looked for a 0.2% monthly gain. The y/y rate also rebounded in April, rising to 1.4% y/y after having fallen to 0.7% in March. IP has clearly trended up since late last year. Since November 2025, it has grown at a 3.6% annual rate. The current level of output is the highest since August 2019 but is still 1.5% below the November 2018 series peak.

Manufacturing output led the April rebound, rising 0.6% m/m (1.3% y/y) following an upwardly revised 0.1% monthly increase in March (previously -0.1% m/m). Mining output fell in April for the second consecutive month, edging down 0.1% m/m (+0.2% y/y) after a 1.6% monthly drop in March (revised down from -1.2% m/m). Utilities production rebounded in April, jumping 1.6% m/m (2.7% y/y) and more than offsetting a 1.4% monthly decline in March (revised up from -2.3% previously). The rebound in utilities output reflected a 1.1% rise in electricity production and a 7.3% monthly jump in natural gas distribution, the first monthly gain in four months.

Within manufacturing, durable goods production jumped 1.2% m/m (3.2% y/y) in April after having been unchanged in March. A 3.7% m/m rebound in motor vehicles and parts production, the largest monthly gain since May 2025, led the April increase. Motor vehicles and parts production had fallen 2.4% m/m in March. Production of computers and electronic products increased 1.5% m/m, the fourth consecutive monthly rise. Aerospace output rose 1.6% m/m in April, the third consecutive monthly gain and the largest since July 2025. By contrast, furniture production fell 1.8% m/m, the third consecutive monthly decline. 

Output of nondurable manufactured goods edged down 0.1% m/m (-0.6% y/y) in April, the first monthly decline in four months. Production of apparel and leather goods slumped 2.2% m/m on top of a 2.0% monthly fall in March. Chemical output fell 0.9% m/m in April, its first monthly decline in four months. Output of plastics and rubber products fell 0.9% m/m, the first monthly fall in four months. By contrast, production of petroleum and coal products rose 1.0% m/m in April, the same monthly increase as in March.

By market group, output of consumer goods rebounded in April, increasing 0.9% m/m (-0.2% y/y) following a 0.8% m/m decline in March. Production of business equipment surged 1.5% m/m (+6.0% y/y) in April, the largest monthly gain since March 2025. Output of construction supplies was unchanged in April from March (+1.2% y/y) following a 0.9% m/m gain in March. Materials production rebounded in April, rising 0.5% m/m (1.2% y/y) after a 0.4% m/m decline in March.

In special classifications, output of selected high-tech industries increased 1.0% m/m (+9.2% y/y) in April following a 0.5% monthly gain in March. The rebound in motor vehicles and parts production reflected a 5.3% monthly surge in vehicle output, the largest monthly gain since May 2025. Manufacturing output excluding selected high-tech industries rose 0.6% m/m in April, the largest increase since February 2025, following a 0.1% m/m increase in March. Manufacturing output excluding both selected high-tech industries and motor vehicles and parts advanced 0.3% m/m in April, the same monthly gain as in March.

Capacity utilization rose to 76.1% in April from 75.7% in March. The April reading was the highest since last August but was still 3.3%-points below its long-term (1972-2025) average. Manufacturing capacity utilization increased to 75.8% in April from 75.4% in March, 2.4%-points below its long-term average.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.



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- Total industrial output increased a much larger-than-expected 0.7% m/m in April with a small upward revision to March.
- Manufacturing output increased 0.6% m/m, led by a 5.3% m/m rebound in vehicle production.
- Mining output edged down 0.1% m/m, while utilities production rose 1.9% m/m.
- The headline rate of capacity utilization rose to 76.1% in April, its highest reading since last August but still well below its long-term average.


U.S. Industrial Production Jumped in April

Robert Brusca

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Industrial orders in Canada are back on an expansion path with orders growing 4.7% in March on top of a 6.9% gain in February. These statistics chronicle Canadian orders digging out from a hole they fell into early in 2026. Now the data show emerging sequential growth in Canadian orders, which are advancing 3.6% over 12 months at a 14.9% annual rate over six-months, and a 26.7% annual rate over three-months. Still, on the chart that plots the year-over-year growth rates these recent accelerated rates of growth appear as mere recoveries from what had been earlier weakness. It remains to be seen how much acceleration the Canadian economy will actually undergo.

Unfilled orders expanded in March for the second month in a row, growing 2.4% after growing 1.4% in February once again following the recovery theme.

Manufacturing shipments grew by 3% in March after growing 3.4% in February and after dropping sharply in January - again echoing the recovery theme. Durable goods show two months of increases with the March increase weak after a very strong rise in February. Motor vehicle output recovered very strongly in February, after falling at a 37.1% annual rate in January; motor vehicle output is up by 15% in March, a hefty growth rate but short of what was posted in February. Once again, we see an echo of the theme of recovery. However, shipments of durable goods excluding motor vehicles are less robust, after dropping 1.8% in January output rose by 3.8% in February and has fallen back, dropping by 1.1% in March, a small fly in the ointment of this recovery theme for Canada. And nondurable goods shipments saw a small increase in January of 0.2%, a flat February, and now an extremely strong, 5.6% month-to-month gain in March.

Canada's sequential growth rates are on the verge of showing broad acceleration. Orders clearly do accelerate from 12-months to six-months to three-months. Unfilled orders, however, accelerate over six-months compared to 12-months and then take a small step back over three-months to an annualized growth rate of 13.4% - a very small step back that is still far above the 12-month growth pace. Manufacturing shipments, too, show a small flaw in acceleration as the 6-month pace dips ever so slightly before logging a very strong 3-month pace. Durable goods then are an exception to the acceleration theme; however, nondurable goods get back on board with the strong acceleration move.

**Rankings**
The rank standings for these categories are based on annual growth rates and comparison with data extend back approximately 25 years. Orders have a 58-percentile standing, unfilled orders have a 57-percentile standing, while manufacturing shipments have a 62-percentile standing. Shipments for durable goods durables excluding motor vehicles and from motor vehicles as a stand-alone have rankings in their 30th- to 40th-percentiles, below their historic medians. (medians occur at a ranking of 50). However, nondurables have an extremely strong 80.5 percentile standing. The data are consistent, the recovery and progress with the exception that durable goods shipments that are not fully on board and languish below their historic median results. Ranking the data over six-month growth rates improves the results somewhat and brings motor vehicles on board for a growth rate that is above its historic median.

**Signs of improvement**
Goods-based industry shows signs of picking up even in March as oil prices were rising and industry was facing greater challenges. The US industrial production report for April, similarly, shows acceleration across the board, even as the economy continued to deal with the difficulties of rising oil prices. Of course, the Canadian US economies are closely linked; we would expect the manufacturing sectors to be performing with some degree of synchronization. However, there's no reason to be complacent about the outlook. Oil prices have continued to rise, the challenge to consumers is strong and across all countries. In the US special tax cuts enacted last year, which went into effect earlier this year, have helped to deliver extra money to consumers that have helped them deal with the oil price shock. But these were funds that were supposed to help stimulate the economy to higher growth and were planned by the President to help him with midterm elections coming later in the year. The US economy still has to deal with those realities with sharply divided political reality as well.

**Outlook**
The US acrimony with Canada has taken a back burner for a while. And as that has happened the Canadian economy has come back to life. However, Canada still has some problems with inflation although it also has a broader inflation target to accommodate some flexibility. And the prospect for more inflation because of global oil prices continues to hang in the balance. The results for March are encouraging but certainly not definitive. Canada has mounted a nice recovery after a period of difficulty earlier in the year but it's still hard to say what comes next.



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Canada

Canadian Industry Perks Up

Andrew Cates

**A Tug of War Between AI Hope and Geopolitical Shock**
The latest Blue Chip Economic Indicators survey highlights a growing divergence between economies benefiting from AI-driven optimism and those more exposed to the inflationary consequences of renewed geopolitical instability. Taiwan stands out as the clearest AI beneficiary, with growth forecasts revised sharply higher while inflation expectations have risen only modestly, reflecting surging semiconductor demand and continued investment in global technology supply chains. China also remains relatively resilient, supported by ongoing AI-related capital spending and stronger technology sectors. By contrast, the euro area and UK have seen much larger upward revisions to inflation forecasts alongside weaker or declining growth expectations, underscoring their greater vulnerability to the recent Middle East shock and higher energy costs. Korea sits somewhere in between: benefiting from the AI hardware cycle but still exposed to trade and energy headwinds. Overall, the chart illustrates the increasingly important push-and-pull shaping the global outlook: AI optimism and productivity hopes on one side, and geopolitical fragmentation, energy insecurity and supply-side inflation pressures on the other.

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**Forecasters See Contained Pass-Through**
Against this backdrop, our latest Blue Chip special question sought to gauge whether economists believe the recent rise in energy prices will remain largely contained — or whether it risks spilling more meaningfully into underlying global inflation dynamics. The results suggest forecasters have become somewhat less concerned about a broad and persistent inflationary impulse since April. A larger share of respondents in the May survey now expect only a “limited and temporary” pass-through into core inflation, while the proportion anticipating “moderate and persistent” effects has declined noticeably. Very few panelists expect significant second-round effects, implying that most still believe inflation expectations and wage-setting behaviour remain relatively well anchored. In part, this reflects confidence in central bank credibility and the view that softer global demand conditions will constrain firms’ pricing power. Yet the persistence of a sizeable minority still expecting moderate pass-through underscores the uncomfortable tension facing policymakers. 

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**Energy Reawakens as a US Inflation Driver**
While survey respondents generally expect only limited pass-through from higher energy prices into broader inflation, the latest US CPI data provide a reminder that the process may already be underway at the margin. April’s CPI report showed core inflation coming in slightly firmer than expected, suggesting underlying price pressures remain more persistent than many policymakers had hoped. The decomposition of CPI inflation highlights that services continue to dominate overall inflation dynamics, reflecting still-elevated wage and labour-intensive price pressures across the economy. However, the more notable recent development has been the renewed contribution from energy prices, which had previously acted as a disinflationary force through much of 2025. Food inflation has also remained comparatively steady, while non-energy goods prices continue to exert only modest upward pressure despite ongoing tariff and supply-chain concerns. Taken together, the data reinforce the idea that the US economy is not facing a classic demand collapse, but rather a more uncomfortable supply-side environment in which geopolitical energy shocks risk colliding with still-resilient domestic demand, AI-related investment spending and sticky service-sector inflation.

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**AI: The Powerful Counterweight to Geopolitical Headwinds**
If rising energy prices and geopolitical instability represent one major force shaping the current macroeconomic outlook, the extraordinary surge in AI-related investment represents the other. The latest data from Our World in Data show global private investment in AI accelerating sharply again in 2025, reaching close to $300 billion — more than double the level seen just two years earlier. The United States continues to dominate the global AI landscape, accounting for the overwhelming majority of private investment spending, while China and Europe remain considerably smaller contributors despite continued growth. The scale and speed of the 2025 increase is particularly striking given the broader backdrop of elevated policy uncertainty, trade fragmentation and concerns about slowing global productivity growth. In effect, the global economy is now being pulled in two competing directions: on one side, geopolitical tensions, supply-chain fragilities and more recent energy shocks are weighing on confidence and raising supply-side costs; on the other, AI enthusiasm is driving an enormous wave of capital expenditure, infrastructure build-out and technology-related demand. This helps explain why growth expectations — particularly in the US and parts of Asia — have remained comparatively resilient despite an increasingly uncertain global environment.

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**Industrial Winners and Losers in a Fragmenting Global Economy**
The divergence in industrial performance across advanced economies has become increasingly striking. Taiwan has emerged as one of the clearest beneficiaries of the global AI boom, with industrial production surging as semiconductor demand, data-centre investment and advanced electronics exports continue to accelerate. Denmark has also significantly outperformed, though for very different reasons, with the extraordinary global success of its pharmaceutical sector — particularly weight-loss and diabetes drugs — driving a powerful expansion in manufacturing output. By contrast, the UK and Germany have experienced a far weaker industrial recovery. In both cases, elevated energy costs and greater dependence on imported energy have weighed heavily on industrial competitiveness since the post-pandemic energy shock. Germany’s large manufacturing sector has been particularly exposed to higher natural gas prices and weaker external demand, while the UK has continued to struggle with a combination of high energy costs, weak productivity growth and subdued business investment. The chart highlights an increasingly important feature of the global economy: countries exposed to powerful structural growth themes such as AI or pharmaceuticals are pulling away from those still burdened by energy dependence and deteriorating industrial competitiveness.

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**China’s Pulse Is Picking Up Again**
China’s economic backdrop has shown clearer signs of improvement in recent months, with both the Citigroup Economic Surprise Index and the Yicai High Frequency Economic Activity Index moving higher. The rebound suggests that incoming data have begun consistently outperforming expectations after a prolonged period of disappointment. Part of the recent improvement likely reflects the cumulative effects of policy easing, including targeted fiscal support, infrastructure spending and further efforts to stabilise the property sector. Export demand has also remained more resilient than many expected, helped in part by the continued strength of global technology and AI-related supply chains. At the same time, improving domestic mobility and energy usage indicators point to firmer underlying activity momentum. The Yicai index itself is designed to provide a near real-time pulse of the Chinese economy using a basket of high-frequency indicators including subway usage, air pollution, coal consumption, freight activity, unemployment and bankruptcy trends. While China still faces significant structural headwinds — including weak household confidence, property-sector fragilities and deflationary pressures — the recent pickup suggests that growth momentum may be stabilising at a time when several other major economies are becoming more vulnerable to geopolitical and energy-related shocks.

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The global economy is still caught between two powerful and competing forces. On one side, the AI investment boom continues to support growth, industrial activity and equity markets, particularly in the US and parts of Asia. On the other, renewed Middle East tensions and higher energy prices are adding to inflation risks and broader policy uncertainty. The latest Blue Chip survey reflects this divide clearly: growth expectations have generally held up best in economies tied to AI-related investment and technology supply chains, while inflation forecasts have risen more sharply in more energy-exposed economies such as the UK and euro area (chart 1). Forecasters still largely expect only limited pass-through from higher energy prices into core inflation, although recent US CPI data suggest underlying price pressures remain somewhat sticky (charts 2 and 3). At the same time, the extraordinary continued surge in global AI investment — now approaching $300 billion annually — highlights the sheer scale of capital being deployed into semiconductors, data centres and digital infrastructure, particularly in the United States (chart 4). The divergence in industrial production trends also reinforces the growing gap between economies benefiting from structural growth drivers — such as Taiwan’s semiconductor sector and Denmark’s pharmaceutical industry — and those struggling with higher energy costs and weaker competitiveness, notably Germany and the UK (chart 5). Meanwhile, improving Chinese activity indicators suggest policy support and stronger technology demand may finally be helping to stabilise growth (chart 6). Overall, the world economy remains resilient, but increasingly uneven, with AI-related investment continuing to offset — though not eliminate — the drag from geopolitical fragmentation and rising energy insecurity.

Charts of the Week: The Tug of War

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Total retail sales rose a solid 0.5% m/m (4.9% y/y) in April on top of a slightly downwardly revised 1.6% monthly jump in March (previously 1.7%), according to data released by the U.S. Census Bureau. The Action Economics Forecast Survey looked for a 05% m/m gain. Excluding autos, other sales increased 0.7% m/m (6.3% y/y) in April following an unrevised 1.9% monthly jump in March. Expectations were for a 0.6% monthly increase. The strong performance in March and the additional solid gain in April put the April level up 7.8% at an annual rate from the Q1 average, providing a very solid start for Q2.

As expected, the continued rise in retail gasoline prices boosted gasoline sales further in April. Gasoline sales increased 2.8% m/m in April following a 13.7% m/m surge in March and accounted for more than 40% of the April increase in total sales. However, sales were solid even without gasoline sales. Total sales excluding gasoline rose 0.3% m/m in April versus a 0.7% monthly gain in March. Sales excluding both autos and gasoline increased 0.5% m/m in April following a 0.7% m/m rise in March.

The control group of sales (total sales excluding food services, autos, gasoline and building materials that the BEA uses to construct PCE in the national accounts) posted another solid increase in March, rising 0.5% m/m in April following an upwardly revised 0.8% m/m increase in March (previously (0.7% m/m). The solid performances of the control group sales in March and April provide a strong start to Q2. April control-group sales are 5.4% at an annual rate above the Q1 average, in line with the 5.7% annualized increase in Q1. Consumer spending remains surprisingly resilient notwithstanding the recent hit to disposable income from the marked increase in energy prices.

Sales across major sectors were varied in April. Consumers clearly spent more on necessities, owing largely to higher prices. Food sales increased 0.8% m/m in April on top of a 1.0% m/m rise in March. And as already noted, gasoline sales posted another outsized monthly increase. By contrast, department store sales slumped 3.2% m/m, clothing sales fell 1.5% m/m, auto sales declined 0.4% m/m and furniture sales fell 2.0% m/m. More encouragingly, sales of nonstore retailers rose 1.1% m/m, their fourth consecutive solid monthly gain. And sales at restaurants increased 0.6% m/m in April, their third consecutive monthly rise. Analysts frequently use restaurant sales as a barometer of consumer attitudes, believing that consumers would not eat out regularly if they were under serious financial stress.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.


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- Total sales increase 0.5% m/m in April after a 1.6% monthly jump in March.
- Gasoline sales rose 2.8% m/m in April on top of a 13.7% surge in March.
- Auto sales fell 0.4% m/m after a 0.6% m/m rise in March.
- Excluding auto and gasoline sales, remaining sales increased by a solid 0.5% m/m in April versus a 0.7% m/m rise in March.
- Sales of the retail control group that is used to construct PCE rose 0.5% m/m in April and are 5.4% annualized above the Q1 average, providing a good start to Q2.


U.S. Retail Sales Slowed in April But Remained Solid

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance rose by 12,000 to 211,000 in the week ending May 9, from 199,000 in the week ending May 2, revised from 200,000. The four-week average rose 750 to 203,750 in the week ending May 9, from 203,000 the May 2 week, revised from 203,250. The Action Economics/Haver Analytics Survey looked for 205,000 claims to have been filed. 

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 24,000 to 1.782 million in the week ending May 2, from 1.758 million in the week ending April 25, revised from 1.766 million. The four-week moving average declined to 1.781 million in the latest week from 1.788 million in the April 25 week. The four-week moving average reached the lowest level since May 2024. The insured unemployment rate rose back to 1.2% in the week of May 2 from the one-week dip to 1.1% in the April 25 week. It had been at 1.2% since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending April 25, the highest unemployment rates were in Rhode Island (2.29%), New Jersey and Massachusetts (both 2.20%), and Washington (2.15%). The lowest rates were in Florida and Louisiana (both 0.31%), South Dakota (0.32%), Alabama and Arkansas (both 0.36%), North Carolina (0.38%), Tennessee (0.47%) and Iowa, Kansas and Virginia (all 0.48%). Rates in other notable states include California (1.99%), New York (1.66%), Illinois (1.56%), Pennsylvania (1.28%), and Texas (1.03%). 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.


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- New claims rose by 12,000 to 211,000.
- Continuing claims rose by 24,000 to 1.782 million.
- The insured unemployment rate was back up to 1.2% in the week of May 2, from the one-week dip to 1.1% the prior week.

Economy in Brief: 2006

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