Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219a.jpg" align="left" border="0" height="265" width="353">
The U.S. government ran a budget surplus last month of $17.8B.
The news did not, however, represent real improvement in the
government's budget condition. The surplus shrank and was roughly half
that during January of 2007 when a surplus of $38.2B. Typically a
surplus is run during the month of January.
The shrinkage of the January surplus highlights a worsening of
the budget condition. For the first four months of FY08 the
government's budget deficit of $87.7B was roughly double the $42.2B
during the first four months of FY07. The deterioration in the dollar
value of the deficit highlights the projected deterioration as a
percentage of the nominal value of GDP.
For the fiscal year to date, growth in federal receipts slowed
to 3.3% which was one third the growth during the first four months of
FY07. The weaker economy with its slower employment growth brought
slower growth in individual income tax receipts (44% of total
receipts); to 4.2% from 12.6%. Withheld income taxes grew 4.4%, a sharp
slowdown from 11.2% last fiscal year, but the weaker stock market
brought a more dramatic drop in the growth in non-withheld taxes; to
4.8% from 21.9% during the four months of FY07.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219b.jpg" align="right" border="0" height="265" width="353">
Corporate income taxes (13% of total receipts) fell 2.5% as a
result of the weakness in corporate profits. During FY07 they rose
16.4% during the first four months. Growth in employment &amp;
general retirement contributions actually rose slightly to 5.8% from
4.0% but unemployment insurance receipts fell 6.0%, nearly twice the
rate of decline in early FY07.
U.S. net outlays grew 8.3%, well up from FY07 but steady with
prior years. Growth in defense spending (19% of total outlays) of 9.6%
was roughly steady and Medicare expenditures (12% of outlays) fell
3.0%. Growth in social security spending (21% of outlays) held about
steady at 5.7% but interest expense grew 20.3% with the rise in
interest rates.
The Government's financial data is available in Haver's USECON
database.
The Federal Reserve's Tools for Responding to
Financial Disruptions is Friday's speech made by Federal
Reserve Board Governor Frederic S. Mishkin and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/mishkin20080215a.htm">
here</a> .

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US
Government Finance</a> &nbsp;</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2007</th>
<th scope="col">FY 2006</th>
<th scope="col">FY 2005 &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$17.839B</td>
<td>$48.261B</td>
<td>$38.236B 
(1/07)</td>
<td>-$162.8B</td>
<td>-$248.2B</td>
<td>-$318.7B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$255.2B</td>
<td>$277.0B</td>
<td>-2.1%</td>
<td>6.7%</td>
<td>11.8%</td>
<td>14.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$237.4B</td>
<td>$228.7B</td>
<td>6.7%</td>
<td>2.8%</td>
<td>7.4%</td>
<td>7.6%</td>
</tr>
</tbody>
</table>
Japan's Current AccountBalances by
Region 
by <a href="/comment/Curley.html">Louise
Curley</a> February 19, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219c.jpg" align="left" border="0" height="265" width="353">
Japan reported a record current account surplus of 250,012 100
million yen or about $215 billion for the year 2007 about a week ago.
The current account balance for the past 12 years is shown in the first
chart.
Today Japan reported the breakdown of the current account
surplus by region for the third quarter of the year. Japan continues to
run its largest surplus on current account with the United States,
however, it's surplus with Western Europe appears to be growing faster
than that of the U.S. as can be seen in the second chart. This chart
also shows Japan's current account surplus with Central/South America,
which shows a small upward trend.
Japan has traditionally run a deficit with China, Indonesia
and the Middle East. The deficits with the Indonesia and the Middle
East are largely the as a result of Japan's dependence on imported oil.
These deficits have increased sharply with the rise in the price of
oil. The deficit with China, however, has decreased significantly this
year as can be seen in the third chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219d.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219e.jpg" height="265" width="312">

<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
CURRENT ACCOUNT BY REGION (100 billion yen)&nbsp;</th>
<th scope="col">Q4 07</th>
<th scope="col">Q3 07&nbsp;</th>
<th scope="col">Q2 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">2007&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>57.6</td>
<td>68.6</td>
<td>56.0</td>
<td>68.3</td>
<td>250.0</td>
<td>198.5</td>
<td>182.6</td>
<td>186.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;United
States&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>33.</td>
<td>26.9</td>
<td>37.4</td>
<td>n.a.</td>
<td>130.8</td>
<td>111.2</td>
<td>96.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Western
Europe</td>
<td>n.a.</td>
<td>21.6</td>
<td>19.4</td>
<td>24.3</td>
<td>n.a.</td>
<td>66.9</td>
<td>51.6</td>
<td>46.0</td>
</tr>
<tr>
<td class="firstcol">
&nbsp;&nbsp;Central/South America</td>
<td>n.a.</td>
<td>6.1</td>
<td>4.5</td>
<td>8.0</td>
<td>n.a.</td>
<td>21.8</td>
<td>19.1</td>
<td>11.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;China</td>
<td>n.a.</td>
<td>-2.0</td>
<td>-3.5</td>
<td>-4.2</td>
<td>n.a.</td>
<td>-22.0</td>
<td>-25.6</td>
<td>-14.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Indonesia</td>
<td>n.a.</td>
<td>-4.3</td>
<td>-4.0</td>
<td>-4.1</td>
<td>n.a.</td>
<td>-15.2</td>
<td>-9.1</td>
<td>-6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Middle
East&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>-25.5</td>
<td>-23.8</td>
<td>-22.1</td>
<td>n.a.</td>
<td>-101.5</td>
<td>-74.1</td>
<td>-48.1</td>
</tr>
</tbody>
</table>
Japan Offers Up some Mixed Signals
From Two LEI Concepts 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 19, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219f.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s own leading index composite is demonstrating ongoing
weakness. The OECD&#8217;s take is that there is an improvement afoot.
Japan&#8217;s own index peaked in the first half of 2006 and has since then
been in a steady and rapid deteriorating phase. Not so for the OECD
measure. It went flat from early 2006 to early 2007 then fell sharply
but has since regained about half of its drop. These are two different
views of Japan&#8217;s future to be sure &#8211; as well as different views of its
present.
While the two indexes broadly tell the same story
historically,
currently their divergence has never been so great. The OECD index is a
bit smoother back through time. There have been disagreements in the
message of these two indexes before, but never one so stark with one
index rising while the other is falling. In the past they were not
directionally different as much as one simply lagged the other. 
Recently it seems that the OECD index has performed a bit
better. In
2000 it turned over to show weakness first. From 2001 to 2005 it
expanded steadily while Japan&#8217;s own index moved up to dwell at two
separate plateaus before expanding again. It is hard to argue with the
OECD&#8217;s recent plateauing then dropping as being a superior signal to
the Japan&#8217;s domestic LEI that has simply fallen so sharply that it
would be reasonable to look for even more disruption in the economy. But then maybe that bad news is
still in the pipeline?
On the other hand what rings false about the OECD index is
that,
apart from the recent episode of plateauing then dropping, it has the
index at its highest point in 15 years. The Japan&#8217;s domestic LEI has
the index level back below four past peaks going back to 1994. Those
are real differences, not just different assessments on the timing of
the economic rebound. 
 

We are left in a quandary by these discrepancies. Still it is
clear
that both reports are saying that Japan has taken some hit and the
uncertainty is about how soon or vigorous the recovery will be. But
they are also saying that there is some difference of opinion on how
hard Japan has been hit and that is an important element in assessing
the depth of the expected drop as well as the timing of recovery. As a
result we must be prepared to continue to watch Japan closely.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Japan's
LEI and its Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Levels</td>
<td colspan="4">Growth (saar)</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td> Dec-07</td>
<td> Nov-07</td>
<td> Oct-07</td>
<td> 3M0</td>
<td> 6M0</td>
<td> 12Mo</td>
<td> 24MO</td>
</tr>
<tr>
<td class="firstcol">LEI</td>
<td>97.3</td>
<td>97.8</td>
<td>100.3</td>
<td>-7.1%</td>
<td>-10.1%</td>
<td>-5.8%</td>
<td>-7.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">LEI: OECD</td>
<td>105.7</td>
<td>104.6</td>
<td>103.5</td>
<td>11.0%</td>
<td>-1.9%</td>
<td>-2.0%</td>
<td>-0.7%</td>
</tr>
<tr style="font-weight: bold;" class="even">
<td class="firstcol" colspan="8">OECD LEI
Details</td>
</tr>
<tr class="grey1">
<td class="firstcol">Share P</td>
<td>1.2</td>
<td>1.2</td>
<td>1.3</td>
<td>-12.7%</td>
<td>-27.0%</td>
<td>-8.2%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Int Spread (chngs)</td>
<td>-0.5</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.2</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.7</td>
</tr>
<tr class="grey1">
<td class="firstcol">Loan/Deposit</td>
<td>#N/A</td>
<td>1.1</td>
<td>1.1</td>
<td>-1.1%</td>
<td>1.5%</td>
<td>1.2%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">Dwellings Started</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>319.1%</td>
<td>-39.9%</td>
<td>-18.4%</td>
<td>-8.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">OT-MFG</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>8.5%</td>
<td>6.3%</td>
<td>0.0%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Stocks/Deliv (M&amp;M)</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>10.6%</td>
<td>6.6%</td>
<td>1.3%</td>
<td>2.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Exp&gt;Imp</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-40.9%</td>
<td>93.6%</td>
<td>-214.3%</td>
<td>-900.0%</td>
</tr>
<tr>
<td class="firstcol"> SmallBiz</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>7.1%</td>
<td>-6.4%</td>
<td>-8.1%</td>
<td>-5.2%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Grey shaded
rows are one month
behind current; Small Biz lags by SIX months</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. government ran a budget surplus last month of $17.8B. The news did not, however, represent real improvement in the government's budget condition. The surplus shrank and was roughly half that during January of 2007 when a [...]

U.S. Budget Deficit Deeper: A Weaker Economy

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080218a.jpg" align="left" border="0" height="265" width="353">
China and Singapore reported foreign trade figures for
January, today. The largest country in Asia and one of the smallest
both reported increases in their trade balances for the month. In the
year over year comparison, however, China showed an increase of $4115
million and Singapore a decrease of $1,722 million.
The moderation in China's trade surplus that took place at the
end of last year was reversed in January. As a result of an $8,415
million increase in exports and a $4,642 million increase in imports,
the balance on trade rose $3,777 million, to $24,750 million in
January, the second highest on record. Singapore's trade surplus rose
$844 million from December as a result of a $5,227 million increase in
exports and a $4,383 million increase in imports. China's and
Singapore's trade balances are shown in the first chart.
Although Singapore is a tiny city state with a population of
4.4 million compared with China's 1.3 billion, its exports in 2007 were
equal to 25% of China's. (In the mid nineties, Singapore's exports were
equal to 80% of China's, but with the more rapid rise of China's
exports than those of Singapore, that percentage has declined over the
years, as shown in the second chart.) However, foreign trade still
plays a greater role in its economy than it does in China. Its net
exports accounted for 30% of nominal GDP in 2006, compared with 7.5%
for China as can be seen in the third chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080218b.jpg" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080218c.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">China&nbsp;
and Singapore Foreign Trade 
&nbsp;(In millions USD)&nbsp;</th>
<th scope="col">Jan 08</th>
<th scope="col">Dec 07&nbsp;</th>
<th scope="col">Jan 07&nbsp;</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">China Balance of Trade</td>
<td>24750</td>
<td>20973</td>
<td>20635</td>
<td>3777</td>
<td>4115</td>
<td>262201</td>
<td>177476</td>
<td>101999</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Exports&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>117000</td>
<td>108581</td>
<td>92077</td>
<td>8419</td>
<td>24923</td>
<td>1218020</td>
<td>968936</td>
<td>761953</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports</td>
<td>92250</td>
<td>87608</td>
<td>71442</td>
<td>4642</td>
<td>20808</td>
<td>955819</td>
<td>791460</td>
<td>659954</td>
</tr>
<tr>
<td class="firstcol"> Singapore Balance of Trade</td>
<td>2967</td>
<td>2123</td>
<td>4690</td>
<td>844</td>
<td>-1723</td>
<td>36151</td>
<td>33109</td>
<td>29607</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Exports&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>31215</td>
<td>25988</td>
<td>25549</td>
<td>5227</td>
<td>5666</td>
<td>299393</td>
<td>271892</td>
<td>229681</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Imports</td>
<td>28248</td>
<td>23865</td>
<td>20859</td>
<td>4383</td>
<td>7389</td>
<td>263242</td>
<td>38783</td>
<td>200074</td>
</tr>
</tbody>
</table>
</body></html>

China and Singapore reported foreign trade figures for January, today. The largest country in Asia and one of the smallest both reported increases in their trade balances for the month. In the year over year comparison, however, China [...]

China and Singapore ---The Big and The Small---Show Increased Trade Surpluses

China and Singapore ---The Big andThe Small---Show Increased Trade Surpluses

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215d.jpg" align="left" border="0" height="265" width="353">
EMU import growth is slowing but export growth is slowing
faster. As a result EMU has developed its first trade deficit in 16
months. Germany and Finland the two EMU countries with the lowest
inflation rates in the last 10 years continue to post surpluses. As the
lowest inflation countries in this common currency area they are more
price competitive than other EMU nations. 
 

On a seasonally adjusted basis, eight of the 13 countries
belonging to the euro area in December registered a trade deficit, led
by sizeable deficits in The Netherlands (-E8.0 billion) and Spain
(-E5.0 billion). Among the larger EMU countries, Italy (-E2.4 billion)
and France (-E0.6 billion) posted deficits. Red ink was also chalked up
on the trade account by were also posted by Belgium (-E1.8 billion) and
Greece (-E1.5 billion). 
 

The EMU surplus with the US is now shrinking slightly and is
abut E8bln lower than it was a year ago. Exports to the US are down
Yr/Yr and imports are up. It is looking like the weak dollar/strong
euro are having an impact. 
 

Like the US, EMU has a huge deficit with China that rose to
E101bln last year from E82.6bln in 2006, as imports from China&#8217;s
spurted by 18%. This is also a reminder that while corporations
continue to be very up beat on China growth, if the US and Europe
slowdown China&#8217;s exports and growth overall will slow as well. China
may have a slug of domestic infrastructure building in progress, but it
remains highly dependent on trade. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col"> Euro Area: 13-Trade trends for goods</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="2">m/m%</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>12-Mo Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance*</td>
<td>&#8364;&#8364; (2,105)</td>
<td>&#8364;&#8364; 1,965</td>
<td>&#8364;&#8364; 703</td>
<td>&#8364;&#8364; 1,603</td>
<td>&#8364;&#8364; 2,550</td>
<td>&#8364;&#8364; (685)</td>
</tr>
<tr>
<td class="firstcol" colspan="7">Exports</td>
</tr>
<tr class="odd">
<td class="firstcol">All Exports</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-0.7%</td>
<td style="color: red;">-8.3%</td>
<td style="color: red;">-3.2%</td>
<td>1.0%</td>
<td>11.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food and Drinks</td>
<td style="color: red;">-1.8%</td>
<td>0.6%</td>
<td>0.3%</td>
<td>7.1%</td>
<td>5.1%</td>
<td>12.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Raw Materials</td>
<td style="color: red;">-1.7%</td>
<td style="color: red;">-2.1%</td>
<td style="color: red;">-11.7%</td>
<td style="color: red;">-9.7%</td>
<td>1.7%</td>
<td>13.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Other</td>
<td style="color: red;">-2.6%</td>
<td style="color: red;">-0.8%</td>
<td style="color: red;">-8.8%</td>
<td style="color: red;">-3.6%</td>
<td>0.7%</td>
<td>11.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td style="color: red;">-4.2%</td>
<td style="color: red;">-0.4%</td>
<td style="color: red;">-17.1%</td>
<td style="color: red;">-7.1%</td>
<td style="color: red;">-2.3%</td>
<td>11.3%</td>
</tr>
<tr>
<td class="firstcol" colspan="7">Imports</td>
</tr>
<tr class="odd">
<td class="firstcol">All Imports</td>
<td>0.7%</td>
<td style="color: red;">-0.5%</td>
<td>9.2%</td>
<td>8.2%</td>
<td>5.2%</td>
<td>7.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food and Drinks</td>
<td style="color: red;">-4.2%</td>
<td style="color: red;">-2.2%</td>
<td style="color: red;">-27.1%</td>
<td>8.6%</td>
<td>9.0%</td>
<td>5.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Raw Materials</td>
<td style="color: red;">-0.3%</td>
<td style="color: red;">-2.1%</td>
<td style="color: red;">-4.9%</td>
<td style="color: red;">-4.9%</td>
<td style="color: red;">-1.8%</td>
<td>23.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Other</td>
<td>1.0%</td>
<td style="color: red;">-0.3%</td>
<td>12.8%</td>
<td>8.9%</td>
<td>5.4%</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td style="color: red;">-2.4%</td>
<td style="color: red;">-2.7%</td>
<td style="color: red;">-20.9%</td>
<td style="color: red;">-9.2%</td>
<td style="color: red;">-4.2%</td>
<td>9.9%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">*Eur mlns; mo or period average</td>
</tr>
</tbody>
</table>
</body></html>

EMU import growth is slowing but export growth is slowing faster. As a result EMU has developed its first trade deficit in 16 months. Germany and Finland the two EMU countries with the lowest inflation rates in the last 10 years [...]

EMU Trade Deficit Emerges

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215c.jpg" align="left" border="0" height="265" width="353">
The Bank of France monthly business survey for January 2008
shows that production has held up but that there is a clear gnawing
away at past trends. The chart at the top shows that the Biz indicators
have been fairly flat recently but viewed as a percentage from a Year
ago there is clear degradation in the index&#8217;s momentum. The sentiment
index itself now sits just below the middle of this two year range in
the 45th percentile. The production outlook is near the top third of
its range in the 64th percentile. Order book reading are in the 60th
percentile and foreign order books have slipped to their 35th
percentile. New orders at 56.9% stand above their midpoint at the
56.9th percentile. 
 

Despite some slippage in the year over year reading most of
the index levels for January are still very near their respective
12-month averages. The Bank of France views the index as a positive in
the outlook for growth in Q1. However the index is clearly losing its
momentum. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col"> Bank of France Monthly INDUSTRY Survey: SUMMARY</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>12 MO</td>
<td>Since Jan-87</td>
<td>2Yr Percentile</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>AVERAGE</td>
<td>Average</td>
<td>rank/range</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Production-latest mo</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>19.07</td>
<td>-4.08</td>
<td>3.83</td>
<td>8</td>
<td>7</td>
<td>98.0%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Production Outlook</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>16.57</td>
<td>21.79</td>
<td>15.87</td>
<td>16</td>
<td>15</td>
<td>64.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Demand</td>
</tr>
<tr>
<td class="firstcol">Overall order books</td>
<td>25.35</td>
<td>25.66</td>
<td>27.43</td>
<td>27</td>
<td>4</td>
<td>60.1%</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td>10.97</td>
<td>8.95</td>
<td>8.59</td>
<td>11</td>
<td>9</td>
<td style="color: red;">35.0%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">New Orders</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>12.53</td>
<td>9.55</td>
<td>7.9</td>
<td>11</td>
<td>9</td>
<td>56.9%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Stocks: Finished Goods</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>-1.88</td>
<td>-4.77</td>
<td>-2.87</td>
<td>-3</td>
<td>-2</td>
<td>63.4%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>83.44</td>
<td>80.83</td>
<td>83.69</td>
<td>84</td>
<td>83</td>
<td>62.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Hiring</td>
</tr>
<tr>
<td class="firstcol">Latest Mo</td>
<td>2.44</td>
<td>-1.55</td>
<td>1.01</td>
<td>0</td>
<td>-1</td>
<td>98.0%</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>-1.7</td>
<td>-0.81</td>
<td>-0.89</td>
<td>-2</td>
<td>-4</td>
<td>74.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Industry Sentiment
Index</td>
<td>106.62</td>
<td>105.8</td>
<td>108.01</td>
<td>108</td>
<td>107</td>
<td>45.6%</td>
</tr>
</tbody>
</table>
</body></html>

The Bank of France monthly business survey for January 2008 shows that production has held up but that there is a clear gnawing away at past trends. The chart at the top shows that the Biz indicators have been fairly flat recently but [...]

BOF Biz Indicators Softens

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215g.jpg" width="353">
During early February, the University of Michigan&#39;s consumer sentiment index fell a hard 11.2% from the January average to a level of 69.6. A reading of 76 had been expected. It was the largest m/m decline since 2005 and it was to the lowest level since early 1992.
The index of expected business conditions during the next year fell the hardest with a 12.8% m/m decline to its lowest level since the recession of 1990. Expectations for business conditions during the next five years fell 10.2% while expectations for personal finances fell 6.9%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215h.jpg" width="353">
The current conditions index more than reversed the January rise with a 9.5% drop. Current conditions for buying large household goods fell out of bed with a 15.1% plunge to the lowest level since 1992. The view of current personal finances fell slightly.
Expectations for inflation during the next twelve months were unchanged at 4.0% and for the next five to ten years expectations ticked up to 3.5%.
Opinions about government policy fell sharply. The 9.0% m/m decline was one of the largest and dropped this measure of opinions to the lowest level since 1993.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.

<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/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Feb (Prelim.</th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Feb&nbsp; y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>69.6</td>
<td>78.4</td>
<td>75.5</td>
<td>-23.8% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>85.4</td>
<td>94.4</td>
<td>91.0</td>
<td>-20.0%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Expectations</td>
<td>59.4</td>
<td>68.1</td>
<td>65.6</td>
<td>-27.1%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
</body>
</html>

During early February, the University of Michigan's consumer sentiment index fell a hard 11.2% from the January average to a level of 69.6. A reading of 76 had been expected. It was the largest m/m decline since 2005 and it was to the [...]

Michigan Consumer Sentiment Dropped Hard

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215e.jpg" width="353">
Industrial production ticked 0.1% higher last month following an upwardly revised 0.1% rise during December. The latest increase was as expected.
Factory output also rose 0.1% after an upwardly revised 0.2% December increase. The m/m gains have picked up a bit since scattered declines last Summer. As a result the three month growth in output rose to 2.1% (AR) from a low of -4.1% in September. Some of that improvement owes to the high tech sector. Less high tech factory output was unchanged in January and three month growth was 1.1%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215f.jpg" width="353">
Production of computers &amp; electronics surged 1.4% (14.4% y/y) after a very much upwardly revised 1.0% December gain. Output of furniture &amp; appliances fell 2.1% and three month dropped to -14.3%. Chemical product output also fell by 0.4%. There was scattered improvement elsewhere. Output of automotive products dropped 1.2% but rose 5.3% on a three month basis. Apparel product output fell 0.1% and three month growth rose to 2.6%.
Output of construction supplies fell again, last month by 1.1% and three month remained negative at -2.6%.
Output of business equipment rose 0.4% with three month growth up to 8.0%. Output of industrial equipment fell 0.4% but three month improved to 2.5%.
Capacity utilization was unchanged for the third month at 81.5%. Utilization in the factory sector slipped a hair to 79.7% from 78.8% where it had been for three months. That ias down from an 80.1% average last year.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INDUSTRIAL PRODUCTION (SA)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.2%</td>
<td>1.9%</td>
<td>4.0%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.1%</td>
<td>0.2%</td>
<td>2.0%</td>
<td>1.9%</td>
<td>4.7%</td>
<td>3.9%</td>
</tr>
</tbody>
</table>


</html>

Industrial production ticked 0.1% higher last month following an upwardly revised 0.1% rise during December. The latest increase was as expected. Factory output also rose 0.1% after an upwardly revised 0.2% December increase. The m/m [...]

U.S. Industrial Production Ticked 0.1% Higher

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215a.jpg" width="353">
Overall import prices during January rose a strong 1.7%. The rise, which was three times expectations, followed the December respite when temporarily lower oil prices produced a revised 0.2% decline initially reported as no change. Consensus expectations had been for a 0.5% rise in January prices.
Petroleum prices jumped 5.5% after a 1.9% decline to close out last year. Crude petroleum prices surged 4.5% (69.7% y/y) after December&#39;s 1.3% decline. That strength was exceeded by a 10.2% (73.7% y/y) jump in fuel oil prices and an 8.1% (44.2% y/y) rise in other petroleum product prices.
Less petroleum, import prices rose 0.6% after a 0.3% December increase. The latest m/m rise was near the strongest since November 2006. 
 During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a reduced 47% against a broader basket of currencies.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080215b.jpg" width="353">
Prices for industrial supplies &amp; materials excluding petroleum surged 2.2% (10.1% y/y) led by strength in paper prices and a 9.7% (21.1% y/y) blowout in chemical prices. The detailed import price series can be found in the Haver USINT database. 
Capital goods import prices fell 0.2% (+0.5% y/y) as prices of computers, peripheral and semiconductors declined again, last month by 1.4% (-5.4% y/y). Less the high tech sector, January capital goods prices rose a modest 0.2% (3.0% y/y) though that rate of gain has accelerated from 2.7% growth last year and 1.4% during 2006.
Prices for imports of nonauto consumer goods rose 0.3% (1.6% y/y) and that y/y rise in prices has been stable since early last year. Apparel prices rose 0.3% (1.9% y/y). These prices had been unchanged or declining through 2004 to 2006. Prices for household goods rose 0.4% (1.5% y/y), a y/y change that has been fairly stable.
Overall export prices surged 1.2% due to a 5.0% (28.9% y/y) rise in agricultural prices. Prices for nonagricultural goods also rose a relatively strong 0.8% (4.8% y/y). 
Some Simple Tests of the Globalization and Inflation Hypothesis from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/pubs/ifdp/2007/891/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>1.7%</td>
<td>-0.2%</td>
<td>13.7%</td>
<td>4.2%</td>
<td>4.9%</td>
<td>7.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>5.5%</td>
<td>-1.9%</td>
<td>66.9%</td>
<td>11.5%</td>
<td>20.6%</td>
<td>37.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.6%</td>
<td>0.3%</td>
<td>3.6%</td>
<td>2.7%</td>
<td>1.7%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">Export- All Commodities</td>
<td>1.2%</td>
<td>0.4%</td>
<td>6.7%</td>
<td>4.9%</td>
<td>3.6%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>


</html>

Overall import prices during January rose a strong 1.7%. The rise, which was three times expectations, followed the December respite when temporarily lower oil prices produced a revised 0.2% decline initially reported as no change. [...]

U.S. Import Price Rise Strong

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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

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

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


Privacy Policy

Disclaimer

Contact us

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

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

251112C20.jpg

251112D20.jpg

Retail gasoline prices for all grades rose to an average $3.19 per gallon (0.3% y/y) in the week ended November 10 after easing to $3.15 in the previous week. 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. Haver Analytics seasonally adjusts the retail price of regular grade gasoline. That price rose to $3.10 last week from $3.05 in the previous week. Diesel fuel prices rose to $3.84 per gallon last week (9.0% y/y) after increasing to $3.75 per gallon in the prior week.

The price of West Texas Intermediate crude oil fell to an average $60.08 per barrel (-16.1% y/y) in the week ended November 7 after improving to $60.70 per barrel in the prior week. Prices remained below a recent high of $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 $61.04 per barrel. The price of European Brent crude declined to $64.30 per barrel (-15.0% y/y) in the week of November 7 after rising to $65.02 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. Yesterday, the price was $63.86 per barrel.

Natural gas prices strengthened to an average $3.54/mmbtu (137.6% y/y) in the week ended November 7 after rising to $3.43/mmbtu in the prior week. The rise left prices at the highest level since the second week of April and well above the low of $1.40/mmbtu in the week of March 15, 2024. Yesterday, the price was $3.80 per mmbtu.

Gasoline demand declined 2.1% y/y in the four weeks ending October 31, following a 4.2% y/y decline in the prior four weeks. Demand for all petroleum products weakened 1.2% y/y in the four weeks ending October 31, after falling 0.9% y/y in the previous four-week period. Crude oil input to refineries declined 4.5% y/y in the four weeks ending October 31, after falling 1.7% y/y in the prior four weeks.

Gasoline inventories fell 2.5% y/y in the week ending October 31 following a 0.1% y/y slip in the prior week. Residual fuel oil inventories fell 7.1% y/y in the October 31 week after falling 10.0% y/y in the prior week. Working higher, crude oil inventories rose 1.9% y/y in the week of October 31 after increasing 1.7% y/y in the previous week.

Measured in days’ supply, gasoline inventories fell to 23.7 days in the week of October 31 from 24.3 days in the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil rose to 27.5 days in the week of October 31 from 26.7 days in the prior week. The supply remained below a recent 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** and **USENERGY** databases.

- Gasoline prices rise to four-week high.
- Crude oil prices decline.
- Natural gas prices move to highest level since April.
- Demand for gasoline & all petroleum products falls.

U.S. Energy Prices Remain Mixed in Latest Week

251112A1.jpg

251112B1.jpg

The number of weekly mortgage loan edged 0.6% higher (73.7% y/y) during the week ended November 7 after falling 1.9% during the prior week and rising 7.1% one week earlier.

The effective interest rate on a 30-year fixed-rate mortgage rose to 6.52% after rough stability at 6.48% during the prior week. These rates stand below their January average of 7.20%. Rates on a 15-year fixed rate loan were 5.86% while interest rates on a 30-year JUMBO loan averaged 6.57%. Rates on a 5-year ARM eased to 5.82%.

Purchase loan applications last week increased 5.8% (29.6% y/y) after falling 0.6% in the prior week and rising 4.5% one week earlier. Applications to refinance an existing loan declined 3.4% (+146.5% y/y) following a 2.8% decline in the prior week and rising 9.3% one week earlier.

Loans to refinance an existing mortgage fell to 55.6% of total applications from 57.0% in the prior week. The percentage of total loans that were ARMs declined to 7.8% from 8.7% one week earlier.

The average loan size declined to $396,500 last week from $414,900. The size of conventional purchase loans declined to $431,400 from $435,100 while the size of refinanced loans declined to $368,700 from $399,700 one week earlier.

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.

- Mortgage interest rates rise to three-week high.
- Purchase loans surge but refinancing declines.

U.S. Weekly Mortgage Applications & Interest Rates Edge Higher

251112E.jpg

Global money supply growth boomed during COVID. Then growth ‘busted,’ decelerating sharply with the United States, the United Kingdom, and the European Monetary Union all showing monetary contraction to some degree throughout 2023. The only country to buck this trend was Japan which had a more modest boost in money supply during COVID and then more modest growth rates that decelerated and continued to gravitate toward near zero growth, until recently, when Japanese money supply started to accelerate very slightly.

**Euro Area**
Recent trends show nominal money growth in the euro area decelerating slightly from a 2.5% growth rate over 12 months to growth rates around 2% or a bit lower over three months and six months. Monetary union private credit has also decelerated from a growth rate of 2.4% over 12 months to 1.7% over six months and to a 1.3% annual rate over three-months.

**United States, United Kingdom, and Japan**
Nominal money supply growth in the U.S. remains fairly steady, growing 4.5% over 12 months and an annual rate of 5 to 5.4% over three months and six months. The U.K. nominal money supply growth is 3.5% over 12 months, 2.8% at an annual rate over six months and 3.6% at an annual rate over three months. Japan's M2 plus CDs has been stepping up its growth from 1.6% over 12 months to a 2% pace over six months to 4% at an annual rate over three months. Nominal money supply growth is mostly fluctuating between steady and stronger across these monetary center countries.

**Real balances in EMU**
Real money balances, however, are looking significantly weaker. In the European monetary Union, real M2 grows 0.3% over 12 months and then its growth rate slips to -0.6% at an annual rate over both three months and six months. Private credit in the euro area rises by 0.1% over 12 months, declines by 0.5% at an annual rate over six months, and declines at a 1.3% annual rate over three months. Real credit is weakening.

**More real balances**
In the U.S., real money supply growth is fluctuating, growing at 1.4% over 12 months, stepping up to 2.3% over six months and back to a 1.4% annual rate over three months. U.K. real money balances are simply shrinking at a -0.6% annual rate over 12 months and a -0.7% annual rate over three months. In Japan, real money balances are actually accelerating; real money growth is -1.3% over 12 months, which rises to plus 0.4% over six months with an annual rate of 2.9% at an annual rate over three months.


251112.jpg

**Global monetary growth conditions**
Global monetary conditions simply don't show a great deal of change over the last year. The perception is that nominal money growth has been relatively stable; however, we can see that real money growth and real credit growth are declining in the euro area and in the U.K. Real balances are growing at a relatively modest rate but also accelerating in Japan. On the whole, money supply doesn't seem to be playing a significant role in charting a new path for monetary policy- except perhaps in Japan.

Global Money Supplies Deliver Growth-Rate Plateau

251111T5.jpg

251111U5.jpg

The NFIB Small Business Optimism Index eased 0.6% (+4.8%) to 98.2 in October after falling 2.0% to a 98.8 in September and rising 0.5% to 100.8 in August, according to the Small Business Economic Trends survey conducted by the National Federation of Independent Business. Four of the ten index components increased last month while five fell and one was unchanged. The NFIB Small Business Uncertainty Index fell 12.0% (-20.0% y/y) last month to 88 after rising 7.5% in September.

The outlook for business conditions was mixed in the latest survey. The net balance of respondents planning to add to inventories declined to a six-month low of -2% from +1% in September. The net percent expecting the economy to improve fell to 20% last month after weakening to 23% in September. A lessened 6% expected higher real sales in six months, compared to 8% in September. A lessened 15% of respondents indicated that now was a good time to increase employment compared to 16% in September. Earnings trends deteriorated sharply.

Offsetting these declines, plans to make capital outlays rose to a ten-month high of 23% of firms after steadying at 21%. The index of expected credit conditions jumped to -3% from -7%. It remained up from a low of -11 in November 2023. A modestly increased 13% of respondents felt that now was a good time to expand. Inventories were assessed as being too low by a lessened 4% of respondents after 7% in September.

On the labor front, 49% of businesses reported few or no qualified workers to fill job openings in October, down slightly from 50% in September. That remained up, however, from a low of 43% in August. These readings remained below a high of 56% in August of 2024.

251111V5.jpg

251111W5.jpg

251111X5.jpg

The net percent raising their average selling prices fell to 21% last month compared to 24% in September. It had grown to 32% in February. The percentage planning to raise prices eased to 30% in October, down from a 32% high in June. Worker compensation deteriorated as a net 26% of respondents lifted compensation during the last three months versus 31% in the last survey. Compensation gains peaked at 50% of firms in January 2022. A steady net 19% of firms are making plans to raise worker compensation in the next three months, below the November 2024 high of 28%.

The quality of labor was reported by 27% of member firms as the single most important issue facing small businesses. That was increased from 18% in September, and the highest in five years. Moving lower, the cost of labor was ranked by 8% of respondents as the largest problem, compared to 11% in September, while financial & interest rates worries dropped to 2%, the lowest in two years. A lessened 12% cited inflation as the most important problem. Other major concerns were taxes (16%) and poor sales (10%). 

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

- Inventory, economy & employment concerns weigh on optimism.
- Percentage of respondents raising prices moves down; price expectations ease.
- Concerns about quality of labor surge but labor cost worries recede.

U.S. NFIB Small Business Optimism Index Slips in October

251111E.jpg

Macroeconomic expectations in the ZEW survey backtracked slightly in Germany while improving slightly in the United States in November. The economic situation improved slightly in the euro area and Germany while backtracking in the United States. That's the assessments of the current economic situation and expectations for Germany or the EMU that are moving in different directions in the U.S. and in Germany or in the U.S. vs. the European Monetary Union in November.

Inflation expectations backed off across the board easing slightly in the euro area, Germany, and also in the United States. While that happened, expectations for short-term interest rates became less focused on rate cuts in the euro area and slightly less tilted toward the expectation for rate cuts in the U.S. as well. Long-term rate expectations receded somewhat in both Germany and in the U.S. in November by small amounts. Stock market expectations picked up in the euro area, Germany, and the U.S., and in most cases, somewhat significantly.

**The queue standings**
The queue standings are ranked standings of these various metrics, and they tell a clear story of how the ZEW experts see current conditions and policy tradeoffs. The euro area has an economic situation where the queue standing is at its 51st percentile, slightly above its historic median (on data since the early 1990s). However, Germany and the U.S. have very weak percentile standings with Germany in its 14.5 percentile and the U.S. in its 35th percentile. Macroeconomic expectations, however, find Germany at a solid 63.6 percentile while the U.S. is at a 23.3 percentile. ZEW experts are far more upbeat on prospects for German recovery right now than in the United States – and that seems odd to me with a lot of fiscal stimulus in train in the U.S. and tons of ‘AI’ investment.

Inflation expectations are high in the U.S. at an 85.5 percentile standing, well above the historic median, and clearly showing threatening conditions. This compares to a 30% queue standing for the euro area and Germany.

Short-term rate expectations are significantly below the median for both the euro area and the U.S. with the euro area at a 26.8 percentile and the U.S. at a 9.3 percentile standing. Long-term rate expectations have Germany at a 43-percentile and the U.S. at a more similar 35-percentile. Stock market expectations are fairly similar across the lot with the euro area at a 38-percentile standing, Germany at a 35-percentile standing and the U.S. at a 38-percentile standing.

251111.jpg

**Summing up**
These metrics remind us that ZEW experts see different inflation circumstances in the U.S. compared to Europe as well as very different current economic situations, especially between the U.S. and the euro area and very different macroeconomic expectations between the U.S. and Germany. The U.S. is seen more as a place that's percolating inflation despite the fact that the Federal Reserve continues to say inflation is under control and inflation expectations are well anchored. Apparently, they are not well-anchored among the ZEW financial experts. We might add, nor are they well-anchored among participants in the University of Michigan survey, or for respondents to the NFIB survey that was just released. Maybe it's the Fed that is not very well anchored to reality when it comes to inflation expectations assessments?

Economy in Brief: 2008

Jump to: