Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020809a.jpg" width="353">
Nonfarm labor productivity grew more than expected last quarter. Consensus estimates were for a 0.8% rate of growth.
Revisions to productivity left 1Q02 growth unchanged at 8.6% but 2001 growth was lowered to 1.1% from 1.8%. Growth in 2000 was lowered to 2.9% from 3.3%.
Output in the nonfarm business sector rose 0.5% (AR) following a 6.2% gain in 1Q02. Hours worked fell 0.7%, the eighth decline in the last nine quarters.
Unit Labor costs rose 2.4% following three consecutive quarters of decline. Compensation growth held steady at its 1Q02 rate, but that&#39;s up sharply from the quarterly rates of growth last year.
Manufacturing sector productivity grew at a 4.9% rate following a 9.7% surge in 1Q02. Unit labor costs fell at a 1.8% rate, the fourth consecutive quarterly decline.
Inflation pressure rose. The price deflator for the nonfarm business sector rose 1.4% following two consecutive quarters of decline.
The price-to-unit labor cost ratio, a key measure of corporate profitability, fell slightly following four quarters of gain.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR)</th>
<th scope="col">2Q &#39;02</th>
<th scope="col">1Q &#39;02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Output per Hour</td>
<td>1.1%</td>
<td>8.6%</td>
<td>4.7%</td>
<td>1.1%</td>
<td>2.9%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Compensation</td>
<td>3.6%</td>
<td>3.6%</td>
<td>2.4%</td>
<td>2.7%</td>
<td>7.0%</td>
<td>4.4%</td>
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<td class="firstcol">Unit Labor Costs</td>
<td>2.4%</td>
<td>-4.6%</td>
<td>-2.2%</td>
<td>1.6%</td>
<td>3.9%</td>
<td>2.0%</td>
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Nonfarm labor productivity grew more than expected last quarter. Consensus estimates were for a 0.8% rate of growth. Revisions to productivity left 1Q02 growth unchanged at 8.6% but 2001 growth was lowered to 1.1% from 1.8%. Growth in [...]

Nonfarm Productivity Firm

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020808a.jpg" width="353">
Finished producer prices were weak last month, falling instead of rising 0.2% as the Consensus expected. It was the third decline in producer prices this year. Excluding food and energy prices also were weaker than expectations for a 0.1% rise.
Energy prices rose a modest 0.1% following no change in June and a decline in May.
Food prices fell for the third month in four.
Core finished consumer goods prices fell a sharp 0.4% (0.2% y/y). Core nondurable goods prices fell for the first month since February. Consumer durables prices were off 0.7% reflecting lower prices for electronics, furniture and cars. Capital goods prices fell 0.4%, the fourth decline this year. 
Intermediate goods prices rose moderately reflecting higher core intermediate prices. 
Crude goods prices rose reflecting higher prices for energy and other commodities.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Finished Goods</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>-1.1%</td>
<td>2.0%</td>
<td>3.7%</td>
<td>1.8%</td>
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<td class="firstcol">&nbsp; Core</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>-0.2%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>1.7%</td>
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<td class="firstcol">Intermediate Goods</td>
<td>0.2%</td>
<td>0.2%</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>4.9%</td>
<td>0.1%</td>
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<td class="firstcol">&nbsp; Core</td>
<td>0.2%</td>
<td>0.2%</td>
<td>-0.3%</td>
<td>-0.1%</td>
<td>2.6%</td>
<td>-0.3%</td>
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<td class="firstcol">Crude Goods</td>
<td>0.6%</td>
<td>-3.6%</td>
<td>-6.3%</td>
<td>0.3%</td>
<td>22.8%</td>
<td>1.5%</td>
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<td class="firstcol">&nbsp; Core</td>
<td>1.7%</td>
<td>1.6%</td>
<td>6.7%</td>
<td>-9.9%</td>
<td>7.3%</td>
<td>-4.7%</td>
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</table>
Initial Claims for Jobless Insurance Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 8, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020808b.jpg" width="353">
Initial claims for unemployment insurance fell more than expected in the latest week. The prior week&#39;s level was revised up slightly. 
Continuing claims for unemployment insurance rose a sharp 1.5%, but the prior week&#39;s level was revised down.
The four-week moving average of initial claims fell to 379,000, -4.2% y/y. 
The insured rate of unemployment rose slightly to 2.8%.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">8/3/02</th>
<th scope="col">7/27/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Initial Claims</td>
<td>376.0</td>
<td>391.0</td>
<td>-5.3%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
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<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,532</td>
<td>15.6%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
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Finished producer prices were weak last month, falling instead of rising 0.2% as the Consensus expected. It was the third decline in producer prices this year. Excluding food and energy prices also were weaker than expectations for a [...]

Producer Prices Fell

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020807a.jpg" width="353">
Prices for imported commodities rose twice the Consensus expectation last month. June figures were revised up.
Petroleum import prices reversed all of their June decline. So far in August, the price of Arab Light crude oil is up slightly to $23.26/bbl versus $23.09 in July.
Nonpetroleum import prices were unchanged and have risen 0.1% YTD.
Prices for imported capital goods fell a sharp 0.4% and are down 1.5% YTD. Nonauto consumer goods prices rose 0.1%, down 0.6% YTD and auto prices were unchanged, up 0.1% YTD.
Export prices rose following two months of no change, up 0.7% YTD. Food and industrial supplies prices have been strong but other export prices have been weak or lower.

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<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">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Import - All Commodities</td>
<td>0.4%</td>
<td>-0.3%</td>
<td>-1.7%</td>
<td>-3.5%</td>
<td>6.5%</td>
<td>0.9%</td>
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<td class="firstcol">&nbsp; Petroleum</td>
<td>4.9%</td>
<td>-4.8%</td>
<td>4.4%</td>
<td>-17.2%</td>
<td>66.5%</td>
<td>34.2%</td>
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<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>0.0%</td>
<td>0.1%</td>
<td>-1.5%</td>
<td>-1.5%</td>
<td>1.0%</td>
<td>-1.4%</td>
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<td class="firstcol">Export - All Commodities</td>
<td>0.3%</td>
<td>0.0%</td>
<td>-0.7%</td>
<td>-0.8%</td>
<td>1.6%</td>
<td>-1.3%</td>
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</table>
Consumer Credit Growth Steady 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 7, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020807b.jpg" width="353">
Consumer borrowing rose 0.5% in June, as expected. May figures were unrevised, up 0.6%. So far this year, consumer credit outstanding has risen at a 5.5% annual rate. 
Revolving credit rose by a moderate 0.5% m/m. Year to date revolving credit has grown at a 4.5% annual rate.
Nonrevolving credit also rose 0.5%, 6.3% (AR) YTD.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E103/@E10308/@E10308.HTM">Consumer Credit Outstanding</a></th>
<th scope="col">June m/m</th>
<th scope="col">May m/m</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total</td>
<td>$8.4B</td>
<td>$9.5B</td>
<td>6.1%</td>
<td>6.8%</td>
<td>10.2%</td>
<td>7.5%</td>
</tr>
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<td class="firstcol">&nbsp; Revolving</td>
<td>$3.8B</td>
<td>$2.4B</td>
<td>2.7%</td>
<td>4.9%</td>
<td>11.5%</td>
<td>6.3%</td>
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<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$4.5B</td>
<td>$7.1B</td>
<td>8.6%</td>
<td>8.3%</td>
<td>9.2%</td>
<td>8.4%</td>
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Prices for imported commodities rose twice the Consensus expectation last month. June figures were revised up. Petroleum import prices reversed all of their June decline. So far in August, the price of Arab Light crude oil is up [...]

Import Prices Rose Sharply

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020806a.jpg" width="353">
Chain store sales rose 0.1% following a 0.4% dip the prior week according to the BTM-UBSW survey.
Sales began the month of August about even with the average for July.
During the last five years there has been a 61% correlation between the year-to-year percent change in monthly chain store sales and the change in GAF retail sales.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">8/3/02</th>
<th scope="col">7/27/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>415.1</td>
<td>414.5</td>
<td>3.8%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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Chain store sales rose 0.1% following a 0.4% dip the prior week according to the BTM-UBSW survey. Sales began the month of August about even with the average for July. During the last five years there has been a 61% correlation [...]

Weekly Chain Store Sales Tick Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020805a.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector fell more than expected last month, down for the second month from a peak in May. 
The overall index has been above 50, the dividing line for expansion and contraction, since February.
Of the seasonally adjusted subgroups, new orders and imports fell but employment rose slightly. The not seasonally adjusted index of export orders was quite strong. 
The not seasonally adjusted index of prices rose, recouping virtually all of the decline of the prior two months. 
During the last five years, there has been a 51% correlation between the level of the NAPM nonmanufacturing index and quarterly growth in real GDP in the service sector.
Business activity for the nonmanufacturing sector is a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Business Activity Index</td>
<td>53.1</td>
<td>57.2</td>
<td>48.5</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
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The Institute for Supply Management business activity index of the nonmanufacturing sector fell more than expected last month, down for the second month from a peak in May. The overall index has been above 50, the dividing line for [...]

ISM Nonmanufacturing Index Fell Again

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020802a.jpg" width="353">
Payrolls rose less than expected last month, but moderate gains in May and June were revised up. Payrolls have fallen 0.1% YTD.
The modest rise in July payrolls was accompanied by a sharp drop in the length of the workweek. As a result, the index of aggregate hours worked (employment times hours worked) fell 0.6% and started the quarter 0.4% below the 2Q average.
Amongst industries, factory sector jobs fell by the least since April 2000. Construction jobs plunged 30,000, or 0.5%, and are down 1.6% so far this year. Jobs in service producing industries rose 46,000 despite a 16,000 decline in government employment. Private service producing jobs are up 0.3% YTD.
The one-month diffusion index for nonfarm payrolls again fell below the 50% level, to 48.4. The level suggests little or no employment growth near term. The three month diffusion index was 50. 
Average hourly earnings rose as expected and the June gain was revised down slightly.
The unemployment rate held steady at it&#39;s high 2Q average. Both employment and the labor force fell.
The employment figures for nonfarm payrolls are based on reports provided to the US Labor Department by businesses, while the figures from which the unemployment rate is derived are based on a survey of US households.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
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<td class="firstcol">Payroll Employment</td>
<td>6,000</td>
<td>66,000</td>
<td>-1.0%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-7,000</td>
<td>-13,000</td>
<td>-5.1%</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>-1.3%</td>
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<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>34.3</td>
<td>34.2</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
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<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.2%</td>
<td>4.1%</td>
<td>3.9%</td>
<td>3.6%</td>
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<td class="firstcol">Unemployment Rate</td>
<td>5.9%</td>
<td>5.9%</td>
<td>4.6%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
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Personal Income & Spending Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 2, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020802b.jpg" width="353">
Personal income rose slightly more than expected in June. May&#39;s gain was revised slightly higher. Income is up 5.6% (AR) year-to-date. 
Personal consumption expenditures rose slightly less than expected following benchmark revisions that generally lowered the level of spending. In chained 96 dollars, spending is up 2.9% (AR) year-to-date.
Wage and salary disbursements rose 0.7%, the strongest gain since July 2000. Wages are up 3.3% (AR) YTD. 
Personal spending rose slightly less than expected. Durables spending was notably strong as unit sales of light vehicles rose 5.2%. Spending on nondurables and services rose moderately
Disposable income rose 0.7% (11.7% AR, YTD, following upwardly revised gains. Personal tax payments fell sharply in January and in five of six months this year. 
The PCE price deflator rose 0.1% following an unrevised 0.1% decline in May. Prices were up 2.1% (AR) year to date. Less food and energy the price deflator rose 0.1% following no change in May.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Personal Income</td>
<td>0.6%</td>
<td>0.4%</td>
<td>3.4%</td>
<td>3.3%</td>
<td>8.0%</td>
<td>4.9%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.5%</td>
<td>-0.0%</td>
<td>4.2%</td>
<td>4.5%</td>
<td>7.0%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>4.2%</td>
<td>4.1%</td>
<td>1.7%</td>
<td>2.3%</td>
<td>2.8%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">PCE Price Deflator</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>1.0%</td>
<td>2.0%</td>
<td>2.5%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
U.S. Light Vehicle Sales Surge 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 2, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020802c.jpg" width="353">
Unit sales of light vehicles rose 9.8% last month versus June as 0% financing plans spurred buying. Sales were quite a bit higher than expected and were the highest since October.
Sales of domestically built vehicles rose 11.8% m/m as both car and truck sales surged.
Imported vehicle sales rose 1.9% vs. June. Autos were about flat but truck sales were strong.
Imports captured 18.5% of the US light vehicle market in July, the lowest percentage this year.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil.Units)</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>18.10</td>
<td>16.48</td>
<td>9.7%</td>
<td>17.25</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>14.75</td>
<td>13.19</td>
<td>9.2%</td>
<td>14.18</td>
<td>14.58</td>
<td>14.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imported</td>
<td>3.35</td>
<td>3.29</td>
<td>11.9%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
</tr>
</tbody>
</table>
Factory Inventory Decumulation Slowed 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 2, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020802d.jpg" width="353">
Manufacturing inventories fell by the least amount since the start of the runoff early last year. May&#39;s decline was unrevised.
Inventory decumulation amongst durable gods industries continued strong and was broad based. Nondurable goods inventories rose 0.4% after sideways movement most of the year. Gains were broad based but strongest for petroleum. 
Shipments plunged 1.0% (-1.5% y/y) following three months of gain.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Inventories</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Mfg Inventories</td>
<td>-0.1%</td>
<td>-0.4%</td>
<td>-7.7%</td>
<td>-8.0%</td>
<td>4.5%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

Payrolls rose less than expected last month, but moderate gains in May and June were revised up. Payrolls have fallen 0.1% YTD. The modest rise in July payrolls was accompanied by a sharp drop in the length of the workweek. As a [...]

July Payrolls Weak, Hours Plunge

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020801c.jpg" width="353">
The ISM Composite Index of manufacturing sector activity was much weaker than expected last month, falling to the lowest level since January. Consensus expectations were for a decline to 55.0. 
Each of the component series declined, but orders and production were notably lower.
Inflation pressure rose sharply as the percentage of companies reporting lower prices fell even further. The percentage of companies reporting higher prices rose slightly.
Over the last twenty years there has been a 68% correlation between the ISM Composite Index and the quarterly growth in chained GDP.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>50.5</td>
<td>56.2</td>
<td>43.9</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>68.3</td>
<td>65.5</td>
<td>39.9</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Fell Sharply in June 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020801b.jpg" width="353">
The value of construction put in place was weaker than expected in June. A slight gain had been expected. May&#39;s figures were lowered sharply due to weaker activity in the nonresidential sector.
Residential building fell for the third consecutive month. Single family building has been flat of late but multi-family has fallen in four of the last six months. 
Nonresidential building activity fell sharply for the fourth month this year. Nonresidential building activity peaked in March 2001 and has since fallen 24.0%. Industrial and office building ticked higher last month after several months of sharp decline.
Spending by governments fell for the third month this year led by lower building in the industrial and hospital areas.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-2.2%</td>
<td>-2.0%</td>
<td>-3.7%</td>
<td>2.5%</td>
<td>7.3%</td>
<td>8.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>-0.9%</td>
<td>-0.9%</td>
<td>3.9%</td>
<td>3.3%</td>
<td>7.4%</td>
<td>11.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-3.4%</td>
<td>-4.9%</td>
<td>-20.1%</td>
<td>-3.1%</td>
<td>7.1%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>-3.1%</td>
<td>2.1%</td>
<td>1.8%</td>
<td>7.4%</td>
<td>5.4%</td>
<td>10.6%</td>
</tr>
</tbody>
</table>
Initial Claims for Jobless Insurance Up Moderately 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020801a.jpg" width="353">
Initial claims for unemployment insurance rose slightly more than expected in the latest week. The prior week&#39;s level was revised up slightly. 
Continuing claims for unemployment insurance rose 0.1% for the first rise in six weeks, but the prior week&#39;s level was revised down.
The four-week moving average of initial claims rose slightly to 386,000, -2.8% y/y. 
The insured rate of unemployment was unchanged at 2.7%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">7/27/02</th>
<th scope="col">7/20/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>387.0</td>
<td>367.0</td>
<td>-1.0%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,502</td>
<td>17.2%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
</tr>
</tbody>
</table>
</body>
</html>

The ISM Composite Index of manufacturing sector activity was much weaker than expected last month, falling to the lowest level since January. Consensus expectations were for a decline to 55.0. Each of the component series declined, [...]

ISM Index Down Sharply in July

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020731a.jpg" width="353">
GDP growth last quarter was quite a bit weaker than Consensus expectations for a 2.3% rise. Growth during prior quarters was revised lower including three consecutive quarters of negative growth in early 2001.
Weakness last quarter was due to weak domestic final demand and the sharpest subtraction from growth due to the foreign sector since 1Q99. A lowered estimate of domestic final demand accounted for most of the downward revision to GDP growth last year.
Trade sector deterioration sapped 1.8 percentage points from GDP growth. Exports grew 11.7% (AR) but imports surged 23.5% due to much higher imports of consumer and capital goods.
Real PCE growth slowed to 1.9% from 3.1% in 1Q and 6.0% in 4Q01. Residential investment also slowed to 4.9% from a heated 14.3% in 1Q. Fixed capital investment grew for the first quarter since 3Q 2000. Higher spending on equipment and software offset declines in industrial and transportation equipment. For a discussion of the prospects for capital spending go to: <a href="http://research.stlouisfed.org/publications/net/cover.pdf">http://research.stlouisfed.org/publications/net/cover.pdf</a>
Production increases to slow the rate of inventory decumulation added to GDP growth over the last two quarters following six quarters of drag. 
Inflation remained low following a decline in prices in 4Q01.

<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/@E7/@E701/@E701.HTM">Chained &#39;96 $, % AR</a></th>
<th scope="col">2Q&#39;02 (Advance)</th>
<th scope="col">1Q&#39;02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.1%</td>
<td>5.0%</td>
<td>2.1%</td>
<td>0.3%</td>
<td>3.8%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>1.2%</td>
<td>2.6%</td>
<td>0.6%</td>
<td>-1.2%</td>
<td>0.1%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>-0.1%</td>
<td>2.4%</td>
<td>1.5%</td>
<td>1.5%</td>
<td>3.7%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-1.8%</td>
<td>-0.8%</td>
<td>-0.7%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>1.6%</td>
<td>3.0%</td>
<td>2.2%</td>
<td>1.6%</td>
<td>4.3%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>1.2%</td>
<td>1.3%</td>
<td>1.0%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Chicago Purchasing Agents' Index Fell Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 31, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020731b.jpg" width="353">
The Chicago Purchasing Manager&#146;s Index of Business activity fell more than expected in July. The index has now retraced most of the improvement of earlier this year 
The indexes of new orders and production, inventories fell sharply. Employment and delivery speeds were down just slightly and inventories rose. 
The prices paid index rose sharply to the highest level since September 2000. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Barometer</td>
<td>51.5</td>
<td>58.2</td>
<td>38.1</td>
<td>41.4</td>
<td>51.8</td>
<td>56.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid</td>
<td>64.5</td>
<td>58.2</td>
<td>47.9</td>
<td>50.5</td>
<td>65.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
</body>
</html>

GDP growth last quarter was quite a bit weaker than Consensus expectations for a 2.3% rise. Growth during prior quarters was revised lower including three consecutive quarters of negative growth in early 2001. Weakness last quarter [...]

2Q GDP Weak, Past Data Revised Down

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

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250509A1.jpg

250509C1.jpg

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) rose 0.6% (-3.6% y/y) during the four weeks ended May 9, 2025. The improvement followed sharp declines in April.

Miscellaneous group prices increased 2.4% (5.9% y/y) over the last four weeks. Natural rubber price soared 13.9% (11.7% y/y). The price of tallow (used in the soap industry) rose 10.6% (41.3% y/y) in four weeks but the cost of framing lumber declined 5.6%, but rose 7.3% y/y.

Prices in the Metals group edged 0.2% higher (-7.3% y/y) over the most recent four weeks. Variation in pricing was wide. Copper scrap prices rose 7.4% (-3.3% y/y) while lead costs rose 4.0% in four weeks (-11.1% y/y). The cost of aluminum increased 2.3% in four weeks, off 4.4% y/y. Working lower, the cost of steel scrap declined 8.1% (-11.6% y/) in four weeks while tin prices followed with a 4.9% decline (-2.9% y/y). Zinc prices eased 0.7% in four weeks and declined 10.3% y/y.

Crude Oil & Benzene group prices edged 0.1% higher (-19.4% y/y) in four weeks. The cost of West Texas Intermediate crude oil weakened 4.0% to $58.50 per barrel and was 25.6% lower y/y. The cost of the petrol-chemical benzene, used for making plastics & synthetic fibers, strengthened 8.5% (-41.8% y/y) in the last four weeks. Excluding crude oil, the industrial commodity price index rose 0.9% (-2.1% y/y) during the last four weeks.

Textile group prices edged 0.9% lower (-0.5% y/y) during the last four weeks. Burlap costs declined 14.3% (+7.4% y/y) but the cost of cotton rose 4.5% (-7.7% y/y) over four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

250509D1.jpg

250509B1.jpg

- Metals prices are mixed.
- Crude oil prices fall sharply.
- Textile prices ease.

FIBER: Industrial Commodity Price Movement Diverges in Latest Four Weeks

250509L1.jpg

250509M1.jpg

Wholesale trade inventories increased 0.4% (2.2% y/y) during March after rising 0.5% in February, revised from 0.3% after a 0.8% January rise. The increase compared to expectations for a 0.5% rise in the Informa Global Markets Survey and compared to a 0.6% gain in the advance report issued two weeks ago.

Durable goods inventories rose 0.6% in March (1.5% y/y) after rising 0.5% in February. Machinery inventories, the largest sector, increased 0.6% (1.7% y/y) while inventories of motor vehicles & parts, the second largest grouping, rose 1.2% (0.8% y/y). Furniture inventories strengthened 2.7% (6.8% y/y) while electrical equipment inventories declined 1.0% (-3.1% y/y). Inventories of nondurable goods edged 0.1% higher (3.4% y/y). Drug inventories, which make up one-quarter of nondurable inventories, advanced 1.0% (4.6% y/y). Grocery inventories, the second largest category, rose 0.4% (8.3% y/y). Apparel inventories fell 0.8% (-6.5% y/y) and chemical inventories rose 2.1% both m/m and y/y. Petroleum inventories increased 0.7% (0.3% y/y).

Sales at the wholesale level rose 0.6% (6.1% y/y) in March after rising 2.0% in February and falling 0.9% in January. A 0.9% March rise had been expected in the Action Economics Forecast Survey.

Durable goods sales rose 1.0% (8.5% y/y) in March after strengthening 3.2% in February. Sales of electrical equipment & electronic goods, the largest sector, rose 2.5% (20.9% y/y), after a 2.3% rise. Professional and commercial equipment sales, which includes computers, rose 1.2% (11.9% y/y), while vehicle sales declined 1.0% (1.1% y/y). Sales of machinery improved 0.7% (4.2% y/y). Nondurable product sales rose 0.3% (3.9% y/y) in March after gaining 0.9% in February. Drug store sales, the largest category, increased 2.8% (13.4% y/y), while grocery store sales eased 0.2% (+4.3% y/y). Sales of apparel weakened 0.8% (+3.5% y/y) while paper sales declined 1.7% (0.5% y/y). Petroleum product sales fell 4.6% both m/m and y/y.

The inventory-to-sales (I/S) ratio at the wholesale level remained at 1.30 in March and has been moving lower for the last two years.

The wholesale I/S ratio for durable goods eased to 1.69 in March and also has been trending lower. The machinery ratio fell to 2.92 while motor vehicles rose to 1.78. The I/S ratio for nondurable goods slipped to 0.93 and remained down from 1.02 early in 2023. The drug industry ratio eased to 0.94. Apparel's I/S ratio held at 2.06, but remained below its 2.28 level one year earlier, and has been declining since early 2023. The petroleum industry I/S ratio rose to 0.33.

The wholesale trade figures are available in Haver's **USECON** database. The expectations figure for inventories is contained in the **MMSAMER** database. Expectations for sales are from the **AS1REPNA** database.

**Assessing Maximum Employment** from Federal Reserve Governor Adriana D. Kugler is available [here](https://www.federalreserve.gov/newsevents/speech/kugler20250509a.htm).

250509N1.jpg

250509O1.jpg

- Inventories trend higher y/y.
- Sales increase broadly.
- Inventory-to-sales ratio steadies.

U.S. Wholesale Inventories & Sales Increase in March

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Nonfarm labor productivity fell 0.8% (SAAR) during Q1’25 after increasing 1.7% in Q4’24, revised from 1.5%. A 0.6% decline had been expected in the Action Economics Forecast Survey. It was the first productivity decline since Q2’22. The y/y increase during Q1 fell to 1.4% from 2.1% in Q4. It was below a 3.3% high in the first quarter of last year. Productivity fell as real value-added output dropped 0.3% last quarter (+2.2% y/y) after increasing 2.5% in Q4, and hours worked lengthened 0.6% (0.8% y/y) following a 0.8% gain.

Compensation per hour increased 4.8% last quarter following a 3.7% Q4 rise. Despite the strength of these last two increases, y/y growth decelerated to 2.7% from a 6.8% high one year earlier. Nevertheless, the productivity decline raised unit labor costs by 5.7% (1.3% y/y) in Q1 versus expectations for a 5.2% increase. It followed a 2.0% gain during Q4 and was the strongest quarterly increase in a year.

Factory sector productivity surged 4.5% (1.5% y/y) during Q1’25 following three consecutive increases of roughly 0.5%. This strength was accompanied by a 6.2% rise (2.2% y/y) in hourly compensation which came after two consecutive increases of approximately 4.1%. The strength in productivity lowered the rise in unit labor costs to 1.6% from 3.8% in Q4. The y/y gain fell to 0.7% from 2.0% in Q4 and stood below the 6.2% y/y increase in Q1’24.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

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- Productivity declines with lower output.
- Compensation surge exacerbates labor market stress.
- Factory sector productivity surge lessens cost pressure.

U.S. Productivity Declines in Q1’25; Unit Labor Costs Surge

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The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) rose 0.6% (3.2% y/y) in March to 103.2 after rising 0.9% to 102.6 in February and rising 0.8% in January to 101.7. The level of home affordability has risen 14.8% from its low of 89.9 in October 2023. It remains 42.4% below the high of 179.2 in April 2020.

The rise in affordability in March occurred as the median price of an existing single-family home rose 1.8% (2.9% y/y) to $408,000 which was offset by a decline in mortgage rates to 6.73% from 6.92% in February. The price compared to the record $432,900 in June 2024. The decline in mortgage rates compared to a recent low of 6.26% in September of last year and a 7.70% high during October of 2023. It remained well above a December 2020 low of 2.73%. These changes lowered the principal & interest payment by 0.2% (+1.1% y/y) to $2,113 per month. That was well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a lessened 24.2% of income during March. They remained up from a low of 14.0% of income in April 2020.

The rise in housing costs in March was accompanied by improvement in median family income. It increased 0.4% (4.4% y/y) to a record $104,705 after rising 0.4% in February and 0.7% in January.

Housing affordability improved m/m across the country in March. The index edged 0.1% higher (2.8% y/y) to 134.5 in the Midwest. It remains the most affordable region of the country. In the South, the index 0.9% (5.4% y/y) to 106.6 and the affordability index in the Northeast increased 2.1% (-2.6% y/y) to 95.7. In the West, where homes are the least affordable, the index rose 0.8% (3.3% y/y) to 71.8 in March.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022.

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

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- Home prices rise but mortgage rates decline.
- Median income improves.
- Affordability increases across the country.

U.S. Housing Affordability Improves Slightly in March

Carol Stone, CBE

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Initial claims for unemployment insurance were 228,000 seasonally adjusted in the week ended May 3, down from 241,000 in the previous week, which was unrevised. For the latest week, the Action Economics Forecast Survey had expected a smaller decline to 233,000.

In the week ended April 26, the total number of unemployment insurance beneficiaries – also known as “continuing claims” – was 1.879 million, down from 1.908 million in the April 19 week.

The insured unemployment rate, that is, the number of beneficiaries as a percentage of covered employment, returned to its longstanding rate of 1.2% in the April 26 week; this rate has held that amount since continuously since the week of January 6, 2024, except for the prior week’s 1.3%.

As we do highlight in every week’s discussion, economic conditions vary widely across individual states and territories. In the week ended April 19, the highest unemployment rates were in New Jersey and Rhode Island (both at 2.48%), California (2.26%), Washington (2.14%) and New York (1.85%). The lowest were in Florida (0.36%), South Dakota (0.37%), Alabama (0.41%), Virginia (0.45%) and Nebraska (0.47%). Rates in other notable states include Illinois (1.78%), Pennsylvania (1.53%) and Texas (1.14%). These state data are not seasonally adjusted.

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

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- Continued claims for unemployment insurance decreased 29, 000 in the week ended April 26.
- Insured unemployment rate returns to longstanding 1.2%.
- Across the states, the insured unemployment rate ranges from 0.36% to 2.48%.

Economy in Brief: 2002

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