Tom Moeller

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<p></p>
<p><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129f.jpg" width="353"></p>
<p>Initial claims for unemployment insurance surged much more than expectations to the highest level since early this year. The 23,000 rise last week to 352,000 followed a little revised 12,000 decline during the week prior. The early timing of this year&#39;s Thanksgiving holiday may have affected the latest figure.</p>
<p>A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.</p>
<p>The four week moving average of initial claims rose to 335,250 (3.3% y/y) and that was up 3.5% from the prior four weeks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129g.jpg" width="353"></p>
<p>The largest increases in initial claims for the week ending Nov. 17 were in Texas (+1,097), Kentucky (+797), Idaho (+341), Arkansas (+219), and Wisconsin (+209), while the largest decreases were in Michigan (-6,493), California (-5,905), Puerto Rico (-3,882), New Jersey (-3,011), and Virginia (-1,542).</p>
<p>Continuing claims for unemployment insurance surged 112,000 from the prior week, the largest one week increase since early this year, and it followed modest decline in the prior three weeks.</p>
<p>The continuing claims numbers lag the initial claims figures by one week.</p>
<p>The insured rate of unemployment rose slightly to 2.0% from 1.9% during the prior week.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b><u>11/24/07  </u></b></th>
<th scope="col"><b><u>11/17/07  </u></b></th>
<th scope="col"><b><u>Y/Y</u></b></th>
<th scope="col"><b><u>2006</u></b></th>
<th scope="col"><b><u>2005</u></b></th>
<th scope="col"><b><u>2004</u></b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td><span style="mso-spacerun: yes">&nbsp;</span>352</td>
<td>329</td>
<td>0.9%</td>
<td>313</td>
<td>331</td>
<td>343</td>
</tr>
<tr>
<td class="firstcol"><span style="mso-spacerun: yes">Continuing Claims</span></td>
<td>--</td>
<td>2,665</td>
<td>8.2%</td>
<td>2,459</td>
<td>2,662</td>
<td>2,924</td>
</tr>
</tbody>
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Initial claims for unemployment insurance surged much more than expectations to the highest level since early this year. The 23,000 rise last week to 352,000 followed a little revised 12,000 decline during the week prior. The early [...]

U.S. Initial Unemployment Insurance Claims Surged

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<p></p>
<p><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129d.jpg" width="353"></p>
<p>New single family home sales rose a modest 1.7% last month to 728,00 but the prior month&#39;s figures were revised down to the point where so far this year, new home sales are down by nearly one third. Sales during the latest three months were 45.3% below the peak hit in the middle of 2005.</p>
<p>In the West, sales fell 15.7% last month to a new low and reversed all of a downwardly revised gain in September. Sales out West are down by more than one third this year and they are down by two thirds from the 2005 peak. Sales in the Northeast ticked up 1.8% and they have moved erratically sideways this year. Sales in the Midwest posted a 14.2 m/m gain but are off by one third since year end 2006. Sales in the South also rose 6.8% m/m but are down one quarter this year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129e.jpg" width="353"></p>
<p>All this weakness in sales has done nothing for prices and they fell another 8.6% last month. The decline left prices down 17.1% from the peak earlier this year.</p>
<p>The number of homes for sale continued down another 2.3% last month and the supply of homes is off a moderate 3.6% this year. However, at the current low sales rate, the months&#39; supply of homes on the market is 8.5, down slightly from September but still double the rate for all of 2005.<br></p>
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<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><b>US New Homes</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2006</b></th>
<th scope="col"><b>2005</b></th>
<th scope="col"><b>2004</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><b>Total Sales</b> (SAAR, 000s)</td>
<td>728</td>
<td>716</td>
<td>-23.5%</td>
<td>1,049</td>
<td>1,279</td>
<td>1,201</td>
</tr>
<tr>
<td class="firstcol"><b>Median Price</b> (NSA, $)</td>
<td>217,800</td>
<td>238,400</td>
<td>-13.0%</td>
<td>243,067</td>
<td>234,208</td>
<td>217,817</td>
</tr>
</tbody>
</table>
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New single family home sales rose a modest 1.7% last month to 728,00 but the prior month's figures were revised down to the point where so far this year, new home sales are down by nearly one third. Sales during the latest three [...]

US Home Sales Ticked Up in October, Revisions Way Down

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<p></p>
<p></p><div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129b.jpg" width="353">
<p>U.S. real <b>GDP </b>growth during the third quarter was revised upward to 4.9% (AR) from 3.9% in the advance report. The latest figures from the Commerce Department were about as expected. The revision came from two components only: net exports and inventories.</p>
<p>Improvement in the <i>net export deficit </i>added 1.4 percentage points to GDP growth during 3Q versus an initial indication of a 0.9 point add. During 2Q, improved net exports made a 1.3 percentage point growth contribution. A modest upward revision to export growth to 18.9% (AR, 10.2% y/y) added 2.1 points to GDP growth and a modest downward revision to import growth to 4.2% (1.7% y/y) left imports subtracting 0.7 points from growth.<i>
<p>Inventories added a revised 1.0 percentage points to 3Q growth in GDP versus an initial indication of just a 0.4 add. Inventories contributed 0.2 points to 2Q growth and that contribution has been negative this year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129c.jpg" width="353"><i>
<p>Overall <b>corporate profits</b> fell at a 4.6% annual rate (+1.9% y/y) last quarter. The housing market&#39;s travails weighed down the financial sector&#39; earnings by 20.5% (AR, +3.4% y/y). Domestic nonfinancial sector profitability also fell 5.9% (AR, -8.3% y/y) as costs rose but the lower dollar boosted rest of world earnings by 30.9% (AR, 34.7% y/y).</p>
<p>Growth in <b>final sales to domestic purchasers</b> actually was taken down a notch to 2.4% but still remained slightly improved from the 2.1% growth during the second quarter.</p>
<p>The drop in residential investment last quarter was left roughly unchanged and it fell 19.7% (AR, -6.3% y/y). It subtracted 1.0 percentage points from growth during 3Q after subtractions of between 0.6 and 1.3 percentage points in each of the prior five quarters.</p>
<p>Firm growth in business fixed investment continued as the underpinning of US demand. The 9.4% (5.2% y/y) rate of growth was upwardly revised and it added 1.0 percentage points to 3Q growth, about the same as during 2Q. Spending on structures was upwardly revised with a 14.3% rate of growth (13.3% y/y) and spending on equipment &amp; software also was revised up to 7.2% (AR, 1.7% y/y) after weak growth or q/q declines from 2Q &#39;06 to 1Q &#39;07.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071129a.jpg" width="353"></p>
<p>Growth in real personal consumption expenditures was taken down a notch to 2.7% (2.9% y/y) but it still was double growth during 2Q. Growth in spending on durable goods rose 4.0% (4.6% y/y) despite a 4.9% drop in spending on motor vehicles. Nondurable goods spending rose 1.9% (2.2% y/y), which was lower than originally indicated, and services spending growth held steady at 2.8% (3.0% y/y).</p>
<p>The GDP <i>chain price index</i> was left little changed at a 0.9% growth rate. Nonresidential (+0.8% y/y) and residential (+0.7 y/y) investment price indexes both fell during 3Q while consumer prices rose 1.7% (2.% y/y), held back by the decline in gasoline prices. Less food &amp; energy consumer prices rose 2.2% (2.2% y/y), a number that was revised up slightly.</p>
<p>The latest <b>Beige Book</b> from the Federal Reserve Board is available <a href="http://www.federalreserve.gov/fomc/beigebook/2007/20071128/default.htm"> here</a>.</p></i></p></i></p></div>
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<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM"><b>Chained 2000$, % AR</b></a></th>
<th scope="col"><u><b>3Q &#39;07 Preliminary</b></u></th>
<th scope="col"><u><b>3Q &#39; 07 Advance</b></u></th>
<th scope="col"><u><b>2Q &#39;07</b></u></th>
<th scope="col"><u><b>Y/Y</b></u></th>
<th scope="col"><u><b>2006</b></u></th>
<th scope="col"><b><u>2005</u></b></th>
<th scope="col"><u><b>2004</b></u></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>GDP</b></td>
<td>4.9</td>
<td>3.9</td>
<td>3.8</td>
<td>2.8</td>
<td>2.9</td>
<td>3.1</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; Inventory Effect</b></td>
<td>1.0</td>
<td>0.4</td>
<td>0.2</td>
<td>-0.4</td>
<td>0.1</td>
<td>-0.2</td>
<td>0.4</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>Final Sales</b></td>
<td>3.9</td>
<td>3.5</td>
<td>3.6</td>
<td>3.1</td>
<td>2.8</td>
<td>3.3</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol"><b>Foreign Trade Effect</b></td>
<td>1.4</td>
<td>0.9</td>
<td>1.3</td>
<td>0.9</td>
<td>-0.1</td>
<td>-0.2</td>
<td>-0.7</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>Domestic Final Demand</b></td>
<td>2.4</td>
<td>2.5</td>
<td>2.1</td>
<td>2.1</td>
<td>2.7</td>
<td>3.3</td>
<td>3.8</td>
</tr>
<tr>
<td class="firstcol"><b>Chained GDP Price Index</b></td>
<td>0.9</td>
<td>0.8</td>
<td>2.6</td>
<td>2.4</td>
<td>2.6</td>
<td>1.7</td>
<td>2.1</td>
</tr>
</tbody>
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U.S. real GDP growth during the third quarter was revised upward to 4.9% (AR) from 3.9% in the advance report. The latest figures from the Commerce Department were about as expected. The revision came from two components only: net [...]

US 3Q GDP Up 4.9%: Trade & Inventories Boosted Revision, Profits Fell

Robert Brusca

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128d.jpg" align="left" border="0" height="265" width="353"></p>
<p>German wholesale sales growth is lagging in new quarter. Real
ex-auto sales remain challenged.<br>
<br>
</p>
<p>Europe has been spinning out mixed economic signals. While
there has been a lot of angst exhibited over the strong euro, the
German finance minister has embraced the strength and ECB members say a
strong currency is &#8216;the right sort of problem to have,&#8217; better than the
other one.<br>
<br>
</p>
<p>In the wake of this strength EMU economic reports have become
uneven. While orders have showed weakness across countries, other
reports have showed some resilience, notably the IFO survey in Germany
and an INSEE morale survey for industry in France. The most recent
German consumer sentiment reading from GFK shows a weaker December is
in store. But there has been no full scale weakening.<br>
<br>
</p>
<p>German wholesalers fit not the mixed mode. Overall sales are
withering in the new quarter down by 0.1% Q/Q for an annual rate drop
of 0.7% and lower from the year ago three month period by 1.6% in real
terms. Ex autos sales are still eroding. The German VAT tax hike has
wreaked havoc with German retail/wholesale trends so far this year. Now
with the euro soaring, a new challenge is in gear. The strong euro does
not appear to have knocked the wind out of the German economy but it
has been added to list of headwinds that the economy faces. Labor
unrest and possibly more ECB rate hikes, especially in the wake of such
strong ongoing money and loan growth in EMU, also are on that list.
Despite it all German wholesale sales are only moderately weak.<br>
</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="4" scope="col"> <b>One
Month of Quarter Complete</b></th>
</tr>
<tr>
<th colspan="4" scope="col"><b>Quarterly
showing</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td><b>%Q/Q</b></td>
<td><b>%-Saar</b></td>
<td><b>%Q/Yr Ago</b></td>
</tr>
<tr>
<td class="firstcol">Nominal</td>
<td>1.1%</td>
<td>5.5%</td>
<td>-19.8%</td>
</tr>
<tr>
<td class="firstcol">Real</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-1.6</td>
</tr>
</tbody>
</table>
</body></html>

German wholesale sales growth is lagging in new quarter. Real ex-auto sales remain challenged. Europe has been spinning out mixed economic signals. While there has been a lot of angst exhibited over the strong euro, the German finance [...]

The German Condition...

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128c.jpg" align="left" border="0" height="265" width="353"></p>
<p>Another low was reached by existing home sales last month. The
level of 4,970 (AR) about met expectations but was the lowest on record
which extends back only to 1999. The tally of single family home sales,
however, extends further back. For October, sales of existing single
family homes were unchanged from the September level, but it was the
lowest since early 1998. The figures are reported by the National
Association of Realtors at the time sales are closed.</p>
<p>Weakness in sales last month was led by a 4.4% decline in
sales out West. The count of single family sales in the West also fell
by 2.5% (-33.1% y/y) to the lowest level since late 1995. Sales in the
Midwest also were lower by 1.7% though single family sales were
unchanged m/m (-15.9% y/y). Total sales in the Northeast were unchanged
m/m as single family sales rose 3.1% (-13.2% y/y), the first gain in
three months. In the South sales were also unchanged m/m as were sales
of singe family units (-19.8% y/y).</p>
<p>The median price of an existing single family home fell for
the fourth straight month. The 1.2% decline pulled prices 5.1% lower
than last October and the price of an existing single family home fell
as well, down 1.4% m/m and 6.3% y/y.</p>
<p>The <b>Economic Outlook and Central Bank Policy</b>
is today' speech by Charles I. Plosser, President of the Federal
Reserve Bank of Philadelphia and it is available <a href="http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2007/11-26-07_university-of-rochester.cfm">
here</a>.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col" colspan="2"><b><b>October
2007</b></b></th>
<th scope="col"><b>Sept 2007</b></th>
<th scope="col"><b>Year Ago</b></th>
<th scope="col"><b>2006</b></th>
<th scope="col"><b>2005</b></th>
<th scope="col"><b>2004</b></th>
</tr>
<tr>
<th></th>
<th scope="col"><b>Number</b></th>
<th scope="col"><b>M/M%</b></th>
<th scope="col" colspan="5"></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales</td>
<td>4,970</td>
<td>-1.2%</td>
<td>5,030</td>
<td>6,270</td>
<td>6,510</td>
<td>7,075</td>
<td>6,727</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>0.0</td>
<td>900</td>
<td>1,030</td>
<td>1,088</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,180</td>
<td>-1.7</td>
<td>1,200</td>
<td>1,420</td>
<td>1,492</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,030</td>
<td>0.0</td>
<td>2,030</td>
<td>2,520</td>
<td>2,578</td>
<td>2,704</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>870</td>
<td>-4.4</td>
<td>910</td>
<td>1,300</td>
<td>1,353</td>
<td>1,616</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,370</td>
<td>0.0</td>
<td>4,370</td>
<td>5,708</td>
<td>5,677</td>
<td>6,182</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>207,800</td>
<td>-1.2</td>
<td>210,400</td>
<td>218,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>
</body></html>

Another low was reached by existing home sales last month. The level of 4,970 (AR) about met expectations but was the lowest on record which extends back only to 1999. The tally of single family home sales, however, extends further [...]

Existing Home Sales Down and So Goes Prices

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<span id="articletext">
<p></p>
<p></p><div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128b.jpg" width="353">
<p>Orders for durable manufactured goods fell for the third consecutive month. The 0.4% slip in October followed a 1.4% slide in September that was only slightly revised. The latest slip contrasted with Consensus expectations for a 0.2% uptick.</p></div><div align="left">
<p>Excluding the notably volatile transportation sector, orders fell an unexpected 0.7% although the September figure was revised to a 1.1% gain from the slight 0.3% increase reported initially.<br><br></p>
<p>In the transportation sector, orders for aircraft &amp; parts fell 6.3% (+9.9% y/y) owing to a 5.2% (+10.6% y/y) decline in nondefense orders. Orders for motor vehicles &amp; parts also fell a hefty 1.4% (-3.7 y/y), down big for the third consecutive month.<br><br></p>
<p>Orders for nondefense capital goods slid 3.1% helped lower by the drop in aircraft. Less aircraft, however, orders were also weak and posted a 2.3% decline. Three month growth in these orders fell to -1.0%, the weakest since early this year.</p></div><div align="left">
<p>Fewer orders for communications equipment led the decline with a 22.6% (+3.3% y/y) plunge. Machinery orders also fell 1.7% and three month growth in these orders fell to -1.7%. <br><br><img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128a.jpg" width="353"></p>
<p>Also down were orders for computers &amp; related products which fell 15.2% (+11.9% y/y) after strong gains during the prior two months.</p></div><div align="left">
<p>To the upside, primary metal orders rose 3.0% (5.0% y/y) but over the last three months the gain is a weaker 0.5%.Orders for electrical equipment, appliances and components recovered all of the prior month&#39;s decline with a 4.1% (1.8% y/y) gain.<br><br></p>
<p>Overall shipments of durable goods rose 0.6% (1.4% y/y) after large declines during the prior two months. Less transportation shipments rose 0.6% (1.6% y/y) after two months of declines by a like amount. </p></div><div align="left">
<p>Inventories of durable goods rose 0.2% (2.1% y/y) and less transportation rose 0.2% as well (1.2% y/y).<br><br></p>
<p>Unfilled orders were firm again last month and rose 1.0% (17.9% y/y). Much of that strength has been due, however, to the strength in orders for aircraft. Less the transportation sector altogether unfilled orders rose 0.7% in October and the y/y gain is a lesser 9.3%.</p></div><div align="left">
<p><b>Financial Markets and Central Banking, </b>today&#39;s speech by Federal Reserve Board Vice ChairmanDonald L. Kohn at the Council on Foreign Relations, New York, New York, is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm"> here</a>.</p></div><div align="left"><b>
<p>Minutes of Board discount rate meetings, October 1 through October 31, 2007 from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/monetary20071127a1.pdf"> here</a>.</p></b></div>
</span>
<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/@ED0101.HTM"><b>NAICS Classification</b></a></th>
<th scope="col"><u><b><span>October</span></b></u></th>
<th scope="col"><b><u>September</u></b></th>
<th scope="col"><b><u>Y/Y</u></b></th>
<th scope="col"><b><u>2006</u></b></th>
<th scope="col"><b><u>2005</u></b></th>
<th scope="col"><b><u>2004</u></b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.4%</td>
<td>-1.4%</td>
<td>1.9%</td>
<td>6.3%</td>
<td>9.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>-0.7%</td>
<td>1.1%</td>
<td>2.0%</td>
<td>7.6%</td>
<td>8.8%</td>
<td>7.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.1%</td>
<td>4.8%</td>
<td>-0.8%</td>
<td>10.6%</td>
<td>17.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.3%</td>
<td>1.2%</td>
<td>-2.4%</td>
<td>8.5%</td>
<td>11.1%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
</body>
</html>


Orders for durable manufactured goods fell for the third consecutive month. The 0.4% slip in October followed a 1.4% slide in September that was only slightly revised. The latest slip contrasted with Consensus expectations for a 0.2% [...]

U.S. Durable Goods Orders Down Big for Second Month

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<br>

<span id="articletext">
<p></p>
<p></p>
<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128b.jpg" align="left" border="0" height="265" width="353">
<p></p>
<p>Orders for durable manufactured goods fell for the third
consecutive month. The 0.4% slip in October followed a 1.4% slide in
September that was only slightly revised. The latest slip contrasted
with Consensus expectations for a 0.2% uptick.</p>
</div>
<div align="left">
<p>Excluding the notably volatile transportation sector, orders
fell an unexpected 0.7% although the September figure was revised to a
1.1% gain from the slight 0.3% increase reported initially.<br>
</p>
<p>In the transportation sector, orders for aircraft &amp;
parts fell 6.3% (+9.9% y/y) owing to a 5.2% (+10.6% y/y) decline in
nondefense orders. Orders for motor vehicles &amp; parts also fell
a hefty 1.4% (-3.7 y/y), down big for the third consecutive month.<br>
</p>
<p>Orders for nondefense capital goods slid 3.1% helped lower by
the drop in aircraft. Less aircraft, however, orders were also weak and
posted a 2.3% decline. Three month growth in these orders fell to
-1.0%, the weakest since early this year.</p>
</div>
<div align="left">
<p>Fewer orders for communications equipment led the decline with
a 22.6% (+3.3% y/y) plunge. Machinery orders also fell 1.7% and three
month growth in these orders fell to -1.7%. <br>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128a.jpg" align="right" border="0" height="265" width="353"></p>
<p>Also down were orders for computers &amp; related products
which fell 15.2% (+11.9% y/y) after strong gains during the prior two
months.</p>
</div>
<div align="left">
<p>To the upside, primary metal orders rose 3.0% (5.0% y/y) but
over the last three months the gain is a weaker 0.5%.Orders for
electrical equipment, appliances and components recovered all of the
prior month's decline with a 4.1% (1.8% y/y) gain.<br>
</p>
<p>Overall shipments of durable goods rose 0.6% (1.4% y/y) after
large declines during the prior two months. Less transportation
shipments rose 0.6% (1.6% y/y) after two months of declines by a like
amount. </p>
</div>
<div align="left">
<p>Inventories of durable goods rose 0.2% (2.1% y/y) and less
transportation rose 0.2% as well (1.2% y/y).<br>
</p>
<p>Unfilled orders were firm again last month and rose 1.0%
(17.9% y/y). Much of that strength has been due, however, to the
strength in orders for aircraft. Less the transportation sector
altogether unfilled orders rose 0.7% in October and the y/y gain is a
lesser 9.3%.</p>
</div>
<div align="left">
<p><b>Financial Markets and Central Banking, </b>today's
speech by Federal Reserve Board Vice ChairmanDonald L. Kohn at the
Council on Foreign Relations, New York, New York, is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm">
here</a>.</p>
</div>
<div align="left">
<p><b>Minutes of Board discount rate meetings, October 1
through October 31, 2007 </b>from the Federal Reserve Board can
be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/monetary20071127a1.pdf">
here</a>.</p>
</div>
<p></p>
</span>
<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/@ED0101.HTM"><b>NAICS
Classification</b></a></th>
<th scope="col"><u><b><span>October</span></b></u></th>
<th scope="col"><b><u>September</u></b></th>
<th scope="col"><b><u>Y/Y</u></b></th>
<th scope="col"><b><u>2006</u></b></th>
<th scope="col"><b><u>2005</u></b></th>
<th scope="col"><b><u>2004</u></b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.4%</td>
<td>-1.4%</td>
<td>1.9%</td>
<td>6.3%</td>
<td>9.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-0.7%</td>
<td>1.1%</td>
<td>2.0%</td>
<td>7.6%</td>
<td>8.8%</td>
<td>7.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.1%</td>
<td>4.8%</td>
<td>-0.8%</td>
<td>10.6%</td>
<td>17.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.3%</td>
<td>1.2%</td>
<td>-2.4%</td>
<td>8.5%</td>
<td>11.1%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
<span id="articletitle">Existing Home Sales Down and
SoGoes Prices</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> November 28, 2007</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128c.jpg" align="left" border="0" height="265" width="353"></p>
<p>Another low was reached by existing home sales last month. The
level of 4,970 (AR) about met expectations but was the lowest on record
which extends back only to 1999. The tally of single family home sales,
however, extends further back. For October, sales of existing single
family homes were unchanged from the September level, but it was the
lowest since early 1998. The figures are reported by the National
Association of Realtors at the time sales are closed.</p>
<p>Weakness in sales last month was led by a 4.4% decline in
sales out West. The count of single family sales in the West also fell
by 2.5% (-33.1% y/y) to the lowest level since late 1995. Sales in the
Midwest also were lower by 1.7% though single family sales were
unchanged m/m (-15.9% y/y). Total sales in the Northeast were unchanged
m/m as single family sales rose 3.1% (-13.2% y/y), the first gain in
three months. In the South sales were also unchanged m/m as were sales
of singe family units (-19.8% y/y).</p>
<p>The median price of an existing single family home fell for
the fourth straight month. The 1.2% decline pulled prices 5.1% lower
than last October and the price of an existing single family home fell
as well, down 1.4% m/m and 6.3% y/y.</p>
<p>The <b>Economic Outlook and Central Bank Policy</b>
is today' speech by Charles I. Plosser, President of the Federal
Reserve Bank of Philadelphia and it is available <a href="http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2007/11-26-07_university-of-rochester.cfm">
here</a>.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col" colspan="2"><b><b>October
2007</b></b></th>
<th scope="col"><b>Sept 2007</b></th>
<th scope="col"><b>Year Ago</b></th>
<th scope="col"><b>2006</b></th>
<th scope="col"><b>2005</b></th>
<th scope="col"><b>2004</b></th>
</tr>
<tr>
<th></th>
<th scope="col"><b>Number</b></th>
<th scope="col"><b>M/M%</b></th>
<th scope="col" colspan="5"></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales</td>
<td>4,970</td>
<td>-1.2%</td>
<td>5,030</td>
<td>6,270</td>
<td>6,510</td>
<td>7,075</td>
<td>6,727</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>0.0</td>
<td>900</td>
<td>1,030</td>
<td>1,088</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,180</td>
<td>-1.7</td>
<td>1,200</td>
<td>1,420</td>
<td>1,492</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,030</td>
<td>0.0</td>
<td>2,030</td>
<td>2,520</td>
<td>2,578</td>
<td>2,704</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>870</td>
<td>-4.4</td>
<td>910</td>
<td>1,300</td>
<td>1,353</td>
<td>1,616</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,370</td>
<td>0.0</td>
<td>4,370</td>
<td>5,708</td>
<td>5,677</td>
<td>6,182</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>207,800</td>
<td>-1.2</td>
<td>210,400</td>
<td>218,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>
<span id="articletitle">The German Condition...</span><br><span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> November 28, 2007</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128d.jpg" align="left" border="0" height="265" width="353"></p>
<p>German wholesale sales growth is lagging in new quarter. Real
ex-auto sales remain challenged.<br>
<br>
</p>
<p>Europe has been spinning out mixed economic signals. While
there has been a lot of angst exhibited over the strong euro, the
German finance minister has embraced the strength and ECB members say a
strong currency is &#8216;the right sort of problem to have,&#8217; better than the
other one.<br>
<br>
</p>
<p>In the wake of this strength EMU economic reports have become
uneven. While orders have showed weakness across countries, other
reports have showed some resilience, notably the IFO survey in Germany
and an INSEE morale survey for industry in France. The most recent
German consumer sentiment reading from GFK shows a weaker December is
in store. But there has been no full scale weakening.<br>
<br>
</p>
<p>German wholesalers fit not the mixed mode. Overall sales are
withering in the new quarter down by 0.1% Q/Q for an annual rate drop
of 0.7% and lower from the year ago three month period by 1.6% in real
terms. Ex autos sales are still eroding. The German VAT tax hike has
wreaked havoc with German retail/wholesale trends so far this year. Now
with the euro soaring, a new challenge is in gear. The strong euro does
not appear to have knocked the wind out of the German economy but it
has been added to list of headwinds that the economy faces. Labor
unrest and possibly more ECB rate hikes, especially in the wake of such
strong ongoing money and loan growth in EMU, also are on that list.
Despite it all German wholesale sales are only moderately weak.<br>
</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="4" scope="col"> <b>One
Month of Quarter Complete</b></th>
</tr>
<tr>
<th colspan="4" scope="col"><b>Quarterly
showing</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td><b>%Q/Q</b></td>
<td><b>%-Saar</b></td>
<td><b>%Q/Yr Ago</b></td>
</tr>
<tr>
<td class="firstcol">Nominal</td>
<td>1.1%</td>
<td>5.5%</td>
<td>-19.8%</td>
</tr>
<tr>
<td class="firstcol">Real</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-1.6</td>
</tr>
</tbody>
</table>
</body></html>

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

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

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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Winnie Tapasanun

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sandy Batten

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

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

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

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

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

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

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

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

FRB Kansas City Manufacturing Index Unchanged in August

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

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

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

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

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

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


U.S. Pending Home Sales Decline in July

Kathleen Stephansen, CBE

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

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

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

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

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

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

Economy in Brief: 2007

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U.S. Initial Unemployment Insurance Claims Surged

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