Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080124c.jpg" width="353">
According to the National Association of Realtors, sales of existing single family homes slipped 2.0% during December after a very slight 0.7% uptick in November. The decline was to the lowest level since 1998 and since the sales peak in late 2005, sales were down by roughly one third. For the full year sales fell 13.0% on top of a 7.7% decline in 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080124d.jpg" width="353">
Sales including condominiums fell 2.2% last month and ended the year down 22.0% from last December, down 12.8% for the full year.
By region, home sales in the Northeast fell 4.6% (-22.4% y/y) and for the full year were off 7.5% after the 6.9% 2006 drop. In the Midwest December sales fell 1.7%, 10.6% for the full year, while sales in the South ended the year with a 1.0% drop. Combined with a 2.0% fall in November overall sales in the South last year fell 13.0%. The worst of it came out West. The 2.1% December decline pulled sales for the year down 19.2% after a 16.2% drop during 2006. For the full year, sales of single family homes in the West was the lowest since 1998.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080124e.jpg" width="353">
The median price of an existing single family home fell 0.4% (-6.5% y/y) in December. It was the fifth m/m decline in the last six months. It lowered prices for the full year 2.8% below the 2006 level, the first full year decline in the thirty five year history of the series. Since the peak early last year, home prices were off 9.9% in December.
Perspectives on Housing and the Economic Outlook from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/SpeechBio/HoenigPDF/SantaFe11-15-07.pdf">here</a>.
The latest Budget Outlook from the Congressional Budget Office is available <a href="http://www.cbo.gov/ftpdocs/89xx/doc8917/01-23-2008_BudgetOutlook.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Existing Single Family Home Sales</th>
<th scope="col">December</th>
<th scope="col">y/y %</th>
<th scope="col">November</th>
<th scope="col">December &#39;06</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>4,890</td>
<td>-22.0</td>
<td>5,000</td>
<td>6,270</td>
<td>5,679</td>
<td>6,510</td>
<td>7,075</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>830</td>
<td>-22.4</td>
<td>870</td>
<td>1,070</td>
<td>1,007</td>
<td>1,088</td>
<td>1,169</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,160</td>
<td>-20.5</td>
<td>1,180</td>
<td>1,160</td>
<td>1,334</td>
<td>1,492</td>
<td>1,588</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,970</td>
<td>-20.9</td>
<td>1,990</td>
<td>2,490</td>
<td>2,243</td>
<td>2,578</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>940</td>
<td>-24.8</td>
<td>960</td>
<td>1,250</td>
<td>1,094</td>
<td>1,353</td>
<td>1,616</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,310</td>
<td>-21.6</td>
<td>4,400</td>
<td>5,500</td>
<td>4,966</td>
<td>5,708</td>
<td>6,182</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>206,500</td>
<td>-6.5</td>
<td>207,300</td>
<td>220,800</td>
<td>215,642</td>
<td>221,883</td>
<td>217,492</td>
</tr>
</tbody>
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According to the National Association of Realtors, sales of existing single family homes slipped 2.0% during December after a very slight 0.7% uptick in November. The decline was to the lowest level since 1998 and since the sales peak [...]

Existing Home Sales Lowest Since 1998, Prices Off 10% Since Peak

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080124a.jpg" width="353">
Initial claims for jobless insurance remained unexpectedly low last week. A 1,000 w/w decline followed sharp declines during the prior three weeks which now have totaled 15.7% since the high one month ago. The latest level was the lowest since September.
Initially, this drop in claims was doubted as genuine due to the difficulties of seasonal adjustment during the Holiday season. Those difficulties suggested that claims would bounce up last week. Indeed, a rise to 320,000 had been the Consensus expectation. No special factors were sighted by the Labor Department as having influenced last week&#39;s figure.
The four week moving average of initial claims, a measure which smoothes out most of the series&#39; w/w volatility, fell sharply to 314,750 (+0.7% y/y). It was the lowest level since mid-October and may suggest that recent labor market weakening was not as great as earlier perceived. But in a wishy-washy spirit, the perception should not be wholly dismissed based on the new figures. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080124b.jpg" width="353">
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.
Continuing claims for unemployment insurance dropped 75,000. It reversed a 59,000 increase during the prior week which was revised down slightly. The figure provides some indication of workers&#39; ability to find employment but here again difficulties of seasonal adjustment this time of year are great.
The continuing claims numbers lag the initial claims figures by one week.
The insured rate of unemployment fell back to 2.0% from 2.1% during the prior week.
Monetary Policy Implementation Frameworks: A Comparative Analysis from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr313.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
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<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">01/19/08</th>
<th scope="col">01/12/07</th>
<th scope="col">Y/Y</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;301</td>
<td>322</td>
<td>4.9%</td>
<td>313</td>
<td>331</td>
<td>343</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,751</td>
<td>11.3%</td>
<td>2,459</td>
<td>2,662</td>
<td>2,924</td>
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Initial claims for jobless insurance remained unexpectedly low last week. A 1,000 w/w decline followed sharp declines during the prior three weeks which now have totaled 15.7% since the high one month ago. The latest level was the [...]

Low U.S. Initial Claims for Jobless Insurance: Doubts About Hiring Slowdown

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123c.jpg" align="left" border="0" height="265" width="353">
With various country indices showing slowing the EMU orders
aggregate for November rose and was surprisingly strong showing a gain
of 2.7% following a rise of 2.5% in Oct. Two months into Q4 data show
total MFG orders rising at a 17.6% annual rate. Domestic MFG orders in
the zone are up at a 13.8% pace while foreign orders are up at a 26.5%
pace. In Q4 German orders through November are up at a 28% pace while
in France, Italy and the UK results are much worse. French orders are
rising at a 1.2% annual rate, in Italy the pace is 7.1%. In the UK
industrial orders are dropping at a 31% annual rate in Q4. 
 

Clearly the EU/EMU is seeing a great deal of irregularity
among members. Still, in January the ECB remains pre-occupied by
inflation risk and is not following the Fed in its rate-cutting
program. The orders data seem to confirm that there remains a core of
strength within the Euro Area but, at the same time we can wonder how
widespread it is and long lived it will be. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">E-zone-13
and UK Industrial Orders And Sales </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
</tr>
<tr class="grey4">
<td class="firstcol">Ezone Detail</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey1">
<td class="firstcol">Manufacturing Orders</td>
<td>2.7%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>17.4%</td>
<td>9.4%</td>
<td>13.0%</td>
<td>10.0%</td>
<td>11.7%</td>
<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">Manufacturing Sales</td>
<td>--</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>--</td>
<td>-0.5%</td>
<td>--</td>
<td>3.7%</td>
<td>--</td>
<td>5.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Consumer Goods</td>
<td>--</td>
<td>0.2%</td>
<td>0.2%</td>
<td>--</td>
<td>3.2%</td>
<td>--</td>
<td>4.1%</td>
<td>--</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>--</td>
<td>0.5%</td>
<td>0.5%</td>
<td>--</td>
<td>6.8%</td>
<td>--</td>
<td>7.1%</td>
<td>--</td>
<td>8.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Intermediate Goods</td>
<td>1.6%</td>
<td>4.2%</td>
<td>-3.0%</td>
<td>11.1%</td>
<td>2.5%</td>
<td>10.7%</td>
<td>8.4%</td>
<td>10.6%</td>
<td>7.1%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Memo: MFG</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey1">
<td class="firstcol">Total Orders</td>
<td>2.7%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>17.4%</td>
<td>9.4%</td>
<td>13.0%</td>
<td>10.0%</td>
<td>11.7%</td>
<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>1.6%</td>
<td>4.2%</td>
<td>-3.0%</td>
<td>11.1%</td>
<td>2.5%</td>
<td>10.7%</td>
<td>8.4%</td>
<td>10.6%</td>
<td>7.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>3.9%</td>
<td>2.4%</td>
<td>0.0%</td>
<td>27.8%</td>
<td>18.6%</td>
<td>14.8%</td>
<td>13.5%</td>
<td>13.6%</td>
<td>11.2%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Countries:</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany (MFG):</td>
<td>4.1%</td>
<td>4.0%</td>
<td>-2.0%</td>
<td>26.8%</td>
<td>15.7%</td>
<td>13.3%</td>
<td>9.8%</td>
<td>14.0%</td>
<td>10.1%</td>
</tr>
<tr>
<td class="firstcol">France (Ind):</td>
<td>-0.2%</td>
<td>2.4%</td>
<td>-2.5%</td>
<td>-1.3%</td>
<td>-4.5%</td>
<td>2.7%</td>
<td>7.9%</td>
<td>7.9%</td>
<td>6.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy (Ind):</td>
<td>3.6%</td>
<td>-0.5%</td>
<td>0.6%</td>
<td>15.8%</td>
<td>-2.9%</td>
<td>11.0%</td>
<td>8.4%</td>
<td>10.4%</td>
<td>6.2%</td>
</tr>
<tr>
<td class="firstcol">UK (Engineering Ind):</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-4.9%</td>
<td>-22.5%</td>
<td>-46.9%</td>
<td>0.7%</td>
<td>0.3%</td>
<td>2.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

With various country indices showing slowing the EMU orders aggregate for November rose and was surprisingly strong showing a gain of 2.7% following a rise of 2.5% in Oct. Two months into Q4 data show total MFG orders rising at a [...]

European Orders Surprise with a Spurt in November

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123b.jpg" width="353">
The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago during December, at -0.91, was negative for the fifth consecutive month after having been negative for virtually all of last year. The three month moving average of the index at -0.67 was its lowest since 2003.
The Chicago Fed indicated that each of the four broad categories of indicators&#151; employment, production, consumption and housing&#151;made negative contributions to the index last month.
A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth and during the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production &amp; income, the labor market, personal consumption &amp; housing, manufacturing &amp; trade sales, and inventories &amp; orders.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_january2008.pdf">here</a>.
Despite Increased Risks, Global Growth to Remain Solid in 2008 from the Federal Reserve Bank of Atlanta can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=224A79FB-5056-9F12-12F3B3005AA2A645&amp;method=display_body"> here</a>

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Dec. &#39;06</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.91</td>
<td>-0.29</td>
<td>-0.43</td>
<td>-0.39</td>
<td>0.03</td>
<td>0.28</td>
</tr>
</tbody>
</table>
</body>
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The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago during December, at -0.91, was negative for the fifth consecutive month after having been negative for virtually all of last year. The three month moving [...]

Chicago Fed National Activity Index Remained Negative

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123a.jpg" width="353">
Chain store sales last week recovered 0.7% after a 0.9% decline during the prior period, according to the International Council of Shopping Centers (ICSC)-UBS.
For the opening three weeks of the the year chain store sales were up 1.6% from the December average which rose 1.0% from November.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS similarly opened 2008 with firm gains of 0.9% and 0.7% to lift the January average level so far up 0.9% from December which fell 0.3% from November.

<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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/19/08</th>
<th scope="col">01/12/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>488.6</td>
<td>485.4</td>
<td>1.6 %</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


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Chain store sales last week recovered 0.7% after a 0.9% decline during the prior period, according to the International Council of Shopping Centers (ICSC)-UBS.

U.S. Chain Store Sales Move Sideways

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123a.jpg" align="left" border="0" height="265" width="353">
Chain store sales last week recovered 0.7% after a 0.9%
decline during the prior period, according to the International Council
of Shopping Centers (ICSC)-UBS.

For the opening three weeks of the the year chain store
sales were up 1.6% from the December average which rose 1.0% from
November.
During the last ten years there has been a 45% correlation
between the y/y change in chain store sales and the change in nonauto
retail sales less gasoline.

The ICSC-UBS retail
chain-store sales index is constructed using the same-store sales
(stores open for one year) reported by 78 stores of seven retailers:
Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.


The leading indicator of chain store sales from ICSC-UBS
similarly opened 2008 with firm gains of 0.9% and 0.7% to lift the
January average level so far up 0.9% from December which fell 0.3% from
November.
<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/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></th>
<th scope="col">01/19/08</th>
<th scope="col">01/12/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>488.6</td>
<td>485.4</td>
<td>1.6 %</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Chicago Fed National Activity
Index Remained Negative 
by <a href="/comment/Moeller.html">Tom
Moeller</a> January 23, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123b.jpg" align="left" border="0" height="265" width="353">
The National Activity Index (CFNAI) from the Federal Reserve
Bank of Chicago during December, at -0.91, was negative for the fifth
consecutive month after having been negative for virtually all of last
year. The three month moving average of the index at -0.67 was its
lowest since 2003.
The Chicago Fed indicated that each of the four broad
categories of indicators&#8212; employment, production, consumption and
housing&#8212;made negative contributions to the index last month.
A zero value of the CFNAI indicates that the economy is
expanding at its historical trend rate of growth and during the last
twenty years there has been a 68% correlation between the level of the
CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic
activity. The indicators reflect activity in the following categories:
production &amp; income, the labor market, personal consumption
&amp; housing, manufacturing &amp; trade sales, and inventories
&amp; orders.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_january2008.pdf">here</a>.
Despite Increased
Risks, Global Growth to Remain Solid in 2008 from the Federal
Reserve Bank of Atlanta can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=224A79FB-5056-9F12-12F3B3005AA2A645&amp;method=display_body">
here</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Fed</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Dec. '06</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.91</td>
<td>-0.29</td>
<td>-0.43</td>
<td>-0.39</td>
<td>0.03</td>
<td>0.28</td>
</tr>
</tbody>
</table>
European Orders Surprise with aSpurt in November 
by <a href="/comment/Brusca.html">Robert
Brusca</a> January 23, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080123c.jpg" align="left" border="0" height="265" width="353">
With various country indices showing slowing the EMU orders
aggregate for November rose and was surprisingly strong showing a gain
of 2.7% following a rise of 2.5% in Oct. Two months into Q4 data show
total MFG orders rising at a 17.6% annual rate. Domestic MFG orders in
the zone are up at a 13.8% pace while foreign orders are up at a 26.5%
pace. In Q4 German orders through November are up at a 28% pace while
in France, Italy and the UK results are much worse. French orders are
rising at a 1.2% annual rate, in Italy the pace is 7.1%. In the UK
industrial orders are dropping at a 31% annual rate in Q4. 
 

Clearly the EU/EMU is seeing a great deal of irregularity
among members. Still, in January the ECB remains pre-occupied by
inflation risk and is not following the Fed in its rate-cutting
program. The orders data seem to confirm that there remains a core of
strength within the Euro Area but, at the same time we can wonder how
widespread it is and long lived it will be. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">E-zone-13
and UK Industrial Orders And Sales </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
</tr>
<tr class="grey4">
<td class="firstcol">Ezone Detail</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey1">
<td class="firstcol">Manufacturing Orders</td>
<td>2.7%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>17.4%</td>
<td>9.4%</td>
<td>13.0%</td>
<td>10.0%</td>
<td>11.7%</td>
<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">Manufacturing Sales</td>
<td>--</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>--</td>
<td>-0.5%</td>
<td>--</td>
<td>3.7%</td>
<td>--</td>
<td>5.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Consumer Goods</td>
<td>--</td>
<td>0.2%</td>
<td>0.2%</td>
<td>--</td>
<td>3.2%</td>
<td>--</td>
<td>4.1%</td>
<td>--</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>--</td>
<td>0.5%</td>
<td>0.5%</td>
<td>--</td>
<td>6.8%</td>
<td>--</td>
<td>7.1%</td>
<td>--</td>
<td>8.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Intermediate Goods</td>
<td>1.6%</td>
<td>4.2%</td>
<td>-3.0%</td>
<td>11.1%</td>
<td>2.5%</td>
<td>10.7%</td>
<td>8.4%</td>
<td>10.6%</td>
<td>7.1%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Memo: MFG</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey1">
<td class="firstcol">Total Orders</td>
<td>2.7%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>17.4%</td>
<td>9.4%</td>
<td>13.0%</td>
<td>10.0%</td>
<td>11.7%</td>
<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>1.6%</td>
<td>4.2%</td>
<td>-3.0%</td>
<td>11.1%</td>
<td>2.5%</td>
<td>10.7%</td>
<td>8.4%</td>
<td>10.6%</td>
<td>7.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>3.9%</td>
<td>2.4%</td>
<td>0.0%</td>
<td>27.8%</td>
<td>18.6%</td>
<td>14.8%</td>
<td>13.5%</td>
<td>13.6%</td>
<td>11.2%</td>
</tr>
<tr class="grey4">
<td class="firstcol">Countries:</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany (MFG):</td>
<td>4.1%</td>
<td>4.0%</td>
<td>-2.0%</td>
<td>26.8%</td>
<td>15.7%</td>
<td>13.3%</td>
<td>9.8%</td>
<td>14.0%</td>
<td>10.1%</td>
</tr>
<tr>
<td class="firstcol">France (Ind):</td>
<td>-0.2%</td>
<td>2.4%</td>
<td>-2.5%</td>
<td>-1.3%</td>
<td>-4.5%</td>
<td>2.7%</td>
<td>7.9%</td>
<td>7.9%</td>
<td>6.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy (Ind):</td>
<td>3.6%</td>
<td>-0.5%</td>
<td>0.6%</td>
<td>15.8%</td>
<td>-2.9%</td>
<td>11.0%</td>
<td>8.4%</td>
<td>10.4%</td>
<td>6.2%</td>
</tr>
<tr>
<td class="firstcol">UK (Engineering Ind):</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-4.9%</td>
<td>-22.5%</td>
<td>-46.9%</td>
<td>0.7%</td>
<td>0.3%</td>
<td>2.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
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background-color:#b8b8b8;
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</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080122e.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080122f.jpg" height="265" width="312">
After a day of record declines in stock markets around the
world, the Fed announced, in an emergency move, a 75 basis points cut
in its benchmark interest rate from 4.25% to 3.50% today. This is the
largest cut since the Fed began, in 1990, to use this rate as its
principal tool of monetary policy.
Daily prices of many of the stock markets of the world can be
found in the Haver data base, INTDAILY.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080122b.jpg" align="left" border="0" height="265" width="312">
We have
attached five charts showing daily stock price changes in selected
countries in five areas of the world: Western Europe, Eastern Europe,
Asia, South America and the Midlle East. The random nature of the day
to day stock price changes make for messy charts, but unusual movements
such as occurred yesterday do stand out. It should be noted, too that
in several countries, similar stock price declines occurred last
August, when the sub prime crisis was first surfacing.
The reaction of U.S. and foreign investors to the Fed's
dramatic move can be monitored using the high frequency data in the
Haver data bases, DAILY and INTDAILY. These
data bases contain daily data on interest rates, exchange rates, stock
markets and commodity prices<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080122c.jpg" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080122d.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">STOCK
MARKETS&nbsp;</th>
<th scope="col">Percent Decline January 21,
2008</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">United Kingdom</td>
<td>5.27</td>
</tr>
<tr class="grey4">
<td class="firstcol">Germany</td>
<td>7.16</td>
</tr>
<tr class="grey4">
<td class="firstcol">France</td>
<td>6.83</td>
</tr>
<tr class="grey4">
<td class="firstcol">Italy</td>
<td>5.09</td>
</tr>
<tr class="grey3">
<td class="firstcol">China</td>
<td>5.20</td>
</tr>
<tr class="grey3">
<td class="firstcol">India</td>
<td>7.81</td>
</tr>
<tr class="grey3">
<td class="firstcol">Japan</td>
<td>3.86</td>
</tr>
<tr class="grey3">
<td class="firstcol">South Korea&nbsp;</td>
<td>2.95</td>
</tr>
<tr class="grey2">
<td class="firstcol">Russia</td>
<td>7.38</td>
</tr>
<tr class="grey2">
<td class="firstcol">Poland</td>
<td>6.73</td>
</tr>
<tr class="grey2">
<td class="firstcol">Latvia</td>
<td>4.57</td>
</tr>
<tr class="grey2">
<td class="firstcol">Czech Republic</td>
<td>4.62</td>
</tr>
<tr class="grey1">
<td class="firstcol">Brazil</td>
<td>6.60</td>
</tr>
<tr class="grey1">
<td class="firstcol">Argentina</td>
<td>5.68</td>
</tr>
<tr class="grey1">
<td class="firstcol">Mexico</td>
<td>5.35</td>
</tr>
<tr class="grey1">
<td class="firstcol">Chile</td>
<td>4.30</td>
</tr>
</tbody>
</table>
</body></html>

After a day of record declines in stock markets around the world, the Fed announced, in an emergency move, a 75 basis points cut in its benchmark interest rate from 4.25% to 3.50% today. This is the largest cut since the Fed began, in [...]

Turmoil in Stock Markets Around the World Leads to a 75 Point Cut in FED'S Benchmark Interest Rate

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

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

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

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

Apart from the US, productivity is moribund

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Andrew Cates

**Upbeat investors**
Despite a year marked by major headwinds — from renewed US tariffs and persistent geopolitical strains to shifting interest-rate expectations — incoming global economic data have consistently outperformed forecasters’ expectations. The Citigroup Economic Surprise Index has remained in positive territory for most of 2025, indicating that growth, labour, and spending indicators have been “less bad” or outright stronger than consensus predicted. That resilience has helped to underpin market sentiment: while bouts of concern have occasionally lifted the Cboe Volatility Index (VIX), volatility has stayed relatively subdued, and equity markets have remained buoyant. In effect, 2025 has been a year in which the real economy has quietly outpaced the gloom, keeping risk appetite supported even as the macro narrative remained fraught with shocks and uncertainty.

251113Z1.jpg

**Less restriction from monetary policy**
Another key source of support for investors through 2025 has been the steady easing in both inflation and monetary policy across the major advanced economies. Core CPI has continued to trend lower from its 2022–23 highs, reflecting softer goods prices, moderating wage growth, and the lagged effects of tighter policy. With inflation now back within sight of central bank targets, policy rates have been edging down for the first time in several years. That shift has eased financial conditions, lowered real borrowing costs, and helped sustain asset valuations even as growth expectations have moderated. In effect, 2025 has marked the transition from a phase of inflation anxiety and policy restraint to one of gentle disinflation and tentative monetary normalisation—an environment that has kept liquidity abundant and risk assets well supported.

251113Z2.jpg

**A thrust from fiscal policy**
A further policy tailwind in 2025 has come from the fiscal side, where governments in the major advanced economies have largely resisted meaningful consolidation despite earlier pledges to rebuild buffers. Across the US, Europe, and Japan, the cyclically adjusted primary balance remains firmly expansionary, helping to sustain demand at a time when private investment and trade have softened. In the United States, spending linked to industrial policy, energy transition, and defence has continued to underpin activity; in Europe, fiscal policy has remained loose as governments balance social pressures and investment needs; and in Japan, the new prime minister has signalled further stimulus to support household income and productivity growth. Yet this persistent fiscal support has also had a side effect: it has kept longer-term real yields unusually elevated, reflecting both heavy sovereign issuance and investor recognition that governments are still running structural deficits even in a low-growth environment. In other words, fiscal policy has been a crucial prop for near-term growth—but also one reason why the “new normal” for real yields now looks higher than in the pre-pandemic decade.

251113Z3.jpg

**The AI Boom**
One of the defining features of 2025 has been the AI investment boom, centred on the extraordinary surge in spending on US data centres and digital infrastructure. Real private investment in this sector has soared to record highs as firms race to expand computing capacity, driven by optimism about artificial intelligence and its potential to transform productivity. The pickup in utilisation-adjusted total factor productivity suggests that some efficiency gains may already be materialising, though it remains too early to tell whether these effects will endure. Investors have largely welcomed this capital deepening as a sign of renewed US dynamism, but it also carries familiar late-cycle risks — from valuation bubbles in AI-related equities to mounting energy demands and strain on power grids. The key question for 2026 and beyond is whether this unprecedented capex wave will deliver the sustained productivity lift needed to justify its scale, or whether it proves another costly technological exuberance.

251113Z4.jpg

**Global trade fragmentation** 
Global trade came under renewed strain in 2025 as President Trump moved quickly in his second term to escalate tariff actions against China and several key trading partners. The US effective tariff rate has surged from below 8% at the end of 2024 to around 21% by mid-2025, marking the most aggressive trade tightening since the late 2010s. The back-and-forth imposition of tariff and non-tariff barriers between Washington and Beijing has led to a sharp pullback in bilateral trade flows, with US imports from China falling markedly and Chinese imports from the US also sliding. The broader ripple effects have been significant: global supply chains are once again being re-routed, firms are diversifying production toward third-country hubs, and world trade growth has slowed. This latest round of protectionism has reinforced the trend toward strategic fragmentation — a more regional, politically filtered form of globalisation — that continues to reshape the post-pandemic trading landscape.

251113Z5.jpg

**Lingering uncertainties**
If there has been one constant through 2025, it has been uncertainty itself. Both global economic policy uncertainty and geopolitical risk indices have remained at historically high levels, underscoring an environment shaped by unpredictable policy shifts, heightened conflict risks, and volatile leadership transitions. Trade tensions between the US and China, renewed instability in the Middle East, and political fragmentation across Europe have all contributed to a pervasive sense of unease. For businesses and investors, this has meant navigating a world where the policy outlook can change overnight — from tariffs and fiscal surprises to shifting regulatory regimes. Yet despite this turbulence, financial markets have shown remarkable resilience, helped by disinflation, easier monetary policy, and continued technological investment. In short, 2025 has been a year in which uncertainty has become the new normal — less an episodic shock, more a defining structural feature of the global economic landscape.


251113Z6.jpg

The global economic story of 2025 has been one of resilience amid disruption. Despite a succession of shocks — from a renewed U.S.–China trade confrontation and elevated geopolitical risks, to a sharp rise in fiscal activism and the energy-intensive AI investment boom — the world economy has held up better than many feared. Activity data have consistently surprised on the upside, supporting buoyant equity markets and keeping volatility contained. Meanwhile, inflation has continued to ease and central banks have cautiously shifted toward easier policy, even as large government deficits have kept longer-term real yields elevated. At the same time, US tariff policies have re-emerged as a defining force in global trade, with steep new duties on Chinese, Canadian, and Mexican goods disrupting supply chains and prompting renewed fragmentation in world commerce. These measures have cooled bilateral trade flows and added another layer of uncertainty to an already unsettled policy environment. Yet uncertainty itself remains the dominant feature of 2025 — geopolitical tension, technological exuberance, and diverging fiscal and monetary paths have left investors navigating a world where optimism and fragility coexist.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/2maIAQuAmTWSmhhZOnQDq3?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: The Year in Review

251113F5.jpg

251113G5.jpg

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) increased 3.9% (-0.3% y/y) during September to 104.5 after rising 2.8% in August and 2.9% in July. The index roughly equaled the recent high of 104.8 in September of 2024. The level of home affordability was 16.2% higher than its low of 89.9 in October 2023, but remained 41.6% below the high of 179.0 in April 2020.

The rise in September affordability occurred as the median price of an existing single-family home fell 1.6% (+2.3% y/y) to $420,700. The price compared to the record $438,600 in June 2025. Mortgage rates fell to 6.43% after declining to 6.67% in August. The fall in mortgage rates left them above their low of 6.26% in September of last year, though below a 7.70% high in October of 2023. They remained well above a December 2020 low of 2.73%.

In September, the principal plus interest payment fell 4.0% (+4.1% y/y) to $2,112 per month, down 8.6% from June’s record high of $2,311, but still well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a lessened 23.9% of income during September, down from 24.9% in August, but increased from a low of 14.0% of income in April 2020.

The decline in housing costs in September was accompanied by a 0.3% decline (+3.8% y/y) in median family income to $105,946 after rising 0.3% in both August and July. Qualifying income declined 4.0% (+4.1% y/y) to $101,376, the third straight month of sharp decline.

Housing affordability improved m/m across the country in September. The index rose in the Midwest, the country’s most affordable region, by 5.1% (-2.8% y/y) to 131.9. In the South, the index increased 2.2% (0.6% y/y) to 109.9, while the affordability index in the Northeast jumped 9.4% (-2.8% y/y) to 92.7. In the West, where homes are the least affordable, the index improved 2.3% (1.1% y/y) to 75.0 in September.

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. It reached an all-time high of 213.3 in January 2013.

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**.

251113H5.jpg

251113I5.jpg

- Home prices & mortgage rates continue to decline.
- Median income edges lower.
- Affordability increases across country.

U.S. Housing Affordability Increases in September

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Retail gasoline prices for all grades rose to an average $3.19 per gallon (0.3% y/y) in the week ended November 10 after easing to $3.15 in the previous week. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. Haver Analytics seasonally adjusts the retail price of regular grade gasoline. That price rose to $3.10 last week from $3.05 in the previous week. Diesel fuel prices rose to $3.84 per gallon last week (9.0% y/y) after increasing to $3.75 per gallon in the prior week.

The price of West Texas Intermediate crude oil fell to an average $60.08 per barrel (-16.1% y/y) in the week ended November 7 after improving to $60.70 per barrel in the prior week. Prices remained below a recent high of $74.17 during the third week of June. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $61.04 per barrel. The price of European Brent crude declined to $64.30 per barrel (-15.0% y/y) in the week of November 7 after rising to $65.02 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. Yesterday, the price was $63.86 per barrel.

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

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

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

Measured in days’ supply, gasoline inventories fell to 23.7 days in the week of October 31 from 24.3 days in the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil rose to 27.5 days in the week of October 31 from 26.7 days in the prior week. The supply remained below a recent high of 31.9 days in the week of March 3, 2023.

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

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

U.S. Energy Prices Remain Mixed in Latest Week

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

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

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

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

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

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

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

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

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

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

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

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

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


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

Economy in Brief: 2008

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Existing Home Sales Lowest Since 1998, Prices Off 10% Since Peak

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