Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020708b.jpg" width="353">
Consumer borrowing rose 0.6% in May, quite a bit more than expected. April figures were little revised. Gains during the last three months are roughly equal to last year&#39;s monthly average of $9.0B. 
Revolving credit rose by a modest 0.3% m/m and generally has run at or below last year&#39;s pace except for this past April.
Nonrevolving credit rose 0.7%, up from 0.4% in each of the prior two months. That rate is slightly above the average monthly gain last year.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E103/@E10308/@E10308.HTM">Consumer Credit Outstanding</a></th>
<th scope="col">May m/m</th>
<th scope="col">April m/m</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
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<tr class="odd">
<td class="firstcol">Total</td>
<td>$9.5B</td>
<td>$8.6B</td>
<td>5.7%</td>
<td>6.9%</td>
<td>10.2%</td>
<td>7.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$2.4B</td>
<td>$4.4B</td>
<td>2.4%</td>
<td>5.1%</td>
<td>11.5%</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$7.1B</td>
<td>$4.2B</td>
<td>8.2%</td>
<td>8.3%</td>
<td>9.2%</td>
<td>8.4%</td>
</tr>
</tbody>
</table>
Challenger Survey Indicates Layoffs Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 8, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020708a.jpg" width="353">
According to Challenger, Gray &amp; Christmas, announced job cuts remained below 100,000 in June for the second month.
The latest figures are an improvement in labor market conditions versus last year when layoffs averaged 160,000 per month.
Layoffs in June did rise slightly versus May, but remain down 24.1% versus last year.

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Consumer borrowing rose 0.6% in May, quite a bit more than expected. April figures were little revised. Gains during the last three months are roughly equal to last year's monthly average of $9.0B. Revolving credit rose by a modest [...]

Consumer Credit Growth Strong

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020705a.jpg" width="353">
Payrolls rose somewhat less than expected last month and the modest May gain was revised down.
The modest rise in June payrolls was accompanied by a sharp 364,000 drop (-0.7% y/y) in household employment which pushed the unemployment rate up as expected. The labor force fell 293,000 (0.7% y/y).
Amongst industries, factory sector jobs fell and are down 11.3% from the peak in early 1998. Construction jobs rose in June but are down 1.2% so far this year. Jobs in service producing industries ticked up and the year-to-date gain is a meager 0.2%.
The one-month diffusion index for nonfarm payrolls fell to 49.1, up versus the November low of 39.3. The level still suggests little or no employment growth near term. 
The index of aggregate hours worked (employment times hours worked) rose in June but was up just slightly in 2Q versus the 1Q average. 
Average hourly earnings rose slightly more than expected following a downwardly revised May gain.
The employment figures for nonfarm payrolls are based on reports provided to the US Labor Department by businesses, while the figures from which the unemployment rate is derived are based on a survey of US households.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
<tbody>
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<td class="firstcol">Payroll Employment</td>
<td>36,000</td>
<td>24,000</td>
<td>-1.0%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-23,000</td>
<td>-27,000</td>
<td>-5.6%</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>-1.3%</td>
</tr>
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<td class="firstcol">Average Weekly Hours</td>
<td>34.3</td>
<td>34.2</td>
<td>34.2</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.4%</td>
<td>0.1%</td>
<td>3.3%</td>
<td>4.1%</td>
<td>3.9%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.9%</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
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Payrolls rose somewhat less than expected last month and the modest May gain was revised down. The modest rise in June payrolls was accompanied by a sharp 364,000 drop (-0.7% y/y) in household employment which pushed the unemployment [...]

June Payrolls Weak, Jobless Rate Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703a.jpg" width="353">
Light vehicle sales rose 5.2% last month versus May. The rise in sales was very slightly more than expected following a 9.7% decline in May. Vehicle sales in 2Q rose 1.2% from 1Q to an average of 16.50M units.
Sales of domestically built cars and trucks rose 4.2% m/m. 2Q sales of domestics rose 2.2% from the 1Q average.
Imported vehicle sales rose 9.4% vs. May. Sales of imports in 2Q fell 3.0% from the 1Q average.
Imports captured 19.6% of the US light vehicle market in 2Q02 versus 20.4% in 1Q and 17.8% last year.
Sales of cars (-5.5% y/y) and light trucks (-3.6% y/y) both rose last month versus May. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil.Units)</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
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<td class="firstcol">Total</td>
<td>16.48</td>
<td>15.67</td>
<td>-4.5%</td>
<td>17.21</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>13.19</td>
<td>12.67</td>
<td>-7.2%</td>
<td>14.15</td>
<td>14.58</td>
<td>14.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imported</td>
<td>3.29</td>
<td>3.00</td>
<td>7.9%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
</tr>
</tbody>
</table>
Claims for Jobless Insurance Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703b.jpg" width="353">
Initial claims for unemployment insurance fell about as expected in the latest week. The prior week&#39;s level was revised up slightly.
Continuing claims for unemployment insurance rose slightly from the prior week&#39;s level which fell sharply and was revised down.
The four-week moving average of initial claims was little changed at 392,000 (-1.8% y/y). 
The insured rate of unemployment was stable at 2.9% for the fourth consecutive week.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">6/29/02</th>
<th scope="col">6/22/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
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<td class="firstcol">Initial Claims</td>
<td>382.0</td>
<td>393.0</td>
<td>-4.0%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,699</td>
<td>23.3%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
</tr>
</tbody>
</table>
ISM Nonmanufacturing Index Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703c.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector fell slightly more than expected last month following strength the month prior. 
The overall index has remained above 50, the dividing line for expansion and contraction, since February.
Of the seasonally adjusted subgroups, new orders were about unchanged, employment fell and imports rose. The not seasonally adjusted index of export orders was quite strong. 
The not seasonally adjusted index of prices fell for the second consecutive month. 
Business activity for the nonmanufacturing sector is a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components. 
During the last four years, there has been a 43% correlation between the level of the NAPM nonmanufacturing index and quarterly growth in real GDP in the service sector.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>57.2</td>
<td>60.1</td>
<td>52.4</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
</tr>
</tbody>
</table>
Factory Inventories Fell Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703d.jpg" width="353">
Manufacturing inventories fell for the sixteenth consecutive month in May. April&#39;s decline was revised slightly deeper and figures back to 1999 also were revised.
Inventory decumulation continued strong across the board, notably in the metals industries. Inventories of computers rose for the third month this year. Furniture &amp; related products inventories rose after months of sharp decline since late 2000. 
Shipments rose slightly (-3.2% y/y) following two months of sharp gain.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Inventories</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">Mfg Inventories</td>
<td>-0.4%</td>
<td>-0.3%</td>
<td>-8.6%</td>
<td>-8.0%</td>
<td>4.5%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
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Light vehicle sales rose 5.2% last month versus May. The rise in sales was very slightly more than expected following a 9.7% decline in May. Vehicle sales in 2Q rose 1.2% from 1Q to an average of 16.50M units. Sales of domestically [...]

U.S. Light Vehicle Sales Recover

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020702a.jpg" width="353">
Chain store sales fell 0.9% in the last full week of June according to the BTM-UBSW survey. The decline was the first in five weeks.
June sales rose 2.0% from the May average.
The leading indicator of chain store sales published by BTM rose in the third week of June and has resumed the upward move begun this past April.
During the last ten years there has been a 40% correlation between the year-to-year percent change in monthly chain store sales and the change in general merchandise store sales.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">6/29/02</th>
<th scope="col">6/22/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>412.9</td>
<td>416.7</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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Chain store sales fell 0.9% in the last full week of June according to the BTM-UBSW survey. The decline was the first in five weeks. June sales rose 2.0% from the May average. The leading indicator of chain store sales published by [...]

Weekly Chain Store Sales Fell

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020701a.jpg" width="353">
The ISM Composite Index of manufacturing sector activity rose slightly more than expected last month. Consensus expectations were for a slight decline to 55.5. 
Higher production, employment and vendor performance (slower deliveries) fueled the gain in the composite index to its highest level since February 2000.
The new orders index fell but has remained in a relatively high range since earlier this year.
Inflation pressure rose sharply as the percentage of companies reporting lower prices fell to the lowest since August 2000. The percentage of companies reporting higher prices rose to the highest since April 2000.
Over the last twenty years there has been a 66% correlation between the ISM Composite Index and quarterly growth in chained GDP.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">Composite Index</td>
<td>56.2</td>
<td>55.7</td>
<td>44.3</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
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<td class="firstcol">Prices Paid Index</td>
<td>65.5</td>
<td>63.0</td>
<td>42.8</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Down in May 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020701b.jpg" width="353">
The value of construction put in place fell unexpectedly in May. A slight gain had been expected. It was the second decline in three months following hefty gains in January and February. Figures were revised back to 1999. Growth in 2001 was lowered substantially in all sectors.
Residential building fell for the first month since October. Activity is up 7.4% versus last year and has been strongest in the multi-unit sector. 
Nonresidential building activity fell sharply for the third month this year, continuing a trend of decline that began last year. Industrial and office building has fallen notably but has been offset somewhat by gains in the hospital and educational areas.
Spending by governments rose for the fourth month this year driven by gains in the education and military sectors.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-0.7%</td>
<td>0.4%</td>
<td>0.6%</td>
<td>2.5%</td>
<td>7.3%</td>
<td>8.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>7.4%</td>
<td>3.3%</td>
<td>7.4%</td>
<td>11.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-3.1%</td>
<td>0.1%</td>
<td>-14.4%</td>
<td>-3.1%</td>
<td>7.1%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>1.9%</td>
<td>0.1%</td>
<td>3.1%</td>
<td>7.4%</td>
<td>5.4%</td>
<td>10.6%</td>
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</tbody>
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The ISM Composite Index of manufacturing sector activity rose slightly more than expected last month. Consensus expectations were for a slight decline to 55.5. Higher production, employment and vendor performance (slower deliveries) [...]

ISM Index Rose Further

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020628a.jpg" width="353">
Personal income rose as expected last month following a slight downward revision to April. Personal consumption expenditures fell as expected. April&#39;s gain was unrevised. 
Wage and salary disbursements rose 0.4% (1.9% y/y) in May, the strongest monthly increase this year, following no change in April. 
Personal spending fell due to lower spending on both durable and nondurable goods. Unit sales of light vehicles fell 9.5% m/m to 15.6M. Spending on services rose 0.7% (5.2% y/y).
Disposable income rose 0.3% (5.8% y/y), the same as in April. 
The PCE price deflator fell (1.0% y/y) for the first month since December. Less food and energy the price deflator also fell but more slightly (1.6% y/y) following an unrevised 0.2% April increase.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.0%</td>
<td>4.9%</td>
<td>7.0%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>4.0%</td>
<td>5.0%</td>
<td>7.7%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>3.1%</td>
<td>2.8%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>1.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">PCE Price Deflator</td>
<td>-0.1%</td>
<td>0.4%</td>
<td>1.0%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Better Than Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020628b.jpg" width="353">
The June reading of Consumer Sentiment from the University of Michigan came in higher than suggested by a lower reading in mid-June. A full-month figure of 90.8 had been expected.
Nevertheless, sentiment remained near the low end of 90.7-96.9 range it has fluctuated in this year.
Indexes of both expectations and current conditions fell.
The University of Michigan survey is not seasonally adjusted.
During the past five years there has been a 37% correlation between the level of consumer sentiment and the 3-month change in real PCE.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">Univ. of Michigan</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Sentiment</td>
<td>92.4</td>
<td>96.9</td>
<td>-0.2%</td>
<td>89.2</td>
<td>107.6</td>
<td>105.8</td>
</tr>
</tbody>
</table>
Chicago Purchasing Agents' Index Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020628c.jpg" width="353">
The Chicago Purchasing Manager&#146;s Index of Business activity fell slightly more than expected in June. Nevertheless, the index remained at its second highest level of the year. 
The index of new orders fell, but production, inventories and employment rose. 
The index of vendor performance fell, indicating that supplier delivery speeds quickened after a sharp slowing in May. 
The prices paid index was roughly unchanged. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Barometer</td>
<td>58.2</td>
<td>60.8</td>
<td>42.6</td>
<td>41.4</td>
<td>51.8</td>
<td>56.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid</td>
<td>58.2</td>
<td>58.3</td>
<td>50.9</td>
<td>50.5</td>
<td>65.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Personal income rose as expected last month following a slight downward revision to April. Personal consumption expenditures fell as expected. April's gain was unrevised. Wage and salary disbursements rose 0.4% (1.9% y/y) in May, the [...]

Personal Income Up, Spending Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020627b.jpg" width="353">
GDP growth last quarter was revised up versus Consensus expectations for no change from the 5.6% growth reported previously. Regular annual revisions extending back several years will occur next month.
The upward revision reflected less of a drag from net export deterioration and firmer domestic final demand.
Trade sector deterioration sapped less from GDP growth. Export growth was revised down sharply to 2.8% but import growth was revised down more to 8.3%.
Real PCE was little changed at 3.3% (AR). Residential investment also was unchanged rising at a 14.6% rate. The decline in fixed capital investment was lessened to 6.2%. Spending on equipment and software rose for the first quarter since 3Q 2000. Government investment was unrevised at 6.7%.
Production increases to slow the rate of inventory decumulation were little revised and added 3.4 percentage points to GDP growth. 
Inflation remained low in 1Q but revised up slightly.
Corporate profit growth was revised up slightly to 2.9% (AR) following a 93.4% surge in 4Q01.

<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">Chained &#39;96 $, % AR</a></th>
<th scope="col">1Q&#39;02 (Final)</th>
<th scope="col">1Q&#39;02 (Prelim)</th>
<th scope="col">4Q &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>6.1%</td>
<td>5.6%</td>
<td>1.7%</td>
<td>1.7%</td>
<td>1.2%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>3.4%</td>
<td>3.5%</td>
<td>-2.0%</td>
<td>0.1%</td>
<td>-1.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>2.6%</td>
<td>2.0%</td>
<td>3.8%</td>
<td>1.6%</td>
<td>2.3%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.8%</td>
<td>-1.1%</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.2%</td>
<td>3.0%</td>
<td>3.9%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>1.2%</td>
<td>1.0%</td>
<td>-0.1%</td>
<td>1.4%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Jobless Insurance Claims Fell, Rehiring May Have Improved 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 27, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020627a.jpg" width="353">
Initial claims for unemployment insurance fell about as expected in the latest week. The prior week&#39;s level was revised up slightly.
In a sign that rehiring may have risen, continuing claims for unemployment insurance fell sharply from the prior week&#39;s level which was revised down. Continuing claims have fallen 3.3% from the high reached in early May.
The four-week moving average of initial claims fell to 391,000, -2.8% y/y. 
The insured rate of unemployment was stable at 2.9% for the third consecutive week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">6/22/02</th>
<th scope="col">6/15/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>388.0</td>
<td>398.0</td>
<td>1.0%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,706</td>
<td>24.2%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
</tr>
</tbody>
</table>
Fed Leaves Interest Rates Unchanged 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 27, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020627c.jpg" width="353">
The Federal Reserve left the Federal Funds Target Rate unchanged at 1.75%, as expected. 
The press release, which accompanied the Fed&#146;s action, contained the following statement. &quot;The Committee expects the rate of increase of final demand to pick up over coming quarters, supported in part by robust underlying growth in productivity, but the degree of the strengthening remains uncertain.&quot;
The complete text of the Fed&#39;s latest press release can be viewed at <a href="http://www.federalreserve.gov/BoardDocs/Press/monetary/2002/20020626/default.htm">http://www.federalreserve.gov/BoardDocs/Press/monetary/2002/20020626/default.htm</a>

Help Wanted Advertising Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 27, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020627d.jpg" width="353">
The Conference Board&#39;s National Index of Help-Wanted Advertising fell unexpectedly in May. A decline in continuing claims for unemployment insurance may have suggested improved rehiring, but the drop in help wanted suggests any improvement will not be large. 
During the past ten years there has been a 91% correlation between the level of help-wanted advertising and the annual change in nonfarm payrolls. 
Job opportunities deteriorated across the nations&#39; regions, but notably in the West South Central (Texas &amp; Oklahoma) and in the East North Central (Illinois &amp; Ohio) regions.
The figures are seasonally adjusted.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">May &#39;02</th>
<th scope="col">April &#39;02</th>
<th scope="col">May &#39;01</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nat&#39;l Help Wanted Index</td>
<td>45</td>
<td>47</td>
<td>60</td>
</tr>
</tbody>
</table>
</body>
</html>

GDP growth last quarter was revised up versus Consensus expectations for no change from the 5.6% growth reported previously. Regular annual revisions extending back several years will occur next month. The upward revision reflected [...]

Strong 1Q GDP Revised Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020626b.jpg" width="353">
Durable goods orders rose as expected last month. April figures were revised down.
Orders for nondefense capital goods rose strongly and were boosted by a 31.3% gain in aircraft orders (down 54.1% in April). Excluding aircraft, nondefense capital goods orders rose 0.2% following a 5.6% rise in April.
Orders for computers and electronic products rose 1.0%, the third consecutive monthly gain. Machinery orders fell slightly following a 4.5% April gain. Orders for electrical equipment also fell, down 2.2% after a 10.3% April surge.
Orders for defense goods fell 9.7% after dropping 46.6% in April. Excluding defense, durable orders rose 0.8% (-1.3% y/y) after a 3.7% April gain.
Durable shipments fell slightly, up 5.8% from the low last September.
Durable inventories fell 0.6% and the April decline was revised deeper.

<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">NAICS Classification</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Durable Goods Orders</td>
<td>0.6%</td>
<td>0.4%</td>
<td>-1.6%</td>
<td>-11.4%</td>
<td>3.3%</td>
<td>5.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nondefense Capital Goods</td>
<td>3.3%</td>
<td>1.4%</td>
<td>-6.6%</td>
<td>-16.5%</td>
<td>7.9%</td>
<td>3.9%</td>
</tr>
</tbody>
</table>
May New Home Sales Surge to Record Level 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 26, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020626a.jpg" width="353">
Sales of new single family homes rose much more than expected last month. April sales were revised higher with sales up 12.3% in the last two months.
May sales of 920,000 were expected.
Sales were up in each of the country&#146;s regions with double-digit m/m gains in the Northeast and South.
The median price of a new home fell 8.8% to $170,200 (-2.9% y/y).
The new home sales data reflect current sales versus the existing home sales figure which reflect closings on past sales. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E90401/@E90401.HTM">Homes Sales (000s, AR)</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>1,028</td>
<td>951</td>
<td>16.3%</td>
<td>908</td>
<td>880</td>
<td>879</td>
</tr>
</tbody>
</table>
</body>
</html>

Durable goods orders rose as expected last month. April figures were revised down. Orders for nondefense capital goods rose strongly and were boosted by a 31.3% gain in aircraft orders (down 54.1% in April). Excluding aircraft, [...]

Durable Goods Orders Rose

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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250509A1.jpg

250509C1.jpg

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

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

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

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

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

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

250509D1.jpg

250509B1.jpg

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

FIBER: Industrial Commodity Price Movement Diverges in Latest Four Weeks

250509L1.jpg

250509M1.jpg

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

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

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

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

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

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

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

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

250509N1.jpg

250509O1.jpg

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

U.S. Wholesale Inventories & Sales Increase in March

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

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

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

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

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

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

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

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

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

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

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

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

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

U.S. Housing Affordability Improves Slightly in March

Carol Stone, CBE

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

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

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

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

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

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

Economy in Brief: 2002

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