Tom Moeller

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Positive growth in the number of jobs has returned. The latest
report from the payroll processor ADP, in their National Employment
Report, indicated that private nonfarm payroll levels rose in April by
32,000, the third consecutive month of increase. The gain roughly
matched Consensus expectations. Earlier data were slightly revised.<span class="style1"></span></p>
<p>ADP compiled the estimate from its database of individual
companies' payroll information. Macroeconomic Advisers, LLC, the St.
Louis economic consulting firm, developed the methodology for
transforming the raw data into an economic indicator.</p>
</span><span class="style1">
</span>The U.S. Bureau of Labor Statistics will report April
payroll employment this Friday<span class="style1">. For
comparison, the March increase of 19,000 in ADP's measure of private
nonfarm payrolls was accompanied by a rise of 123,000 jobs in the BLS
measure of private sector payrolls.</span><span class="style1">
According to ADP and Macro-Advisers, the correlation between the
monthly percentage change in the ADP estimate and that in the BLS data
is 0.90.</span><span class="style1">
<p>ADP reported that private service-producing industry
employment rose for the third consecutive month with a gain of 50,000
(-0.8% y/y). Small-sized payrolls grew 25,000 (-0.6% y/y) while
medium-sized payrolls grew 20,000 (-0.9% y/y). These increases were
accompanied by a modest 5,000 increase (-1.5% y/y) in large service
producing payrolls.</p>
</span><span class="style1">
<p>Though declines in the goods producing sector have lessened,
employment nevertheless fell another 18,000 during April (-7.4% y/y).
The three-month annual rate of change eased to -2.0% versus -17.1% one
year ago. In the manufacturing sector alone, however, payrolls rose
29,000 (-4.9% y/y). The three-month change of 1.3% was the first
positive figure since early-2006. Large goods producing payrolls
increased 9,000 (-7.6% y/y), the first positive change in more than two
years. Small-sized payrolls fell 24,000 (-8.4% y/y) while medium-sized
payrolls fell 3,000 (-6.5% y/y). </p>
</span><span class="style1">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><strong><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM">ADP
National Employment
Report</a></strong></th>
<th scope="col"><strong>April</strong></th>
<th scope="col"><b>March</b></th>
<th scope="col"><strong>February</strong></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><strong>2009</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Nonfarm Private Payroll
Employment (m/m Chg., 000s)</td>
<td>32</td>
<td>19</td>
<td>3</td>
<td>2.0%</td>
<td>-4.9%</td>
<td>-0.7%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>1</td>
<td>4</td>
<td>-10</td>
<td>-1.7</td>
<td>-4.1</td>
<td>-0.1</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>17</td>
<td>12</td>
<td>17</td>
<td>-2.0</td>
<td>-5.7</td>
<td>-0.9</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>14</td>
<td>3</td>
<td>-4</td>
<td>-2.8</td>
<td>-5.6</td>
<td>-1.8</td>
<td>-0.2</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">EMU Service Sector Continues To
Improve</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> May 05, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The services sector continues to improve in EMU with the EMU
and German indices rising in April to their strongest levels since late
in 2007 (France was last stronger in Nov of 2009; Italy&#8217;s index slipped
in April).</p>
<p>While Germany and the overall EMU measures continue to rise
strongly some countries in the Zone are slowing their progress, as the
French and Italian comparisons show. The services sector is still where
the jobs are and this sector is not as vibrant as the manufacturing
sector.</p>
<p>The Euro-Area retail sales for April were flat in volume terms
and barley higher Yr/Yr. The consumer sector has just not come alive in
Europe and that is a key part of the services sector.</p>
<p>Looking ahead there will be challenges to Europe&#8217;s service
sector. The ash cloud that shut down air transportation has just shut
down a few more airports in Scotland. Those interruptions will probably
affect services, especially tourism. Greece which is a hot tourism
destination will have been off limits to most tourists during the time
of its upheaval. And, since Greece is in the Zone there is no such
thing as a post crisis &#8216;drachma discount.&#8217; Indeed, with strikes still
in progress in Greece there is no telling how much the tourists season
will harmed as we head into summer.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th colspan="8">Markit Services Indices for EU/EMU</th>
</tr>
<tr>
<th class="firstcol">&nbsp;
</th>
<th>Apr-10</th>
<th>Mar-10</th>
<th>Feb-10</th>
<th>3Mo</th>
<th>6Mo</th>
<th>12Mo</th>
<th>Percentile</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Euro-Area</td>
<td>55.60</td>
<td>54.08</td>
<td>51.81</td>
<td>53.83</td>
<td>53.44</td>
<td>50.77</td>
<td>76.4%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>55.22</td>
<td>54.86</td>
<td>51.89</td>
<td>53.99</td>
<td>53.04</td>
<td>51.11</td>
<td>70.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>59.17</td>
<td>53.80</td>
<td>54.60</td>
<td>55.86</td>
<td>57.23</td>
<td>53.72</td>
<td>85.0%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>54.47</td>
<td>55.34</td>
<td>50.76</td>
<td>53.52</td>
<td>52.53</td>
<td>49.35</td>
<td>69.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>50.93</td>
<td>51.27</td>
<td>47.12</td>
<td>49.77</td>
<td>48.21</td>
<td>45.82</td>
<td>70.6%</td>
</tr>
<tr>
<td class="firstcol">Ireland</td>
<td>51.02</td>
<td>49.61</td>
<td>48.84</td>
<td>49.82</td>
<td>48.15</td>
<td>46.05</td>
<td>56.0%</td>
</tr>
<tr style="font-weight: bold;" class="grey3">
<td colspan="8" class="firstcol">EU only</td>
</tr>
<tr class="odd">
<td class="firstcol">UK (CIPs)</td>
<td>#N/A</td>
<td>56.46</td>
<td>58.41</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
</tr>
<tr style="font-weight: bold;" class="grey3">
<td colspan="8" class="firstcol">EU
Commission Indices
for EU and EMU</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">EU
Index</td>
<td style="font-weight: bold;">Apr-10</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6Mo</td>
<td style="font-weight: bold;">12Mo</td>
<td style="font-weight: bold;">Percentile</td>
</tr>
<tr>
<td class="firstcol">EU Services</td>
<td>4</td>
<td>1</td>
<td>0</td>
<td>-16.33</td>
<td>-16.33</td>
<td>-19.42</td>
<td>54.3%</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">EMU
</td>
<td style="font-weight: bold;">Apr-10</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6Mo</td>
<td style="font-weight: bold;">12Mo</td>
<td style="font-weight: bold;">Percentile</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>5</td>
<td>1</td>
<td>1</td>
<td>2.33</td>
<td>-0.17</td>
<td>-8.21</td>
<td>55.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Cons Confidence</td>
<td>-15</td>
<td>-17</td>
<td>-17</td>
<td>-16.33</td>
<td>-16.33</td>
<td>-11.94</td>
<td>54.3%</td>
</tr>
<tr style="font-weight: bold;" class="grey3">
<td colspan="8" class="firstcol">Consumer
confidence by
country</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany-Ccon</td>
<td>-7</td>
<td>-13</td>
<td>-17</td>
<td>-12.33</td>
<td>-15.00</td>
<td>-19.58</td>
<td>60.5%</td>
</tr>
<tr>
<td class="firstcol">France-Ccon</td>
<td>-20</td>
<td>-19</td>
<td>-17</td>
<td>-18.67</td>
<td>-18.00</td>
<td>-22.75</td>
<td>42.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Ital-Ccon</td>
<td>-21</td>
<td>-22</td>
<td>-22</td>
<td>-21.67</td>
<td>-19.17</td>
<td>-18.75</td>
<td>31.4%</td>
</tr>
<tr>
<td class="firstcol">UK-Ccon</td>
<td>-6</td>
<td>-5</td>
<td>-2</td>
<td>-4.33</td>
<td>-6.00</td>
<td>-10.42</td>
<td>76.3%</td>
</tr>
<tr class="grey3">
<td colspan="8" class="firstcol">percentile
is over
range since May 2000</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. ISM Nonmanufacturing Index
Steady But Pricing Reaches New High</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 5,2010</span>
<span id="articletext">
<p></p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505f.jpg" style="width: 312px; height: 265px;">
<p>Recovery in the service sector continued last month. The
Institute for Supply Management's (ISM) Composite Index for the service
&amp; construction sectors held steady in April at 55.4, the
highest level since early-2006. Moreover, the series has risen
considerably from a low of 37.2 late in 2008. The latest figure fell
slightly short of Consensus expectations for a reading of 56.0. Since
the series' inception in 1997 there has been a 65% correlation between
the level of the composite index in the nonmanufacturing sector and the
q/q change in real GDP for the services and the construction sectors.</p>
<p>ISM surveys more than 370 purchasing managers in more than 62
industries including law firms, hospitals, government and retailers.
The nonmanufacturing survey dates back to July 1997. The figures are
available in Haver's <b>USECON </b>database.</p>
<p>The business activity index for the nonmanufacturing sector
nudged up to 60.3 which was the highest level since early-2006. The
supplier delivery index also rose indicating slower delivery speeds.
Working the other way, the new orders index retraced a piece of its
March surge but remained near the highest level since 2006. Thirty-six
percent of respondents reported higher orders while only 11% reported
them lower. Finally, the employment index also slipped from the highest
level since April 2008 and remained up sharply from the late-2008 low.
Since the series' inception in 1997 there has been an 80% correlation
between the level of the ISM nonmanufacturing employment index and the
m/m change in payroll employment in the service-producing plus the
construction industries.</p>
<p>Pricing power continued to firm. At its strongest since
September 2008, the index at 64.7 was up sharply from the 2008 low.
Forty-two percent of respondents reported higher prices while just 2%
reported them lower. At the worst, late in 2008, 41% reported lower
prices. Since its inception ten years ago, there has been a 73%
correlation between the price index and the q/q change in the GDP
services chain price index.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505h.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM
Nonmanufacturing Survey</a></b></th>
<th scope="col"><b>April</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>April '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Composite Index</td>
<td>55.4</td>
<td>55.4</td>
<td>53.0</td>
<td>43.9</td>
<td>46.2</td>
<td>47.3</td>
<td>53.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Business
Activity</td>
<td>60.3</td>
<td>60.0</td>
<td>54.8</td>
<td>45.7</td>
<td>48.0</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; New Orders</td>
<td>58.2</td>
<td>62.3</td>
<td>55.0</td>
<td>47.4</td>
<td>47.9</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Employment</td>
<td>49.5</td>
<td>49.8</td>
<td>48.6</td>
<td>36.9</td>
<td>39.9</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Supplier
Deliveries (NSA)</td>
<td>53.5</td>
<td>49.5</td>
<td>53.5</td>
<td>45.5</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="even">
<td class="firstcol">Prices Index</td>
<td>64.7</td>
<td>62.9</td>
<td>60.4</td>
<td>40.6</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>
</tbody>
</table>
<span id="articletitle">Challenger Layoffs Reach Cycle Low</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 5, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100505i.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The outplacement firm Challenger, Grey &amp; Christmas
reported that the level of layoffs fell last month to 38,326. It was
the lowest level since mid-2006 and remained well under the cycle-high
of 241,748 in January of last year. The decline was led by sharply
lower layoffs in the government, computer, energy, entertainment, and
retail industries. An increased level of layoffs occurred in the
construction, financial, health care and utility industries.</p>
<p>Challenger also samples firms' hiring plans. April plans
increased for the second month consecutive month to the highest level
since 2005. They rose in the transportation, consumer goods, health
care and financial industries though most elsewhere they fell.</p>
<p>During the last ten years there has been a 67% (inverse)
correlation between the three-month moving average of announced job
cuts and the three-month change in payroll employment<em>.</em>
Job cut announcements differ from layoffs. Many are achieved through
attrition, early retirement or just never occur.</p>
<p>The Challenger figures are available in Haver's <b>SURVEYS</b>
database.</p>
</span>
<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/SURVEYS/@S3/@S301/@S301.HTM" style="color: black;"><b>Challenger, Gray &amp;
Christmas</b></a></th>
<th scope="col"><strong>April</strong></th>
<th scope="col"><strong>March</strong></th>
<th scope="col"><strong>February</strong></th>
<th scope="col"><strong>Y/Y</strong></th>
<th scope="col"><strong>2009</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Announced Job Cuts</td>
<td>38,326</td>
<td>67,611</td>
<td>42,090</td>
<td>-71.1%</td>
<td>1,288,030</td>
<td>1,223,993</td>
<td>768,264</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>15,654</td>
<td>13,994</td>
<td>8,300</td>
<td>-42.2%</td>
<td>272,573</td>
<td>118,600</td>
<td>365,583</td>
</tr>
</tbody>
</table>
</body></html>

Positive growth in the number of jobs has returned. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payroll levels rose in April by 32,000, the third consecutive [...]

ADP Report: Job Growth Resumes Led By The Service & Factory Sectors

Robert Brusca

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<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504m.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Pressure on the Euro-Area PPI remained in force in March as
the price index continues to show Yr/Yr drops. Still the 6-month index
is up at a 0.4% rate and the 3-Mo index is up at a 4.1% pace. For
manufacturing the same trends are in play but with accelerated rates of
growth.</p>
<p>Excluding energy prices both France and Germany show
manufactured prices that are transitioning to positive growth rates for
prices over three months or longer. Both series show a gradual
acceleration in prices. Headline prices accelerate for all large EMU/EU
countries in the table. Only Germany is still showing price drops even
over three months for headline prices (excluding construction).</p>
<p>Sector prices also how an acceleration (or reduced
deceleration, if you prefer) is in motion. These trends are also
consistent with the notion that aggregate demand is picking up since at
some point very weak prices indicate not just pricing and cost trends
but demand deficiencies. That part of the weak price picture appears to
be going away. And that is consistent with the better growth metrics we
have been seeing in the Zone recently.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"><b>Euro-Area
and UK PPI Trends</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Area</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">TotalxConstruct</td>
<td>0.3%</td>
<td style="color: red;">-0.1%</td>
<td>4.1%</td>
<td>0.4%</td>
<td style="color: red;">-6.6%</td>
<td>6.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Capital Gds</td>
<td style="color: red;">0.0%</td>
<td>0.0%</td>
<td style="color: red;">-0.1%</td>
<td>-0.8%</td>
<td style="color: red;">-0.7%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Consurmer Gds</td>
<td style="color: red;">-0.3%</td>
<td style="color: red;">-0.1%</td>
<td style="color: red;">-1.1%</td>
<td>-0.8%</td>
<td style="color: red;">-2.8%</td>
<td>2.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Intermediate&amp;Cap
Gds</td>
<td style="color: red;">-0.1%</td>
<td>0.5%</td>
<td>3.3%</td>
<td>0.5%</td>
<td style="color: red;">-6.5%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.3%</td>
<td style="color: red;">0.0%</td>
<td>5.2%</td>
<td>2.4%</td>
<td style="color: red;">-5.2%</td>
<td>3.6%</td>
</tr>
<tr class="grey1">
<td style="font-weight: bold;" class="firstcol">Germany</td>
<td>0.2%</td>
<td style="color: red;">-0.2%</td>
<td style="color: red;">-5.2%</td>
<td>-6.1%</td>
<td style="color: red;">-7.5%</td>
<td>7.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Gy
ExEnergy</td>
<td style="font-weight: bold;">0.2%</td>
<td style="font-weight: bold;">0.4%</td>
<td style="font-weight: bold;">3.1%</td>
<td>1.5%</td>
<td style="font-weight: bold;">0.3%</td>
<td style="color: red;">-1.4%</td>
</tr>
<tr class="grey1">
<td style="font-weight: bold;" class="firstcol">France:Tot</td>
<td>1.0%</td>
<td>-<span style="color: red;">0.2%</span></td>
<td>6.5%</td>
<td>2.7%</td>
<td style="color: red;">-6.6%</td>
<td>4.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Fr
ExF&amp;Energy</td>
<td style="font-weight: bold;">0.3%</td>
<td style="font-weight: bold;">0.0%</td>
<td style="font-weight: bold;">1.5%</td>
<td>-0.4%</td>
<td style="color: red;">-3.4%</td>
<td>3.3%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>0.3%</td>
<td>0.3%</td>
<td>5.9%</td>
<td>1.2%</td>
<td style="color: red;">-6.1%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>1.4%</td>
<td>0.4%</td>
<td>19.0%</td>
<td>8.6%</td>
<td style="color: red;">-2.7%</td>
<td>14.6%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Euro-Area
Harmonized
PPI ex construction</td>
</tr>
</tbody>
</table>
</body></html>

Pressure on the Euro-Area PPI remained in force in March as the price index continues to show Yr/Yr drops. Still the 6-month index is up at a 0.4% rate and the 3-Mo index is up at a 4.1% pace. For manufacturing the same trends are in [...]

EMU PPI Prices Show Downward Pressures Unwinding

Louise Curley

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504j.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Brazilian economy continued strong in the first quarter of
this year. Industrial production in March, published today, was up
2.75% from February and 18.56% from March 2009. Between February and
March production of intermediate goods was up 1.25%, consumer goods,
2.26 and capital goods 2.47%. The year to year increases were,
respectively, 17.64%, 13.32% and 35.80%. The levels of the production
of intermediate, consumer and capital goods, are shown in the first
chart.</p>
<p>In response to the strength of the economy and signs of rising
price pressures, COPOM, the Monetary Policy Committee of the Bank of
Brazil raised its target rate 75 basis points from 8.75% to 9.50% last
week. The second chart shows the target rate since 2000. While not
exactly low, by comparison with interest rates in the developed
nations, the current level of interest rates in Brazil is a tribute to
the long and relatively successful effort to control the country's
bouts with hyperinflation.</p>
<p>In addition to the current data on the economy of Brazil in
the data base EMERGELA, forecasts of selected features of the economy
are available in the Haver data bases, FX4CASTS and OEFMAJOR. The
former contains five year forecasts of exchange rates, interest rates,
real growth rates, inflation rates and the current account as a percent
of GDP. The latter contains ten year forecasts of many of the usual
items found in the EMERGELA data base under the headings: Financial,
National Income, Prices, Production, Unemployment, International Trade
and Balance of Payments and Population/Demographics. The third chart
shows the ten year annual forecast of industrial production from the
OEFMAJOR data base and the actual 2OO9 industrial production from
EMEREGLA.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504k.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504l.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Brazil</th>
<th scope="col"><b>Mar 10&nbsp;</b></th>
<th scope="col"><b>Feb 10&nbsp;</b></th>
<th scope="col"><b>Mar 09</b></th>
<th scope="col"><b>M/M Chg</b></th>
<th scope="col"><b>Y/Y Chg</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial
Production (2002=100)</td>
<td>130.65</td>
<td>127.15</td>
<td>110.27</td>
<td>2.75</td>
<td>18.36</td>
<td>116.21</td>
<td>125.31</td>
<td>121.78</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>181.32</td>
<td>176.09</td>
<td>133.52</td>
<td>2.97</td>
<td>35.80</td>
<td>150.50</td>
<td>182.32</td>
<td>159.49</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Goods</td>
<td>130.39</td>
<td>127.51</td>
<td>115.06</td>
<td>2.26</td>
<td>13.32</td>
<td>118.68</td>
<td>121.89</td>
<td>119.73</td>
</tr>
<tr>
<td class="firstcol">Intermediate
Goods&nbsp;</td>
<td>122.10</td>
<td>120.68</td>
<td>103.84</td>
<td>1.25</td>
<td>17.64</td>
<td>109.65</td>
<td>119.87</td>
<td>118.34</td>
</tr>
</tbody>
</table>
</body></html>

The Brazilian economy continued strong in the first quarter of this year. Industrial production in March, published today, was up 2.75% from February and 18.56% from March 2009. Between February and March production of intermediate [...]

Brazil: Current Data And Forecasts

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Following the recovery already reported for existing home
sales, the National Association of Realtors (NAR) today indicated that
March pending sales of existing single-family homes rose 5.3% from
February. The gain left home sales up more than one-quarter from the
low in January of last year. The latest slightly beat Consensus
expectations for a 4.0% increase.</p>
<p>The m/m performance of home sales varied across the country. A
large monthly increase in the South (28.4% y/y) was accompanied by
small increases in the Midwest (18.4% y/y) and in the West (8.8% y/y).
Sales in the Northeast fell moderately (+27.3% y/y)</p>
<p>Pending home sales figures are analogous to the new home sales
data from the Commerce Department in that they measure existing home
sales when the sales contract is signed, not at the time the sale is
closed. The series dates back to 2001 and the data is available in
Haver's <b>PREALTOR </b>database.</p>
<p>The latest Senior Loan Officer Opinion Survey on Bank Lending
Practices from the Federal Reserve can be found <a href="http://www.federalreserve.gov/boarddocs/SnLoanSurvey/201005/fullreport.pdf">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>102.9</td>
<td>97.6</td>
<td>90.2</td>
<td>&nbsp;&nbsp;21.1%</td>
<td>95.1</td>
<td>86.9</td>
<td>95.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>75.1</td>
<td>77.7</td>
<td>71.3</td>
<td>27.3</td>
<td>76.7</td>
<td>73.0</td>
<td>86.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>98.9</td>
<td>97.7</td>
<td>80.4</td>
<td>18.4</td>
<td>88.8</td>
<td>80.7</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>121.2</td>
<td>107.5</td>
<td>98.0</td>
<td>28.4</td>
<td>98.9</td>
<td>90.3</td>
<td>107.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>99.9</td>
<td>98.0</td>
<td>102.9</td>
<td>8.8</td>
<td>109.9</td>
<td>99.2</td>
<td>92.1</td>
</tr>
</tbody>
</table>
</body></html>

Following the recovery already reported for existing home sales, the National Association of Realtors (NAR) today indicated that March pending sales of existing single-family homes rose 5.3% from February. The gain left home sales up [...]

U.S. Pending Home Sales' Recovery Gains Steam

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504a.jpg" align="left" border="0" height="265" width="353"></p>
<p>Forward momentum behind <b>U.S. unit sales of light
vehicles</b> eased during April and sales fell 4.8% to 11.21M
units (SAAR) from 11.78M in March. Nevertheless, sales remained up by
nearly one-quarter from the recession low. April sales fell slightly
short of Consensus expectations for 11.4M. (Seasonal adjustment of
these figures is provided by the U.S. Bureau of Economic Analysis).</p>
<p>Sales of <b>domestically produced vehicles</b>
fell 3.2% last month to 8.50M but gave back just a piece of the 14.0%
March gain. Sales of fuel efficient cars fell 8.3% to 3.78M (+22.6%
y/y) after the 11.8% March increase. Light truck sales went the other
way and rose 1.2% to 4.72M (30.0% y/y). <b>Imported light vehicle</b>
sales also fell 9.5% to 2.70M and gave back most of the March rise.
Sales of imported autos fell 4.8% to 1.83M after the 5.9% March
increase while light truck sales fell 18.0% to 0.88M (+6.5% y/y).</p>
<p>Overall,<b> import's share </b>of the U.S. light
vehicle market fell during April to 24.1% its lowest since early 2008.
The share has been declining erratically from its high of 30.5% in
February '09 and from 27.6% during all of last year. (Imported vehicles
are those produced outside the United States.) Imports' share of the
U.S. car market rose m/m to 32.6% but remained below 34.8% during 2009.
Imports' share of the light truck market also fell to 15.7% but
remained below the 19.6% last year.</p>
<p>The U.S. vehicle sales figures can be found in Haver's<b>
USECON </b>database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504c.jpg" style="width: 312px; height: 265px;">
<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/@ED/@ED09/@ED0901/@ED0901.HTM%22"><b>Light
Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>April</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>April y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.21</td>
<td>11.78</td>
<td>10.38</td>
<td>21.4%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.61</td>
<td>6.04</td>
<td>5.49</td>
<td>17.5</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>3.78</td>
<td>4.12</td>
<td>3.68</td>
<td>22.6</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.83</td>
<td>1.92</td>
<td>1.81</td>
<td>8.1</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.60</td>
<td>5.74</td>
<td>4.88</td>
<td>25.7</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.72</td>
<td>4.67</td>
<td>4.03</td>
<td>30.0</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported0</td>
<td>0.88</td>
<td>1.07</td>
<td>0.86</td>
<td>6.5</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</body></html>

Forward momentum behind U.S. unit sales of light vehicles eased during April and sales fell 4.8% to 11.21M units (SAAR) from 11.78M in March. Nevertheless, sales remained up by nearly one-quarter from the recession low. April sales [...]

U.S. Vehicle Sales Slip From High

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504a.jpg" align="left" border="0" height="265" width="353"></p>
<p>Forward momentum behind <b>U.S. unit sales of light
vehicles</b> eased during April and sales fell 4.8% to 11.21M
units (SAAR) from 11.78M in March. Nevertheless, sales remained up by
nearly one-quarter from the recession low. April sales fell slightly
short of Consensus expectations for 11.4M. (Seasonal adjustment of
these figures is provided by the U.S. Bureau of Economic Analysis).</p>
<p>Sales of <b>domestically produced vehicles</b>
fell 3.2% last month to 8.50M but gave back just a piece of the 14.0%
March gain. Sales of fuel efficient cars fell 8.3% to 3.78M (+22.6%
y/y) after the 11.8% March increase. Light truck sales went the other
way and rose 1.2% to 4.72M (30.0% y/y). <b>Imported light vehicle</b>
sales also fell 9.5% to 2.70M and gave back most of the March rise.
Sales of imported autos fell 4.8% to 1.83M after the 5.9% March
increase while light truck sales fell 18.0% to 0.88M (+6.5% y/y).</p>
<p>Overall,<b> import's share </b>of the U.S. light
vehicle market fell during April to 24.1% its lowest since early 2008.
The share has been declining erratically from its high of 30.5% in
February '09 and from 27.6% during all of last year. (Imported vehicles
are those produced outside the United States.) Imports' share of the
U.S. car market rose m/m to 32.6% but remained below 34.8% during 2009.
Imports' share of the light truck market also fell to 15.7% but
remained below the 19.6% last year.</p>
<p>The U.S. vehicle sales figures can be found in Haver's<b>
USECON </b>database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504c.jpg" style="width: 312px; height: 265px;">
<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/@ED/@ED09/@ED0901/@ED0901.HTM%22"><b>Light
Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>April</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>April y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.21</td>
<td>11.78</td>
<td>10.38</td>
<td>21.4%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.61</td>
<td>6.04</td>
<td>5.49</td>
<td>17.5</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>3.78</td>
<td>4.12</td>
<td>3.68</td>
<td>22.6</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.83</td>
<td>1.92</td>
<td>1.81</td>
<td>8.1</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.60</td>
<td>5.74</td>
<td>4.88</td>
<td>25.7</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.72</td>
<td>4.67</td>
<td>4.03</td>
<td>30.0</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported0</td>
<td>0.88</td>
<td>1.07</td>
<td>0.86</td>
<td>6.5</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Pending Home Sales' Recovery
Gains Steam </span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 4, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Following the recovery already reported for existing home
sales, the National Association of Realtors (NAR) today indicated that
March pending sales of existing single-family homes rose 5.3% from
February. The gain left home sales up more than one-quarter from the
low in January of last year. The latest slightly beat Consensus
expectations for a 4.0% increase.</p>
<p>The m/m performance of home sales varied across the country. A
large monthly increase in the South (28.4% y/y) was accompanied by
small increases in the Midwest (18.4% y/y) and in the West (8.8% y/y).
Sales in the Northeast fell moderately (+27.3% y/y)</p>
<p>Pending home sales figures are analogous to the new home sales
data from the Commerce Department in that they measure existing home
sales when the sales contract is signed, not at the time the sale is
closed. The series dates back to 2001 and the data is available in
Haver's <b>PREALTOR </b>database.</p>
<p>The latest Senior Loan Officer Opinion Survey on Bank Lending
Practices from the Federal Reserve can be found <a href="http://www.federalreserve.gov/boarddocs/SnLoanSurvey/201005/fullreport.pdf">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending
Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>102.9</td>
<td>97.6</td>
<td>90.2</td>
<td>&nbsp;&nbsp;21.1%</td>
<td>95.1</td>
<td>86.9</td>
<td>95.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>75.1</td>
<td>77.7</td>
<td>71.3</td>
<td>27.3</td>
<td>76.7</td>
<td>73.0</td>
<td>86.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>98.9</td>
<td>97.7</td>
<td>80.4</td>
<td>18.4</td>
<td>88.8</td>
<td>80.7</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>121.2</td>
<td>107.5</td>
<td>98.0</td>
<td>28.4</td>
<td>98.9</td>
<td>90.3</td>
<td>107.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>99.9</td>
<td>98.0</td>
<td>102.9</td>
<td>8.8</td>
<td>109.9</td>
<td>99.2</td>
<td>92.1</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Gasoline Prices Reach Another
High</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 4,2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Each week it's the same story. The cost of <b>regular
gasoline reached another high</b>. Last week the price for a
gallon rose to $2.90, up more than three-quarters since December of
2008. Yesterday, the rise in the spot market price for a gallon of
regular gasoline took a breather and fell eight percent from last
week's high. The figures are reported by the U.S. Department of Energy
and can be found in Haver's <b>WEEKLY &amp; DAILY </b>databases.</p>
<p>Higher crude oil costs continue behind the rise in gasoline
prices. For all of April, the price for a barrel of light sweet crude
(WTI) averaged $84.23 versus $81.01 in March. That's up from the
December 2008 low of $32.37. Yesterday, the spot price rose further to
$86.19.</p>
<p>Improved demand for gasoline has been part of the story
driving prices higher. Demand for gasoline rose 1.6% last week versus
one year ago but that compares with a 3.0% decline in early-February.
The demand for residual fuel oil rose an easier 5.8% and distillate
demand fell 3.0% y/y. That's improved, however, from a 12.3% decline
during February. Inventories of crude oil and petroleum products
improved through April but still were down slightly from one year ago.</p>
<p>U.S. natural gas prices continued to slide last week to an
average $4.03 per mmbtu (+2.6% y/y). Prices reached a high of $6.50
early in January. Nevertheless, prices remained nearly double the
September low.</p>
<p>The energy price data can be found in Haver's <b>WEEKLY
</b>database while the daily figures are in <b>DAILY</b>.
The gasoline demand figures are in <b>OILWKLY</b>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504h.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504i.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM"><b>Weekly
Prices</b></a></th>
<th scope="col"><b>05/03/10</b></th>
<th scope="col"><b>04/25/10</b></th>
<th scope="col"><b>04/18/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.90</td>
<td>2.85</td>
<td>2.86</td>
<td>39.5%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>84.24</td>
<td>83.04</td>
<td>84.60</td>
<td>65.0%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
<tr class="odd">
<td class="firstcol">Natural Gas Price ($/mmbtu)</td>
<td>4.13</td>
<td>3.99</td>
<td>4.09</td>
<td>25.4%</td>
<td>3.95</td>
<td>8.88</td>
<td>6.97</td>
</tr>
</tbody>
</table>
<span id="articletitle">Brazil: Current Data And Forecasts</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley</a> May 4, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504j.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Brazilian economy continued strong in the first quarter of
this year. Industrial production in March, published today, was up
2.75% from February and 18.56% from March 2009. Between February and
March production of intermediate goods was up 1.25%, consumer goods,
2.26 and capital goods 2.47%. The year to year increases were,
respectively, 17.64%, 13.32% and 35.80%. The levels of the production
of intermediate, consumer and capital goods, are shown in the first
chart.</p>
<p>In response to the strength of the economy and signs of rising
price pressures, COPOM, the Monetary Policy Committee of the Bank of
Brazil raised its target rate 75 basis points from 8.75% to 9.50% last
week. The second chart shows the target rate since 2000. While not
exactly low, by comparison with interest rates in the developed
nations, the current level of interest rates in Brazil is a tribute to
the long and relatively successful effort to control the country's
bouts with hyperinflation.</p>
<p>In addition to the current data on the economy of Brazil in
the data base EMERGELA, forecasts of selected features of the economy
are available in the Haver data bases, FX4CASTS and OEFMAJOR. The
former contains five year forecasts of exchange rates, interest rates,
real growth rates, inflation rates and the current account as a percent
of GDP. The latter contains ten year forecasts of many of the usual
items found in the EMERGELA data base under the headings: Financial,
National Income, Prices, Production, Unemployment, International Trade
and Balance of Payments and Population/Demographics. The third chart
shows the ten year annual forecast of industrial production from the
OEFMAJOR data base and the actual 2OO9 industrial production from
EMEREGLA.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504k.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504l.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Brazil</th>
<th scope="col"><b>Mar 10&nbsp;</b></th>
<th scope="col"><b>Feb 10&nbsp;</b></th>
<th scope="col"><b>Mar 09</b></th>
<th scope="col"><b>M/M Chg</b></th>
<th scope="col"><b>Y/Y Chg</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial
Production (2002=100)</td>
<td>130.65</td>
<td>127.15</td>
<td>110.27</td>
<td>2.75</td>
<td>18.36</td>
<td>116.21</td>
<td>125.31</td>
<td>121.78</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>181.32</td>
<td>176.09</td>
<td>133.52</td>
<td>2.97</td>
<td>35.80</td>
<td>150.50</td>
<td>182.32</td>
<td>159.49</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Goods</td>
<td>130.39</td>
<td>127.51</td>
<td>115.06</td>
<td>2.26</td>
<td>13.32</td>
<td>118.68</td>
<td>121.89</td>
<td>119.73</td>
</tr>
<tr>
<td class="firstcol">Intermediate
Goods&nbsp;</td>
<td>122.10</td>
<td>120.68</td>
<td>103.84</td>
<td>1.25</td>
<td>17.64</td>
<td>109.65</td>
<td>119.87</td>
<td>118.34</td>
</tr>
</tbody>
</table>
<span id="articletitle">EMU PPI Prices Show Downward
Pressures Unwinding</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> May 04, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100504m.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Pressure on the Euro-Area PPI remained in force in March as
the price index continues to show Yr/Yr drops. Still the 6-month index
is up at a 0.4% rate and the 3-Mo index is up at a 4.1% pace. For
manufacturing the same trends are in play but with accelerated rates of
growth.</p>
<p>Excluding energy prices both France and Germany show
manufactured prices that are transitioning to positive growth rates for
prices over three months or longer. Both series show a gradual
acceleration in prices. Headline prices accelerate for all large EMU/EU
countries in the table. Only Germany is still showing price drops even
over three months for headline prices (excluding construction).</p>
<p>Sector prices also how an acceleration (or reduced
deceleration, if you prefer) is in motion. These trends are also
consistent with the notion that aggregate demand is picking up since at
some point very weak prices indicate not just pricing and cost trends
but demand deficiencies. That part of the weak price picture appears to
be going away. And that is consistent with the better growth metrics we
have been seeing in the Zone recently.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"><b>Euro-Area
and UK PPI Trends</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Area</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr>
<td class="firstcol">TotalxConstruct</td>
<td>0.3%</td>
<td style="color: red;">-0.1%</td>
<td>4.1%</td>
<td>0.4%</td>
<td style="color: red;">-6.6%</td>
<td>6.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Capital Gds</td>
<td style="color: red;">0.0%</td>
<td>0.0%</td>
<td style="color: red;">-0.1%</td>
<td>-0.8%</td>
<td style="color: red;">-0.7%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Consurmer Gds</td>
<td style="color: red;">-0.3%</td>
<td style="color: red;">-0.1%</td>
<td style="color: red;">-1.1%</td>
<td>-0.8%</td>
<td style="color: red;">-2.8%</td>
<td>2.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Intermediate&amp;Cap
Gds</td>
<td style="color: red;">-0.1%</td>
<td>0.5%</td>
<td>3.3%</td>
<td>0.5%</td>
<td style="color: red;">-6.5%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.3%</td>
<td style="color: red;">0.0%</td>
<td>5.2%</td>
<td>2.4%</td>
<td style="color: red;">-5.2%</td>
<td>3.6%</td>
</tr>
<tr class="grey1">
<td style="font-weight: bold;" class="firstcol">Germany</td>
<td>0.2%</td>
<td style="color: red;">-0.2%</td>
<td style="color: red;">-5.2%</td>
<td>-6.1%</td>
<td style="color: red;">-7.5%</td>
<td>7.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Gy
ExEnergy</td>
<td style="font-weight: bold;">0.2%</td>
<td style="font-weight: bold;">0.4%</td>
<td style="font-weight: bold;">3.1%</td>
<td>1.5%</td>
<td style="font-weight: bold;">0.3%</td>
<td style="color: red;">-1.4%</td>
</tr>
<tr class="grey1">
<td style="font-weight: bold;" class="firstcol">France:Tot</td>
<td>1.0%</td>
<td>-<span style="color: red;">0.2%</span></td>
<td>6.5%</td>
<td>2.7%</td>
<td style="color: red;">-6.6%</td>
<td>4.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Fr
ExF&amp;Energy</td>
<td style="font-weight: bold;">0.3%</td>
<td style="font-weight: bold;">0.0%</td>
<td style="font-weight: bold;">1.5%</td>
<td>-0.4%</td>
<td style="color: red;">-3.4%</td>
<td>3.3%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>0.3%</td>
<td>0.3%</td>
<td>5.9%</td>
<td>1.2%</td>
<td style="color: red;">-6.1%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>1.4%</td>
<td>0.4%</td>
<td>19.0%</td>
<td>8.6%</td>
<td style="color: red;">-2.7%</td>
<td>14.6%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Euro-Area
Harmonized
PPI ex construction</td>
</tr>
</tbody>
</table>
</body></html>

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503l.jpg" style=" width: 353px; height: 265px;" align="left"></p>
<p>World wide, purchasing managers in the manufacturing industry
have become increasingly optimistic. The Markit Economic Survey
expresses the responses of the purchasing managers in the form of
diffusion indexes that are based on percent balances between those
expecting improvement and those expecting deterioration. Values of the
index above 50 represent expansion and those below, contraction.</p>
<p>Data for April, 2010 are currently being reported and most of
the data show indexes that are now above the 50 level. The first to
show expansion were the purchasing manages in the Far East. The first
chart shows the diffusion indexes for the purchasing managers of
Taiwan, Korea and India, three countries in the Far East for which
April data are available. In these countries the indexes began to rise
above 50 in early 2009. The second chart shows the indexes for Italy,
France and Germany. Purchasing manager in these countries only became
optimistic in late 2009. And in the troubled countries of the Euro Area
that have reported--Greece, Ireland and Spain--the purchasing managers
in Greece have yet to predict expansion while those in Ireland and
Spain have only begun to predict expansion in March and April of this
year, as can be seen in the third chart.</p>
</span>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503m.jpg" style="width: 312px; height: 265px;">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503n.jpg" style="width: 312px; height: 265px;">
<table  cellspacing="0" width="100%">
<colgroup><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;
&nbsp; <span style="font-weight: bold;">PMI Diffusion
Indexes Manufacturing</span></th>
<th scope="col"><b>April 10&nbsp;</b></th>
<th scope="col"><b>Mar 10&nbsp;</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Italy</td>
<td>54.29</td>
<td>53.73</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; France</td>
<td>56.55</td>
<td>56.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
Germany</td>
<td>61.51</td>
<td>60.23</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Taiwan</td>
<td>60.72</td>
<td>62.74</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Korea</td>
<td>57.06</td>
<td>55.62</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; India</td>
<td>57.24</td>
<td>57.73</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Greece</td>
<td>43.64</td>
<td>42.94</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
Ireland</td>
<td>53.41</td>
<td>52.99</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Spain</td>
<td>53.31</td>
<td>51.85</td>
</tr>
</tbody>
</table>
</body></html>

World wide, purchasing managers in the manufacturing industry have become increasingly optimistic. The Markit Economic Survey expresses the responses of the purchasing managers in the form of diffusion indexes that are based on [...]

World Wide, Purchasing Managers In Manufacturing Optimistic

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<span id="articletext">
<p></p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503h.jpg" style="width: 312px; height: 265px;">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503i.jpg" style="width: 312px; height: 265px;">
<p>Construction activity remains depressed. The negligible 0.2%
uptick in March after the 2.1% February collapse left it near the
lowest level since 2003. The latest rise barely beat Consensus
expectations for a 0.3% dip.</p>
<p>Total private construction activity continued lower in March,
led down by a 1.1% drop in residential building activity. The decline
reflected a 6.3% drop (-58.1% y/y) in multi-family building activity
and a 3.0% decline (+6.8% y/y) in improvements. Conversely,
single-family construction activity rose 1.6% (17.2% y/y). It has risen
consecutively m/m since last June.</p>
<p>Nonresidential building activity fell another 0.7% during
March and was off by one-quarter during the last twelve months.
Spending on lodging fell by nearly two-thirds during the last year
while office construction dropped 42%. Retail shopping centers also
have developed a hard downward trend (-39.8% y/y) in addition to school
construction (-12.6% y/y). Health care construction also has suffered
(-16.3% y/y).</p>
<p>In the public sector, building activity bucked the negative
trend and rose 2.3% in March. The gain was led by a 23.7% rise (-14.9%
y/y) in power-plant construction. Spending on health-care facilities
added to the gain with a 4.9% increase (0.0% y/y) while spending on
highways &amp; streets rose 1.5% (-1.4% y/y). Building in the
education sector fell 2.2% for the month and was down 16.9% y/y.</p>
<p>The construction put-in-place figures are available in Haver's
<b>USECON </b>database.</p>
</span>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503j.jpg" style="width: 312px; height: 265px;"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100503k.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Construction
Put In Place (%)</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Total</td>
<td>0.2</td>
<td>-2.1</td>
<td>-0.7</td>
<td>-12.3</td>
<td>-12.5</td>
<td>-6.9</td>
<td>-1.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Private</td>
<td>-0.9</td>
<td>-2.4</td>
<td>-0.1</td>
<td>-15.3</td>
<td>-18.8</td>
<td>-11.1</td>
<td>-5.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>-1.1</td>
<td>-3.4</td>
<td>3.8</td>
<td>1.2</td>
<td>-28.0</td>
<td>-29.1</td>
<td>-19.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-0.7</td>
<td>-1.5</td>
<td>-3.3</td>
<td>-25.5</td>
<td>-11.1</td>
<td>13.2</td>
<td>23.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>2.3</td>
<td>-1.6</td>
<td>-1.9</td>
<td>-6.3</td>
<td>3.3</td>
<td>5.6</td>
<td>13.1</td>
</tr>
</tbody>
</table>
</body></html>

Construction activity remains depressed. The negligible 0.2% uptick in March after the 2.1% February collapse left it near the lowest level since 2003. The latest rise barely beat Consensus expectations for a 0.3% dip. Total private [...]

U.S. Construction Activity Remains Near 2003 Low

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

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

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Andrew Cates

**The growth consensus for 2026** 
Consensus growth forecasts for 2026 have continued to firm over the past six months, with upward revisions most pronounced in economies that are more directly exposed to the global AI investment cycle. Taiwan stands out, reflecting its central role in advanced semiconductor manufacturing and the spillovers from sustained AI-related capex across the global tech supply chain. The US has also seen a sizeable upgrade, consistent with strong domestic investment in AI infrastructure and data-centre capacity, alongside resilient demand for high-value tech services. Elsewhere in Asia, upgrades to South Korea and, to a lesser extent, China and India point to a broader regional benefit from the AI-driven electronics and capital-goods cycle, even as underlying macro conditions remain mixed. Canada has also seen modest upward revisions, likely reflecting its close integration with US investment trends. By contrast, revisions across much of Europe and Japan have been more muted, while forecasts for Russia remain under downward pressure.

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**The next steps for central bank policy** 
Based on responses to the special questions in the latest Blue Chip survey, the chart highlights how uncertain panelists remain about the precise timing of the next policy move, even where there is broad agreement on direction. Expectations for both the Fed and the Bank of England are now loosely centred on March 2026 as the most likely window for the next easing step, but the spread of responses points to limited conviction and a high sensitivity to incoming data. By contrast, panelists continue to see the ECB as largely through its easing cycle, with a clear majority expecting any further move only later, if at all. The Bank of Japan remains the clear outlier: while further tightening is still the central expectation, views are split on timing, with panelists divided between a March move and a hike pushed beyond April 2026—highlighting ongoing uncertainty over the durability of domestic inflation and wage dynamics.

260115Z2.jpg

**The UK economy and BoE policy** 
While Blue Chip panelists remain divided on the precise timing of the Bank of England’s next policy cut, the latest run of UK data is tilting market expectations toward an earlier move. Economic releases have increasingly fallen short of expectations, a pattern that has coincided with a steady decline in short-dated gilt yields. The negative surprise profile reflects a combination of weak household demand and softer labour-market indicators. This has generated downside momentum in the data, reinforcing the case—at least from a market perspective—for earlier or deeper policy easing.

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**The impact of Artificial Intelligence**
Responses to the special questions in the latest Blue Chip survey also suggest that panelists are divided over the timing of AI’s macroeconomic impact in the US. A sizeable share already reports seeing noticeable effects, consistent with the rapid pace of AI-related investment and adoption over the past year. At the same time, a similarly large group expects AI’s impact to become more evident only over the next one to three years, implying a belief that productivity and growth effects will materialise with a lag. These views are notable given that a majority of panelists continue to judge anticipated AI-related gains as being overstated in financial markets, underscoring the risk of disappointment—and potential equity market volatility—if realised outcomes fail to match elevated expectations.

260115Z4.jpg

**US business formation and productivity growth**
The chart points to a renewed pick-up in US productivity growth alongside a marked step-up in business applications, a combination that has naturally fuelled interest in the role of AI. The acceleration in output per hour over the past year coincides with a surge in corporate formations, potentially reflecting both heightened investment in new technologies and the emergence of new, AI-enabled business models. That said, productivity growth has historically been highly cyclical, often strengthening late in the cycle or during periods of labour hoarding and cost discipline, before fading again. As such, while AI may be contributing at the margin, it remains too early to conclude that the recent improvement marks a durable, technology-driven shift rather than another cyclical upswing.

260115Z5.jpg

**China’s export growth**
This week’s China trade data revealed that its export growth has continued to rotate away from the US and toward Europe and ASEAN, a pattern that has become more pronounced over the past year. While exports to the US have fallen sharply on a year-on-year basis, shipments to both Europe and ASEAN have held up markedly better, and in recent months have returned to positive growth. This divergence is consistent with the tightening of US trade policy toward China, including higher tariffs, expanded export controls and broader efforts to “de-risk” supply chains. By contrast, trade with Europe and ASEAN appears to be benefiting from trade diversion and re-routing, as Chinese firms redirect exports toward markets where barriers remain lower and supply-chain integration is deeper.

260115Z6.jpg

The global backdrop remains unsettled, reflected in rising gold prices amid geopolitical tensions—most recently around Venezuela—and renewed political noise, including questions over Federal Reserve independence. At the same time, however, many major equity indices remain at or close to all-time highs, buoyed by optimism around AI and reinforced by a run of relatively benign US inflation readings. Against this mixed backdrop, the charts this week point to a global outlook that is becoming more differentiated rather than uniformly weaker. Blue Chip forecasts for 2026 growth have edged higher over the past six months, with upgrades concentrated in economies most exposed to the AI investment cycle, notably the US and parts of Asia (chart 1). Central bank expectations remain fluid: while panelists broadly anticipate easing by the Fed and Bank of England, conviction around timing is limited, and the Bank of Japan remains an outlier with further tightening still expected (chart 2). In the UK, that uncertainty sits alongside a deteriorating data flow, with negative economic surprises increasingly tilting market expectations toward an earlier BoE rate cut (chart 3). Turning to the US, special questions highlight a divide over whether AI is already having a noticeable macro impact or whether its effects will emerge more gradually, a tension that mirrors concerns about over-optimism in financial markets (chart4). That debate is echoed in the recent pick-up in US productivity growth and the step-change in business formation—developments that may reflect AI-related dynamics but which also warrant caution given the historically cyclical nature of productivity (chart 5). Finally, China’s trade data point to a continued re-orientation of export growth away from the US and toward Europe and ASEAN, consistent with evolving US trade policy and broader supply-chain realignment (chart 6).

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Charts of the Week: Between Optimism and Uncertainty

Sandy Batten

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260115O2.jpg

The Current Activity Diffusion Index from the latest Manufacturing Business Outlook Survey (MBOS) conducted by the Federal Reserve Bank of Philadelphia rose to 12.6 in January from -8.8 in December. The survey covers the third Federal Reserve District. A reading of -4.5 for January was expected by the Action Economics Forecast Survey. Over 23% of respondents reported increases in activity in January (up from 21% last month), exceeding the 11% reporting decreases (down from 30%); 63% of the firms reported no change in current activity (up from 50%). Survey responses were collected from January 5 to January 12.

The headline index is the answer to just one question: whether activity increased, decreased or was unchanged from the previous month. Haver Analytics calculates an ISM-adjusted current activity diffusion index from the five key components using the methodology employed to construct the national ISM index. This figure rose to 52.9 in January from 52.5 in December, inching further above the critical 50 value that separates contraction from expansion.

For the component indexes, the new orders index rose to 14.4 from 5.7 in December. The percentage of respondents reporting an increase in orders edged up to 28.3% in January from 27.4% in the prior month while 13.9% reported a decrease, down markedly from 21.7% in December. The shipments index increased to 9.5 in January from 3.2 in December. The percentage of respondents reporting an increase in shipments rose slightly to 27.3% from 26.2% while the percentage reporting a decrease fell to 17.8% from 23.0%. Delivery times lengthened marginally to 7.3 in January from 5.2 in December. The inventories index fell 17 points to -8.4 in January, its lowest level since July 2024.

Respondents continued to report overall increases in employment with the employment index remaining in positive territory. However, the index fell to 9.7 in January from 13.0 in December, indicating that gains in employment slowed in the latest month. The percentage of respondents reporting an increase in employment rose to 19.8% from 13.6% in December but the percentage reporting a decline jumped to 10.1% in January from 0.6% in December. The average workweek index fell from 12.5 in December to 9.1 in January.

On balance, the firms continued to report overall increases in prices. The prices paid index edged down 2 points to 46.9 in January, its second consecutive decrease and its lowest level since June. Nearly 47% of respondents reported increases in input prices, while none reported decreases; 53% reported no change. The current prices received index ticked up 2 points to 27.8. More than 31% of respondents reported increases in the prices of their own goods, 3% reported decreases, and 66% reported no change.

The diffusion index for future general activity declined from a revised reading of 38.1 in December to 25.5 in January, its lowest reading since July. Nearly 35% of respondents expect an increase in activity over the next six months (down from 53% last month), exceeding the 9% that expect a decrease. The future new orders index fell 6 points to 32.9, while the future shipments index ticked up 1 point to 40.8. On balance, the firms continue to expect increases in employment over the next six months with the future employment index rising 4 points to 28.8. Both future price indexes were well above their long-run averages: The future prices paid index rose 2 points to 66.6; the future prices received index moved up 5 points to 61.8. The index for future capital expenditures edged up 1 point to 30.3.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The indexes range from -100 to +100 with positive values indicating an increase in activity. The series from the survey dating back to May 1968 can be found in Haver’s **SURVEYS** database. The expectations forecast figures are from the Action Economics Forecast Survey in **AS1REPNA**.

260115P2.jpg

260115Q2.jpg

- The headline index increased to 12.6 in January, the highest reading since September, from -8.8 in December.
- Both new orders and shipments increased in January.
- Delivery times lengthened while the pace of input price increases slowed.
- Employment decreased but remained in positive territory, indicating further gains in employment though at a slower pace.

Philly Fed Manufacturing Activity Rebounds in January

Kathleen Stephansen, CBE

260115A5.jpg

260115B5.jpg

Initial claims for unemployment insurance declined by 9,000 to 198,000 in the week ending January 10, from 207,000 in the week ending January 3, revised from 208,000. The four-week moving average of initial claims was 205,000 in the January 10 week, a decline of 6,500 from 211,500 in the January 3 week, revised from 211,750, and reaching is the lowest level for this average since January 20, 2024, when it was 203,250.

Federal government employees initially filed 646 (NSA) jobless insurance claims in the week ended January 3, after filing 476 claims in the week ended December 27.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” –decreased by 19,000 to 1.884 million in the week ended January 3 from 1.903 million in the December 27 week, revised from 1.914 million. The four-week moving average was 1.889 million in the week ending January 3, a decrease of 250 from the prior week, revised from 1.893 million. The insured unemployment rate stood at 1.2% in the week of January 3, unchanged from previous 5 weeks.

Federal government employees’ continuing benefits claims were 12,803 (NSA) in the week of December 27, 12,161 (NSA) from 12,129 (NSA) in the week of December 20. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 27, the highest unemployment rates were in Rhode Island (2.86%), New Jersey (2.85%), Washington (2.81%), Minnesota (2.74%), Massachusetts (2.59%), Oregon (2.28%), Montana (2.16%), California and Connecticut (both 2.12%) and Alaska (2.06%). The lowest rates were in Florida (0.31%), North Carolina (0.41%), Louisiana (0.43%), Alabama and Virginia (both 0.49%). Rates in other notable states include Illinois (2.18%), New York (2.10%), Pennsylvania (2.02%), and Texas (1.20%). 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.

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- Initial claims declined from the prior week.
- Continuing claims declined from the prior week.
- The insured unemployment rate was unchanged.

U.S. Initial Claims for Unemployment Insurance Declined in Latest Week

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Existing home sales jumped 5.1% m/m (+1.4% y/y) in December to 4.35 million units (SAAR). This was the fourth consecutive monthly gain and was well above the 1.7% m/m increase expected by the Action Economics Forecast Survey. December sales were the highest since February 2023. For all of 2025, sales remained anemic, totaling just 4.084 million and only up slightly from 4.067 million in 2024, which was the lowest annual total in the history of the series dating back to 1999. The average effective 30-year mortgage interest rate fell to 6.51% in December from 6.54% in November. This is down markedly from 7.10% in May and accounts for some of the revival in home sales over the past several months. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales rose 5.1% m/m (+1.8% y/y) in December to 3.95 million. This was the fourth consecutive monthly increase and highest level of single-family sales since February 2023. Sales of condos and co-ops surged 5.3% m/m (-2.4% y/y) in December to 400,000, more than reversing a 2.6% monthly drop in November. For all of 2025, sales of single-family homes edged up to 3.706 million from 3.673 million in 2024. By contrast, sales of condos and co-ops declined to 378,333 from 393,333 in 2024.

Compared to a month ago, sales rose 2.0% m/m in the Northeast, increased 2.0% m/m in the Midwest, jumped 6.9% m/m in the South (the largest monthly gain since February 2024), and surged 6.6% m/m in the West (the largest monthly gains since February). Year-over-year comparisons were less flattering. Compared to a year ago, sales were unchanged in both the Midwest and the West and fell 1.9% y/y in the Northeast. By contrast, sales rose 3.6% y/y in the South.

The median price of all existing homes (NSA) declined 1.1% m/m (+0.4% y/y) to $405,400 in December. The median price of an existing single-family home fell 1.3% m/m (+0.2% y/y) to $409,500 in December. Prices of single-family homes in the Northeast were essentially unchanged in December from November. However, prices in the other three regions fell: -3.6% m/m in the Midwest, -0.3% m/m in the South, -1.9% m/m in the West.

Inventories of homes for sale continued to weaken in December. The number of existing homes for sale (NSA) plummeted 18.1% m/m (+3.5% y/y) to 1.18 million units, the lowest level since January. The supply of homes on the market at the current selling rate (NSA) fell to 3.3 months, its lowest reading since last December.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- Existing home sales jumped a much larger-than-expected 5.1% m/m in December, the fourth consecutive monthly gain.
- Month-over-month sales increased in each of the four major areas.
- But year-over-year sales rose only in the South.
- For all of 2025, sales totaled 4.084 million, up slightly from 4.067 million in 2024.

U.S. Existing Home Sales Jumped 5.1% in December

Michael J. Moran

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The Bureau of Labor Statistics did not publish a report on producer prices for October because of the government shutdown, but it was able to collect sufficient data retroactively to construct all the usual statistics. Those results were included in the November report, which was published on January 14.

The producer price index for final demand rose 0.2% In November after an increase of 0.1 percent in October. These modest changes followed firmer increases in the prior three months (0.4% on average), leaving little change in the year-over-year increase. The Producer Price Index can fluctuate sharply from month-to-month, but the ups and downs recently have traced a sideways trend, with inflation remaining in a range of approximately 2.0% to 4.0% since early 2024. Inflation in the past several months has been in the middle of that range.

The goods and service components of final demand both posted annual inflation near 3.0% in November (goods at 3.2% and services at 2.9%), but they were moving along different trajectories. Good inflation was drifting upward, while service inflation was easing slightly. Casual observation suggests that tariffs might be playing a role in the pickup in goods inflation. Tariffs could be leading to higher prices of inputs for domestic producers, which might be passed on to final prices. The year-over-year increase in final goods inflation totaled only 0.4% in April, when President Trump announced draconian tariffs, but it has since climbed to 3.2%.

The final demand PPI, in addition to goods and service components, also has a construction component, although it has a small weight in the overall index (2.6%). This component was unchanged in November after an increase of 1.6% in October; the year-over-year change totaled 2.7%. The BLS claims that monthly changes in the construction component are seasonally adjusted, but the published figures seem to have residual seasonality. Specifically, the first month of many quarters often shows an outsized change. In the chart below, the spikes upward and downward are nearly always in the first month of a quarter.

In addition to final demand measures, the Bureau of Labor Statistics also publishes price indexes for intermediate goods and services produced by US firms. The intermediate service measure had been showing a downward drift in inflation, although it has taken a slight turn upward in recent months. Among producers of processed goods, inflation at the intermediate level has taken a sharp turn since mid-2024, moving from deflation to essentially no inflation one year later. Inflation remained close to zero for a time, but a renewed upward trend began in the spring of last year (after April – one wonders about the effect of tariffs).

The BLS publishes an index for unprocessed goods at the intermediate level, but this measure is wild. Month-to-month changes are often pronounced, and the year-over-year change swings sharply as well. Since mid-2024, year-over-year inflation has ranged from -32.1% to 9.3%.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

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- Offsetting drifts in final demand for goods and services leave inflation steady at 3%.
- Inflation quickens for producers of intermediate goods and services.

Economy in Brief

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