Tom Moeller

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<p>The Business Cycle Dating Committee at the National Bureau of
Economic Research indicated that it's premature to call an end to the
U.S. recession. Their latest communiqué can be found <a href="http://www.nber.org/cycles/april2010.html">here</a>.</p>
<p>Nevertheless, Haver Analytics has gone ahead and updated the
business cycle shading in its charts, primarily for two reasons. We
have chosen June 2009 as the end date for the recession: 1) The index
of coincident economic indicators, which includes data covering nonfarm
payrolls, industrial production, business sales and personal income,
troughed in June. 2) Real GDP growth has been positive since 3Q '09 and
likely was again positive last quarter. The 1Q data will be published
later this month.</p>
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The Business Cycle Dating Committee at the National Bureau of Economic Research indicated that it's premature to call an end to the U.S. recession. Their latest communiqué can be found here. Nevertheless, Haver Analytics has gone [...]

Dating The U.S. Recession's End

Louise Curley

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<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412b.jpg" style="width: 353px; height: 265px;" align="right">Five
countries--Italy, Ireland, India, Kazakhstan and Mexico--reported
February data on industrial production today.&nbsp; One, Kazakhstan
reported data for March.&nbsp;&nbsp; We have put the various
indexes on a common basis, 2003=100, so that growth of production can
be compared.&nbsp; Production in Italy in February, for example, at
84.8, was still well below its level of 100 in 2003.&nbsp; And
although production in Ireland has increased sharply in the last two
months, it is only 20% above its 2003 level after seven
years.&nbsp; Industrial production data in Italy and Ireland since
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412c.jpg" style="width: 353px; height: 265px;" align="right">2003
are shown in the first chart.</p>
<p> Industrial production in India and
Kazakhstan declined 0.25% and 0.68% in February from January, but it
has been increasing over the past year and is 15.0% and 10.4%,
respectively, ahead of January, 2009.&nbsp;&nbsp; Incidentally,
production in Kazakhstan rose in March.&nbsp; Both India and
Kazakhstan have grown strongly in the past seven years and production
is now 73% and 56%, respectively above their 2003 levels of
production.&nbsp;</p>
<p>In contrast to the performance of
industrial production in India and Kazakhstan, that in Mexico, the
other emerging country reporting today, has recently shown some
improvement but it has grown only 10% since 2003.&nbsp; Industrial
production data since 2003 for the three emerging countries are shown
in the second chart.</p><p> It should be noted that a common index base of
production among countries enables one to compare the growth of
production among countries, but it says nothing of the magnitude of
output in the various countries.&nbsp;&nbsp;&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"><b>Industrail Production
(2003=100)</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td><b>Feb 10&nbsp;</b></td>
<td><b>Jan 10&nbsp;</b></td>
<td><b>Feb 09</b></td>
<td><b>M/M % Chg</b></td>
<td><b>Y/Y % Chg</b></td>
<td><b>2009</b></td>
<td><b>2008</b></td>
<td><b>2007</b></td>
</tr>
<tr>
<td class="firstcol">India</td>
<td>172.5</td>
<td>172.9</td>
<td>149.9</td>
<td>-0.25</td>
<td>15.02</td>
<td>158.4</td>
<td>149.0</td>
<td>142.2</td>
</tr>
<tr>
<td class="firstcol">Kazakhstan</td>
<td>156.3*</td>
<td>157.4</td>
<td>141.6</td>
<td>-0.68</td>
<td>10.38</td>
<td>149.8</td>
<td>147.5</td>
<td>146.5</td>
</tr>
<tr>
<td class="firstcol">Mexico</td>
<td>110.3</td>
<td>109.5</td>
<td>105.6</td>
<td>0.55</td>
<td>4.45</td>
<td>106.1</td>
<td>114.0</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>84.8</td>
<td>84.8</td>
<td>83.5</td>
<td>0.00</td>
<td>2.95</td>
<td>82.4</td>
<td>100.8</td>
<td>104.8</td>
</tr>
<tr>
<td class="firstcol">Ireland</td>
<td>119.3</td>
<td>117.9</td>
<td>106.8</td>
<td>1.2</td>
<td>11.7</td>
<td>107.2</td>
<td>111.9</td>
<td>113.7</td>
</tr>
<tr class="odd">
<td colspan="9" class="firstcol">*March-159.2</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Five countries--Italy, Ireland, India, Kazakhstan and Mexico--reported February data on industrial production today. One, Kazakhstan reported data for March. We have put the various indexes on a common basis, 2003=100, so that growth [...]

Industrial Production In Five Countries

Robert Brusca

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<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>History tells us that gains this strong do not continue to
accelerate like this for very long. Already the sequential growth rates
are showing that the pace of growth is beginning to ebb even though the
12-month rates continue to accelerate. Despite that, the six- month
growth rates, the horizon on which the OECD prefers to evaluate its
indices, shows a slow down from the previous 6 months but still posts
strong rates of expansion. The whole of the OECD area is still
advancing at a rate of 8.6% over six months, the e-Zone is up at a 6.6%
pace and the US is up at a 10.5% pace. Japan alone is still
accelerating, to a pace of 8.6% over six months.</p>
<p>But economic recovery is not simply achieved by getting out of
the woods with a strong LEI reading. As we have seen, Europe is dogged
by debt problems from Greece to Portugal to Spain. The UK, in the midst
of elections, has posted some very erratic economic figures including a
recent spike in its PPI. Today Italy posted a sideways IP result with
output remaining flat month-to-month. By itself that does not sound so
bad, but Italy has a long way to go to restore output to its past cycle
peak level. So a month of no progress is not a good result.</p>
<p>The OECD data tell us, however, that results are improving
across the OECD area and that conditions in Japan are accelerating. For
the time being it is still good news but it is still not good enough
given all the post-cycle risks that continue to lurk and to chase after
the outlook.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"><b>OECD
Trend-restored leading Indicators</b> </th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="odd">
<td style="text-align: center;" colspan="5">Growth progression-SAAR</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD</td>
<td style="color: red;">6.5%</td>
<td style="color: red;">8.6%</td>
<td>10.1%</td>
<td style="color: red;">-11.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td style="color: red;">6.7%</td>
<td style="color: red;">8.9%</td>
<td>10.2%</td>
<td style="color: red;">-12.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Ezone</td>
<td style="color: red;">3.5%</td>
<td style="color: red;">6.6%</td>
<td>9.8%</td>
<td style="color: red;">-12.1%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td style="color: red;">7.0%</td>
<td>8.6%</td>
<td>7.6%</td>
<td style="color: red;">-14.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD US</td>
<td style="color: red;">9.1%</td>
<td style="color: red;">10.5%</td>
<td>10.9%</td>
<td style="color: red;">-13.1%</td>
</tr>
<tr style="font-weight: bold;">
<td style="text-align: center;" colspan="5">Six
month readings at 6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td style="color: red;">8.6%</td>
<td>11.6%</td>
<td style="color: red;">-14.1%</td>
<td style="color: red;">-9.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD7</td>
<td style="color: red;">8.9%</td>
<td>11.6%</td>
<td style="color: red;">-16.3%</td>
<td style="color: red;">-9.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td style="color: red;">6.6%</td>
<td>13.0%</td>
<td style="color: red;">-12.4%</td>
<td style="color: red;">-11.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Japan</td>
<td>8.6%</td>
<td>6.6%</td>
<td style="color: red;">-21.1%</td>
<td style="color: red;">-7.6%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td style="color: red;">10.5%</td>
<td>11.2%</td>
<td style="color: red;">-17.6%</td>
<td style="color: red;">-8.3%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol"><span style="color: red; font-weight: bold;">Slowdowns</span><span style="color: red; font-weight: bold;"> </span>indicated
by BOLD RED</td>
</tr>
</tbody>
</table>
</body></html>

History tells us that gains this strong do not continue to accelerate like this for very long. Already the sequential growth rates are showing that the pace of growth is beginning to ebb even though the 12-month rates continue to [...]

OECD LEIs Show Strongest Synchronized Revival Since 1975 Expansion

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<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>History tells us that gains this strong do not continue to
accelerate like this for very long. Already the sequential growth rates
are showing that the pace of growth is beginning to ebb even though the
12-month rates continue to accelerate. Despite that, the six- month
growth rates, the horizon on which the OECD prefers to evaluate its
indices, shows a slow down from the previous 6 months but still posts
strong rates of expansion. The whole of the OECD area is still
advancing at a rate of 8.6% over six months, the e-Zone is up at a 6.6%
pace and the US is up at a 10.5% pace. Japan alone is still
accelerating, to a pace of 8.6% over six months.</p>
<p>But economic recovery is not simply achieved by getting out of
the woods with a strong LEI reading. As we have seen, Europe is dogged
by debt problems from Greece to Portugal to Spain. The UK, in the midst
of elections, has posted some very erratic economic figures including a
recent spike in its PPI. Today Italy posted a sideways IP result with
output remaining flat month-to-month. By itself that does not sound so
bad, but Italy has a long way to go to restore output to its past cycle
peak level. So a month of no progress is not a good result.</p>
<p>The OECD data tell us, however, that results are improving
across the OECD area and that conditions in Japan are accelerating. For
the time being it is still good news but it is still not good enough
given all the post-cycle risks that continue to lurk and to chase after
the outlook.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"><b>OECD
Trend-restored leading Indicators</b> </th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="odd">
<td style="text-align: center;" colspan="5">Growth
progression-SAAR</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD</td>
<td style="color: red;">6.5%</td>
<td style="color: red;">8.6%</td>
<td>10.1%</td>
<td style="color: red;">-11.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td style="color: red;">6.7%</td>
<td style="color: red;">8.9%</td>
<td>10.2%</td>
<td style="color: red;">-12.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Ezone</td>
<td style="color: red;">3.5%</td>
<td style="color: red;">6.6%</td>
<td>9.8%</td>
<td style="color: red;">-12.1%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td style="color: red;">7.0%</td>
<td>8.6%</td>
<td>7.6%</td>
<td style="color: red;">-14.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD US</td>
<td style="color: red;">9.1%</td>
<td style="color: red;">10.5%</td>
<td>10.9%</td>
<td style="color: red;">-13.1%</td>
</tr>
<tr style="font-weight: bold;">
<td style="text-align: center;" colspan="5">Six
month readings at 6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td style="color: red;">8.6%</td>
<td>11.6%</td>
<td style="color: red;">-14.1%</td>
<td style="color: red;">-9.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD7</td>
<td style="color: red;">8.9%</td>
<td>11.6%</td>
<td style="color: red;">-16.3%</td>
<td style="color: red;">-9.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td style="color: red;">6.6%</td>
<td>13.0%</td>
<td style="color: red;">-12.4%</td>
<td style="color: red;">-11.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Japan</td>
<td>8.6%</td>
<td>6.6%</td>
<td style="color: red;">-21.1%</td>
<td style="color: red;">-7.6%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td style="color: red;">10.5%</td>
<td>11.2%</td>
<td style="color: red;">-17.6%</td>
<td style="color: red;">-8.3%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol"><span style="color: red; font-weight: bold;">Slowdowns</span><span style="color: red; font-weight: bold;"> </span>indicated
by BOLD RED</td>
</tr>
</tbody>
</table>
<span id="articletitle">Industrial Production In Five
Countries</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley</a> April 12, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412b.jpg" style="width: 353px; height: 265px;" align="right">Five
countries--Italy, Ireland, India, Kazakhstan and Mexico--reported
February data on industrial production today.&nbsp; One, Kazakhstan
reported data for March.&nbsp;&nbsp; We have put the various
indexes on a common basis, 2003=100, so that growth of production can
be compared.&nbsp; Production in Italy in February, for example, at
84.8, was still well below its level of 100 in 2003.&nbsp; And
although production in Ireland has increased sharply in the last two
months, it is only 20% above its 2003 level after seven
years.&nbsp; Industrial production data in Italy and Ireland since
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412c.jpg" style="width: 353px; height: 265px;" align="right">2003
are shown in the first chart.</p>
<p> Industrial production in India and
Kazakhstan declined 0.25% and 0.68% in February from January, but it
has been increasing over the past year and is 15.0% and 10.4%,
respectively, ahead of January, 2009.&nbsp;&nbsp; Incidentally,
production in Kazakhstan rose in March.&nbsp; Both India and
Kazakhstan have grown strongly in the past seven years and production
is now 73% and 56%, respectively above their 2003 levels of
production.&nbsp;</p>
<p>In contrast to the performance of
industrial production in India and Kazakhstan, that in Mexico, the
other emerging country reporting today, has recently shown some
improvement but it has grown only 10% since 2003.&nbsp; Industrial
production data since 2003 for the three emerging countries are shown
in the second chart.</p><p> It should be noted that a common index base of
production among countries enables one to compare the growth of
production among countries, but it says nothing of the magnitude of
output in the various countries.&nbsp;&nbsp;&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"><b>Industrail
Production
(2003=100)</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td><b>Feb 10&nbsp;</b></td>
<td><b>Jan 10&nbsp;</b></td>
<td><b>Feb 09</b></td>
<td><b>M/M % Chg</b></td>
<td><b>Y/Y % Chg</b></td>
<td><b>2009</b></td>
<td><b>2008</b></td>
<td><b>2007</b></td>
</tr>
<tr>
<td class="firstcol">India</td>
<td>172.5</td>
<td>172.9</td>
<td>149.9</td>
<td>-0.25</td>
<td>15.02</td>
<td>158.4</td>
<td>149.0</td>
<td>142.2</td>
</tr>
<tr>
<td class="firstcol">Kazakhstan</td>
<td>156.3*</td>
<td>157.4</td>
<td>141.6</td>
<td>-0.68</td>
<td>10.38</td>
<td>149.8</td>
<td>147.5</td>
<td>146.5</td>
</tr>
<tr>
<td class="firstcol">Mexico</td>
<td>110.3</td>
<td>109.5</td>
<td>105.6</td>
<td>0.55</td>
<td>4.45</td>
<td>106.1</td>
<td>114.0</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>84.8</td>
<td>84.8</td>
<td>83.5</td>
<td>0.00</td>
<td>2.95</td>
<td>82.4</td>
<td>100.8</td>
<td>104.8</td>
</tr>
<tr>
<td class="firstcol">Ireland</td>
<td>119.3</td>
<td>117.9</td>
<td>106.8</td>
<td>1.2</td>
<td>11.7</td>
<td>107.2</td>
<td>111.9</td>
<td>113.7</td>
</tr>
<tr class="odd">
<td colspan="9" class="firstcol">*March-159.2</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">Dating The U.S. Recession's End</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> April 12, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412e.jpg" style="width: 312px; height: 265px;"></p>
<p>The Business Cycle Dating Committee at the National Bureau of
Economic Research indicated that it's premature to call an end to the
U.S. recession. Their latest communiqué can be found <a href="http://www.nber.org/cycles/april2010.html">here</a>.</p>
<p>Nevertheless, Haver Analytics has gone ahead and updated the
business cycle shading in its charts, primarily for two reasons. We
have chosen June 2009 as the end date for the recession: 1) The index
of coincident economic indicators, which includes data covering nonfarm
payrolls, industrial production, business sales and personal income,
troughed in June. 2) Real GDP growth has been positive since 3Q '09 and
likely was again positive last quarter. The 1Q data will be published
later this month.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412g.jpg" style="width: 312px; height: 265px;">
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OECD LEIs Show StrongestSynchronized Revival Since 1975 Expansion

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409f.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>UK MFG inflation trends are still running hot with the release
of the PPI for March. Commodity prices are still rising, adding to the
pressure with Brent prices up by 7% in the March and other commodity
prices rising as well. Coupled with weakness in sterling, inflation has
a real foothold in the UK. The BOE has an inflation ceiling but that
applies to its Consumer price measure, not the PPI. Still, with this
kind of pressure on producer prices it is hard to conclude that the CPI
will be out of the woods anytime soon.</p>
<p>In terms trends in the PPI, The various sequential rates of
growth all are elevating but the three month rate is below the six
month rate for both the core and the headline rates indicating that it
is not a pure acceleration for inflation But the Core rate is still
slightly above its Yr/Yr pace and that is not a good sign. Inflation
trends in the UK could be worse but they could be a lot better too.
There is not much in this report that is reassuring if you are at the
Bank of England trying to decide on policy.</p>
<p>On top of these poor trends there is also pressure from input
prices that were up exceptionally strongly in March. While the UK has
posted some better growth numbers recently the BOE is still helping the
markets with securities purchases. The last thing it needs is for
inflation to become more unstable. Inflation is already pushing the
limits of BOE tolerance for the CPI. Any further pressure would really
put the BOE between a rock and hard place.</p>
</span>

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"><b>UK PPI MFG net output prices</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%M/M</td>
<td colspan="4">%SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>6.7%</td>
<td>5.0%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Core</td>
<td>0.6%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>4.3%</td>
<td>5.1%</td>
<td>3.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Core: ex food
beverages, tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

UK MFG inflation trends are still running hot with the release of the PPI for March. Commodity prices are still rising, adding to the pressure with Brent prices up by 7% in the March and other commodity prices rising as well. Coupled [...]

UK PPI Surges – Not What The Doctor Ordered

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409c.jpg" style="width: 312px; height: 265px;"></p>
<p>The U.S. unemployment rate has lingered near 10% since last
summer. As if that's not bad enough news, the detail behind the total
paints a picture of an even graver economic situation. The current
range of the unemployment rate is 7%-to-47% in the U.S. depending on
age, race and sex. But many other variables matter greatly for the
level of unemployment amongst certain groups.</p>
<p>The unemployment rate for adults, aged 20 or over, currently
is 9.1%. That is lower than the total, but it's still more than double
the rate from 2005 to 2007. Here, however, is where a further breakdown
of the numbers reveals even more notable divergences in unemployment. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409a.jpg" style="border: 0px solid ; width: 312px; height: 265px; float: right;" align="left"> Let's begin by looking further at age. For
teenagers, the unemployment rate is a relatively high 26.1% and that's
up from roughly 15% in 2006. But the adult female unemployment rate is
a lower at 8.0%, though that is double the 2007 low. The adult male
unemployment rate is 10.0%, roughly equal to the total.</p>
<p>The figures by race versus age &amp; gender diverge
greatly. At the low end of the unemployment scale are white individuals
with an 8.8% rate, though that is more than double the average from
2005 to 2007. Again, the rate for adult females is lower at 7.3%,
compared to 8.9% for adult white men. For blacks, the numbers rise
significantly. The unemployment rate amongst blacks and African
Americans is up to 16.5% from the 8.3% low in 2007. Again, female black
unemployment is lower than that of males at 13.2%, compared to 20.2%
for men. But the grown-ups, as usual, are better off. Unemployment
amongst adult blacks amounted to 15.5%. Though that was double the 2007
low, the rate for black teenagers was an eye-popping 41.1%. If you're
male and a teen the rate jumps higher to 47.4% from 32.5% in 2006.</p>
<p>As might be expected, the level of educational attainment
matters when it some to employment. The unemployment rate for
individuals who either took some college courses (8.2%) or received a
BA or higher (4.9%) suggest that preparation for a professional career
pays off. These numbers ignore, of course, the payoff to folks who
seriously prepare for a skilled-labor position. For adults with less
than a high school diploma, the relatively high unemployment rate of
14.5% is up from the 7.0% low in 2006-07.</p>
<p>Unemployment data are available in Haver's <b>USECON</b>
&amp; <b>EMPL</b> databases.</p>
<p><b>The Labor Market in the Great Recession </b>from
the Federal Reserve Bank of San Francisco is available here <a href="http://www.frbsf.org/publications/economics/papers/2010/wp10-07bk.pdf">here</a>.</p>
<p><b>The Economic Outlook</b> is the title of
yesterday's speech by Fed Vice Chairman Donald L. Kohn and it can be
found here <a href="http://www.federalreserve.gov/newsevents/speech/kohn20100408a.htm">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409e.jpg" style="width: 312px; height: 265px;">&gt;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Unemployment
Rate (%)</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>March '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="odd">
<td class="firstcol">Total</td>
<td>9.7</td>
<td>9.7</td>
<td>9.7</td>
<td>8.6</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 16-19 Years</td>
<td>26.1</td>
<td>25.0</td>
<td>26.4</td>
<td>22.0</td>
<td>24.3</td>
<td>18.7</td>
<td>15.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>23.7</td>
<td>22.5</td>
<td>23.5</td>
<td>20.3</td>
<td>21.9</td>
<td>16.7</td>
<td>13.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>41.1</td>
<td>42.0</td>
<td>43.8</td>
<td>33.1</td>
<td>39.6</td>
<td>31.2</td>
<td>29.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 20 Years &amp;
Over</td>
<td>9.1</td>
<td>9.1</td>
<td>9.0</td>
<td>8.0</td>
<td>8.7</td>
<td>5.2</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>8.1</td>
<td>8.2</td>
<td>8.1</td>
<td>7.4</td>
<td>7.9</td>
<td>4.7</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>15.5</td>
<td>14.8</td>
<td>15.3</td>
<td>12.7</td>
<td>13.7</td>
<td>9.1</td>
<td>7.2</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. unemployment rate has lingered near 10% since last summer. As if that's not bad enough news, the detail behind the total paints a picture of an even graver economic situation. The current range of the unemployment rate is [...]

U.S. Unemployment By Age, Race,Gender & Schooling

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409c.jpg" style="width: 312px; height: 265px;"></p>
<p>The U.S. unemployment rate has lingered near 10% since last
summer. As if that's not bad enough news, the detail behind the total
paints a picture of an even graver economic situation. The current
range of the unemployment rate is 7%-to-47% in the U.S. depending on
age, race and sex. But many other variables matter greatly for the
level of unemployment amongst certain groups.</p>
<p>The unemployment rate for adults, aged 20 or over, currently
is 9.1%. That is lower than the total, but it's still more than double
the rate from 2005 to 2007. Here, however, is where a further breakdown
of the numbers reveals even more notable divergences in unemployment. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409a.jpg" style="border: 0px solid ; width: 312px; height: 265px; float: right;" align="left"> Let's begin by looking further at age. For
teenagers, the unemployment rate is a relatively high 26.1% and that's
up from roughly 15% in 2006. But the adult female unemployment rate is
a lower at 8.0%, though that is double the 2007 low. The adult male
unemployment rate is 10.0%, roughly equal to the total.</p>
<p>The figures by race versus age &amp; gender diverge
greatly. At the low end of the unemployment scale are white individuals
with an 8.8% rate, though that is more than double the average from
2005 to 2007. Again, the rate for adult females is lower at 7.3%,
compared to 8.9% for adult white men. For blacks, the numbers rise
significantly. The unemployment rate amongst blacks and African
Americans is up to 16.5% from the 8.3% low in 2007. Again, female black
unemployment is lower than that of males at 13.2%, compared to 20.2%
for men. But the grown-ups, as usual, are better off. Unemployment
amongst adult blacks amounted to 15.5%. Though that was double the 2007
low, the rate for black teenagers was an eye-popping 41.1%. If you're
male and a teen the rate jumps higher to 47.4% from 32.5% in 2006.</p>
<p>As might be expected, the level of educational attainment
matters when it some to employment. The unemployment rate for
individuals who either took some college courses (8.2%) or received a
BA or higher (4.9%) suggest that preparation for a professional career
pays off. These numbers ignore, of course, the payoff to folks who
seriously prepare for a skilled-labor position. For adults with less
than a high school diploma, the relatively high unemployment rate of
14.5% is up from the 7.0% low in 2006-07.</p>
<p>Unemployment data are available in Haver's <b>USECON</b>
&amp; <b>EMPL</b> databases.</p>
<p><b>The Labor Market in the Great Recession </b>from
the Federal Reserve Bank of San Francisco is available here <a href="http://www.frbsf.org/publications/economics/papers/2010/wp10-07bk.pdf">here</a>.</p>
<p><b>The Economic Outlook</b> is the title of
yesterday's speech by Fed Vice Chairman Donald L. Kohn and it can be
found here <a href="http://www.federalreserve.gov/newsevents/speech/kohn20100408a.htm">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409e.jpg" style="width: 312px; height: 265px;">&gt;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Unemployment
Rate (%)</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>March '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="odd">
<td class="firstcol">Total</td>
<td>9.7</td>
<td>9.7</td>
<td>9.7</td>
<td>8.6</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 16-19 Years</td>
<td>26.1</td>
<td>25.0</td>
<td>26.4</td>
<td>22.0</td>
<td>24.3</td>
<td>18.7</td>
<td>15.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>23.7</td>
<td>22.5</td>
<td>23.5</td>
<td>20.3</td>
<td>21.9</td>
<td>16.7</td>
<td>13.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>41.1</td>
<td>42.0</td>
<td>43.8</td>
<td>33.1</td>
<td>39.6</td>
<td>31.2</td>
<td>29.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 20 Years &amp;
Over</td>
<td>9.1</td>
<td>9.1</td>
<td>9.0</td>
<td>8.0</td>
<td>8.7</td>
<td>5.2</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>8.1</td>
<td>8.2</td>
<td>8.1</td>
<td>7.4</td>
<td>7.9</td>
<td>4.7</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>15.5</td>
<td>14.8</td>
<td>15.3</td>
<td>12.7</td>
<td>13.7</td>
<td>9.1</td>
<td>7.2</td>
</tr>
</tbody>
</table>
<span id="articletitle">UK PPI Surges &#8211; Not What The
Doctor Ordered</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> April 9, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409f.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>UK MFG inflation trends are still running hot with the release
of the PPI for March. Commodity prices are still rising, adding to the
pressure with Brent prices up by 7% in the March and other commodity
prices rising as well. Coupled with weakness in sterling, inflation has
a real foothold in the UK. The BOE has an inflation ceiling but that
applies to its Consumer price measure, not the PPI. Still, with this
kind of pressure on producer prices it is hard to conclude that the CPI
will be out of the woods anytime soon.</p>
<p>In terms trends in the PPI, The various sequential rates of
growth all are elevating but the three month rate is below the six
month rate for both the core and the headline rates indicating that it
is not a pure acceleration for inflation But the Core rate is still
slightly above its Yr/Yr pace and that is not a good sign. Inflation
trends in the UK could be worse but they could be a lot better too.
There is not much in this report that is reassuring if you are at the
Bank of England trying to decide on policy.</p>
<p>On top of these poor trends there is also pressure from input
prices that were up exceptionally strongly in March. While the UK has
posted some better growth numbers recently the BOE is still helping the
markets with securities purchases. The last thing it needs is for
inflation to become more unstable. Inflation is already pushing the
limits of BOE tolerance for the CPI. Any further pressure would really
put the BOE between a rock and hard place.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"><b>UK PPI MFG
net output prices</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%M/M</td>
<td colspan="4">%SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>6.7%</td>
<td>5.0%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Core</td>
<td>0.6%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>4.3%</td>
<td>5.1%</td>
<td>3.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Core: ex
food
beverages, tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Unemployment By Age,Race,Gender & Schooling

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Euro consumer is not helping to lead growth to the
Promised Land. Retail sales came up lame in February after rising by
just the thinnest margin of 0.1% in January. The growth rate for retail
sales is steady over 3-and 6-months at under 1.5% in nominal terms. The
lift from auto sales is going, going gone as purchase incentive plans
have ended and the bulge in vehicle registrations is unwinding fast.
Retail sales in Germany, the big EMU economy, are off for two months in
a row. There is no leadership there.</p>
<p>Greece&#8217;s problems continue to worsen and to hang over growth
prospects for the Zone. No one is sure just what will happen, but
speculation is rife and that makes things worse. The German hard line
on Greece that delivers election protection to Angelina Merkel can&#8217;t
make the Zone look like a very attractive place to be. The cry we heard
in the past, &#8217;we are all Europeans now,&#8217; rings hollow. They are all
Europeans until a crisis hits then they are German, French, Greek and
etc. For now Greek bonds are suffering their widest spreads to bunds
since EMU was formed; credit default protection is getting to be very
expensive for Greek paper. A few market pundits push for Greece to
default but for the most part that is a fringe faction. Most realize
the potential dangers from such an event and the risk of knock-on
effects from having Greece actually default. Just think of the US and
what happened when Lehman Brothers failed. It is often hard to predict
the fallout from such events; German banks already hold a lot of Greek
bonds on their balance sheets.</p>
<p>Meanwhile the Germans are being tough on Greece. One must
wonder if Greece at some point does not simply succumb to the pressure
and call the German bluff and let the forces of default begin to run
their course, forcing Germany to either to deal with the fallout of
default or to back Greece more solidly. In the meantime the Greek
tragedy plays out as one of Europe&#8217;s longest running sold-out
performances. Uncertainty about Greece continues to adversely impact
growth in the Zone.</p>
<p>The main bright news for Europe has come from the UK where
industrial output has risen strongly (compared to flat output in
Germany this month) and rising home prices. The Bank of England is
continuing to given the markets there assistance with securities
purchases. Still growth in the UK is less than stellar, that&#8217;s why the
BOE is still providing market support after all.</p>
<p>The US recovery is looking better&#8230; then bleaker. While the
data clearly have improved, the jobless claims report from the current
week has shot up to a five-week high making it clear that jobs growth
is mounting no head of steam in the wake of the March jobs report. It&#8217;s
time to go back to playing fantasy baseball, not fantasy recovery. The
Fed Chairman is making it clear that job growth is not significantly in
gear, dashing the value of any analysis that was arguing that the Fed
is on the brink of a rate hike after one lukewarm job report.</p>
<p>Clearly the global economy is still sputtering. While the US
expansion seems to be the strongest that is in train; it continues to
be unable to get the various jobs metrics on the right path together
with any speed. Consumers remain the key to the global recovery since
there are many nations with the ability to supply goods. Germany and
China and Japan are exporting again. The US is exporting, too. But
exports need consumers, and consumers are holding back, especially in
Europe. Investment demand is not enough by itself to drive the kind of
recovery that the world needs.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"><b>Euro-Area
Retail
Sales</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>2.6%</td>
<td>-0.8%</td>
<td>-3.0%</td>
<td>-5.0%</td>
<td>-1.0%</td>
<td>5.6%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>-0.4%</td>
<td>-0.5%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.8%</td>
<td>-0.9%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>2.1%</td>
<td>-3.0%</td>
<td>-0.2%</td>
<td>-4.5%</td>
<td>-0.7%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
</body></html>

The Euro consumer is not helping to lead growth to the Promised Land. Retail sales came up lame in February after rising by just the thinnest margin of 0.1% in January. The growth rate for retail sales is steady over 3-and 6-months at [...]

Euro-Consumer Remains Sluggish

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

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

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Michael J. Moran

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The Conference Board’s index of Consumer Confidence inched higher in April from an upwardly revised reading in March. The combined changes left the measure 1.1% higher than the preliminary tally in March. Despite the improvement, the index remained in the low end of the range for the current expansion. The index in April totaled 92.8, down from an average of 96.1 in 2025 and an annual cyclical high of 105.4 in 2023.

The Improvement in April reflected a pickup in the expectations component, which rose 1.7%. The current conditions component inched 0.2% lower. Overall views on current conditions slipped despite more favorable assessments of the labor market. The so-called measure of the jobs gap (share of respondents indicating that jobs are plentiful less the share saying that jobs are hard to get) rose 1.4 percentage points higher to 7.5%. The pickup reflected a drop in the share indicating that jobs are hard to get (down 1.5 percentage points to 19.8%). The share indicating that jobs are plentiful eased 0.1 percentage point to 27.3%.

Although expectations improved in April, from a long-term perspective they could be viewed as the more important factor restraining the headline measure of confidence. As shown in the left chart below, the expectations component of confidence shows considerably less volatility than the current conditions component does. The contrasting patterns suggest that individuals realize that the economy will undergo possibly sharp cyclical swings, but they expect conditions at some point to return to an underlying norm.

The current conditions index in the current cycle has indeed dropped noticeably, but it is still above the long run average (123.8 in April versus the average of approximately 108 from 1990 to 2025). The expectations component, as usual, has eased less than the current conditions component, but its shift has pushed the measure to the low end of its long-run range (72.2 in April versus an average of approximately 88).

Interestingly, concern about the labor market seems to be a factor affecting expectations. While current views on the labor market are favorable (plentiful less hard to get jobs gap of 7.5%), Individual are concerned about the future. The survey asks respondents if they expect more jobs or fewer jobs six months hence. The share indicating fewer jobs has moved well into the upper end of the historical range. Such observations in the past were typically seen only during recession (chart, below right). An unfavorable view on interest rates also seems to be playing a role in depressing the expectations component. More than 60% of respondents to the current survey expect higher interest rates 12 months from now.

The results from the Conference Board survey of consumers differ markedly from those of the University of Michigan Survey Research Center. The Michigan results show consumer sentiment at a record low, while the Conference Board index is only slightly below its long-run average. The difference most likely reflects the nature of the questions in the surveys. The Conference Board focuses on business and employment conditions, while Michigan emphasizes personal finances. The focus on finances, along with questions on inflation, probably picks up concerns about affordability.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Expectations improved slightly in April, but are still subdued relative to norms.
- Moderately favorable view of current conditions.

Consumer Confidence: Modest Change in April

Winnie Tapasanun

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U.S. house prices were essentially unchanged m/m in February after rises of 0.2% in January (+0.1% initially) and 0.3% in December (unrevised), according to the Federal Housing Finance Agency (FHFA) House Price Index. February marked the first flat reading since September following four consecutive m/m increases. The HPI was at 441.43 in February, up 14.8% from its August 2022 low of 384.59. The year-on-year growth rate eased to 1.7% in February—the lowest since March 2012—from 1.8% in January (+4.1% in February 2025), down from a high of 6.9% in February 2024 and well below a peak of 18.5% in February 2022.

By region, February FHFA house prices showed a mixed performance. House prices fell m/m in February (vs. January) in four of the nine census divisions. Declines were led by Mountain (-1.1% vs. +0.4%), followed by Pacific (-0.5% vs. +0.6%), West North Central (-0.4% vs. +0.3%), and Middle Atlantic (-0.1% vs. +0.3%). To the upside, house prices rose m/m in four census divisions in February (vs. January): South Atlantic (+0.6% vs. -0.2%), East South Central (+0.2% vs. +1.2%), New England (+0.2% vs. +0.6%), and West South Central (+0.2% vs. -0.3%). Meanwhile, house prices in East North Central were virtually unchanged m/m for the second successive month in February following seven straight m/m gains.

Year-on-year house prices continued to rise in February in most regions, except Mountain, Pacific, and West South Central. The y/y growth rate accelerated in February (vs. January) in only two of the nine census divisions: East South Central (+4.0% vs. +3.2%) and South Atlantic (+0.9% vs. +0.4%). Meanwhile, house price growth decelerated y/y in February (vs. January) in four regions: New England (+3.1% vs. +3.9%), West North Central (+3.1% vs. +3.6%), East North Central (+3.8% vs. +4.5%), and Middle Atlantic (+4.2% vs. +4.5%). To the downside, Mountain (-0.7% vs. 0.0%), Pacific (-0.4% vs. -0.3%), and West South Central (-0.1% vs. -0.4%) posted y/y declines in February.

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

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- February FHFA HPI 0.0% m/m; +1.7% y/y, lowest since Mar. ’12.
- House prices down m/m in four of nine census divisions, led by Mountain (-1.1%); up in four, driven by South Atlantic (+0.6%); flat in East North Central.
- House prices up y/y in six of nine regions, led by Middle Atlantic (+4.2%), but down in Mountain (-0.7%), Pacific (-0.4%), and West South Central (-0.1%).

U.S. FHFA House Prices Flat in February After Four Straight M/M Gains

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Early PPI reports in the monetary union show collective pressures building over the past year, with newly emergent pressures popping up strongly in March.

The sequence of monthly inflation observations for these five early reporters in March shows that inflation pressure has not been clearly building but did jump up suddenly in March. In February, before the Iran war, the median monthly PPI gain was -0.5%. In March, that jumped to +3.9% (median month-to-month gain). Monthly pressure does not show steady gains anywhere except moderately in Germany. Finland shows deceleration in progress (!) even through—especially through—March, as its PPI in March fell by 5.3%. But the whole Finish pattern is somewhat upside down, with prices up month-to-month by 6.2% in January and 2.9% in February. It is not a trend that is easy to understand.

However, the March monthly gains are strong enough to drive sequential inflation higher from 12-months, to 6-months, to 3-months across all early-reporting countries. Even the German ex-energy index shows acceleration on that profile.

On a year-on-year basis, two of the early reporters have PPI inflation below 2%. Finland has 12-month PPI inflation at 2.1%, but Italy and Spain have inflation much higher, up by 3.4% over 12 months in Spain and by 5.6% in Italy.

The PPI has been very well-behaved in the last few years. Looking at 12-month changes for the year ended in March, the median change for this group in 2025 was -0.1%, compared to -4.6% in 2024.

The chart shows the PPI flared sharply in 2021 and 2022, then fell quickly into line in 2023. Clearly, the inflation tune now is being called by oil prices, the same as for that spike prices in 2022 and 2023.

The hope is that the oil price bump up will not be as long-lived, that the war will end soon, with the Strait of Hormuz reopened, and that oil prices—and other inflation pressures—will sink back to prerevision norms relatively quickly. That could happen, but so could other outcomes so markets remain wary. One problem this time is the destruction of oil facilities and the shutting of oil fields that could cause high prices to linger longer.

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**A new dynamic**
However, there is now a new dynamic with the UAE leaving OPEC. OPEC has been a vehicle to harness common behavior to control oil prices mostly to keep them higher. While undermining OPEC (UAE pumps about 13% of OPEC capacity) at a time the U.S. oil prowess has risen, this defection will make it much harder for OPEC to control prices. When countries are not bound together, the incentive is for countries to cheat on their production quota. In a cartel arrangement, when many cheat, the output reduction does not hold, and oil prices fall. A cartel arrangement allows for supply control and reduction which raises prices. But once prices are up, each member has an individual incentive to cheat—to sell more than his quota share of oil at the higher price. But that undermines the cartel. So, this move, this exit of UAE from the cartel, will create instability in the OPEC by moving more production outside the OPEC framework, beyond its control. Unless the Saudis are willing to be the ‘swing man’ and cut back their output to keep prices on target—something the Saudis have been increasingly unwilling to do—OPEC will be in less control.

EMU PPIs Show Instant Pressure

Tian Yong Woon

In this week’s Letter, we cover the latest developments and implications of the Middle East conflict for Asia, while also making space for other important themes, including artificial intelligence (AI). The Middle East conflict remains in a no deal state coming out of the weekend, though some early Monday optimism emerged in Asian markets following Iran’s reported offer to reopen the Strait of Hormuz (chart 1). Nonetheless, as the Strait closure drags on, so too do the fiscal costs of domestic fossil fuel subsidies across Asia, which have been shown to move closely with crude oil prices (chart 2). While such measures offer direct relief by cushioning household energy costs, they remain difficult to sustain over the long haul.

Over the week, we also saw a further fraying in regional monetary policy trends, with the Philippines hiking its policy rate for the first time in about two years amid inflation concerns, while Indonesia stood pat on rates (chart 3). Investor attention is likely to remain fixed on monetary policy this week, with the Bank of Japan due to decide on policy. Expectations for an April hike have faded amid the persistent Middle East conflict, though yen weakness continues to present a source of concern (chart 4). The week also brings China’s latest PMI readings (chart 5), adding to the recent run of hard data accompanying the Q1 GDP release.

Beyond the Middle East conflict, the evolution of AI continues to demand close attention. Before geopolitical tensions took centre stage, AI was the dominant market narrative — and that enthusiasm has hardly faded. If anything, recent developments suggest the story is broadening: use cases are expanding, scalability is improving, and access is widening beyond large corporates to the mass market — increasingly spilling into the realm of physical AI. It may well be this persistent wave of optimism that is helping to underpin equity valuations, even as the geopolitical backdrop darkens (chart 6).

**The Middle East conflict**
About two months in, we remain stuck in the limbo of the US-Iran conflict, which has left the Strait of Hormuz largely closed and much of the world starved of the critical oil flows needed to power the global economy. The back and forth between the US and Iran has persisted in recent weeks, with both sides again failing to reach a peace deal over the weekend, though Monday’s news of Iran offering to reopen the Strait has revived some hope in markets. In truth, commodity and market valuations do not hinge so much on a peace deal itself, but rather on the resumption of oil flows through the Strait, something that could materialise even in the absence of a formal deal, though any agreement that includes and credibly delivers such a reopening would likely be warmly received by markets. Until then, market gyrations are likely to persist, with prices fluctuating in response to each new snippet of news. And until then, the world will continue both to be starved of, while gradually adapting to, the drip feed of oil flows emerging from the Strait.

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**The fiscal costs of the Middle East conflict**
As the Middle East conflict drags on, so too does the strain on fiscal resources across parts of Asia, as the costs of energy-related subsidy programmes continue to mount. While such programmes have an immediate, direct, and tangible impact in shielding households from surging energy costs, they are far from sustainable, particularly if oil prices remain well above targeted levels or stay elevated for an extended period. As chart 2 illustrates, the costs of these explicit subsidy programmes tend to rise closely with crude oil prices, as seen in India and Indonesia. Other measures adopted elsewhere, such as drawing down oil reserves, may be less fiscally costly, but are similarly difficult to sustain indefinitely. In both respects, the clock is ticking, and the world continues to hold its breath as the conflict drags on.

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**The latest central bank responses to the conflict**
Over the past week, Asia saw two central bank decisions. The Philippines’ (BSP) opted to deliver its first rate hike in about two years, while Indonesia’s (BI) chose to stand pat on policy rates and instead committed to stepped up FX intervention (chart 3). This latest round of decisions points to a further fraying of what had been a broad regional monetary policy consensus, namely that central banks would delay additional easing while maintaining a high bar for outright tightening. Domestic considerations, however, remain paramount. In the Philippines’ case, the central bank has moved to rein in inflation, which is already showing notable signs of price pass through stemming from disruptions linked to the Strait of Hormuz. That said, BSP is not the first in the region to buck the reluctance to tighten. Singapore’s central bank had already tightened policy in mid-April, albeit through its own distinct framework, given its use of the exchange rate rather than policy rates as the primary channel for monetary policy.

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**The week ahead**
Looking to the week ahead, a major central bank decision looms in Japan. Market expectations for the Bank of Japan to deliver a rate hike at its April meeting have ebbed amid the persistence of the Middle East conflict, to which Japan remains particularly vulnerable given its reliance on oil imports flowing through the Strait of Hormuz. At the same time, inflation in Japan has yet to become a major concern, with recent readings having picked up but not yet entering troubling territory. One potential source of concern, however, lies with the Japanese yen, which has remained on a weakening trend since early last year (chart 4). That depreciation has been one of the key arguments underpinning calls for further rate hikes.

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The week also brings China’s latest PMIs into focus. March saw a divergence between China’s official PMI readings, which improved, and the unofficial readings from RatingDog, which instead pulled back. Nonetheless, both official and unofficial gauges remained in expansionary territory (chart 5), with investors now watching closely to see whether that resilience can be sustained amid ongoing stresses from the Middle East, or whether offsetting drivers can continue to keep Chinese business sentiment and prospects buoyant.

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**Beyond the strait**
Moving beyond the Middle East conflict, a whole host of developments continue to unfold globally, many of which have in fact helped offset some of the pessimism wrought by the Strait’s chokehold. One such development is artificial intelligence (AI), which had dominated headlines before the outbreak of the conflict and continues to advance at breakneck pace. AI capabilities are still rapidly evolving, while practical applications, such as physical AI embodied in humanoid robots, are beginning to show broader and stronger use cases. Production of such robots is also becoming increasingly scalable and within reach not just for industrial complexes and healthcare, but for the mass market as well. It is perhaps growing optimism around these prospects that has helped keep equity valuations buoyant, even in the face of the festering conflict in the Middle East. Moreover, while concerns over AI-driven job displacement persist, new opportunities are emerging as well, particularly for AI adopters, with a growing share of job postings in Western economies increasingly referencing AI-related skills, as shown in chart 6.

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Asia

Economic Letter from Asia: Not Just About the Strait

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**The Distributive Trades Survey**

The U.K. Distributive Trades Survey for April 2026 and the look-ahead expectation readings for May paint an extremely soured outlook for the U.K. economy.

**Retail ranking**: Surveys for retail sales compared to a year ago, orders compared to a year ago, and sales evaluated for the time of year all have rankings near zero, which is the worst result on this timeline. This zero distinction applies to retail sales compared to a year ago. The best ranking is 11.6%; that is for sales evaluated for the time of year. Orders compared to a year ago have a 4.2 percentile standing. The stock-to-sales ratio—which is a completely different concept—shows that the inventory-to-sales ratio has a 29.9 percentile standing.

**Retail diffusion**: The raw April diffusion readings (up minus down diffusion) show that sales compared to a year ago slipped to a reading of -68 in April from -52 in March. Orders fell to -46 in April from -26 in March. Sales evaluated for the time of year fell to -32 April from -23 in March. All three measures weakened, and all three weakened decisively, resulting in extremely weak rankings. All of the rankings are executed on data back to 2002.

**Expectations for retailing**: The expectations readings for May show slippage again across all three metrics: expected sales compared to a year ago, expected orders compared to a year ago, and expected sales for the time of year. Expected sales compared to a year ago fell to -60 in May from -49 in April. Orders compared to a year ago declined to -45 in May from -30 in April, and sales for the time of year slipped to -43 from -19. In May, these readings have rankings in a 0.4 percentile standing for sales compared to a year ago, a 1.8 percentile standing for sales evaluated relative to the time of year, and a 4.6 percentile standing for orders compared to a year ago. These two panels on current and expected retail sales volumes are just simply terrible: weak monthly, weak in ranking terms, and showing slipping momentum.

The distributor trade series also provides data on the wholesale sector. While the wholesale sector is not quite as beat up as the retail sector, it's still extremely weak. There is no cause for any kind of hope that things are getting better based on wholesaling trends.

**Wholesaling**: The wholesale survey for sales compared to a year ago edged lower to -32 in April from -31 in March. Orders compared to a year ago remained at a reading of -41 in April. Sales evaluated for the time of year improved to a reading of -20 in April from -39 in March—a significant step up, but still very weak. The percentile standings for these three categories show sales compared to a year ago at the 8.8 percentile, orders compared to a year ago at the 5.6 percentile, and sales evaluated for the time of year at the 14.8 percentile.

**Wholesale Expectations**: The look-ahead observations, which provide expectations for wholesaling in May, show a similar constellation of readings, with sales compared to a year ago falling to -37 in May from -27 in April and orders compared to a year ago falling to -42 from -38, while sales evaluated for the time of year improved to  16 from  37. That category for wholesale sales improved both in April in real time and in May for expectations; however, it continues to have a very weak percentile standing, at the 17.9 percentile in May, while sales for a year ago have a 6.7 percentile standing and orders for a year ago have a 6.0 percentile standing.

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While some of the global PMI data have improved, these survey data for the U.K. are particularly dour. The war in Ukraine drags on, and there's a new conflict in Iran that has shut the Strait of Hormuz, creating energy problems for much of Europe. More broadly, supply chains have been harmed. In addition, the U.K. is undergoing a bout of political instability, as its Prime Minister is under pressure and a good deal of political uncertainty is being worsened by deteriorating economic performance.

Both the U.K. and the European Monetary Union had been showing some progress on inflation until the Iran war hit. Now, as the oil prices are up so sharply, headline inflation is going to be worse everywhere and there will probably be a bit more attention directed to the core inflation rate. However, the U.K. has had inflation too hot for a while, and it has failed to settle down. At its last meeting, the Bank of England’s Monetary Policy Committee warned that if the war was still ongoing at the next meeting, there would be a risk of a rate hike. So, it would seem that a rate hike is going to be in play unless the economy falls off a cliff first, which, based on the distributive trades data, is also something that could happen. The U.K. economy appears to be on very unsound footing, and what happens next is just about anybody's guess.