Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020613b.jpg" width="353">
Total retail sales fell more than expected last month due to broad based declines. April sales were little revised. Sales excluding autos also fell versus expectations for a slight rise. 
Declines were widespread. Sales of motor vehicles (-5.8% YTD), apparel (-0.7% YTD), general merchandise (+1.7% YTD), gasoline (+8.6% YTD), building materials (+7.1% YTD) and restaurants (+0.1% YTD) all fell.
Sales of furniture, home furnishings and electronics rose sharply (0.9% YTD) led by strong electronics sales. 
Unit sales in May of domestic and imported light vehicles fell a sharp 9.7% to 15.67M (SAAR). 

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<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>-0.9%</td>
<td>1.2%</td>
<td>2.2%</td>
<td>3.8%</td>
<td>6.7%</td>
<td>8.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>-0.4%</td>
<td>1.1%</td>
<td>3.4%</td>
<td>3.4%</td>
<td>7.3%</td>
<td>7.4%</td>
</tr>
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</table>
Producer Prices Fell for Second Month 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 13, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020613c.jpg" width="353">
Finished producer prices fell vs. Consensus expectations for a 0.1% gain. It was the second consecutive decline in May led by lower energy prices. Core finished goods prices were unchanged (-0.1% YTD), about as expected.
Energy prices fell for the first time since January led by lower prices for gasoline and heating oil. Market gasoline prices in early June are flat-to-lower versus May.
Food prices fell for the second consecutive month.
Core finished consumer goods prices were unchanged (0.1% YTD). Core nondurable goods prices were unchanged and durable goods prices fell for the fourth month this year. Capital goods prices also dropped for the fourth month this year. 
Intermediate goods prices were broadly weak led by lower nondurable prices. 
Crude goods prices rose, although many commodity prices fell through the month.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Finished Goods</td>
<td>-0.4%</td>
<td>-0.2%</td>
<td>-2.7%</td>
<td>2.0%</td>
<td>3.7%</td>
<td>1.8%</td>
</tr>
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<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>1.7%</td>
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<td class="firstcol">Intermediate Goods</td>
<td>-0.5%</td>
<td>0.9%</td>
<td>-3.0%</td>
<td>0.4%</td>
<td>4.9%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>0.2%</td>
<td>-1.4%</td>
<td>-0.1%</td>
<td>2.6%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>1.7%</td>
<td>5.5%</td>
<td>-15.9%</td>
<td>0.3%</td>
<td>22.8%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>3.4%</td>
<td>3.6%</td>
<td>3.4%</td>
<td>-9.9%</td>
<td>7.3%</td>
<td>-4.7%</td>
</tr>
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</table>
Initial Jobless Insurance Claims Up Moderately 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 13, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020613a.jpg" width="353">
Initial claims for unemployment insurance rose moderately in the latest week, about as expected. The prior week&#39;s level, which had fallen sharply, was little revised. 
Continuing claims for unemployment insurance fell for the third week and the prior week&#39;s level was revised down.
The four-week moving average of initial claims fell to 402,500, -2.2% y/y. 
The insured rate of unemployment fell slightly to 2.9%.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">6/8/02</th>
<th scope="col">6/1/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Initial Claims</td>
<td>390.0</td>
<td>384.0</td>
<td>-6.5%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
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<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,773</td>
<td>27.1%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
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Total retail sales fell more than expected last month due to broad based declines. April sales were little revised. Sales excluding autos also fell versus expectations for a slight rise. Declines were widespread. Sales of motor [...]

Retail Sales Broadly Lower in May

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020612a.jpg" width="353">
Prices for imported commodities were unchanged last month versus April. Consensus estimates were for a 0.4% gain. April figures were revised up due to a stronger gain in nonpetroleum import prices.
Petroleum import prices rose modestly. It was the weakest gain in petroleum prices this year. So far in June, the price of Arab Light crude oil has averaged just under $22.00/bbl versus $23.14 in May.
Nonpetroleum import prices fell unexpectedly for the third month this year. The decline came despite the fourth strong gain in food prices this year.
Prices for imported capital goods, nonauto consumer goods and autos were all flat or lower.
Export prices fell for the third month this year following two months of moderate gain. Prices in most categories were flat or down except industrial supplies which rose modestly.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Import - All Commodities</td>
<td>0.0%</td>
<td>1.6%</td>
<td>-3.8%</td>
<td>-3.5%</td>
<td>6.5%</td>
<td>0.9%</td>
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<td class="firstcol">&nbsp; Petroleum</td>
<td>0.9%</td>
<td>12.7%</td>
<td>-2.2%</td>
<td>-17.2%</td>
<td>66.5%</td>
<td>34.2%</td>
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<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>-0.1%</td>
<td>0.6%</td>
<td>-3.0%</td>
<td>-1.5%</td>
<td>1.0%</td>
<td>-1.4%</td>
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<td class="firstcol">Export - All Commodities</td>
<td>-0.1%</td>
<td>0.4%</td>
<td>-1.7%</td>
<td>-0.8%</td>
<td>1.6%</td>
<td>-1.3%</td>
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Prices for imported commodities were unchanged last month versus April. Consensus estimates were for a 0.4% gain. April figures were revised up due to a stronger gain in nonpetroleum import prices. Petroleum import prices rose [...]

Import Prices Surprisingly Unchanged

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020611a.jpg" width="353">
Chain store sales jumped 1.6% in the first week of June following four consecutive weeks when sales were flat or down according to BTM-UBSW.
For all of May, sales rose 0.8% from the April average owing to a surge in sales early in the month.
The leading indicator of chain store sales published by BTM also jumped late in May. The index rose 1.1% in the last full week of the month following a 0.7% gain the week prior.
During the last ten years there has been a 40% correlation between the year-to-year percent change in monthly chain store sales and the change in general merchandise store sales.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">6/8/02</th>
<th scope="col">6/1/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>411.6</td>
<td>405.0</td>
<td>4.6%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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Chain store sales jumped 1.6% in the first week of June following four consecutive weeks when sales were flat or down according to BTM-UBSW. For all of May, sales rose 0.8% from the April average owing to a surge in sales early in the [...]

Chain Store Sales Jumped

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020610a.jpg" width="353">
Consumer borrowing rose somewhat more than expected in April. March figures were revised up due to faster reported growth in both revolving and nonrevolving credit. It was the fastest m/m gain in consumer credit outstanding since November. 
Revolving credit rose by a moderate 0.6% m/m. It was the first material monthly gain since November. Nevertheless, year-to-year growth in revolving credit slowed to its lowest rate since the credit crunch of 1980.
Nonrevolving credit rose 0.5%. That rate of gain has been steady for the last four months but down versus a 0.7% average monthly gain last year.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E103/@E10308/@E10308.HTM">Consumer Credit Outstanding</a></th>
<th scope="col">April m/m</th>
<th scope="col">Mar m/m</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total</td>
<td>$8.8B</td>
<td>$6.8B</td>
<td>5.6%</td>
<td>7.0%</td>
<td>10.2%</td>
<td>7.5%</td>
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<td class="firstcol">&nbsp; Revolving</td>
<td>$4.2B</td>
<td>$2.3B</td>
<td>2.6%</td>
<td>5.3%</td>
<td>11.5%</td>
<td>6.3%</td>
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<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$4.8B</td>
<td>$4.4B</td>
<td>7.8%</td>
<td>8.2%</td>
<td>9.2%</td>
<td>8.4%</td>
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Consumer borrowing rose somewhat more than expected in April. March figures were revised up due to faster reported growth in both revolving and nonrevolving credit. It was the fastest m/m gain in consumer credit outstanding since [...]

Consumer Credit Growth Up in April

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020607a.jpg" width="353">
Payrolls rose somewhat less than expected last month and the modest gain in April payrolls was revised down.
The Establishment Survey of nonfarm payrolls, hours, and earnings was revised to reflect annual benchmark adjustments and updated seasonal adjustment factors. Revisions were small.
Despite the weakness in nonfarm payrolls, the unemployment rate fell unexpectedly. Household employment rose 441,000 (-0.6% y/y) and the labor force rose 199,000 (0.9% y/y).
The one-month diffusion index for nonfarm payrolls rose to 50.6, the first month above 50 since last March. This breadth of change measure was reported last month rising to 50.7 for April but that was revised down to 49.7.
Factory sector jobs continued to fall, down 11.2% versus the peak in April 1998. The one month diffusion index for the factory sector fell to 46.7%.
Construction sector jobs (-2.6% y/y) fell for the fifth month this year. 
Employment in the service sector (-0.2% y/y) rose moderately for the third consecutive month. 
The index of aggregate hours worked (employment times hours worked) fell 0.1% and so far in 2Q is up just slightly from the 1Q average. 
Average hourly earnings rose a less than expected 0.2%.
The employment figures for nonfarm payrolls are based on reports provided to the US Labor Department by businesses, while the figures from which the unemployment rate is derived are based on a survey of US households.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Payroll Employment</td>
<td>41,000</td>
<td>6,000</td>
<td>-1.1%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-19,000</td>
<td>-22,000</td>
<td>-6.1%</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>-1.3%</td>
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<td class="firstcol">Average Weekly Hours</td>
<td>34.2</td>
<td>34.2</td>
<td>34.2</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2%</td>
<td>0.1%</td>
<td>3.2%</td>
<td>4.1%</td>
<td>3.9%</td>
<td>3.6%</td>
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<td class="firstcol">Unemployment Rate</td>
<td>5.8%</td>
<td>6.0%</td>
<td>4.4%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
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Payrolls rose somewhat less than expected last month and the modest gain in April payrolls was revised down. The Establishment Survey of nonfarm payrolls, hours, and earnings was revised to reflect annual benchmark adjustments and [...]

May Payrolls Weak, but the Jobless Rate Fell

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020606a.jpg" width="353">
Initial claims for unemployment insurance fell more than expected in the latest week which contained the Memorial Day holiday. The prior week&#39;s level was revised slightly higher. 
Continuing claims for unemployment insurance again rose, but the prior week&#39;s level was revised down sharply.
The four-week moving average of initial claims fell slightly to 411,250 versus an October high of 482,000 which reflected filings for extended benefits. 
The insured rate of unemployment was stable at 3.0% for the fourth consecutive week.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">6/1/02</th>
<th scope="col">5/25/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Initial Claims</td>
<td>383.0</td>
<td>415.0</td>
<td>-6.6%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
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<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,824</td>
<td>29.2%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
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</tbody>
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ECRI Gauges Suggest Continued Recovery, Moderately Higher Inflation 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 6, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020606b.jpg" width="353">
The Weekly Leading Index of the US economy published by the Economic Cycle Research Institute (ECRI) rose slightly in the latest week, pulling the monthly level near its high for this cycle.
The index is designed to signal turning points in the US economy and is &quot;real time,&quot; i.e. weekly, and not subject to significant revision.
The Future Inflation Gauge published by ECRI also has firmed. The level of the index has moved slightly higher from its January low pulling the six-month growth rate to a modest -4.1%.
Construction of the ECRI Leading Index is quite different from the Index of Leading Economic Indicators published by the Conference Board. Nevertheless there has been an 80% correlation between the annual percent change in the two over the last 20 years.
The components of the index are money supply plus stock &amp; bond mutual funds, the JOC-ECRI industrial materials price index, mortgage applications, bond quality spreads, stock prices, bond yields, and initial jobless insurance claims.
The median lead of the ECRI index at business cycle peaks has been 10.5 months and at cycle troughs 3.0 months. The sideways movement of the leading index in 2002 may or may not signal something about the economy&#39;s growth rate.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/weekly/@W8/@W801/@W801.HTM">ECRI</a></th>
<th scope="col">5/24/02</th>
<th scope="col">5/17/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Weekly Leading Index</td>
<td>122.0</td>
<td>121.8</td>
<td>1.2%</td>
<td>-5.0%</td>
<td>0.8%</td>
<td>2.4%</td>
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Initial claims for unemployment insurance fell more than expected in the latest week which contained the Memorial Day holiday. The prior week's level was revised slightly higher. Continuing claims for unemployment insurance again [...]

Initial Jobless Insurance Claims Fell Sharply

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020605a.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector rose more than expected last month to the highest level since August 2000. 
New orders and employment rose only moderately. The not seasonally adjusted index of export orders was quite strong. 
The not seasonally adjusted index of prices fell but remained at a relatively high level. 
Business activity for the nonmanufacturing sector is a question separate from the components mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components. 
During the last four years, there has been a 43% correlation between the level of the NAPM nonmanufacturing index and quarterly growth in real GDP in the service sector.
ISM surveys more than 370 purchasing managers in more than 62 industries, including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>60.1</td>
<td>55.3</td>
<td>47.8</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
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The Institute for Supply Management business activity index of the nonmanufacturing sector rose more than expected last month to the highest level since August 2000. New orders and employment rose only moderately. The not seasonally [...]

ISM Nonmanufacturing Index Strong

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Light vehicle sales fell 9.7% last month versus April. A more moderate decline to 16.8 mil. units was expected. Total vehicle sales in 2Q so far are up 1.2% from 1Q.
Sales of domestically built cars and trucks fell 9.3% m/m. Sales of domestics in 2Q so far are up 2.5% from the 1Q average.
Imported vehicle sales fell 11.4% m/m. Sales of imports in 2Q so far are down 3.9% from the 1Q average.
Imports captured 19.2% of the US light vehicle market in May versus 20.4% in 1Q and 17.8% last year.
Sales of cars (-7.0% y/y) and light trucks (-4.6% y/y) both fell last month versus April. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil.Units)</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>15.67</td>
<td>17.36</td>
<td>-5.8%</td>
<td>17.21</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>12.67</td>
<td>13.97</td>
<td>-7.3%</td>
<td>14.15</td>
<td>14.58</td>
<td>14.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imported</td>
<td>3.00</td>
<td>3.39</td>
<td>1.5%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
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</table>
Chain Store Sales Remain Soft 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 4, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020604b.jpg" width="353">
Chain store sales in the latest week rose 0.1% following three consecutive down weeks according to BTM-UBSW.
For all of May, sales rose 0.8% from the April average owing to a surge in sales early in the month.
The leading indicator of chain store sales published by BTM recovered some of its lost momentum with a 0.8% rise in the third full week of May.
During the last ten years there has been a 40% correlation between the year-to-year percent change in monthly chain store sales and the change in general merchandise store sales.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">6/1/02</th>
<th scope="col">5/25/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>405.0</td>
<td>404.6</td>
<td>3.2%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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Light vehicle sales fell 9.7% last month versus April. A more moderate decline to 16.8 mil. units was expected. Total vehicle sales in 2Q so far are up 1.2% from 1Q. Sales of domestically built cars and trucks fell 9.3% m/m. Sales of [...]

U.S. Light Vehicle Sales Soft

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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

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

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

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

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

FIBER: Industrial Commodity Price Movement Diverges in Latest Four Weeks

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

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

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

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

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

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

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

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

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

U.S. Wholesale Inventories & Sales Increase in March

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

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

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

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

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

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

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

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

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

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

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

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

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

U.S. Housing Affordability Improves Slightly in March

Carol Stone, CBE

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

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

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

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

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

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

Economy in Brief: 2002

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