Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081230d.jpg" width="353">
Chain store sales during Christmas week gave nothing to cheer about, according to the International Council of Shopping Centers-Goldman Sachs Index. The level of sales last week fell 1.5% and that reversed about half of the prior week&#39;s rise. For the month, December sales did rise but only by a scant 0.3% from the November average. That uptick followed declines of between 1.0% and 1.9% during each of the prior three months.
The year-to-year decline in sales of 1.8% was the weakest performance since early 2003. During the last ten years there has been a 59% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Perhaps better news on sales are in store. The weekly leading indicator of chain store sales from ICSC-Goldman Sachs jumped another 1.1% after a 0.2% rise during the prior week. And since the lows of several weeks ago the index has recovered 3.4%.
The chain store sales figures are available in Haver&#39;s SURVEYW database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">12/27/08</th>
<th scope="col">12/20/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>478.9</td>
<td>486.1</td>
<td>-1.8%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>


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Chain store sales during Christmas week gave nothing to cheer about, according to the International Council of Shopping Centers-Goldman Sachs Index. The level of sales last week fell 1.5% and that reversed about half of the prior [...]

U.S. Chain Store Sales Ticked Up But Still Near Lows

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081230a.jpg" align="right" border="0" height="265" width="353">Worry about
jobs, income and the future shape of business conditions weighed
heavily on consumer psychology. For December, the Conference Board
indicated that consumer confidence fell and washed away a slight
improvement in November. The 15.0% month-to-month decline in confidence
was to an index level of 38.0 which was the lowest in the series'
history which extends back to 1967. The decline disappointed Consensus
expectations for a modest improvement in the December index to 45.5.During the last ten years there has been a 82% correlation between the
level of consumer confidence and the y/y change in real consumer
spending.A decline in consumers' reading of current economic
conditions was responsible for most of the decline in overall
confidence this month. The index measure fell by nearly one-third from
the November level and the latest reading was down by three-quarters
from last December's figure.The index of consumers' expectations fell
a slight 5.2% month-to-month and it has been relatively stable this
year near a historically low level.Only 7.7% of respondents thought
that business conditions were good and 46.0% thought they were bad, up
from 16.2% during all of last year. A gloomy reading of the current job
market was notably evident as 42.0% thought that jobs were hard to get,
double last year's percentage and up five percentage points just since
last month.Moving somewhat counter to the increase in gloom about the
short-term economy was that 2.5% of respondents planned to buy a home
during the next six months, up from 2.1% in November. The reading was,
however, still near the series' historic low.&nbsp;Also showing
slight m/m improvement were plans to buy an appliance or an automobile,
but both measures also still were near their all time lows. Expectations for the inflation rate in twelve months fell further
5.8%, the lowest level since February. &nbsp; The Conference Board
figures referenced above are available in Haver's CBDB
database.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081230b.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081230c.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board &nbsp;(SA, 1985=100)</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Y/Y %</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>38.0</td>
<td>44.7</td>
<td>-58.1</td>
<td>57.9</td>
<td>103.4</td>
<td>105.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>29.4</td>
<td>42.3</td>
<td>-74.0</td>
<td>69.8</td>
<td>128.8</td>
<td>130.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>43.8</td>
<td>46.2</td>
<td>-42.2</td>
<td>49.9</td>
<td>86.4</td>
<td>89.7</td>
</tr>
</tbody>
</table>
</body></html>

Worry about jobs, income and the future shape of business conditions weighed heavily on consumer psychology. For December, the Conference Board indicated that consumer confidence fell and washed away a slight improvement in November. [...]

U.S. Consumer Confidence Fell Back To A Historic Low

U.S. Consumer Confidence Fell BackTo A Historic Low

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081229a.jpg" align="right" border="0" height="265" width="353">
The results of the December Hometrack Survey of real estate
agents in England and Wales regarding the prices at which houses are
being sold and the ease or difficulty in making sales was released
today. The year to year decline in house prices that started in April,
2008 has continued and intensified. In December the weighted overall
average price of a house was 159,900 pounds, a price this low was last
seen in July and August of 2003, as can be seen in the first chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081229b.jpg" align="right" border="0" height="265" width="353">
The sales price of a house in December was 88.6% of the asking
price, the lowest ratio recorded since the survey began in January
2001. Similarly the time it took to complete a sale was 12 weeks, the
longest time recorded in the survey. The ratio of selling to asking
price and the number of weeks to complete a sale are shown in the
second chart.
Also released today were data on equity withdrawals during the
third quarter of this year. For the second quarter in a row, equity
withdrawals were negative. In order to see what this means it is useful
to see how the series is derived. According to the Bank of England,
equity withdrawals are equal to that part of secured borrowing that is
not invested in the housing market. The series is measured by the sum
of household's net lending secured on dwellings and capital grants for
households paid to persons and household associations less the sum of
expenditures on the construction of dwellings and net transfers of land
to the household sector. Data are available only for the net lending
and expenditures on dwellings, but these are by far the most important
factors in equity withdrawals. As can be seen in the third chart, the
difference between lending and construction is a close approximation of
equity withdrawals.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081229c.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081229d.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">UNITED
KINGDOM&nbsp;</th>
<th scope="col">Dec 08</th>
<th scope="col">Nov&nbsp; 08&nbsp;</th>
<th scope="col">Oct 08&nbsp;</th>
<th scope="col">Sep 08&nbsp;</th>
<th scope="col">Aug 08&nbsp; &nbsp;</th>
<th scope="col">Jul 08</th>
<th scope="col">June 08</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Hometrack Housing
Survey</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;House Prices
(Thou GBP)</td>
<td>159.9</td>
<td>161.4</td>
<td>163.2</td>
<td>165.3</td>
<td>167.0</td>
<td>168.5</td>
<td>170.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Ratio of
Sale Price to Asking Price&nbsp; (%)</td>
<td>88.6</td>
<td>88.9</td>
<td>89.2</td>
<td>90.0</td>
<td>90.7</td>
<td>90.9</td>
<td>91.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Number of
Weeks to Complete Sale (Number)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol"></td>
<td>&nbsp;Q3 08</td>
<td>Q2 08&nbsp;</td>
<td>Q1 08&nbsp;</td>
<td>Q4 07&nbsp;</td>
<td>Q3 07&nbsp;</td>
<td>Q2 07</td>
<td>Q1 07</td>
</tr>
<tr class="odd">
<td class="firstcol">Equity Withdrawals
(Mil. GBP)</td>
<td>-5695</td>
<td>-1951</td>
<td>5650</td>
<td>7317</td>
<td>11170</td>
<td>9846</td>
<td>13941</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Lending -
Construction (Mil. GBP)</td>
<td>-6684</td>
<td>-99</td>
<td>7581</td>
<td>11190</td>
<td>14948</td>
<td>14077</td>
<td>15553</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Lending Secured on
Dwellings (Mil. GBP)</td>
<td>4656</td>
<td>11628</td>
<td>20033</td>
<td>24032</td>
<td>28177</td>
<td>27352</td>
<td>28809</td>
</tr>
<tr class="odd">
<td class="firstcol">Expenditure on
Construction of Dwellings (Mil. GBP)</td>
<td>11340</td>
<td>11727</td>
<td>12452</td>
<td>12542</td>
<td>13229</td>
<td>13275</td>
<td>13256</td>
</tr>
</tbody>
</table>
</body></html>

The results of the December Hometrack Survey of real estate agents in England and Wales regarding the prices at which houses are being sold and the ease or difficulty in making sales was released today. The year to year decline in [...]

UK House Prices Continue to Fall, Sales Harder to Make, Equity Withdrawals Turn Negative

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224c.jpg" align="left" border="0" height="265" width="353">
Consumers further retrenched last month as spending was cut in
a successful attempt to raise savings. Personal consumption
expenditures fell 0.6% during November after an unrevised
1.0% October decline. The latest was the fifth consecutive monthly drop
which pulled the y/y rise to a barely positive 0.5%, the weakest since
1961.
So far in 4Q, spending is down at a 6.2% annual rate from 3Q,
but the drop in gasoline prices is helping to lift real
spending. It gained 0.6% during November and that was the
first rise since May. So far in 4Q, real spending is down at a 2.2%
annual rate from 3Q. That compares to a 3.8% decline during 3Q. During
the last three months together, real spending on motor vehicles fell at
a 50.3% annual rate. Furniture spending rose at a 3.7% rate due to
price deflation stimulating sales. Lower prices only somewhat helped
spending on clothing. Real spending here fell at a 0.8% rate during the
last three months, following their summer collapse, while nominal
spending continued to fall sharply at a 5.0% rate during those three
months.
Lower gasoline prices have fueled more driving. Since a year
ago gasoline prices have halved and they're down at an 86% annual rate
during the last three months. As a result, nominal spending on gasoline
&amp; oil is down at an 81% annual rate during the last three
months. But real spending is up at a 40% rate. The level of
real spending on gasoline is near its historic high. 
 

Disposable personal<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224d.jpg" align="right" border="0" height="265" width="353">
 income fell 0.1% last month following a downwardly
revised 0.2% October increase. Again, lower prices have bolstered real
income. Adjusted for inflation disposable income rose 1.0% after a 0.7%
October increase. That raised the level of real take home
income pay by 1.6% versus a year ago and by 3.5% so far in 4Q versus 3Q.
Overall, personal income fell 0.2% last month versus
expectations for no change. October's income gain was revised down.
Wage &amp; salary income slipped 0.1% and that reversed an
unrevised 0.1% uptick during October. The y/y gain of 1.5% compares to
a 5.6% rise last year. Factory sector wages fell for the fourth
straight month (-2.4% y/y) and wages &amp; salaries in the private
service-providing industries slipped 0.1%. The 1.4% y/y rise compares
to 6% or greater growth from 2004 to 2007. Wages in the government
sector rose 0.3% and year-to-year growth of 5.5% has been steady.
Reduced spending combined with modest income growth
raised the personal savings rate to 2.8%. So far this year, the savings
rate has averaged 1.5%, the highest since 2004.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224e.jpg" align="left" border="0" height="265" width="353">
The PCE chain price index fell 1.1% and
the index was slightly below its May level. Lower gasoline prices, off
28.5% (-27.9% y/y), again offset the rise in food prices which rose
0.3% (6.2% y/y). The core PCE price index fell
slightly for the second month and the decline matched Consensus
expectations. Three-month growth of 0.5% was the lowest since 2001.
Furniture prices fell yet again (-3.6% y/y) while apparel prices fell
0.3% y/y. Transportation costs continued firm and rose 5.4% y/y while
medical care prices rose 2.0% y/y.
The figures noted above are available in the Haver USECON
and in the USNA databases. 


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<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition
of Personal Income</a> (%)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.5</td>
<td>6.1</td>
<td>7.1</td>
<td>5.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Disposable
Personal Income</td>
<td>-0.1</td>
<td>0.2</td>
<td>3.0</td>
<td>5.5</td>
<td>6.4</td>
<td>4.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption</td>
<td>-0.6</td>
<td>-1.0</td>
<td>0.5</td>
<td>5.5</td>
<td>5.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>2.8</td>
<td>2.4</td>
<td>0.1 (Nov. '07)</td>
<td>0.5</td>
<td>0.7</td>
<td>0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>-1.1</td>
<td>-0.5</td>
<td>1.4</td>
<td>2.6</td>
<td>2.8</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Less food
&amp; energy</td>
<td>-0.0</td>
<td>-0.0</td>
<td>1.9</td>
<td>2.2</td>
<td>2.3</td>
<td>2.1</td>
</tr>
</tbody>
</table>
</body></html>

Consumers further retrenched last month as spending was cut in a successful attempt to raise savings. Personal consumption expenditures fell 0.6% during November after an unrevised 1.0% October decline. The latest was the fifth [...]

Lower Prices Raise Real Income

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224a.jpg" width="353">
Initial claims for unemployment insurance rose sharply last week and the 30,000 increase to 586,000 pushed them to a level nearly double the lows of last year.Expectations had been for stability in claims last week at 551,000. The rise in the trend level of claims is reinforced by the gain in the four-week moving average of initial claims to a cycle high of 558,000, up 61.9% y/y.
The rise in initial claims has been accompanied by a 1.4% decline in nonfarm payrolls since year-end 2007.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224b.jpg" width="353">
The Labor Department indicated that the largest increases in initial claims for the week ending December 13 were in Oklahoma (+1,590), Connecticut (+1,286), Illinois (+962), Maine (+707), and Utah (+402), while the largest decreases were in North Carolina (-20,526), California (-16,493), Pennsylvania (-12,438), Georgia (-12,053), and South Carolina (-8,432).
Continuing claims for unemployment insurance during the week of December 13 fell 17,000 after a revised 44,000 decline during the prior week. But again the trend is up sharply. As a result of a huge 340,000 increase at the end of November, continuing claims were still near their highest level since 1982. The four-week average of continuing claims rose to 4,319,750. Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment held for the third consecutive week at this cycle&#39;s high of 3.3%.
The highest insured unemployment rates in the week ending December 6 were in Oregon (5.2 percent), Puerto Rico (5.2), Michigan (4.9), Idaho (4.7), Pennsylvania (4.7), Nevada (4.6), Wisconsin (4.3), South Carolina (4.2), California (4.1), Alaska (4.0), Arkansas (4.0), and New Jersey (4.0).
On Economic Conditions and Building a Recovery is the recent speech given by Dennis P. Lockhart, President and Chief Executive Officer of the Federal Reserve Bank of Atlanta and it can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=222D6340-5056-9F12-1223B443E9C1EB7B&amp;method=display">here.</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">12/20/08</th>
<th scope="col">12/13/08</th>
<th scope="col">12/06/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>586</td>
<td>556</td>
<td>575</td>
<td>66.0%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,370</td>
<td>4,387</td>
<td>61.7%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose sharply last week and the 30,000 increase to 586,000 pushed them to a level nearly double the lows of last year.Expectations had been for stability in claims last week at 551,000. The [...]

U.S. Weekly Claims For Jobless Insurance Double From Last Year's Lows

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224a.jpg" align="left" border="0" height="265" width="353">
Initial claims for unemployment insurance rose sharply last
week and the 30,000 increase to 586,000 pushed them to a level nearly
double the lows of last year.Expectations had been for stability in
claims last week at 551,000. The rise in the trend level of claims is
reinforced by the gain in the four-week moving average of initial
claims to a cycle high of 558,000, up 61.9% y/y.
The rise in initial claims has been accompanied by a 1.4%
decline in nonfarm payrolls since year-end 2007.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224b.jpg" align="right" border="0" height="265" width="353">
The Labor Department indicated that the largest increases in
initial claims for the week ending December 13 were in Oklahoma
(+1,590), Connecticut (+1,286), Illinois (+962), Maine (+707), and Utah
(+402), while the largest decreases were in North Carolina (-20,526),
California (-16,493), Pennsylvania (-12,438), Georgia (-12,053), and
South Carolina (-8,432).
Continuing claims for unemployment insurance during the week
of December 13 fell 17,000 after a revised 44,000 decline during the
prior week. But again the trend is up sharply. As a result of a huge
340,000 increase at the end of November, continuing claims were still
near their highest level since 1982. The four-week average of
continuing claims rose to 4,319,750. Continuing claims provide some
indication of workers' ability to find employment and they lag the
initial claims figures by one week.
The insured rate of unemployment held for the third
consecutive week at this cycle's high of 3.3%.
The highest insured unemployment rates in the week ending
December 6 were in Oregon (5.2 percent), Puerto Rico (5.2), Michigan
(4.9), Idaho (4.7), Pennsylvania (4.7), Nevada (4.6), Wisconsin (4.3),
South Carolina (4.2), California (4.1), Alaska (4.0), Arkansas (4.0),
and New Jersey (4.0).
On Economic
Conditions and Building a Recovery is the recent speech given
by Dennis P. Lockhart, President and Chief Executive
Officer of the Federal Reserve Bank of Atlanta and it can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=222D6340-5056-9F12-1223B443E9C1EB7B&amp;method=display">here.</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">12/20/08</th>
<th scope="col">12/13/08</th>
<th scope="col">12/06/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>586</td>
<td>556</td>
<td>575</td>
<td>66.0%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,370</td>
<td>4,387</td>
<td>61.7%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
Lower Prices Raise Real
Income 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224c.jpg" align="left" border="0" height="265" width="353">
Consumers further retrenched last month as spending was cut in
a successful attempt to raise savings. Personal consumption
expenditures fell 0.6% during November after an unrevised
1.0% October decline. The latest was the fifth consecutive monthly drop
which pulled the y/y rise to a barely positive 0.5%, the weakest since
1961.
So far in 4Q, spending is down at a 6.2% annual rate from 3Q,
but the drop in gasoline prices is helping to lift real
spending. It gained 0.6% during November and that was the
first rise since May. So far in 4Q, real spending is down at a 2.2%
annual rate from 3Q. That compares to a 3.8% decline during 3Q. During
the last three months together, real spending on motor vehicles fell at
a 50.3% annual rate. Furniture spending rose at a 3.7% rate due to
price deflation stimulating sales. Lower prices only somewhat helped
spending on clothing. Real spending here fell at a 0.8% rate during the
last three months, following their summer collapse, while nominal
spending continued to fall sharply at a 5.0% rate during those three
months.
Lower gasoline prices have fueled more driving. Since a year
ago gasoline prices have halved and they're down at an 86% annual rate
during the last three months. As a result, nominal spending on gasoline
&amp; oil is down at an 81% annual rate during the last three
months. But real spending is up at a 40% rate. The level of
real spending on gasoline is near its historic high. 
 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224d.jpg" align="right" border="0" height="265" width="353">
Disposable personal income fell 0.1% last
month following a downwardly revised 0.2% October increase. Again,
lower prices have bolstered real income. Adjusted for inflation
disposable income rose 1.0% after a 0.7% October increase. That raised
the level of real take home income pay by 1.6% versus a year
ago and by 3.5% so far in 4Q versus 3Q.
Overall, personal income fell 0.2% last month versus
expectations for no change. October's income gain was revised down.
Wage &amp; salary income slipped 0.1% and that reversed an
unrevised 0.1% uptick during October. The y/y gain of 1.5% compares to
a 5.6% rise last year. Factory sector wages fell for the fourth
straight month (-2.4% y/y) and wages &amp; salaries in the private
service-providing industries slipped 0.1%. The 1.4% y/y rise compares
to 6% or greater growth from 2004 to 2007. Wages in the government
sector rose 0.3% and year-to-year growth of 5.5% has been steady.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081224e.jpg" align="left" border="0" height="265" width="353">
Reduced spending combined with modest income growth
raised the personal savings rate to 2.8%. So far this year, the savings
rate has averaged 1.5%, the highest since 2004.
The PCE chain price index fell 1.1% and
the index was slightly below its May level. Lower gasoline prices, off
28.5% (-27.9% y/y), again offset the rise in food prices which rose
0.3% (6.2% y/y). The core PCE price index fell
slightly for the second month and the decline matched Consensus
expectations. Three-month growth of 0.5% was the lowest since 2001.
Furniture prices fell yet again (-3.6% y/y) while apparel prices fell
0.3% y/y. Transportation costs continued firm and rose 5.4% y/y while
medical care prices rose 2.0% y/y.
The figures noted above are available in the Haver USECON
and in the USNA databases. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition
of Personal Income</a> (%)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.5</td>
<td>6.1</td>
<td>7.1</td>
<td>5.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Disposable
Personal Income</td>
<td>-0.1</td>
<td>0.2</td>
<td>3.0</td>
<td>5.5</td>
<td>6.4</td>
<td>4.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption</td>
<td>-0.6</td>
<td>-1.0</td>
<td>0.5</td>
<td>5.5</td>
<td>5.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>2.8</td>
<td>2.4</td>
<td>0.1 (Nov. '07)</td>
<td>0.5</td>
<td>0.7</td>
<td>0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>-1.1</td>
<td>-0.5</td>
<td>1.4</td>
<td>2.6</td>
<td>2.8</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Less food
&amp; energy</td>
<td>-0.0</td>
<td>-0.0</td>
<td>1.9</td>
<td>2.2</td>
<td>2.3</td>
<td>2.1</td>
</tr>
</tbody>
</table>
</body></html>

Surging orders for computers and electronics propelling durable goods orders

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

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

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Winnie Tapasanun

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The U.S. international trade deficit in goods ballooned to a larger-than-expected $105.75 billion in May after narrowing to $83.01 billion in April, according to the advance estimate from the U.S. Census Bureau. The May reading marked the third widening in the goods trade deficit in four months, exceeding a $91.55 billion shortfall in May 2025. A deficit of $84.0 billion for May had been expected by the Action Economics Forecast Survey. The deficit reached a low of $61.44 billion in October 2025 (the smallest since February 2020) and a record high of $158.73 billion in March 2025. On a quarterly basis, the deficit averaged $94.38 billion so far in Q2'26 versus $81.96 billion in Q1'26.

Total goods exports fell 5.4% m/m (+14.7% y/y) to $207.67 billion in May, the first monthly fall since December and a three-month low, following a 3.8% rise to a record-high $219.52 billion in April. Exports were up 27.7% from a June 2023 low. The m/m fall in exports in May reflected declines of 9.2% (-5.0% y/y) in nonfood consumer goods excluding autos, 7.0% (+23.2% y/y) in industrial supplies & materials, 6.8% (+19.5% y/y) in other goods, and 5.0% (+14.8% y/y) in capital goods excluding autos. To the upside, exports of foods, feeds & beverages (+3.9%; +19.1% y/y) and automotive vehicles & parts (+0.5%; -3.6% y/y) rebounded m/m in May.

Total goods imports, up for the fourth consecutive month, rose 3.6% m/m (15.0% y/y) to $313.43 billion in May, after a 2.0% increase to $302.53 billion in April, marking the highest level since the March 2025 record high of $340.11 billion. Imports were up 25.0% from a March 2023 low. The m/m rise in imports in May was broad-based across all end-use categories, led by an 11.5% gain (22.0% y/y) in other goods, followed by increases of 6.3% (1.4% y/y) in automotive vehicles & parts, 5.7% (-9.1% y/y) in nonfood consumer goods excluding autos, 4.8% (11.7% y/y) in industrial supplies & materials, 4.3% (-0.2% y/y) in foods, feeds & beverages, and 0.4% (41.9% y/y) in capital goods excluding autos. 

The advance international trade data can be found in Haver's **USECON** database. The expectation figure is from the Action Economics Forecast Survey, which is in **AS1REPNA**.

- Deficit: $105.75 bil. in May, up $22.75 bil. (+27.4%) from April’s $83.01 bil.
- Exports -5.4%, first m/m decline since Dec., led by a 9.2% drop in nonauto consumer goods exports.
- Imports +3.6%, fourth straight m/m rise to highest level since Mar. ’25, driven by an 11.5% gain in imports of other goods.

U.S. Goods Trade Deficit Balloons in May, Largest Since March ’25

Robert Brusca

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In June, there's a slight divergence in the performance of industry climate and service sector climate, although broadly the two sectors have seen their composite indexes moving in more or less the same direction. Since 2024, the industry survey has moved up slightly after falling faster than the services gauge. The services survey has been locked in a slow trend of deterioration, largely since it reached a peak in 2021 in the wake of COVID.

The industry climate gauge has a 30.8 percentile standing, but the recent production trend, while declining, logs a more substantial 42.8 percentile standing. Contributing survey members find their own industry ‘likely trend’ much weaker, at a 21.2 percentile standing. Demand overall, however, has standings above the 50th percentile, putting overall and foreign orders & demand each above their respective medians for this period of ranking back to 2001. Inventories have a strong 81-percentile ranking. Prices are extremely strong, with 87-percentile and 86-percentile standings for respondents for their personal industry trend for prices as well as for the overarching manufacturing sector estimate of prices. Higher prices seem to be the one thing that everyone can agree on by a large margin.

260626.jpg

As for services, the service climate index improved slightly to 93.4 in June from 92.6 in May. The three-month moving average was weaker in June than in May as well; the 12-month moving average has been stuck at its current level for a number of months. The outlook in June improved slightly to a reading of -12 from -15 in May, but the outlook ranking is still a weak 26.8 percentile standing. The three-month expectations and observations of past sales trends haven't changed much in the last two months, but there has been a slight improvement for sales expectations. However, both sales metrics have low 20th percentile standings. Sales prices have deteriorated slightly in June compared to May for both the observed and the expected trends, but prices have standings above their 50th percentiles, logging above-median performance. Employment over the last three months has weakened noticeably, and expected employment is weaker by a small amount.

In terms of rankings, all of the sector rankings are below the 50th percentile on all of these observations, including the climate headline except for sales prices where both the past three-month observed trend and the expected trend have readings above their respective 50th percentiles, indicating past and expected price pressures in excess of normal.

260626 2.jpg

**Assessment**
On balance, the readings for the French industry, manufacturing sector and services are not encouraging. In addition, concerns about prices linger. The services sector, those concerns seem moderate compared to the concerns in manufacturing.

The hot war continues between Ukraine and Russia, while in the Middle East there was talk of some improvement and a potential peace deal between the United States and Iran, but every time there is some talk of a breakthrough, there appears to be a breakdown. In the most recent development, Iran has asserted its right to control traffic through the Strait of Hormuz, and it's not clear how that demand would ever be consistent with the U.S. allowing a ceasefire. It appears that Iran may have traded its irreconcilable demand for nuclear weapons for a more pragmatic and real-world argument—that it will control the traffic through the Strait of Hormuz simply because it can—and it still is doing exactly that, even after all the destruction it suffered.

Stopping Iran from controlling the Strait would take a commitment to restart the war. All this makes me personally more pessimistic. I think Iran sees the need for Trump to cut a deal and stop the war before the U.S. mid-term elections, and it is pressing that need to its advantage. Trading its nuclear ambitions for real world control of the Strait would elevate Iran’s power from being dangerous but ethereal to a real world event with constant consequences.

France

French Industry and Services Confidence Diverge in June

Andrew Cates

**Equity Momentum and Global Surprises — Still Moving Together**
One of the more telling features of global equity markets in 2026 has been the persistence of the correlation between non-US equity momentum and global growth and inflation surprise indices. Equity markets outside the United States have generally prospered when economic data have beaten consensus expectations and when inflation surprises have been negative  — a combination that has historically been associated with stronger corporate earnings and a more benign policy backdrop in economies other than the US. That correlation has held reasonably well through the turbulence of the past few months, even as the Middle East conflict introduced significant noise into both the economic data and the financial market signal. What the chart reveals this week is a picture of moderate but not alarming deterioration: global growth surprises have softened at the margin, consistent with the energy cost headwinds that have weighed on European and Asian activity, but the relationship between equity momentum and the broader data pulse remains intact. It is a signal that market participants continue to track economic fundamentals rather than purely geopolitical newsflow — a modestly reassuring sign that the underlying framework for assessing the global cycle has not broken down.

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**The Fed Decouples: Why Oil and US Two-Year Yields Have Parted Ways**
For much of 2026, oil prices and US two-year Treasury yields moved in close alignment. The logic was straightforward: higher oil prices raised inflation expectations, which in turn pushed market participants to anticipate a more hawkish Federal Reserve, lifting short-dated yields in the process. That relationship held with notable consistency through the March escalation and the months that followed, as energy market shocks and monetary policy expectations fed off each other. What this week’s chart captures is a striking breakdown in that correlation. As oil prices have fallen on the back of the US-Iran memorandum of understanding and the associated unwinding of the geopolitical risk premium, US two-year yields have not followed them lower. The reason is last week’s Federal Reserve meeting. Under new chair Kevin Warsh, the Fed delivered a hawkish dot plot that shifted the median year-end projection to a hike, making clear that the easing cycle previously priced by some market participants is no longer the central scenario. The message is important: the deflationary impulse from lower oil prices is being offset — at least in the Fed’s framing — by persistent underlying inflation pressures and a commitment to keeping policy tight.

260625Z2.jpg

**Flash PMIs Signal Easing Supply Chain Stress and Softer Price Pressures**
June’s flash PMI surveys, released this week across the major advanced economies, provide a timely read on how the global manufacturing and services sectors are absorbing the shifting macro backdrop. Two findings stand out. First, supplier delivery times have improved (or not lengthened as much as they had in the prior two months). This finding coheres naturally with the broader narrative: lower oil prices reduce transport and energy input costs, while the resumption of Strait of Hormuz shipping flows — examined in more detail in chart 4 — is beginning to reduce the freight disruption and re-routing costs that had been building since the conflict escalated. Second, output price inflation in manufacturing has softened, suggesting that some of the pipeline pressure from earlier energy cost spikes is beginning to fade.

260625Z3.jpg

**Hormuz Traffic and Oil: A Coherent Story of Tentative Normalisation**
The recent US-Iran memorandum of understanding to work towards a final deal, though not without subsequent flare-ups, has already brought relief to markets, most visibly in crude oil prices. This should go a long way towards unwinding the inflation-related concerns that previously elevated oil prices had stoked. While the pullback has owed much to anticipation of the glut of pent-up supply expected to follow, certain trackers of shipping volume through the Strait of Hormuz, such as the IMF’s, already point to a marked pickup in traffic, even if it remains well below pre-conflict levels. Should this normalisation of shipping flows persist, it would lend continued justification to a corresponding easing in oil prices, energy-related inflation and, by extension, headline inflation — a welcome development for central banks grappling with the delicate balancing act of reining in price pressures without dampening growth too sharply.

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**South Korea’s Trade Data Flag a Modest Softening in Global Demand**
South Korea’s trade data serve as one of the global economy’s most useful early warning systems. As one of the world’s most open economies, with exports spanning semiconductors, petrochemicals, steel, automobiles and consumer electronics, South Korea’s monthly trade figures provide a timely and broad-based read on the state of global demand. This week’s data show a slightly softer picture than the strong prints that characterised much of the first quarter. Headline export growth has moderated at the margin, and crucially, semiconductor exports — which had been the most dynamic component of the trade data, propelled by AI-related chip demand — have also come in a touch below the exceptional run rates seen earlier in the year. This is not, in itself, alarming: some moderation from peak rates was always to be expected, and the semiconductor cycle remains structurally supported by the scale of AI infrastructure investment globally.

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**A Super El Niño on the Horizon — The Next Inflation Risk**
With that said, while one driver of price pressures seems to be ebbing for now — albeit not without the risk of future flare-ups — another potential inflationary risk looms on the horizon. The chart illustrates the transmission mechanism. It plots Thailand’s milled rice production (left axis) against Australia’s Southern Oscillation Index (right axis), a well-established barometer of El Niño and La Niña conditions. The convention is straightforward: SOI readings persistently above +8 indicate La Niña, associated with above-average rainfall across Southeast Asia and broadly supportive crop conditions; readings persistently below -8 signal El Niño, which brings drought stress and reduced water availability across the region. The historical relationship is striking. The sharp negative SOI troughs around 2002–03, 2009–10 and most dramatically around 2015 all coincide with visible falls in Thai milled rice output. The severe El Niño of 2014–16 produced both the deepest SOI trough in the series and the sharpest single drop in rice production, to below 24,000 thousand tonnes. As meteorological authorities have been warning for some time, the world appears to be facing an imminent Super El Niño event, with the SOI already drifting back towards negative territory in recent months. Were a significant El Niño to materialise in the second half of this year, the implications for Thai rice output — and by extension for Asian food price inflation — could be substantial. Central bankers, in other words, may find themselves having to wrestle with a new inflationary impulse just as they had begun to hope the worst was behind them.

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The mood in global financial markets this week is more settled, though “settled” should not be confused with resolved. The US-Iran memorandum of understanding, signed last week, has continued to do its work: oil prices have fallen further, Strait of Hormuz shipping traffic has picked up measurably, and the risk premium that had been embedded in energy markets since the conflict escalated in March is now visibly unwinding. That is a material development for the inflation outlook, and central bankers will be watching carefully. Yet the picture is not without its complications. Technology stocks — the most conspicuous beneficiary of the prevailing low-rate, high-growth narrative — have been subject to renewed jitters this week, as investors grow more attentive to stretched valuations and the implications of a Federal Reserve that, under new chair Kevin Warsh, is no longer signalling the easing cycle previously priced into markets. Against this backdrop, this week’s charts draw on the latest data to assess where the global economic cycle stands. Equity momentum outside the United States has tracked closely with global growth and inflation surprises, a correlation that tells us something important about how activity is being perceived (chart 1). Meanwhile, the breakdown of the previously tight relationship between oil prices and US two-year yields is arguably one of the more telling market signals of recent weeks (chart 2). June’s flash PMI surveys point to easing supply chain stress and softer output price inflation in manufacturing — a finding that chimes naturally with lower crude prices and the resumption of Hormuz flows (chart 3). The Strait of Hormuz itself deserves a closer look: traffic data and the mechanics of the oil price pullback are telling a coherent story that supports the PMI picture (chart 4). South Korea’s trade data, including semiconductors, offer a slightly softer read on global demand momentum at the margin (chart 5). And looming on the horizon, one new risk is drawing the attention of meteorological authorities: a Super El Niño event whose probability has been rising, with potentially significant implications for food commodity prices and Asian agriculture (chart 6).

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Charts of the Week: Calmer Waters, New Currents

Michael J. Moran

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The price index for personal consumption expenditures rose 0.4% in May, although the measure almost rounded up to 0.5% (0.4498%). May marked the sixth consecutive month with headline prices increasing 0.3% or more. This series of changes has pulled the year-over-year inflation rate to 4.1%, up from 2.3% just over one year ago (April 2025). Energy prices, of course, have been the most important factor behind the acceleration in inflation, and they remained an issue in May, increasing 4.0% after advances of 3.9% and 11.6% in the prior two months. Food prices have moved erratically in the past year, with jumps and lulls leaving an average monthly increase of 0.2%. The noise was evident in recent months, with food prices increasing only 0.1% in May after a jump of 0.5% in April.

Core prices also have contributed to the pickup in inflation. After averaging monthly increases of 0.24% during 2025, core prices have increased at an average rate of 0.34% so far this year. The year-over-year increase in core inflation totaled 3.4% in May, up from a recent low of 2.6% in April of last year. Both the headline and core inflation rates are uncomfortably above the Federal Reserve’s target of 2.0%.

Total personal income rose briskly in May (0.7%). A surge in farm income played an important role (up 125% month-to-month, most likely reflecting government support payments), but nominal results also were firm elsewhere (up 0.5% ex farm income). Inflation reduced the purchasing power of this income gain, but aggregate income still advanced slightly in real terms (0.2%).

Given the recent surge in energy-driven inflation, May marked only the second monthly increase in real income so far this year. Tight budgets have dampened consumer spending, but individuals have not pulled to the sidelines. Real consumption expenditures rose 0.5% (annual rate) in the first quarter, and results for April and May suggest that real PCE is on track to increase 1.5% to 2.0% in the second quarter.

Households have managed to remain moderately active in their spending by limiting their saving. The saving rate has drifted lower since early 2024 moving to 3.0% in May (chart, below right). The erosion in saving perhaps seems reckless, but some of the reduction could be a response to the strength in the equity market, where wealth gains have possibly limited the incentive to save. Also, larger-than-normal tax refunds this year because of tax cuts in the One Big Beautiful Budget Act have allowed many households to spend actively despite modest increases in real income.

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

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- Energy prices rose sharply for the third consecutive month; core prices were unsettling as well.
- A jump in nominal income translated to a modest advance in real terms, allowing consumers to remain reasonably active.

Personal Income, Consumption, and Prices in May

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New orders for durable goods fell 4.5% m/m in May, the first monthly fall in three months, following an upwardly revised 8.5% gain in April (+7.9% initially reported on May 28) and a 1.3% increase in March (unrevised), according to today’s advance report by the U.S. Census Bureau. The Action Economics Forecast Survey had expected a 4.4% m/m May decrease. The year-on-year rate decelerated to -3.5% in May from +17.7% in April (+20.0% in May 2025), marking the first negative reading since December 2024 (-4.5%). Excluding transportation, durable goods orders rose 1.3% (10.2% y/y) in May, the 13th consecutive m/m rise, after a 1.4% increase in April. Meanwhile, durable goods orders excluding defense dropped 4.6% (-5.0% y/y), down for the third time in four months, following an 8.4% April rebound.

The m/m fall in May durable goods orders was driven by a 51.8% m/m plunge in orders for nondefense aircraft & parts, following a 167.4% surge in April and a 23.0% slump in March. Orders for defense aircraft & parts rose 7.9% (63.5% y/y), the fourth successive m/m increase, after gains of 2.5% in April and 23.7% in March. Orders excluding aircraft climbed 1.0% (9.8% y/y), the six straight m/m rise and the 10th in 11 months, after a 1.3% April increase.

Durable goods orders for transportation dropped 14.0% (-22.1% y/y) in May, the first m/m decline since February, following a 22.4% gain in April. In addition to May’s m/m plunge in nondefense aircraft orders and increase in defense aircraft orders, motor vehicles & parts orders rose 1.1% (12.4% y/y), the sixth straight m/m rise, after a 0.7% April increase. Orders for primary metals advanced 3.0% (15.9% y/y), the largest of six successive m/m gains, after a 2.6% April rise. Machinery orders climbed 1.9% (14.0% y/y), up for the 13th straight month, on top of a 1.3% April rise. Orders for fabricated metal products grew 1.5% (11.2% y/y), the third m/m increase in four months, following a 4.1% April gain. Orders for all other durable goods rose 0.8% (3.2% y/y), the strongest of nine consecutive m/m increases, after a 0.1% April uptick. Orders for computers & electronic products rebounded 0.3% (13.3% y/y), the eighth m/m gain in nine months, following a 0.4% April decrease. Orders for electrical equipment, appliances & components recovered 0.3% (5.8% y/y), the second increase in three months, after a 0.2% April decline.

Capital goods orders fell 13.6% (-21.1% y/y) in May, the first m/m fall in three months and the deepest since June 2025, following a 22.2% jump in April. Nondefense capital goods orders dropped 15.7% (-26.4% y/y), the fifth m/m decrease in six months, after a 24.9% April rebound. Core capital goods orders (i.e., nondefense capital goods orders excluding aircraft) rose 1.6% (10.5% y/y), the third m/m gain in four months, reversing a 0.7% April decline. Defense capital goods orders slid 3.4% (+14.4% y/y), the first m/m slide since January, after a 10.4% April gain. Notably, core capital goods shipments (core capex shipments)—a reliable coincident indicator of business spending on equipment in the national accounts—rose 0.3% (7.6% y/y), the eighth m/m rise in nine months, after a 0.5% April increase.

Shipments of all manufactured goods climbed 1.6% (8.9% y/y) in May following a 1.3% gain in April. Durable goods shipments rose 1.0% (8.9% y/y) after a 0.7% April increase. Nondurable goods shipments advanced 2.2% (9.0% y/y), building on a 1.9% April gain. All three series posted the sixth consecutive m/m increase.

Unfilled orders of durable goods rose 0.6% (8.5% y/y) in May, the 10th straight m/m rise, after a 1.8% gain in April. Excluding transportation, unfilled orders increased 0.9% (4.3% y/y), also up for the 10th consecutive month, following a 0.7% April rise.

Manufacturing inventories edged up 0.2% (1.9% y/y) in May, the seventh successive m/m gain, after a 0.3% rise in April. Durable goods inventories grew 0.2% (2.1% y/y), the eighth straight m/m increase, after rising 0.3% in April and March. Nondurable goods inventories, up for the fourth consecutive month, rose 0.3% (1.6% y/y), matching April's pace.

Manufacturers’ orders and shipments of durable and nondurable goods, along with unfilled orders and inventories, are compiled by the U.S. Census Bureau. They are available in Haver’s **USECON** database. The Action Economics forecast data are in the **AS1REPNA** database.

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- May headline orders -4.5% m/m, first fall in three mths.; -3.5% y/y, first negative reading since Dec. ’24.
- Nondefense aircraft & parts -51.8% m/m vs. April’s +167.4%.
- Transportation orders -14.0%, first m/m drop since Feb.; orders ex transp. +1.3%, 13th straight m/m rise.
- Core capital goods shipments +0.3%, eighth gain in nine mths., pointing to a moderate contribution to Q2’26 GDP from business equipt. spending.
- Durable goods shipments +1.0%; unfilled orders +0.6%; inventories +0.2%.

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