Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130d.jpg" align="left" border="0" height="265" width="353">
Canada's Real Gross Domestic Product rose 0.40% on an annual
rate basis in the third quarter, its first increase after three
quarters of decline. The annual rate of rise was smaller than the 2%
the Bank of Canada had predicted a month or so ago and smaller than
more recent consensus estimate of 1.0%. Canada's annual rate of growth
in the third quarter was also below those of the Mexico and the United
States, its NAFTA partners, as can be seen in the first chart.
The annual rates of change of the major components of real GDP
are shown in the table below. Private consumption showed its first
increase in the second quarter and has continued to increase in the
third quarter. Private fixed investment and exports have had their
first increases in the third quarter. Canada's stimulus programs are
reflected in the increases in Government consumption and fixed
investment over the past several quarters.
The dynamics of the change in Canada's third quarter GDP is
best seen by looking at the contribution (the weighted percent changes)
of the various components of GDP to total growth. The quarterly
increase in GDP in the third quarter was 0.088%. Private consumption
contributed .448 points; private fixed investment,.246; inventories,
.229; government spending on goods and services, .265; government fixed
investment, .218 and government inventories .001. Exports contributed
.998. These positive contributions amounted to 2.405 points. They were,
however, offset by the 2.316 point negative contribution of imports.
Part of the rise in imports was due to the increase in private and
government fixed investment. It has been estimated that Canadian
businesses import more than 70% of their spending on plant and
equipment.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">
Annual Rates of&nbsp; Change</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1&nbsp; 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3&nbsp;08</th>
<th scope="col">Q2 08&nbsp;</th>
<th scope="col">Q1 08&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"> Real Gross Domestic
Product</td>
<td>0.35</td>
<td>-3.05</td>
<td>-6.19</td>
<td>-3.74</td>
<td>0.41</td>
<td>0.33</td>
<td>-0.75</td>
</tr>
<tr>
<td class="firstcol"> Private Consumption</td>
<td>3.08</td>
<td>1.76</td>
<td>-1.41</td>
<td>-3.13</td>
<td>0.57</td>
<td>1.10</td>
<td>2.54</td>
</tr>
<tr class="odd">
<td class="firstcol">Private Fixed
Investment</td>
<td>5.60</td>
<td>-9.03</td>
<td>-27.00</td>
<td>-18.59</td>
<td>0.45</td>
<td>-2.13</td>
<td>-1.73</td>
</tr>
<tr>
<td class="firstcol">Government Consumption</td>
<td>4.99</td>
<td>3.27</td>
<td>2.15</td>
<td>2.48</td>
<td>0.02</td>
<td>4.56</td>
<td>5.67</td>
</tr>
<tr class="odd">
<td class="firstcol"> Government Fixed
Investment</td>
<td>24.66</td>
<td>16.55</td>
<td>8.60</td>
<td>8.72</td>
<td>7.11</td>
<td>11.81</td>
<td>18.89</td>
</tr>
<tr>
<td class="firstcol"> Exports</td>
<td>15.35</td>
<td>-19.54</td>
<td>-29.81</td>
<td>-17.69</td>
<td>-4.15</td>
<td>-4.11</td>
<td>-2.30</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports</td>
<td>36.0</td>
<td>-6.91</td>
<td>-39.24</td>
<td>-23.36</td>
<td>-3.44</td>
<td>2.99</td>
<td>-4.68</td>
</tr>
</tbody>
</table>
</body></html>

Canada's Real Gross Domestic Product rose 0.40% on an annual rate basis in the third quarter, its first increase after three quarters of decline. The annual rate of rise was smaller than the 2% the Bank of Canada had predicted a month [...]

The Canadian Economy Begins to Show Growth

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130c.jpg" align="left" border="0" height="265" width="353">
EMU prices rose in October. Trends are still good but core
inflation is showing a hint of acceleration as three month core prices
are up at a 1.4% annual rate above their six-month and 12-month pace of
increase.
Headline inflation shows a clear acceleration from an annual
pace of -0.1% Yr/Yr to a +1.2% annual rate over six-months and to a
2.3% annualized pace over three- months.
Germany, France, Italy and Spain all show the same
accelerating headline inflation pattern from 12-months to six-months to
three-months. Italy&#8217;s 3-mo inflation rate is up to 3.4% annualized.
Core inflation has much less clear patterns across countries.
Core inflation is not accelerating from 12-months to
six-months to three-months in any of these large EMU countries. It is
accelerating from six-months to three-months in Germany and in Italy.
But that similarity has little breadth. In Italy core inflation is
running at a strong 4.1% pace. In Germany it is at 1.1% only the same
as its Yr/Yr pace but up from its six-month pace. In France the core
rate is still steadily decelerating. Spain&#8217;s core is back down after a
pop-up over six-months.
On balance combined with news that UK consumers are repaying
credit this holiday season and that German firms are having a tough
time getting credit, it hardly seems that inflation is about to take
root. The recent rise in energy prices is the reason for most headline
inflation to be creeping higher. Core inflation is still largely under
wraps. Still it is notable that inflation is starting to show some
traces in the more inflation-prone country of Italy.
We don&#8217;t expect any policy change in EMU but the inflation
worm may be starting its turn. Even so we expect it to be a big slow
turn, even for a worm.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th scpoe="col" colspan="8">Trends in HICP</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% mo/mo</td>
<td colspan="3">% saar</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr>
<td class="firstcol">EMU</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>2.7%</td>
<td>1.2%</td>
<td>-0.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>1.0%</td>
<td>1.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Goods</td>
<td>0.4%</td>
<td>0.5%</td>
<td>0.4%</td>
<td>5.5%</td>
<td>-0.2%</td>
<td>-1.4%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>0.1%</td>
<td>-0.7%</td>
<td>0.2%</td>
<td>-1.7%</td>
<td>1.1%</td>
<td>1.8%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">HICP</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.2%</td>
<td>-0.3%</td>
<td>0.7%</td>
<td>2.3%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>1.3%</td>
<td>0.8%</td>
<td>-0.2%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.0%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>3.4%</td>
<td>1.1%</td>
<td>0.2%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.1%</td>
<td>-0.3%</td>
<td>0.7%</td>
<td>2.1%</td>
<td>1.9%</td>
<td>-0.6%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Core:xFE&amp;A</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>0.4%</td>
<td>1.1%</td>
<td>0.9%</td>
<td>1.1%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>0.9%</td>
<td>1.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>4.1%</td>
<td>1.7%</td>
<td>1.4%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>0.7%</td>
<td>0.2%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
</body></html>

EMU prices rose in October. Trends are still good but core inflation is showing a hint of acceleration as three month core prices are up at a 1.4% annual rate above their six-month and 12-month pace of increase. Headline inflation [...]

EMU Prices Rise - Has The Worm Tuned?

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130a.jpg" align="right" border="0" height="265" width="353">
The
Chicago Purchasing Managers' Association reported that its November
Business Barometer improved to the highest level since August of last
year. The index level of 56.1 was up sharply from the March low of
31.4. The survey covers a sample of over 200 purchasing professionals
in the Chicago area with a monthly response rate of about 50%. During
the last ten years there has been a 72% correlation between the
Business Barometer and the three-month change in factory sector
industrial production. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130b.jpg" align="right" border="0" height="265" width="353">
The Association indicated that gains in the
index of vendor deliveries (slower speed), order backlogs and
employment contributed greatly to the November rise in the overall
index. The new orders index rose modestly m/m but was more than double
the year-ago level. The production component fell and reversed much of
the prior month's increase. Nevertheless, it remained nearly double the
January low. The index of prices paid increased and made up an
October decline. The latest level was more than double its May low.
During the last ten years there has been a 78% correlation between the
Prices Paid Index and the three-month change in the PPI for
intermediate materials. Why Are Banks Failing?
from the Federal Reserve Bank of St. Louis can be found <a href="http://www.stlouisfed.org/publications/cb/articles/?id=1667">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/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Purchasing Mgs.</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">November '08</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">&nbsp; Business Barometer</td>
<td>56.1</td>
<td>54.2</td>
<td>46.1</td>
<td>33.6</td>
<td>46.8</td>
<td>54.4</td>
<td>56.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production</td>
<td>57.6</td>
<td>63.9</td>
<td>47.2</td>
<td>34.1</td>
<td>48.1</td>
<td>58.3</td>
<td>60.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
New Orders</td>
<td>62.8</td>
<td>61.4</td>
<td>46.3</td>
<td>29.2</td>
<td>46.7</td>
<td>57.7</td>
<td>59.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment</td>
<td>41.9</td>
<td>38.3</td>
<td>38.8</td>
<td>33.4</td>
<td>41.4</td>
<td>51.5</td>
<td>51.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Prices Paid</td>
<td>52.6</td>
<td>48.6</td>
<td>51.3</td>
<td>54.1</td>
<td>73.5</td>
<td>66.5</td>
<td>72.8</td>
</tr>
</tbody>
</table>

</body></html>

The Chicago Purchasing Managers' Association reported that its November Business Barometer improved to the highest level since August of last year. The index level of 56.1 was up sharply from the March low of 31.4. The survey covers a [...]

Chicago Purchasing Managers Index Improves Steadily

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130a.jpg" align="right" border="0" height="265" width="353">The
Chicago Purchasing Managers' Association reported that its November
Business Barometer improved to the highest level since August of last
year. The index level of 56.1 was up sharply from the March low of
31.4. The survey covers a sample of over 200 purchasing professionals
in the Chicago area with a monthly response rate of about 50%. During
the last ten years there has been a 72% correlation between the
Business Barometer and the three-month change in factory sector
industrial production. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130b.jpg" align="right" border="0" height="265" width="353">The
Association indicated that gains in the
index of vendor deliveries (slower speed), order backlogs and
employment contributed greatly to the November rise in the overall
index. The new orders index rose modestly m/m but was more than double
the year-ago level. The production component fell and reversed much of
the prior month's increase. Nevertheless, it remained nearly double the
January low. 
 The index of prices paid increased and made up an
October decline. The latest level was more than double its May low.
During the last ten years there has been a 78% correlation between the
Prices Paid Index and the three-month change in the PPI for
intermediate materials. 
 Why Are Banks Failing?
from the Federal Reserve Bank of St. Louis can be found <a href="http://www.stlouisfed.org/publications/cb/articles/?id=1667">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/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Purchasing Mgs.</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">November '08</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">&nbsp; Business Barometer</td>
<td>56.1</td>
<td>54.2</td>
<td>46.1</td>
<td>33.6</td>
<td>46.8</td>
<td>54.4</td>
<td>56.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production</td>
<td>57.6</td>
<td>63.9</td>
<td>47.2</td>
<td>34.1</td>
<td>48.1</td>
<td>58.3</td>
<td>60.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
New Orders</td>
<td>62.8</td>
<td>61.4</td>
<td>46.3</td>
<td>29.2</td>
<td>46.7</td>
<td>57.7</td>
<td>59.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment</td>
<td>41.9</td>
<td>38.3</td>
<td>38.8</td>
<td>33.4</td>
<td>41.4</td>
<td>51.5</td>
<td>51.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Prices Paid</td>
<td>52.6</td>
<td>48.6</td>
<td>51.3</td>
<td>54.1</td>
<td>73.5</td>
<td>66.5</td>
<td>72.8</td>
</tr>
</tbody>
</table>

 EMU Prices Rise - Has The Worm
Tuned? 
by <a href="/comment/Brusca.html">Robert
Brusca</a> November 30, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130c.jpg" align="left" border="0" height="265" width="353">
EMU prices rose in October. Trends are still good but core
inflation is showing a hint of acceleration as three month core prices
are up at a 1.4% annual rate above their six-month and 12-month pace of
increase.
Headline inflation shows a clear acceleration from an annual
pace of -0.1% Yr/Yr to a +1.2% annual rate over six-months and to a
2.3% annualized pace over three- months.
Germany, France, Italy and Spain all show the same
accelerating headline inflation pattern from 12-months to six-months to
three-months. Italy&#8217;s 3-mo inflation rate is up to 3.4% annualized.
Core inflation has much less clear patterns across countries.
Core inflation is not accelerating from 12-months to
six-months to three-months in any of these large EMU countries. It is
accelerating from six-months to three-months in Germany and in Italy.
But that similarity has little breadth. In Italy core inflation is
running at a strong 4.1% pace. In Germany it is at 1.1% only the same
as its Yr/Yr pace but up from its six-month pace. In France the core
rate is still steadily decelerating. Spain&#8217;s core is back down after a
pop-up over six-months.
On balance combined with news that UK consumers are repaying
credit this holiday season and that German firms are having a tough
time getting credit, it hardly seems that inflation is about to take
root. The recent rise in energy prices is the reason for most headline
inflation to be creeping higher. Core inflation is still largely under
wraps. Still it is notable that inflation is starting to show some
traces in the more inflation-prone country of Italy.
We don&#8217;t expect any policy change in EMU but the inflation
worm may be starting its turn. Even so we expect it to be a big slow
turn, even for a worm.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scpoe="col" colspan="8">Trends in
HICP</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% mo/mo</td>
<td colspan="3">% saar</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr>
<td class="firstcol">EMU</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>2.7%</td>
<td>1.2%</td>
<td>-0.1%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>1.0%</td>
<td>1.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Goods</td>
<td>0.4%</td>
<td>0.5%</td>
<td>0.4%</td>
<td>5.5%</td>
<td>-0.2%</td>
<td>-1.4%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>0.1%</td>
<td>-0.7%</td>
<td>0.2%</td>
<td>-1.7%</td>
<td>1.1%</td>
<td>1.8%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">HICP</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.2%</td>
<td>-0.3%</td>
<td>0.7%</td>
<td>2.3%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>1.3%</td>
<td>0.8%</td>
<td>-0.2%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.0%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>3.4%</td>
<td>1.1%</td>
<td>0.2%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.1%</td>
<td>-0.3%</td>
<td>0.7%</td>
<td>2.1%</td>
<td>1.9%</td>
<td>-0.6%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Core:xFE&amp;A</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>0.4%</td>
<td>1.1%</td>
<td>0.9%</td>
<td>1.1%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>0.9%</td>
<td>1.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>4.1%</td>
<td>1.7%</td>
<td>1.4%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>0.7%</td>
<td>0.2%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
 The Canadian Economy Begins to
Show Growth 
by <a href="/comment/Curley.html">Louise
Curley</a> November 30, 2009

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091130d.jpg" align="left" border="0" height="265" width="353">
Canada's Real Gross Domestic Product rose 0.40% on an annual
rate basis in the third quarter, its first increase after three
quarters of decline. The annual rate of rise was smaller than the 2%
the Bank of Canada had predicted a month or so ago and smaller than
more recent consensus estimate of 1.0%. Canada's annual rate of growth
in the third quarter was also below those of the Mexico and the United
States, its NAFTA partners, as can be seen in the first chart.
The annual rates of change of the major components of real GDP
are shown in the table below. Private consumption showed its first
increase in the second quarter and has continued to increase in the
third quarter. Private fixed investment and exports have had their
first increases in the third quarter. Canada's stimulus programs are
reflected in the increases in Government consumption and fixed
investment over the past several quarters.
The dynamics of the change in Canada's third quarter GDP is
best seen by looking at the contribution (the weighted percent changes)
of the various components of GDP to total growth. The quarterly
increase in GDP in the third quarter was 0.088%. Private consumption
contributed .448 points; private fixed investment,.246; inventories,
.229; government spending on goods and services, .265; government fixed
investment, .218 and government inventories .001. Exports contributed
.998. These positive contributions amounted to 2.405 points. They were,
however, offset by the 2.316 point negative contribution of imports.
Part of the rise in imports was due to the increase in private and
government fixed investment. It has been estimated that Canadian
businesses import more than 70% of their spending on plant and
equipment.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">
Annual Rates of&nbsp; Change</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1&nbsp; 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3&nbsp;08</th>
<th scope="col">Q2 08&nbsp;</th>
<th scope="col">Q1 08&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"> Real Gross Domestic
Product</td>
<td>0.35</td>
<td>-3.05</td>
<td>-6.19</td>
<td>-3.74</td>
<td>0.41</td>
<td>0.33</td>
<td>-0.75</td>
</tr>
<tr>
<td class="firstcol"> Private Consumption</td>
<td>3.08</td>
<td>1.76</td>
<td>-1.41</td>
<td>-3.13</td>
<td>0.57</td>
<td>1.10</td>
<td>2.54</td>
</tr>
<tr class="odd">
<td class="firstcol">Private Fixed
Investment</td>
<td>5.60</td>
<td>-9.03</td>
<td>-27.00</td>
<td>-18.59</td>
<td>0.45</td>
<td>-2.13</td>
<td>-1.73</td>
</tr>
<tr>
<td class="firstcol">Government Consumption</td>
<td>4.99</td>
<td>3.27</td>
<td>2.15</td>
<td>2.48</td>
<td>0.02</td>
<td>4.56</td>
<td>5.67</td>
</tr>
<tr class="odd">
<td class="firstcol"> Government Fixed
Investment</td>
<td>24.66</td>
<td>16.55</td>
<td>8.60</td>
<td>8.72</td>
<td>7.11</td>
<td>11.81</td>
<td>18.89</td>
</tr>
<tr>
<td class="firstcol"> Exports</td>
<td>15.35</td>
<td>-19.54</td>
<td>-29.81</td>
<td>-17.69</td>
<td>-4.15</td>
<td>-4.11</td>
<td>-2.30</td>
</tr>
<tr class="odd">
<td class="firstcol">Imports</td>
<td>36.0</td>
<td>-6.91</td>
<td>-39.24</td>
<td>-23.36</td>
<td>-3.44</td>
<td>2.99</td>
<td>-4.68</td>
</tr>
</tbody>
</table>
</body></html>

Chicago Purchasing Managers IndexImproves Steadily

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127g.jpg" align="right" border="0" height="265" width="353">
Improvement in factory sector activity was apparent in the
latest orders figures. Durable goods orders slipped 0.6% in October
after an upwardly revised 2.0% rise during September. Despite the
monthly setback, however, the deterioration in factory sector activity
has abated. That is consistent with the recent monthly ISM reports on
manufacturing sector activity. Durable goods orders have risen 5.0%
from their March low and the y/y decline is less than half the worst of
this past winter.
Much of the recent improvement has been due to the
transportation equipment sector where orders rose 1.5% last month
(-13.6% y/y) after an upwardly revised, strong September increase.
Higher orders for aircraft &amp; parts account for most of the
recent gains. Excluding the transportation equipment sector altogether,
orders fell 1.3% during October but they have risen 4.3% from their
April low.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127h.jpg" align="right" border="0" height="265" width="353">
Primary metals orders also continued their recovery with a
3.6% October increase (-13.7% y/y) and they have risen one-quarter from
the March low. A 2.7% rise in electrical equipment orders also helped
last month's total. They have risen slightly from the spring low after
falling by one-third from last year's high. Showing tenuous improvement
have been orders for computers &amp; related equipment. While
orders remain off their recession low, the gain stalled during the last
three months. The same is true for machinery orders.
The capital goods sector also has improved as indicated by a
slower year-to-year rate of decline. However, declines in nondefense
capital goods orders less aircraft during three of the last four months
raises uncertainty about the momentum behind the trend.
Shipments of durable goods slipped 0.2% during October
following increases during two of the prior three months. Nevertheless,
the y/y decline eased to 13.6% from 20.2% at its worst this spring. The
improvement has been paced by firm monthly gains in shipments of metals
(-27.9% y/y) but the machinery (-22.9% y/y) and electrical equipment
(-20.3% y/y) sectors continue to lag.
Perhaps the shedding of inventories of durable manufactured
goods is coming to its end after nearly a year of correction.
Inventories were essentially unchanged during October after steep
declines in each of the prior nine months. The shedding of inventory
has been broad-based led by an 18.6% decline this year in the metals
area, a 14.4% drop in computer inventories, a 14.3% drop in motor
vehicles and a 13.6% decline in electrical equipment. The recent
decline in inventories has been successful in lowering the ratio to
shipments to its lowest since November of last year.
The durable goods figures are available in Haver's USECON
database.


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM" style="color: rgb(0, 0, 0);">NAICS Classification
</a>(%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</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">Durable Goods Orders</td>
<td>-0.6</td>
<td>2.0</td>
<td>-2.7</td>
<td>-11.9</td>
<td>-5.8</td>
<td>1.4</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-1.3</td>
<td>1.8</td>
<td>-0.5</td>
<td>-11.3</td>
<td>-1.2</td>
<td>-0.3</td>
<td>9.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>1.2</td>
<td>3.2</td>
<td>-7.8</td>
<td>-14.1</td>
<td>-6.8</td>
<td>3.5</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.9</td>
<td>2.6</td>
<td>-1.0</td>
<td>-12.8</td>
<td>-0.3</td>
<td>-2.7</td>
<td>10.7</td>
</tr>
</tbody>
</table>
</body></html>

Improvement in factory sector activity was apparent in the latest orders figures. Durable goods orders slipped 0.6% in October after an upwardly revised 2.0% rise during September. Despite the monthly setback, however, the [...]

U.S. Durable Goods Orders Slip M/M But Trend Improves

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127d.jpg" align="right" border="0" height="265" width="353">
Consumer sentiment during all of November improved from
mid-month to a reading of 67.4 as measured by the Reuters/University of
Michigan Index of Consumer Sentiment. The figure about matched
Consensus expectations. Despite recent declines, sentiment was up by
nearly one-quarter from the lows of last fall. During the last ten
years there has been a two-thirds correlation between the level of
sentiment and the three-month change real consumer spending.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127e.jpg" align="right" border="0" height="265" width="353">
The November reading on expected economic conditions fell to
66.5 from October's 68.6, although it did improve from mid-month. The
primary weakness came in survey participants' outlook for business
conditions over the next year. This move seems to show that the rise in
September was a temporary blip. The reading of expected personal
finances also fell to the lowest since August as more respondents felt
that their personal finances would worsen .
The reading of current economic conditions fell from October
and from mid-month. People's assessments of their current financial
condition and buying conditions for large household goods both moved
down to their lowest since August.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127f.jpg" align="right" border="0" height="265" width="353">
Expected price inflation during the next year slipped to 3.1%,
down from October's 3.2% but up from the December reading of
1.7%.Respondents' view of government policy, which may eventually
influence economic expectations, improved from October and remained up
significantly from the low of October 2008. Nineteen percent of
respondent thought that a good job was being done by government versus
30% who thought a poor job was being done.
The Reuters/University of Michigan survey data are not
seasonally adjusted. The reading is based on telephone interviews with
about 500 households at month-end. These mid-month results are based on
about 320 interviews. The summary indexes are in Haver's USECON
database with details in the proprietary UMSCA database.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">November</th>
<th scope="col">Mid-November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Nov 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 Sentiment</td>
<td>67.4</td>
<td>66.0</td>
<td>70.6</td>
<td>73.5</td>
<td>21.9%</td>
<td>63.8</td>
<td>85.6</td>
<td>87.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>68.8</td>
<td>69.6</td>
<td>73.7</td>
<td>73.4</td>
<td>19.7</td>
<td>73.7</td>
<td>101.2</td>
<td>105.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>66.5</td>
<td>63.7</td>
<td>68.6</td>
<td>73.5</td>
<td>23.4</td>
<td>57.3</td>
<td>75.6</td>
<td>75.9</td>
</tr>
</tbody>
</table>
</body></html>

Consumer sentiment during all of November improved from mid-month to a reading of 67.4 as measured by the Reuters/University of Michigan Index of Consumer Sentiment. The figure about matched Consensus expectations. Despite recent [...]

Michigan Consumer Sentiment Improves From Mid-Month

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127b.jpg" align="right" border="0" height="265" width="353">
Though sales of new homes rose 6.2% to 430,000 last month, the
gain followed two months of decline. In all, new home sales have risen
nearly one-third from the January trough and the October figure
exceeded Consensus expectations for 405,000 sales.
Home prices firmed during October for the second consecutive
month. The median price of a new single-family home rose to $212,200
from an upwardly revised September level. The monthly increase pared
the y/y decline to 0.5% from its worst of -14.5% this past February.
The average new home price of $261,100 was off 4.7% y/y.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127c.jpg" align="right" border="0" height="265" width="353">

Price discounts, higher sales and much lower housing starts
have combined to lower the overhang of unsold homes. It fell by more
than one-third versus last year to the lowest level since the early
1970s (again, no typo). The months' supply of unsold homes fell further
last month to 6.7 months and was down from the high of 12.4 months in
January. The figure was the lowest since December 2006.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</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">Total Sales
(SAAR, 000s)</td>
<td>430</td>
<td>405</td>
<td>415</td>
<td>5.1%</td>
<td>481</td>
<td>769</td>
<td>1,049</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>37</td>
<td>39</td>
<td>38</td>
<td>&nbsp;5.7</td>
<td>35</td>
<td>64</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>56</td>
<td>70</td>
<td>55</td>
<td>-11.1</td>
<td>69</td>
<td>118</td>
<td>161</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>244</td>
<td>198</td>
<td>212</td>
<td>8.4</td>
<td>264</td>
<td>408</td>
<td>559</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>93</td>
<td>98</td>
<td>110</td>
<td>8.1</td>
<td>113</td>
<td>178</td>
<td>266</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>212,200</td>
<td>210,700</td>
<td>206,300</td>
<td>&nbsp;-0.5</td>
<td>230,408</td>
<td>243,742</td>
<td>243,067</td>
</tr>
</tbody>
</table>


</body></html>

Though sales of new homes rose 6.2% to 430,000 last month, the gain followed two months of decline. In all, new home sales have risen nearly one-third from the January trough and the October figure exceeded Consensus expectations for [...]

U.S. New Home Sales Struggle Higher

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127b.jpg" align="right" border="0" height="265" width="353">
Though sales of new homes rose 6.2% to 430,000 last month, the
gain followed two months of decline. In all, new home sales have risen
nearly one-third from the January trough and the October figure
exceeded Consensus expectations for 405,000 sales.
Home prices firmed during October for the second consecutive
month. The median price of a new single-family home rose to $212,200
from an upwardly revised September level. The monthly increase pared
the y/y decline to 0.5% from its worst of -14.5% this past February.
The average new home price of $261,100 was off 4.7% y/y.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127c.jpg" align="right" border="0" height="265" width="353">

Price discounts, higher sales and much lower housing starts
have combined to lower the overhang of unsold homes. It fell by more
than one-third versus last year to the lowest level since the early
1970s (again, no typo). The months' supply of unsold homes fell further
last month to 6.7 months and was down from the high of 12.4 months in
January. The figure was the lowest since December 2006.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</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">Total Sales
(SAAR, 000s)</td>
<td>430</td>
<td>405</td>
<td>415</td>
<td>5.1%</td>
<td>481</td>
<td>769</td>
<td>1,049</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>37</td>
<td>39</td>
<td>38</td>
<td>&nbsp;5.7</td>
<td>35</td>
<td>64</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>56</td>
<td>70</td>
<td>55</td>
<td>-11.1</td>
<td>69</td>
<td>118</td>
<td>161</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>244</td>
<td>198</td>
<td>212</td>
<td>8.4</td>
<td>264</td>
<td>408</td>
<td>559</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>93</td>
<td>98</td>
<td>110</td>
<td>8.1</td>
<td>113</td>
<td>178</td>
<td>266</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>212,200</td>
<td>210,700</td>
<td>206,300</td>
<td>&nbsp;-0.5</td>
<td>230,408</td>
<td>243,742</td>
<td>243,067</td>
</tr>
</tbody>
</table>


 Michigan Consumer Sentiment
Improves From Mid-Month 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 27, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127d.jpg" align="right" border="0" height="265" width="353">
Consumer sentiment during all of November improved from
mid-month to a reading of 67.4 as measured by the Reuters/University of
Michigan Index of Consumer Sentiment. The figure about matched
Consensus expectations. Despite recent declines, sentiment was up by
nearly one-quarter from the lows of last fall. During the last ten
years there has been a two-thirds correlation between the level of
sentiment and the three-month change real consumer spending.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127e.jpg" align="right" border="0" height="265" width="353">
The November reading on expected economic conditions fell to
66.5 from October's 68.6, although it did improve from mid-month. The
primary weakness came in survey participants' outlook for business
conditions over the next year. This move seems to show that the rise in
September was a temporary blip. The reading of expected personal
finances also fell to the lowest since August as more respondents felt
that their personal finances would worsen .
The reading of current economic conditions fell from October
and from mid-month. People's assessments of their current financial
condition and buying conditions for large household goods both moved
down to their lowest since August.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127f.jpg" align="right" border="0" height="265" width="353">
Expected price inflation during the next year slipped to 3.1%,
down from October's 3.2% but up from the December reading of
1.7%.Respondents' view of government policy, which may eventually
influence economic expectations, improved from October and remained up
significantly from the low of October 2008. Nineteen percent of
respondent thought that a good job was being done by government versus
30% who thought a poor job was being done.
The Reuters/University of Michigan survey data are not
seasonally adjusted. The reading is based on telephone interviews with
about 500 households at month-end. These mid-month results are based on
about 320 interviews. The summary indexes are in Haver's USECON
database with details in the proprietary UMSCA database.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">November</th>
<th scope="col">Mid-November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Nov 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 Sentiment</td>
<td>67.4</td>
<td>66.0</td>
<td>70.6</td>
<td>73.5</td>
<td>21.9%</td>
<td>63.8</td>
<td>85.6</td>
<td>87.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>68.8</td>
<td>69.6</td>
<td>73.7</td>
<td>73.4</td>
<td>19.7</td>
<td>73.7</td>
<td>101.2</td>
<td>105.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>66.5</td>
<td>63.7</td>
<td>68.6</td>
<td>73.5</td>
<td>23.4</td>
<td>57.3</td>
<td>75.6</td>
<td>75.9</td>
</tr>
</tbody>
</table>


 U.S. Durable Goods Orders Slip M/M
But Trend Improves 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 27, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127g.jpg" align="right" border="0" height="265" width="353">
Improvement in factory sector activity was apparent in the
latest orders figures. Durable goods orders slipped 0.6% in October
after an upwardly revised 2.0% rise during September. Despite the
monthly setback, however, the deterioration in factory sector activity
has abated. That is consistent with the recent monthly ISM reports on
manufacturing sector activity. Durable goods orders have risen 5.0%
from their March low and the y/y decline is less than half the worst of
this past winter.
Much of the recent improvement has been due to the
transportation equipment sector where orders rose 1.5% last month
(-13.6% y/y) after an upwardly revised, strong September increase.
Higher orders for aircraft &amp; parts account for most of the
recent gains. Excluding the transportation equipment sector altogether,
orders fell 1.3% during October but they have risen 4.3% from their
April low.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091127h.jpg" align="right" border="0" height="265" width="353">
Primary metals orders also continued their recovery with a
3.6% October increase (-13.7% y/y) and they have risen one-quarter from
the March low. A 2.7% rise in electrical equipment orders also helped
last month's total. They have risen slightly from the spring low after
falling by one-third from last year's high. Showing tenuous improvement
have been orders for computers &amp; related equipment. While
orders remain off their recession low, the gain stalled during the last
three months. The same is true for machinery orders.
The capital goods sector also has improved as indicated by a
slower year-to-year rate of decline. However, declines in nondefense
capital goods orders less aircraft during three of the last four months
raises uncertainty about the momentum behind the trend.
Shipments of durable goods slipped 0.2% during October
following increases during two of the prior three months. Nevertheless,
the y/y decline eased to 13.6% from 20.2% at its worst this spring. The
improvement has been paced by firm monthly gains in shipments of metals
(-27.9% y/y) but the machinery (-22.9% y/y) and electrical equipment
(-20.3% y/y) sectors continue to lag.
Perhaps the shedding of inventories of durable manufactured
goods is coming to its end after nearly a year of correction.
Inventories were essentially unchanged during October after steep
declines in each of the prior nine months. The shedding of inventory
has been broad-based led by an 18.6% decline this year in the metals
area, a 14.4% drop in computer inventories, a 14.3% drop in motor
vehicles and a 13.6% decline in electrical equipment. The recent
decline in inventories has been successful in lowering the ratio to
shipments to its lowest since November of last year.
The durable goods figures are available in Haver's USECON
database.


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM" style="color: rgb(0, 0, 0);">NAICS Classification
</a>(%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</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">Durable Goods Orders</td>
<td>-0.6</td>
<td>2.0</td>
<td>-2.7</td>
<td>-11.9</td>
<td>-5.8</td>
<td>1.4</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-1.3</td>
<td>1.8</td>
<td>-0.5</td>
<td>-11.3</td>
<td>-1.2</td>
<td>-0.3</td>
<td>9.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>1.2</td>
<td>3.2</td>
<td>-7.8</td>
<td>-14.1</td>
<td>-6.8</td>
<td>3.5</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.9</td>
<td>2.6</td>
<td>-1.0</td>
<td>-12.8</td>
<td>-0.3</td>
<td>-2.7</td>
<td>10.7</td>
</tr>
</tbody>
</table>
</body></html>

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

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

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Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

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250430B.jpg

High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

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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- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

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The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

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The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

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- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 62,000 (1.4% y/y) during April after increasing 147,000 (1.4% y/y) during March, revised from 155,000. A 124,000 April rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.5% y/y during April, from 4.6% y/y in March and from 4.7% y/y in the prior two months. Manufacturing sector pay grew 4.6% y/y during April, down from 4.8% y/y in March. Construction sector pay was unchanged at 4.7% y/y. Natural resource & mining sector pay grew 4.4% y/y. Financial sector pay rose 5.1% y/y, while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.3% y/y as did trade, transportation & utilities pay. Information pay rose 4.1% y/y. Median annual pay for “job changers” rose 6.9% y/y after 6.7% y/y in March.

Small business hiring (less than 50 employees) rose 11,000 (0.6% y/y) after rising 18,000 (0.6% y/y) in March, revised down from 52,000. Employment at medium-sized firms (50-499,000 employees) rose 40,000 (1.1% y/y) after rising 43,000 (1.1% y/y). Large business hiring (500+ employees) rose 12,000 (3.4% y/y) in April, after rising 61,000 (3.6% y/y) in March, revised from 59,000.

Goods-producing employment rose 26,000 (1.3% y/y) in April, after rising 16,000 (1.3% y/y) during March, revised from 24,000. Manufacturing jobs rose 4,000 (-0.2% y/y) after rising 17,000 (-0.3% y/y) in March. The number of construction sector jobs rose 16,000 (3.4% y/y) in April, following a 2,000 (3.6% y/y) March increase, revised from 6,000. Natural resources & mining jobs rose 6,000 (2.8% y/y) in April after falling 3,000 (+1.9% y/y) in March.

The number of service-producing jobs rose 34,000 (1.4% y/y) during April, following a rise of 131,000 (1.4% y/y) in March. Professional & business services employment fell 2,000 (0.6% y/y) after rising 46,000 (0.7% y/y) in the prior month, revised from 57,000. Employment in the financial industry rose 20,000 (2.1% y/y) in April, after rising 38,000 (2.0% y/y) in March. Leisure and hospitality employment increased 27,000 (3.0% y/y), following a 23,000 (2.9% y/y) March increase, revised from 17,000. The number of education & health care jobs fell 23,000 (1.6% y/y) in April, following a 15,000 (1.8% y/y) rise in March, revised from 12,000. Information sector employment fell 8,000 (-0.1% y/y) after a rise of 3,000 (0.2% y/y) in March. The number of jobs in trade, transportation & utilities rose 21,000 (0.4% y/y) in April, after falling 4,000 (+0.4% y/y) in March, revised from a 6,000 fall. Employment in “other” services rose fell 1,000 (+3.2% y/y) following a 10,000 (3.4% y/y) rise in March, revised from 11,000.

By region, employment in the Northeast increased 10,000 (1.9% y/y) in April, following an increase of 95,000 (2.0% y/y) in March, revised from 89,000. Employment in the Midwest rose 42,000 (1.5% y/y) after a gain of 84,000 (1.4% y/y) in March, revised from 81,000. In the South, employment rose 3,000 (1.3% y/y) during April, after rising 10,000 (1.4% y/y) in March, revised from 27,000. In the West, employment rose 9,000 (0.6% y/y) after declining 43,000 (+0.6% y/y), revised from a 41,000 decline in March.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Employment increase is modest in both services & factory sectors.
- Wage growth for “job stayers” moderates.
- Small and medium-sized business employment slows.

Economy in Brief: November 2009

Jump to:

The Canadian Economy Begins to Show Growth

EMU Prices Rise - Has The Worm Tuned?

Chicago Purchasing Managers Index Improves Steadily

Chicago Purchasing Managers IndexImproves Steadily

U.S. Durable Goods Orders Slip M/M But Trend Improves

Michigan Consumer Sentiment Improves From Mid-Month

U.S. New Home Sales Struggle Higher

U.S. New Home Sales Struggle Higher