Tom Moeller

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      <p>The National Association of Realtors (NAR) reported that <b>pending
      sales of single-family homes ticked up 0.1% during January </b>following a
      5.8% December decline, revised from an 8.7% shortfall. The latest uptick
      followed six consecutive months of sharp decline. Therefore, sales were
      14.3% below the peak last June. Expectations had been for a 1.8% rise
      according to Bloomberg. Data were revised back through 2011.</p>
      
      <p>Home sales were mixed across the country last month. In the South,
      sales rose 3.5% (-5.5% y/y) following a 5.7% December drop. Sales remained
      down 7.7% from the May peak. In the Northeast, a 2.3% rise (-5.3% y/y)
      followed two months of sharp decline. Sales remained 12.3% lower than the
      peak last April. In the West, sales declined 4.8% (-17.5% y/y) and have
      fallen in each of the last seven months, a decline totaling more than
      one-quarter from the peak. In the Midwest, sales fell 2.5% last month
      (-9.3% y/y), off for the seventh straight month and down 17.6% from the
      May peak.</p>
      
      <p><b>The pending home sales figures are analogous to the new home sales</b>
      data from the Commerce Department. They measure home sales when the sales
      contract is signed, not at the time the sale is closed. In developing the
      model for the index, the NAR demonstrated that the level of monthly
      sales-contract activity parallels the level of closed existing-home sales
      in the following two months. The series dates back to 2001 and the data
      are available in Haver's <b>PREALTOR </b>database.</p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

        <thead>
          <tr>
            <th class="firstcol" scope="col" >Pending Home Sales (%)</th>
            <th scope="col" >Jan</th>
            <th scope="col" >Dec</th>
            <th scope="col" >Nov</th>
            <th scope="col" >Y/Y </th>
            <th scope="col" >2013</th>
            <th scope="col" >2012</th>
            <th scope="col" >2011</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Total</td>
            <td  >0.1</td>
            <td  >-5.8</td>
            <td  >-1.2</td>
            <td  >-9.0</td>
            <td  >4.5</td>
            <td  >11.3</td>
            <td  >1.3</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Northeast</td>
            <td  >2.3</td>
            <td  >-7.3</td>
            <td  >-2.0</td>
            <td  >-5.3</td>
            <td  >6.1</td>
            <td  >16.6</td>
            <td  >-4.0</td>
          </tr>
          <tr>
            <td class="firstcol" >Midwest</td>
            <td  >-2.5</td>
            <td  >-5.2</td>
            <td  >-3.1</td>
            <td  >-9.3</td>
            <td  >10.4</td>
            <td  >17.7</td>
            <td  >2.2</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >South</td>
            <td  >3.5</td>
            <td  >-5.7</td>
            <td  >0.0</td>
            <td  >-5.5</td>
            <td  >5.4</td>
            <td  >12.7</td>
            <td  >1.4</td>
          </tr>
          <tr>
            <td class="firstcol" >West</td>
            <td  >-4.8</td>
            <td  >-5.9</td>
            <td  >-0.3</td>
            <td  >-17.5</td>
            <td  >-3.6</td>
            <td  >1.2</td>
            <td  >3.4</td>
   </tr>
              </tbody>
            </table>
            </span>
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The National Association of Realtors (NAR) reported that pending sales of single-family homes ticked up 0.1% during January following a 5.8% December decline, revised from an 8.7% shortfall. The latest uptick followed six consecutive [...]

U.S. Pending Home Sales Remain Depressed by Winter Storms

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            <p>Real GDP growth for Q4'13 eased more than initially estimated.
            The growth estimate was lowered by the Department of Commerce to 2.4% (2.5% y/y) 
            from 3.2% in the advance release, down sharply from 4.1% in the third
            quarter. The gain roughly matched consensus expectations for a 2.5%
            rise in the Action Economics Forecast Survey. For all of last year
            growth moderated to 1.9%, down nearly a full percentage point from
            2012.</p>
            
            <p>Domestic final sales rose at a lessened 1.2% rate (1.5% y/y) last
            quarter. Growth in personal consumption expenditures was lowered to
            2.6% (2.1% y/y). Spending growth on durable goods eased sharply to
            2.5% (5.6% y/y) as motor vehicle purchases slipped (+2.1% y/y).
            Spending on home furnishings &amp; appliances rose at a 2.4% rate
            (7.1% y/y), the weakest gain since Q2 2012. Nondurable spending,
            however, jumped at a 3.5% rate (2.7% y/y) led by a surge in
            purchases of apparel. Growth in spending on services still improved
            sharply to 2.2% (1.4% y/y). To the upside, business fixed investment
            growth was nearly doubled to 7.3% (3.0% y/y). Residential investment
            showed a lessened 8.8% decline (+6.6% y/y) but spending still jumped
            12.1% for all of 2013. The decline in government spending was
            deepened to 5.5% (-2.5% y/y). The fall subtracted roughly a full
            percentage point from Q4 GDP growth. Defense spending fell at a 14.5%
            rate (-6.9% y/y) while state &amp; local government spending growth
            eased 0.5% (+0.1% y/y). Final sales to private domestic purchasers
            grew at a 2.8% rate (2.4% y/y), little changed from the advance
            estimate.</p>
            
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            <p>The effects from inventory investment and foreign trade were
            lessened but remained positive. A faster rate of inventory
            accumulation added 0.1 percentage point to Q4 GDP growth following
            the 1.7 point addition in Q3. A lessened foreign trade deficit added
            one percentage point to Q4 growth. The improvement owed last quarter
            to a 9.4% rise (4.9% y/y) in exports versus a 1.5% gain (2.8% y/y)
            in imports.</p>
            
            <p>Price inflation moderated in Q4, though not as much as initially
            estimated. The chain-type GDP price index rose at a 1.6% rate (1.4%
            y/y) versus the advance estimate of a 1.3% increase and a 2.0% Q3
            gain. A 1.3% rise had been expected. The personal consumption price
            index rose at a 1.0% rate (1.0% y/y) while the business fixed
            investment price index increase held q/q at 1.2% (1.2% y/y). The
            residential investment price index surged at an 8.2% rate (6.2%
            y/y), the fastest y/y growth since early 2006.</p>
            
            <p>The latest GDP figures can be found in Haver's <b>USECON</b> and <b>USNA</b>
            databases; <b>USNA</b> contains basically all of the Bureau of
            Economic Analysis' detail in the national accounts, including the
            new integrated economics accounts and the recently added GDP data
            for U.S. Territories. The Action Economics consensus estimates can
            be found in <b>AS1REPNA</b>.</p>
            
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      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

              <thead>
                <tr>
                  <th class="firstcol" scope="col" ><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM" ;>Chained
                    2009 $, %, AR</a></th>
                  <th scope="col"  >Q4'13&nbsp; (2nd
                    Estimate)</th>
                  <th scope="col"  >Q4'13 (Advance)</th>
                  <th scope="col"  >Q3'13</th>
                  <th scope="col"  >Q2'13</th>
                  <th scope="col"  >Q4 Y/Y</th>
                  <th scope="col"  >2013</th>
                  <th scope="col"  >2012</th>
                  <th scope="col"  >2011</th>
                </tr>
              </thead>
              <tbody>
                <tr>
                  <td class="firstcol" >Gross Domestic Product</td>
                  <td  >2.4</td>
                  <td  >3.2</td>
                  <td  >4.1</td>
                  <td  >2.5</td>
                  <td  >2.5</td>
                  <td  >1.9</td>
                  <td  >2.8</td>
                  <td  >1.8</td>
                </tr>
                <tr class="odd">
                  <td class="firstcol" >&nbsp; Inventory Effect</td>
                  <td  >0.1</td>
                  <td  >0.4</td>
                  <td  >1.7</td>
                  <td  >0.4</td>
                  <td  >0.2</td>
                  <td  >0.2</td>
                  <td  >0.2</td>
                  <td  >-0.2</td>
                </tr>
                <tr>
                  <td class="firstcol" >Final Sales</td>
                  <td  >2.3</td>
                  <td  >2.8</td>
                  <td  >2.5</td>
                  <td  >2.1</td>
                  <td  >1.7</td>
                  <td  >1.7</td>
                  <td  >2.6</td>
                  <td  >2.0</td>
                </tr>
                <tr class="odd">
                  <td class="firstcol" >&nbsp; Foreign Trade Effect</td>
                  <td  >1.0</td>
                  <td  >1.3</td>
                  <td  >0.1</td>
                  <td  >-0.1</td>
                  <td  >0.2</td>
                  <td  >0.2</td>
                  <td  >0.2</td>
                  <td  >0.2</td>
                </tr>
                <tr>
                  <td class="firstcol" >Domestic Final Sales</td>
                  <td  >1.2</td>
                  <td  >1.4</td>
                  <td  >2.3</td>
                  <td  >2.1</td>
                  <td  >1.5</td>
                  <td  >1.5</td>
                  <td  >2.4</td>
                  <td  >1.8</td>
                </tr>
                <tr class="grey3">
                  <td class="firstcol" colSpan="9" ><b>Demand
                    Components</b></td>
                </tr>
                <tr>
                  <td class="firstcol" >Personal Consumption</td>
                  <td  >2.6</td>
                  <td  >3.3</td>
                  <td  >2.0</td>
                  <td  >1.8</td>
                  <td  >2.1</td>
                  <td  >2.0</td>
                  <td  >2.2</td>
                  <td  >2.5</td>
                </tr>
                <tr class="odd">
                  <td class="firstcol" >Business Fixed Investment</td>
                  <td  >7.3</td>
                  <td  >3.8</td>
                  <td  >4.8</td>
                  <td  >4.7</td>
                  <td  >3.0</td>
                  <td  >2.8</td>
                  <td  >7.3</td>
                  <td  >7.6</td>
                </tr>
                <tr>
                  <td class="firstcol" >Residential Investment</td>
                  <td  >-8.8</td>
                  <td  >-9.8</td>
                  <td  >10.3</td>
                  <td  >14.2</td>
                  <td  >6.6</td>
                  <td  >12.1</td>
                  <td  >12.9</td>
                  <td  >0.5</td>
                </tr>
                <tr class="odd">
                  <td class="firstcol" >Government Spending</td>
                  <td  >-5.5</td>
                  <td  >-4.9</td>
                  <td  >0.4</td>
                  <td  >-0.4</td>
                  <td  >-2.5</td>
                  <td  >-2.3</td>
                  <td  >-1.0</td>
                  <td  >-3.2</td>
                </tr>
                <tr class="grey3">
                  <td class="firstcol" colSpan="9" ><b>Chain-Type
                    Price Index</b></td>
                </tr>
                <tr>
                  <td class="firstcol" >GDP&nbsp;&nbsp; &nbsp;&nbsp;</td>
                  <td  >1.6</td>
                  <td  >1.3</td>
                  <td  >2.0</td>
                  <td  >0.6</td>
                  <td  >1.4</td>
                  <td  >1.4</td>
                  <td  >1.7</td>
                  <td  >2.0</td>
                </tr>
                <tr class="odd">
                  <td class="firstcol" >Personal Consumption</td>
                  <td  >1.0</td>
                  <td  >0.7</td>
                  <td  >1.9</td>
                  <td  >-0.1</td>
                  <td  >1.0</td>
                  <td  >1.1</td>
                  <td  >1.8</td>
                  <td  >2.4</td>
                </tr>
                <tr>
                  <td class="firstcol" >&nbsp;Less Food/Energy</td>
                  <td  >1.3</td>
                  <td  >1.1</td>
                  <td  >1.4</td>
                  <td  >0.6</td>
                  <td  >1.2</td>
                  <td  >1.2</td>
                  <td  >1.8</td>
                  <td  >1.4</td>
                 </tr>
              </tbody>
            </table>
            </span>
</body></html>

Real GDP growth for Q4'13 eased more than initially estimated. The growth estimate was lowered by the Department of Commerce to 2.4% (2.5% y/y) from 3.2% in the advance release, down sharply from 4.1% in the third quarter. The gain [...]

U.S. GDP Growth is Revised Lower; Price Inflation Raised

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      <p>New orders for durable goods fell 1.0% during January (+4.6 y/y)
      following a 5.3% December drop, revised from a 4.3% decline. The latest
      decline matched expectations in the Action Economics Forecast Survey. A
      5.6% drop (+13.6% y/y) in orders for transportation equipment weighed on
      last month's total. Nondefense aircraft &amp; parts orders fell 20.2%
      (+56.7% y/y) after December's 22.3% shortfall. Motor vehicle &amp; parts
      orders also softened, posting a 2.2% drop last month (+3.8% y/y) on the
      heels of a 6.6% decline. </p>
      <p>Outside of the transportation sector, new orders showed mixed
      performance as a 1.1% gain (1.2% y/y) countered December's 1.9% decline.
      Fabricated metal orders led the increase with a 7.3% rise (-9.1 y/y).
      Orders for computers &amp; electronic products followed with a 4.7% rise
      (1.7% y/y). Working to the downside, primary metal orders were off 2.3%
      (+7.0% y/y and electrical equipment, appliances &amp; components orders
      declined 2.1% (+3.7% y/y). Machinery orders slipped 0.4% (+1.5% y/y).
      Nondefense capital goods orders fell 3.9% (+5.6% y/y) reflecting the
      weakened aircraft bookings. Excluding aircraft, however, orders improved
      1.7% (-0.8% y/y) and reversed December's decline.</p>
      <p>Shipments of durable goods were off 0.4% (+3.4% y/y) in January
      following December's 1.8% fall. Shipments excluding the transportation
      sector slipped 0.5% (+2.7% y/y), the first material decline in nine months.
      Unfilled orders ticked 0.1% higher (7.1% y/y) while order backlogs outside
      of the transportation sector gained 0.3% (5.7% y/y). Inventories of
      durable goods improved 0.3% (3.7% y/y) after December's 0.9% jump.
      Inventories outside the transportation sector were roughly unchanged (1.4%
      y/y).</p>
      <p>The durable goods figures are available in Haver's <b>USECON </b>database.
      The Action Economics consensus forecast figure is in the <b>AS1REPNA</b>
      datab.</p>
      <p><b>Semiannual Monetary Policy Report to the Congress</b> by Fed Chair
      Janet L. Yellen can be found here&nbsp; <a href="http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm">http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm</a></p>
      <table class="centered" border="0" cellSpacing="0" width="1871">
        <thead>
          <tr>
            <th class="firstcol" scope="col" width="984">Durable Goods NAICS
              Classification</th>
            <th width="126">Jan</th>
            <th width="126">Dec</th>
            <th width="126">Nov</th>
            <th width="126">Y/Y</th>
            <th width="126">2013</th>
            <th width="126">2012</th>
            <th width="127">2011</th>
          </tr>
        </thead>
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            <td class="firstcol" width="984">New Orders (SA, %)</td>
            <td align="center" width="126">-1.0</td>
            <td align="center" width="126">-5.3</td>
            <td align="center" width="126">2.7</td>
            <td align="center" width="126">4.6</td>
            <td align="center" width="126">5.1</td>
            <td align="center" width="126">4.1</td>
            <td align="center" width="127">11.0</td>
          </tr>
          <tr>
            <td class="firstcol" width="984">&nbsp; Transportation</td>
            <td align="center" width="126">-5.6</td>
            <td align="center" width="126">-12.0</td>
            <td align="center" width="126">8.1</td>
            <td align="center" width="126">13.6</td>
            <td align="center" width="126">7.7</td>
            <td align="center" width="126">8.9</td>
            <td align="center" width="127">14.9</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="984">Total Excluding Transportation</td>
            <td align="center" width="126">1.1</td>
            <td align="center" width="126">-1.9</td>
            <td align="center" width="126">0.2</td>
            <td align="center" width="126">1.2</td>
            <td align="center" width="126">3.9</td>
            <td align="center" width="126">2.1</td>
            <td align="center" width="127">9.5</td>
          </tr>
          <tr>
            <td class="firstcol" width="984">&nbsp; Nondefense Capital Goods</td>
            <td align="center" width="126">-3.9</td>
            <td align="center" width="126">-6.5</td>
            <td align="center" width="126">8.2</td>
            <td align="center" width="126">5.6</td>
            <td align="center" width="126">8.6</td>
            <td align="center" width="126">3.7</td>
            <td align="center" width="127">15.3</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="984">&nbsp;&nbsp;&nbsp; Excluding
              Aircraft</td>
            <td align="center" width="126">1.7</td>
            <td align="center" width="126">-1.8</td>
            <td align="center" width="126">3.0</td>
            <td align="center" width="126">-0.8</td>
            <td align="center" width="126">5.1</td>
            <td align="center" width="126">2.1</td>
            <td align="center" width="127">11.6</td>
          </tr>
          <tr>
            <td class="firstcol" width="984">Shipments</td>
            <td align="center" width="126">-0.4</td>
            <td align="center" width="126">-1.8</td>
            <td align="center" width="126">1.4</td>
            <td align="center" width="126">3.4</td>
            <td align="center" width="126">3.7</td>
            <td align="center" width="126">6.4</td>
            <td align="center" width="127">9.4</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="984">Inventories</td>
            <td align="center" width="126">0.3</td>
            <td align="center" width="126">0.9</td>
            <td align="center" width="126">0.3</td>
            <td align="center" width="126">3.7</td>
            <td align="center" width="126">3.7</td>
            <td align="center" width="126">4.5</td>
            <td align="center" width="127">10.8</td>
          </tr>
          <tr>
            <td class="firstcol" width="984">Unfilled Orders</td>
            <td align="center" width="126">0.1</td>
            <td align="center" width="126">0.2</td>
            <td align="center" width="126">0.9</td>
            <td align="center" width="126">7.1</td>
            <td align="center" width="126">6.8</td>
            <td align="center" width="126">3.7</td>
            <td align="center" width="127">10.0</td>
          </tr>
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      <span id="articletitle">U.S. Initial Claims for Unemployment Insurance
      Slip</span><br>
      <span id="byline">by <a href="http://www.haver.com/comment/Moeller.html">Tom
      Moeller</a>&nbsp;&nbsp;February 27, 2014</span><span id="articletext">
      <p>&nbsp;Initial claims for unemployment insurance edged down to 336,000
      (-8.2% y/y) during the week ended February 15 versus an unrevised 339,000
      during the week prior. Expectations had been for 335,000 claims in the
      Action Economic forecast survey. The four-week moving average of initial
      claims ticked up to 338,500.</p>
      <p>Continuing claims for unemployment insurance in the week ended February
      8 increased to 2.981 million (-5.8% y/y). The four-week moving average
      slipped to 2.960 million and still was near its highest level since early
      August. The insured rate of unemployment nudged up to 2.3% from a
      downwardly revised 2.2%. This particular count covers only
      &quot;regular&quot; programs and does not include all extended benefit and
      other specialized jobless insurance programs. In the week of February 1,
      the latest available, the total of all benefit recipients was
      little-changed at 3.525 million (-36.8% y/y). This broader measure is not
      seasonally adjusted. It compares to a cycle peak of 12.060 million in
      January 2010 and pre-recession figures that averaged 2.596 million in
      2007.</p>
      <p>By state, the insured rate of unemployment continued to vary greatly
      with Louisiana (1.24%), Tennessee (1.43%),&nbsp; Florida (1.44%), Texas
      (1.64%), North Carolina (1.89%), Indiana (2.14%) and Ohio (2.61%) at the
      low end of the range. At the high end were New York (3.10%), California
      (3.45%), Massachusetts (3.45%), Wisconsin (3.65%), Illinois (3.78%),
      Pennsylvania (3.84%) and Connecticut (4.01%). These data are not
      seasonally adjusted.</p>
      <p>Data on weekly unemployment insurance are contained in Haver's <b>WEEKLY</b>
      database and they are summarized monthly in <b>USECON</b>. Data for
      individual states are in <b>REGIONW</b>. The expectations figure is from
      the Action Economics survey, carried in the <b>AS1REPNA</b> database. </p>
      <table class="centered" border="0" cellSpacing="0" width="1871">
        <thead>
          <tr>
            <th class="firstcol" 0801 width="625">Unemployment Insurance (000s)</th>
            <th 0801 width="177">02/22/14</th>
            <th 0801 width="177">02/15/14</th>
            <th 0801 width="177">02/08/14</th>
            <th 0801 width="177">Y/Y %</th>
            <th 0801 width="178">2013</th>
            <th 0801 width="178">2012</th>
            <th 0801 width="178">2011</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" 0801 width="625">Initial Claims</td>
            <td 0801 align="center" width="177">348</td>
            <td 0801 align="center" width="177">334</td>
            <td 0801 align="center" width="177">340</td>
            <td 0801 align="center" width="177">0.0</td>
            <td 0801 align="center" width="178">343</td>
            <td 0801 align="center" width="178">374</td>
            <td 0801 align="center" width="178">409</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 width="625">Continuing Claims</td>
            <td 0801 align="center" width="177">--</td>
            <td 0801 align="center" width="177">2,964</td>
            <td 0801 align="center" width="177">2,956</td>
            <td 0801 align="center" width="177">-4.4</td>
            <td 0801 align="center" width="178">2,980</td>
            <td 0801 align="center" width="178">3,319</td>
            <td 0801 align="center" width="178">3,742</td>
          </tr>
          <tr>
            <td class="firstcol" 0801 width="625">Insured Unemployment Rate (%)</td>
            <td 0801 align="center" width="177">--</td>
            <td 0801 align="center" width="177">2.3</td>
            <td 0801 align="center" width="177">2.3</td>
            <td 0801 align="center" width="177">2.4<br>
              (2/13)</td>
            <td 0801 align="center" width="178">2.3</td>
            <td 0801 align="center" width="178">2.6</td>
            <td 0801 align="center" width="178">3.0</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 width="625">Total &quot;All Programs&quot;
              (NSA)</td>
            <td 0801 align="center" width="177">--</td>
            <td 0801 align="center" width="177">--</td>
            <td 0801 align="center" width="177">3.486 mil.</td>
            <td 0801 align="center" width="177">-39.5</td>
            <td 0801 align="center" width="178">4.659 mil.</td>
            <td 0801 align="center" width="178">6.047 mil.</td>
            <td 0801 align="center" width="178">7.750 mil.</td>
          </tr>
        </tbody>
      </table>
      </span>
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New orders for durable goods fell 1.0% during January (+4.6 y/y) following a 5.3% December drop, revised from a 4.3% decline. The latest decline matched expectations in the Action Economics Forecast Survey. A 5.6% drop (+13.6% y/y) in [...]

U.S. Durable Goods Order Decline Reflects a Weaker Transportation Sector

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      <p><a href="/comment/140227j_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227j.png"></a>
      <a href="/comment/140227k_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227k.png"></a></p>
      
      <p>The Federal Reserve Bank of Kansas City reported that its February Composite 
      index of 10th District factory sector activity dipped to 4 from 5 during January. 
      The composite index is an average of the production, new orders, employment, supplier 
      delivery time, and raw materials inventory indexes. The Bank cited severe winter weather 
      as responsible for holding back the current index component readings. Shipments and 
      production, nevertheless, improved versus January and versus one year ago.</p>
      
      <p>Expectations component readings remained above current activity indexes, suggesting 
      future improvement. Nevertheless, in February the index of expected business conditions 
      in six months retreated as the new orders, production and employment components fell. 
      Remaining near its recovery high was the index for capital expenditures in six months. 
      Also, inventory levels were viewed as being higher in six months. These projected 
      improvements were offset to some extent by a lower reading for expected exports.</p>
      
      <p>The diffusion indexes are calculated as the percentage of total
      respondents reporting increases minus the percentage reporting declines.
      The survey included 94 responses from plants in Colorado, Kansas,
      Nebraska, Oklahoma, Wyoming northern New Mexico. Data for the Kansas City
      Fed Survey can be found in Haver's <b>SURVEYS</b> database.</p>
      
      <p><a href="/comment/140227l_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227l.png"></a>
      <a href="/comment/140227m_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227m.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
  
        <thead>
          <tr>
            <th class="firstcol" 0801 >Kansas City Federal Reserve
              Manufacturing Survey</th>
            <th 0801 >Feb</th>
            <th 0801 >Jan</th>
            <th 0801 >Dec</th>
            <th 0801 >Y/Y </th>
            <th 0801 >2013</th>
            <th 0801 >2012</th>
            <th 0801 >2011</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" 0801 >Conditions Versus One Month
              Ago (% Balance)</td>
            <td 0801  >4</td>
            <td 0801  >5</td>
            <td 0801  >-3</td>
            <td 0801  >-8</td>
            <td 0801  >0</td>
            <td 0801  >4</td>
            <td 0801  >9</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >&nbsp;&nbsp; New Orders Volume</td>
            <td 0801  >5</td>
            <td 0801  >5</td>
            <td 0801  >1</td>
            <td 0801  >-23</td>
            <td 0801  >1</td>
            <td 0801  >0</td>
            <td 0801  >5</td>
          </tr>
          <tr>
            <td class="firstcol" 0801 >&nbsp;&nbsp; Number of
              Employees</td>
            <td 0801  >3</td>
            <td 0801  >11</td>
            <td 0801  >0</td>
            <td 0801  >2</td>
            <td 0801  >-2</td>
            <td 0801  >5</td>
            <td 0801  >11</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >&nbsp;&nbsp; Prices Received
              for Finished Product</td>
            <td 0801  >7</td>
            <td 0801  >8</td>
            <td 0801  >2</td>
            <td 0801  >4</td>
            <td 0801  >3</td>
            <td 0801  >5</td>
            <td 0801  >12</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >Expected Conditions in Six
              Months </td>
            <td 0801  >11</td>
            <td 0801  >26</td>
            <td 0801  >15</td>
            <td 0801  >5</td>
            <td 0801  >10</td>
            <td 0801  >12</td>
            <td 0801  >16</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >&nbsp;&nbsp; New Orders Volume</td>
            <td 0801  >23</td>
            <td 0801  >35</td>
            <td 0801  >24</td>
            <td 0801  >15</td>
            <td 0801  >18</td>
            <td 0801  >21</td>
            <td 0801  >24</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >&nbsp;&nbsp; Number of
              Employees</td>
            <td 0801  >6</td>
            <td 0801  >29</td>
            <td 0801  >15</td>
            <td 0801  >3</td>
            <td 0801  >9</td>
            <td 0801  >13</td>
            <td 0801  >17</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >&nbsp;&nbsp; Prices Received
              for Finished Product</td>
            <td 0801  >25</td>
            <td 0801  >30</td>
            <td 0801  >18</td>
            <td 0801  >24</td>
            <td 0801  >24</td>
            <td 0801  >24</td>
            <td 0801  >29</td>
          </tr>
              </tbody>
            </table>
            </span>
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The Federal Reserve Bank of Kansas City reported that its February Composite index of 10th District factory sector activity dipped to 4 from 5 during January. The composite index is an average of the production, new orders, [...]

Kansas City Fed Survey Depressed by Weather but Expectations Suggest Recovery

Robert Brusca

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The EMU overall sentiment gauge and the reading on the EU overall rose in February. The sector readings for the whole of the EU show weakening consumer confidence in the month, a flat construction sector and a small rise in the industrial sector. Retailing and services improved more substantially.
</p><p>
Of the 16 members that have reported on this basis, only five of them showed overall sentiment declines in February. The rebound is widespread. Of the 48 various monthly changes for the 17 EMU members and the EMU itself over the past three months, only 17 have showed declines; that is about one-third of the one month changes for this group of eighteen over three months. 
</p><p>
We also present the queue standings for the EU's various sectors and for the EMU and its key members. EMU sentiment as a whole stands only in the 47th percentile of its historic queue. For the broader EU, the standing is in the 62nd percentile of its historic queue.
</p><p>
The sectors show raw up-minus down diffusion scores in the table. The raw scores show the strongest raw readings are for services and retail. Next the industrial sector has raw reading of minus 2.3, consumer confidence is at minus 9.3 and construction is at minus 25. However, growth is about changes and this month only consumer confidence backtracked.    
</p><p>
The EU region and the sector readings, therefore, are stronger than the EMU readings. The EU sits in the 62nd percentile of its historic range. The EMU indicator sits in the 47th percentile of its range. The EU contains all the countries of EMU and more. Those other countries of the EU are generally stronger than the run-of-the-mill EMU member. One of them is the UK whose values are presented in the table at the bottom.
</p><p>
Another way to understand the current readings is to evaluate them versus their respective historic means.  On that basis, irrespective of whether the absolute reading is positive or negative, all EU sectors are above their historic means except construction. However, we can also look at the standing of each indicator in its historic queue, a statistic that speaks a lot more directly to the median, as for each country or sector, the median will lie at the 50% mark of its range by definition.
</p><p>
The EMU countries show stratified rankings. Only 3 countries are in the top 30% of their historic queue while six are in their lower 30th percentile. The average queue ranking of the members in the EMU is the 41.7 percentile. That compares to an EMU statistic of the 47.3 percentile. The EMU-wide figure is a weighted average. It indicates that the larger economies are doing better than the smaller economies. Germany, the largest EMU economy, has a queue ranking in its 73.7 percentile. Malta, a small economy with a shorter data history, is the only country doing relatively better than Germany.
</p><p>
Across EMU expected unemployment is back to a ranking in the 49.4 percentile. Expectations for hiring are getting better; the fastest expected improvement is in the manufacturing sector and next in the retail sector.
</p><p>
In looking at the service sector's queue rankings in February, Germany stands at 69.7% with France at 18.4%, Italy at 35.1% and Spain at 42.2%. Germany lives in a world of its own and its large economic weight tends to dress up the EMU total which, for services, stands at the 39.5% level. You can only imagine how weak other member readings are with Germany pulling such a high weight and having a strong reading to boot. Similarly consumer confidence across countries shows Germany at the 77.3% mark, France at 29.9%, Italy at 36.3% and Spain at 38.2%. Among the large economies, Germany again is in a world of its own. Largely due to the German weight, the EMU standing is at the 52.6 percentile. There is still a lot but not as much divergence for the industrial sector. Still, the German index is at 74.3%, France at 51.0%, Italy at 44.3% and Spain at 43.1%. The EMU metric is at the 65th percentile.
</p><p>
These are only a few samplings of the divergences we see by sector. The table provides a hint of how great the divergences must be if we look at the circumstances of the countries whose aggregate measures are among the worst. And it is not like there are only a few stragglers that are lagging: six of the 16 countries detailed in the table are still in the bottom one-third of their respective historic ranges for economic sentiment. 
</p><p>
These divergences are the reason that I remain on guard in evaluating the EMU economy and its prospects. There is so much yet to do and so many risks that are internal to the community and are not addressed by looking at the state of the aggregate, weighted, and anesthetized measures.
</p>


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The EMU overall sentiment gauge and the reading on the EU overall rose in February. The sector readings for the whole of the EU show weakening consumer confidence in the month, a flat construction sector and a small rise in the [...]

EU and EMU Sentiment Rise in February

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      <p>Initial claims for unemployment insurance bounced up to 348,000 during
      the week ended February 22 from 334,000 in the prior week, initially
      reported as 336,000. This latest level was the highest since late-January.
      Expectations had been for 335,000 claims in the Action Economics Forecast
      Survey. The four-week moving average of initial claims ticked up to 338,250.
      So far this month claims averaged 341,000 versus 333,000 in January.
      During the last ten years there has been a 75% correlation between the
      level of claims and the m/m change in nonfarm payrolls.</p>
      
      <p>Continuing claims for unemployment insurance in the week ended February
      15 ticked higher to 2.964 million (-4.4% y/y). This latest reading nudged
      the four-week moving average up to 2.955 million, still near its highest
      level since early August. The insured rate of unemployment held at 2.3%.
      This particular count covers only &quot;regular&quot; programs and does
      not include all extended benefit and other specialized jobless insurance
      programs. In the week of February 8, the latest available, the total of
      all benefit recipients moved lower to 3.486 million (-39.5% y/y). This
      broader measure is not seasonally adjusted. It compares to a cycle peak of
      12.060 million in January 2010 and pre-recession figures that averaged
      2.596 million in 2007.</p>
      
      <p>By state, the insured rate of unemployment continued to vary greatly
      with Louisiana (1.21%), Florida (1.37%), Tennessee (1.48%), Texas (1.58%),
      North Carolina (1.83%), Indiana (1.98%) and Ohio (2.1%) at the low end of
      the range. At the high end were New York (3.06%), Massachusetts (3.34%),
      California (3.65%), Wisconsin (3.69%), Illinois (3.76%), Connecticut
      (3.81%) and Pennsylvania (3.85%). These data are not seasonally adjusted.</p>
      
      <p>Data on weekly unemployment insurance are contained in Haver's <b>WEEKLY</b>
      database and they are summarized monthly in <b>USECON</b>. Data for
      individual states are in <b>REGIONW</b>. The expectations figure is from
      the Action Economics survey, carried in the <b>AS1REPNA</b> database. </p>
      
      <p><a href="/comment/140227g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227g.png"></a>
      <a href="/comment/140227h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227h.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

        <thead>
          <tr>
            <th class="firstcol" 0801 >Unemployment Insurance (000s)</th>
            <th 0801 >02/22/14</th>
            <th 0801 >02/15/14</th>
            <th 0801 >02/08/14</th>
            <th 0801 >Y/Y %</th>
            <th 0801 >2013</th>
            <th 0801 >2012</th>
            <th 0801 >2011</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" 0801 >Initial Claims</td>
            <td 0801  >348</td>
            <td 0801  >334</td>
            <td 0801  >340</td>
            <td 0801  >0.0</td>
            <td 0801  >343</td>
            <td 0801  >374</td>
            <td 0801  >409</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >Continuing Claims</td>
            <td 0801  >--</td>
            <td 0801  >2,964</td>
            <td 0801  >2,956</td>
            <td 0801  >-4.4</td>
            <td 0801  >2,980</td>
            <td 0801  >3,319</td>
            <td 0801  >3,742</td>
          </tr>
          <tr>
            <td class="firstcol" 0801 >Insured Unemployment Rate (%)</td>
            <td 0801  >--</td>
            <td 0801  >2.3</td>
            <td 0801  >2.3</td>
            <td 0801  >2.4<br>
              (2/13)</td>
            <td 0801  >2.3</td>
            <td 0801  >2.6</td>
            <td 0801  >3.0</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" 0801 >Total &quot;All Programs&quot;
              (NSA)</td>
            <td 0801  >--</td>
            <td 0801  >--</td>
            <td 0801  >3.486 mil.</td>
            <td 0801  >-39.5</td>
            <td 0801  >4.659 mil.</td>
            <td 0801  >6.047 mil.</td>
            <td 0801  >7.750 mil.</td>
  </tr>
              </tbody>
            </table>
            </span>
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Initial claims for unemployment insurance bounced up to 348,000 during the week ended February 22 from 334,000 in the prior week, initially reported as 336,000. This latest level was the highest since late-January. Expectations had [...]

U.S. Initial Jobless Insurance Claims Move Higher

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      <p>New orders for durable goods fell 1.0% during January (+4.6 y/y)
      following a 5.3% December drop, revised from a 4.3% decline. The latest
      decline matched expectations in the Action Economics Forecast Survey. A
      5.6% drop (+13.6% y/y) in orders for transportation equipment weighed on
      last month's total. Nondefense aircraft &amp; parts orders fell 20.2%
      (+56.7% y/y) after December's 22.3% shortfall. Motor vehicle &amp; parts
      orders also softened, posting a 2.2% drop last month (+3.8% y/y) on the
      heels of a 6.6% decline.</p>
      
      <p>Outside of the transportation sector, new orders showed mixed
      performance as a 1.1% gain (1.2% y/y) countered December's 1.9% decline.
      Fabricated metal orders led the increase with a 7.3% rise (-9.1 y/y).
      Orders for computers &amp; electronic products followed with a 4.7% rise
      (1.7% y/y). Working to the downside, primary metal orders were off 2.3%
      (+7.0% y/y and electrical equipment, appliances &amp; components orders
      declined 2.1% (+3.7% y/y). Machinery orders slipped 0.4% (+1.5% y/y).
      Nondefense capital goods orders fell 3.9% (+5.6% y/y) reflecting the
      weakened aircraft bookings. Excluding aircraft, however, orders improved
      1.7% (-0.8% y/y) and reversed December's decline.</p>
      
      <p>Shipments of durable goods were off 0.4% (+3.4% y/y) in January
      following December's 1.8% fall. Shipments excluding the transportation
      sector slipped 0.5% (+2.7% y/y), the first material decline in nine months.
      Unfilled orders ticked 0.1% higher (7.1% y/y) while order backlogs outside
      of the transportation sector gained 0.3% (5.7% y/y). Inventories of
      durable goods improved 0.3% (3.7% y/y) after December's 0.9% jump.
      Inventories outside the transportation sector were roughly unchanged (1.4%
      y/y).</p>
      
      <p>The durable goods figures are available in Haver's <b>USECON </b>database.
      The Action Economics consensus forecast figure is in the <b>AS1REPNA</b>
      database.</p>
      
      <p><b>Semiannual Monetary Policy Report to the Congress</b> by Fed Chair
      Janet L. Yellen can be found <a href="http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm">here.</a></p>
      
      
      <p><a href="/comment/140227c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227c.png"></a>
      <a href="/comment/140227d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140227d.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

        <thead>
          <tr>
            <th class="firstcol" scope="col" >Durable Goods NAICS
              Classification</th>
            <th>Jan</th>
            <th>Dec</th>
            <th>Nov</th>
            <th>Y/Y</th>
            <th>2013</th>
            <th>2012</th>
            <th>2011</th>
          </tr>
        </thead>
        <tbody>
          <tr class="odd">
            <td class="firstcol" >New Orders (SA, %)</td>
            <td  >-1.0</td>
            <td  >-5.3</td>
            <td  >2.7</td>
            <td  >4.6</td>
            <td  >5.1</td>
            <td  >4.1</td>
            <td  >11.0</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp; Transportation</td>
            <td  >-5.6</td>
            <td  >-12.0</td>
            <td  >8.1</td>
            <td  >13.6</td>
            <td  >7.7</td>
            <td  >8.9</td>
            <td  >14.9</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Total Excluding Transportation</td>
            <td  >1.1</td>
            <td  >-1.9</td>
            <td  >0.2</td>
            <td  >1.2</td>
            <td  >3.9</td>
            <td  >2.1</td>
            <td  >9.5</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp; Nondefense Capital Goods</td>
            <td  >-3.9</td>
            <td  >-6.5</td>
            <td  >8.2</td>
            <td  >5.6</td>
            <td  >8.6</td>
            <td  >3.7</td>
            <td  >15.3</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >&nbsp;&nbsp;&nbsp; Excluding
              Aircraft</td>
            <td  >1.7</td>
            <td  >-1.8</td>
            <td  >3.0</td>
            <td  >-0.8</td>
            <td  >5.1</td>
            <td  >2.1</td>
            <td  >11.6</td>
          </tr>
          <tr>
            <td class="firstcol" >Shipments</td>
            <td  >-0.4</td>
            <td  >-1.8</td>
            <td  >1.4</td>
            <td  >3.4</td>
            <td  >3.7</td>
            <td  >6.4</td>
            <td  >9.4</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Inventories</td>
            <td  >0.3</td>
            <td  >0.9</td>
            <td  >0.3</td>
            <td  >3.7</td>
            <td  >3.7</td>
            <td  >4.5</td>
            <td  >10.8</td>
          </tr>
          <tr>
            <td class="firstcol" >Unfilled Orders</td>
            <td  >0.1</td>
            <td  >0.2</td>
            <td  >0.9</td>
            <td  >7.1</td>
            <td  >6.8</td>
            <td  >3.7</td>
            <td  >10.0</td>
           </tr>
              </tbody>
            </table>
            </span>
</body></html>

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	  <br>
      
      <span id="articletext">
      <p></p>
      
      <p><a href="/comment/140226f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140226f.png"></a>
      <a href="/comment/140226g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140226g.png"></a></p>
      
      <p>Harsh winter weather didn't discourage home buyers
      last month. New home sales improved 9.6% to 468,000 (2.2% y/y), the highest level since
      July 2008. December sales were revised to 427,000 from 414,000. The latest
      figure beat expectations for 400,000 sales in the Action Economics
      Forecast Survey. These volume numbers are quoted at seasonally adjusted
      annual rates.</p>
      
      <p>Sales in the South improved 10.4% to 276,000 (22.7% y/y), a new high for the recovery. 
      In the Northeast sales recovered by three-quarters m/m to 33,000 (3.1% y/y)
      following a sharp December decline. Sales in the West also rebounded 11.0%
      to 111,000 (-23.4% y/y) and reversed December softness. Working the other
      way, new home sales in the Midwest fell 17.2% to 48,000 (-14.3% y/y), the
      lowest level since December 2012.</p>
      
      <p>The median price of a new home during January fell 2.2% to $260,100 (+3.4%
      y/y) from a downwardly revised December reading. The average price of a
      new home increased 4.5% last month to $322,800 (5.2% y/y).</p>
      
      <p>Sales improvement left the inventory of unsold homes roughly unchanged
      during the last four months (+23.5%). The months' sales supply of new
      homes fell to 4.7, the lowest level since June. The length of time to sell
      a new home ticked up m/m to 3.3 months, still down from 14.0 months at the
      end of 2009.</p>
      
      <p>The data in this report are available in Haver's <b>USECON</b>
      database. The consensus expectation figure is from the Action Economics
      survey and is available in the <b>AS1REPNA</b> database.</p>
      
      <p><b>Economic Conditions and Monetary Policy: A Transitional Phase
      Introduction</b> from John C. Williams, President and CEO, Federal Reserve
      Bank of San Francisco is available <a href="http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2014/february/economic-conditions-monetary-policy-transition/">here.</a></p>
      
      <p><a href="/comment/140226h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140226h.png"></a>
      <a href="/comment/140226i_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/140226i.png"></a></p>
      
      <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

        <thead>
          <tr>
            <th class="firstcol" scope="col" ><b>U.S. New Home Sales</b></th>
            <th scope="col" ><b>Jan</b></th>
            <th scope="col" ><b>Dec</b></th>
            <th scope="col" ><b>Nov</b></th>
            <th scope="col" ><b>Y/Y %</b></th>
            <th scope="col" ><b>2013</b></th>
            <th scope="col" ><b>2012</b></th>
            <th scope="col" ><b>2011</b></th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Total SAAR, 000s</td>
            <td  >468</td>
            <td  >427</td>
            <td  >444</td>
            <td  >2.2</td>
            <td  >430</td>
            <td  >368</td>
            <td  >306</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Northeast</td>
            <td  >33</td>
            <td  >19</td>
            <td  >32</td>
            <td  >3.1</td>
            <td  >31</td>
            <td  >29</td>
            <td  >21</td>
          </tr>
          <tr>
            <td class="firstcol" >Midwest</td>
            <td  >48</td>
            <td  >58</td>
            <td  >54</td>
            <td  >-14.3</td>
            <td  >60</td>
            <td  >47</td>
            <td  >45</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >South</td>
            <td  >276</td>
            <td  >250</td>
            <td  >247</td>
            <td  >22.7</td>
            <td  >233</td>
            <td  >196</td>
            <td  >168</td>
          </tr>
          <tr>
            <td class="firstcol" >West</td>
            <td  >111</td>
            <td  >100</td>
            <td  >111</td>
            <td  >-23.4</td>
            <td  >106</td>
            <td  >97</td>
            <td  >72</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Median Price (NSA, $)</td>
            <td  >260,100</td>
            <td  >265,900</td>
            <td  >269,200</td>
            <td  >3.4</td>
            <td  >263,633</td>
            <td  >242,108</td>
            <td  >224,317</td>
          </tr>
              </tbody>
            </table>
            </span>
</body></html>

Harsh winter weather didn't discourage home buyers last month. New home sales improved 9.6% to 468,000 (2.2% y/y), the highest level since July 2008. December sales were revised to 427,000 from 414,000. The latest figure beat [...]

U.S. New Home Sales Improve Unexpectedly to Five-Year High

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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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: February 2014

Jump to:

U.S. Pending Home Sales Remain Depressed by Winter Storms

U.S. GDP Growth is Revised Lower; Price Inflation Raised

U.S. Durable Goods Order Decline Reflects a Weaker Transportation Sector

Kansas City Fed Survey Depressed by Weather but Expectations Suggest Recovery

EU and EMU Sentiment Rise in February

U.S. Initial Jobless Insurance Claims Move Higher

U.S. Durable Goods Order Decline Reflects a Weaker Transportation Sector

U.S. New Home Sales Improve Unexpectedly to Five-Year High