Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228.jpg" width="353">
GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. 
Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential (-5.0%) and business fixed investment (-13.1%).
The rate of inventory decumulation was little changed, about doubling versus 3Q. 
The net export deficit was lessened significantly due to a decline in imports that was revised deeper.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Chained &#39;96 $, % AR</th>
<th scope="col">4Q &#39;01 (Revised)</th>
<th scope="col">4Q &#39;01 (Advance)</th>
<th scope="col">3Q &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.4%</td>
<td>0.2%</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-2.2%</td>
<td>-2.3%</td>
<td>-0.8%</td>
<td>-1.6%</td>
<td>-1.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>3.6%</td>
<td>2.5%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.9%</td>
<td>3.2%</td>
<td>-0.3%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228b.jpg" width="353">
Initial claims for unemployment insurance rose to the level which was expected in the latest week, however the prior week&#39;s level was revised substantially lower. The monthly average of claims was the lowest since February of last year.
The chart plots the level of weekly claims against the (inverted) monthly change in nonfarm payrolls. Only a modest decline in February payrolls is suggested for next Friday&#39;s, 3/8, release.
The four-week moving average of claims fell to 373,250.
Continuing claims for unemployment insurance rose slightly in the latest week. The prior week&#39;s level was revised down.
The insured rate of unemployment was unchanged at 2.7% for the third week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Unemployment Insurance (000s)</th>
<th scope="col">02/23/02</th>
<th scope="col">02/16/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>378.0</td>
<td>361.0</td>
<td>1.1%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,492</td>
<td>42.5%</td>
<td>3,3031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
</body>
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GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential [...]

Revised 4Q GDP Up More Than Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228.jpg" width="353">
GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. 
Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential (-5.0%) and business fixed investment (-13.1%).
The rate of inventory decumulation was little changed, about doubling versus 3Q. 
The net export deficit was lessened significantly due to a decline in imports that was revised deeper.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Chained &#39;96 $, % AR</th>
<th scope="col">4Q &#39;01 (Revised)</th>
<th scope="col">4Q &#39;01 (Advance)</th>
<th scope="col">3Q &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.4%</td>
<td>0.2%</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-2.2%</td>
<td>-2.3%</td>
<td>-0.8%</td>
<td>-1.6%</td>
<td>-1.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>3.6%</td>
<td>2.5%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.9%</td>
<td>3.2%</td>
<td>-0.3%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228b.jpg" width="353">
Initial claims for unemployment insurance rose to the level which was expected in the latest week, however the prior week&#39;s level was revised substantially lower. The monthly average of claims was the lowest since February of last year.
The chart plots the level of weekly claims against the (inverted) monthly change in nonfarm payrolls. Only a modest decline in February payrolls is suggested for next Friday&#39;s, 3/8, release.
The four-week moving average of claims fell to 373,250.
Continuing claims for unemployment insurance rose slightly in the latest week. The prior week&#39;s level was revised down.
The insured rate of unemployment was unchanged at 2.7% for the third week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">02/23/02</th>
<th scope="col">02/16/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>378.0</td>
<td>361.0</td>
<td>1.1%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,492</td>
<td>42.5%</td>
<td>3,3031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020227a.jpg" width="353">
Durable goods orders rose more-than- expected last month, but December&#39;s previously reported gain was revised lower. 
Excluding transportation, durable orders rose 1.3%, the fourth consecutive monthly gain. December&#39;s 0.4% gain was revised slightly down.
Higher aircraft orders, up 21.6%, added to a 4.3% gain in the motor vehicle sector, the forth gain in a row.
Orders for nondefense capital goods rose slightly but December&#39;s previously reported gain now shows decline. Excluding aircraft, capital goods orders fell 0.1% following two month of strong gain.
Orders for computers and electronics products rose for the fourth month in a row. Orders for semiconductors, computers and communication equipment all rose. Orders for electrical equipment fell sharply for the second month but machinery orders rose. 
Shipments rose sharply. Excluding transportation shipments rose 2.5%, the first meaningful rise since October.
Inventories of durable goods fell for the twelfth consecutive month. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">NAICS Classification</th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Durable Goods Orders</td>
<td>2.6%</td>
<td>0.9%</td>
<td>-2.2%</td>
<td>-12.9%</td>
<td>6.6%</td>
<td>6.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nondefense Capital Goods</td>
<td>0.5%</td>
<td>-1.2%</td>
<td>-17.4%</td>
<td>-17.2%</td>
<td>14.4%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
New Home Sales Fall Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 27, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020227b.jpg" width="353">
Sales of new single family homes fell much more than expected last month after surging in November and December, which was revised up. Consensus estimates were for sales at a 925,000 annual rate.
January sales were the lowest since June 2000, but may have biased lower by strong seasonal adjustment factors.
Sales were mixed across the country&#39;s region, falling most sharply in the South but rising in the Northeast. 
The median price of a new home rose sharply to $183,400, 7.1% y/y. December&#39;s figures were revised up.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Homes Sales (000s, AR)</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">&nbsp;Dec &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>823</td>
<td>966</td>
<td>-12.3%</td>
<td>907</td>
<td>881</td>
<td>879</td>
</tr>
</tbody>
</table>
</body>
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Durable goods orders rose more-than- expected last month, but December's previously reported gain was revised lower. Excluding transportation, durable orders rose 1.3%, the fourth consecutive monthly gain. December's 0.4% gain was [...]

Durable Goods Orders Rise

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020226a.jpg" width="353">
Chain store sales fell 0.4% during the last full week of February. The decline followed two consecutive weeks during which sales had surged.
Sales for most of the month of February are now 2.5% above January. 
During the last nine years there has been a 28% correlation between the monthly percent change in chain store sales and the change in general merchandise store sales as published by the Commerce Department.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">BTM-UBSW (SA, 1977=100)</th>
<th scope="col">2/23/02</th>
<th scope="col">02/16/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>413.1</td>
<td>414.7</td>
<td>5.1%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
Consumer Confidence Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 26, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020226b.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence fell unexpectedly in February. January&#39;s level was revised up slightly. 
The fall in the Conference Board measure was in-line with the mid-month University of Michigan reading that consumer sentiment declined this month. 
The rise in confidence reflected lower readings for both consumer expectations and confidence regarding the present situation. 
The Conference Board&#39;s survey is conducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Conference Board</th>
<th scope="col">Feb &#39;02</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>94.1</td>
<td>97.8</td>
<td>-13.8%</td>
<td>106.6</td>
<td>139.0</td>
<td>135.3</td>
</tr>
</tbody>
</table>
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Chain store sales fell 0.4% during the last full week of February. The decline followed two consecutive weeks during which sales had surged. Sales for most of the month of February are now 2.5% above January. During the last nine [...]

Weekly Chain Store Sales Fall Just Slightly

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020225.jpg" width="353">
Sales of existing single family homes rose 16.2% m/m, more than expected last month to a new record. Sales rose for the first time in three months. December sales were little revised.
Home sales, which reflect closings on past sales, rose in each of the country&#146;s four regions. 
The average rate on a conventional 30-year mortgage fell to 7.00% last month, about the level of January 2001.
The median price of an existing single-family home jumped to $151,100 (10.2% y/y). December figures were revised up. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Existing Home Sales (000, AR)</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;6,040</td>
<td>&nbsp;5,200</td>
<td>14.6%</td>
<td>5,291</td>
<td>5,159</td>
<td>5,193</td>
</tr>
</tbody>
</table>
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Sales of existing single family homes rose 16.2% m/m, more than expected last month to a new record. Sales rose for the first time in three months. December sales were little revised. Home sales, which reflect closings on past sales, [...]

Existing Homes Sales Set Record

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020222.jpg" width="353">
Since the low last October, the OECD Leading Index has risen 2.0%. The rise in the index follows a period of several months of stable, negative growth. 
Despite the leading index rise through December, growth remained negative. Nevertheless, the degree of recent improvement in the leaders has been sufficient in the past to signal improvement in industrial production in the OECD.
Over the last 20 years, there has been a 77% correlation between the six month growth in OECD industrial production and growth in the leading indicators, when led by six months.

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Since the low last October, the OECD Leading Index has risen 2.0%. The rise in the index follows a period of several months of stable, negative growth. Despite the leading index rise through December, growth remained negative. [...]

OECD Leaders Signal Recovery?

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020221a.jpg" width="353">
The US foreign trade deficit improved unexpectedly versus a November deficit that was revised slightly deeper. 
Exports rose modestly, but remained down 15.2% from the peak in August 2000.Goods exports plunged 1.9% and were down 18.5% from their peak. Service exports rose sharply for the second consecutive month
Exports of automotive vehicles and parts fell sharply for the fifth month in six. Exports of capital goods also were down sharply, but nonauto consumer goods exports were up for the second month in three.
Imports plunged 2.9% as inventory liquidation dropped goods imports by 4.4%, down 19.0% since the peak in September 2000.
Imports of capital goods fell a sharp 2.6% and were down 27.7% from the peak last year. Also, non-auto consumer goods imports dropped 6.2% after three months of relative stability. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Foreign Trade</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Nov &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Trade Deficit</td>
<td>$25.3B</td>
<td>$28.5B</td>
<td>$33.3B(12/00)</td>
<td>$346.3B</td>
<td>$375.7B</td>
<td>$261.8B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports - Goods &amp; Services</td>
<td>0.2%</td>
<td>0.3%</td>
<td>-12.8%</td>
<td>-5.8%</td>
<td>11.3%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports - Goods &amp; Services</td>
<td>-2.9%</td>
<td>-0.5%</td>
<td>-15.8%</td>
<td>-6.3%</td>
<td>18.2%</td>
<td>10.9%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020221b.jpg" width="353">
Initial claims for unemployment insurance rose slightly more than expected in the latest week. The prior week&#39;s level was not revised. It was the ninth week in eleven that claims remained below 400,000, a sign that the layoff pace remains down.
The four-week moving average of claims rose slightly to 381,750.
Continuing claims for unemployment insurance rose in the latest week. Continuing claims have risen 4.4% since early January, a sign that new hiring has not kept pace with the decline in layoffs.
The insured rate of unemployment was unchanged at 2.7%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Unemployment Insurance (000s)</th>
<th scope="col">02/16/02</th>
<th scope="col">02/09/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>383.0</td>
<td>373.0</td>
<td>15.0%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,501</td>
<td>48.9%</td>
<td>3,031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
Leading Indicators Rise Fourth in a Row 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020221c.jpg" width="353">
The Composite Index of Leading Economic Indicators rose about as expected last month. December&#39;s rise was revised up slightly. 
The breadth of gain amongst the leaders narrowed as only about half the component series rose versus all having risen in December. Lower claims for jobless insurance and quicker vendor delivery speeds had the largest positive contribution to the leader&#39;s gain. 
The ratio of coincident-to-lagging indicators, a measure of how the economy is actually performing relative to it&#39;s excesses, rose for the fourth straight month. 
The Leading Index is based on eight previously reported economic data series and two that are estimated.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Business Cycle Indicators</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Leading</td>
<td>0.6%</td>
<td>1.3%</td>
<td>3.0%</td>
<td>-0.6%</td>
<td>1.0%</td>
<td>3.3%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.0%</td>
<td>0.1%</td>
<td>-0.7%</td>
<td>0.3%</td>
<td>3.4%</td>
<td>3.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>-0.2%</td>
<td>-0.3%</td>
<td>-5.2%</td>
<td>-1.3%</td>
<td>2.8%</td>
<td>1.8%</td>
</tr>
</tbody>
</table>
Philadelphia Fed Index Added to Gain 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020221d.jpg" width="353">
The Philadelphia Fed&#146;s index of general business conditions improved in February rather than retracing some of last month&#39;s surge into positive territory, as expected.
New orders and shipments both added to gains in January though employment fell. 
The business conditions index reflects a separate survey question, not the components. 
Price deflationary pressure eased slightly for the fourth month in a row.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Philadelphia Fed Business Outlook</th>
<th scope="col">Feb &#39;02</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>16.0</td>
<td>14.7</td>
<td>-25.4</td>
<td>-17.3</td>
<td>8.2</td>
<td>13.3</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>-4.5</td>
<td>-5.9</td>
<td>12.9</td>
<td>-1.0</td>
<td>27.1</td>
<td>10.0</td>
</tr>
</tbody>
</table>
U.S. Budget Surplus Shrinking 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020221e.jpg" width="353">
In the month of January, the Federal government recorded a $43.7B surplus versus $76.4B last year, as expected. A $6.6B surplus was logged during the first four months of fiscal 2002 which began Oct. 1. That&#39;s versus a $74.0B surplus recorded for the first four months of fiscal 2000.
Receipts rose 8.3% month-to-month. Versus last year receipts fell 7.2% pulling the fiscal year-to-date receipt total down 1.7% versus 2000. Individual income tax receipts are down 4.8% fiscal year-to-date versus 2000. Rising unemployment and lowered tax rates explain the shortfall. Corporate income tax receipts were strong as extensions on payments were granted until Jan. 15 following 9/11. 
Expenditures surged fiscal year-to-date due to higher spending on defense, education and most other categories except interest. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">US Government Finance</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Fiscal YTD</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$43.7B</td>
<td>$26.6B</td>
<td>$6.6B</td>
<td>$127.2B</td>
<td>$236.9B</td>
<td>$124.4B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revenues</td>
<td>8.3%</td>
<td>55.0%</td>
<td>-1.7%</td>
<td>-1.7%</td>
<td>10.8%</td>
<td>6.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>-1.0%</td>
<td>-8.1%</td>
<td>9.2%</td>
<td>4.2%</td>
<td>5.0%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

The US foreign trade deficit improved unexpectedly versus a November deficit that was revised slightly deeper. Exports rose modestly, but remained down 15.2% from the peak in August 2000.Goods exports plunged 1.9% and were down 18.5% [...]

Foreign Trade Deficit Improved

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020220a.jpg" width="353">
Consumer prices rose as expected last month. It was the first increase in four months and historical data was revised to reflect new seasonal factors. Core inflation at 0.2% also was as expected. 
Higher energy prices led the increase in the CPI. They rose for only the second time since last May. Gasoline prices ticked up 2.7% after falling 30.1% during the last seven months of 2001.
Core goods prices continued to decline led by lower prices for new vehicles, apparel and home furnishings. Tobacco prices rose slightly.
Services prices rose moderately reflecting a 0.3% gain in shelter and a 0.2% gain in public transportation prices but a 0.5% in medical care services and a 0.6% gain in education prices. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Price Index</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>1.1%</td>
<td>2.8%</td>
<td>3.4%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>2.7%</td>
<td>2.4%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-0.8%</td>
<td>0.3%</td>
<td>0.5%</td>
<td>0.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.4%</td>
<td>0.3%</td>
<td>4.0%</td>
<td>3.7%</td>
<td>3.3%</td>
<td>2.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>0.9%</td>
<td>-3.0%</td>
<td>-15.3%</td>
<td>3.7%</td>
<td>16.9%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Food &amp; Beverages</td>
<td>0.3%</td>
<td>0.0%</td>
<td>2.9%</td>
<td>3.1%</td>
<td>2.3%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Weekly Chain Store Sales Surge, Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 20, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020220b.jpg" width="353">
Chain store sales rose 2.0% in the second full week of February. The jump followed a 2.1% gain the prior week and raised sales so far in February 2.0% above January. 
The recent improvement in sales is confirmed by figures from Redbook Instinet Research, which slightly lag the BTM-UBSW figures. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">BTM-UBSW (SA, 1977=100)</th>
<th scope="col">2/16/02</th>
<th scope="col">02/09/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>414.7</td>
<td>406.6</td>
<td>5.2%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer prices rose as expected last month. It was the first increase in four months and historical data was revised to reflect new seasonal factors. Core inflation at 0.2% also was as expected. Higher energy prices led the increase [...]

CPI Increase As Expected

Sticky services prices behind sticky overall PCE inflation

Flash April PMIs point to slower growth in the US but a pickup in Europe and Japan

Outlook strengthens for US while it weakens for other major economies

Crude petroleum prices are having a big impact on inflation expectations

Inflation surprising to upside in the US; by contrast to the downside in the euro area

 Gross Domestic Income is catching up with GDP

FOMC expects GDP growth above trend over the next three years

US core CPI inflation has begun to reaccelerate

Fiscal-policy aided factory building in the U.S. provided an unusually large boost to growth last year

US consumers much more optimistic than those in the Euro area and the UK

  Job openings take a step down in 2024

Fed's super core services inflation measure pushing up core rate

Blue Chip forecasters expect significant monetary easing this year except in Japan

Euro area economy stagnating while US grows above trend

Chinese and Japanese equity markets are diverging markedly

Chinese population declines in 2023 for second consecutive year

Outlook for US GDP growth on the rise; declining in euro area, Japan and China

There are still 1.4 job openings for every unemployed person in the US

US PCE inflation over the past six months has slowed to the Fed's 2% target

FOMC think rate hikes are done and looks for 75bps of decline in 2024

Weaker economic data surprises pushing down US interest rates

Recent disinflation has been widespread across Europe and North America

Recent decline in US inflation expectations helping to lower interest rates

China is losing its luster as foreign direct investment heads out

Blue Chip forecasters think Fed will be tighter for longer

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% (+2.7% y/y) during the four weeks ended May 3, 2024, after exhibiting strength since December. The index remained 20.1 % below the cycle peak in the second week of March 2022. During most of that period of time, U.S. factory output has been little changed.

Prices in the miscellaneous group fell 4.9% during the last four weeks and weakened 0.7% y/y. Plywood prices fell 14.4% and by 4.8% y/y. The cost of natural rubber fell 11.2% in four weeks but rose by nearly one-third y/y.

Textile group prices declined 2.5% (-0.7% y/y) in the latest four weeks but had been rising since their low in the second week of November. Cotton prices decreased 15.7% (-9.3% y/y) in the last four weeks but the cost of burlap rose 1.8% (8.0% y/y) in four weeks.

Prices in the crude oil & benzene group weakened 2.1% (+6.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 4.2% in four weeks to $81.28 per barrel, up 11.5% y/y. Prices hit a low of $70.42 in the third week of December. The cost of the petro-chemical benzene, used for making plastics & synthetic fibers, declined 2.7% (+13.4% y/y) in four weeks. Excluding crude oil, the industrial commodity price index rose 0.2% (2.1% y/y) in the latest four-week period.

Offsetting these declines, metals group prices increased 9.8% (7.9% y/y) over the most recent four weeks. Zinc prices rose 17.6% (8.7% y/y) while tin prices improved 15.1% in four weeks, up 20.4% y/y. Copper scrap prices increased 10.4% (15.2% y/y) in the last four weeks and aluminum prices improved 9.6%, rising9.0% y/y. Lead prices improved 8.2% (0.9% y/y) in four weeks while the cost of steel scrap rose 0.3% (-4.2% y/y).

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

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- Lumber & rubber costs have fallen sharply. 
- Cotton prices show protracted decline. 
- Crude oil prices weaken for three weeks.
- Metals price increase, paced by zinc and tin.

FIBER: Industrial Commodity Prices Slip in Latest Four Weeks

Robert Brusca

240506E.jpg

April readings for the S&P total or composite PMI survey show mixed performance in April with more countries showing deterioration month-to-month than showing improvement, but with the average reading in April higher than the average reading in March. That makes it a bit of a standoff in terms of trying to assess the performance of the survey. More countries are doing worse but on average countries are doing better.

These tendencies are provided without any weighting for the country’s GDP size; that's another caveat. Looking at the United States, the European Monetary Union, and the EMU’s four largest members as though they are all separate and independent observations (which they are not) shows two worsening was in April with the same relative results in March; February shows only one worsening and five improving.  Those are certainly good statistics and good news since these are large economies carrying a large weight in terms of their contribution to world output.

In Asia, Japan, and China show different performance with China improving month-to-month in February, March, and April but with Japan worsening month-to-month in April and February but improving in March.

Turning to sequential data that look at averages and changes over three months, six months and 12 months, we find the highly developed European and the U.S. readings all improving over three months; however, four of six of those readings deteriorate over six months compared to 12 months. Three deteriorate and three improve on balance over 12 months compared to the average ending 12 months ago.

We also assess the performance of these countries by looking at their PMIs in a queue of ranked data since January 2020. In that queue, Italy and Spain have 70th percentile standings, above their historic medians (medians occur at a ranking of 50%) along with the European Monetary Union with a 53.1 percentile ranking. However, the United States has a 36.7 percentile ranking, Germany, a 40.8 percentile ranking, and France, a 46.9 percentile ranking; that leaves us with three readings above their median and three below for the full period assessment.

Over the entire sample, the averages from February to March to April cluster in a very tight range from 52.0 to 52.5; the median lies in a range of 51.3 to 52.7. Over those three months, there are 4 of the countries in the survey below a reading of 50 which means they're contracting in April. Six are contracting, in March and six are contracting in February. The averaged data show improvements from three-, six-, and 12-months. On those metrics, nine countries contract over three months, 11 contract over six months, and 11 contract over 12 months.

Turning to statistics on acceleration, we find that 52% of countries are slowing in April but only 44% in March and only 32% in February. The averages are fairly stable; there are deteriorating circumstances in terms of the proportion of countries showing readings below the month before and on a month-to-month basis. Looking at the sequential data for three months compared to six-months, six months compared to 12 months, and 12 months compared to 12-months ago, the percentage of countries slowing steadily diminishes from nearly 70% over 12 months to 56.5% over six months to 30.4% over three months. The broad picture shows less slowing while the monthly picture shows that there may be more slowing creeping into the process.

The average queue standing, which positions these countries in their queue of data since January 2020, is at 51.6%. Across our sample of 25 countries, 12 of them show readings below their respective 50th percentile rankings. This gives us a sense that across the sample based on the ranking data and the average of the PMI data statistics are hovering close to the median for the period. However, this is comparison over a four-year period that has seen a good deal of contraction in play.

240506.jpg

On balance, the sense of improvement in this sample is not very strong. There is some progress evident; however, there's still obviously widespread weakness that permeates this system so it's hard to look at the month's data as anything special based upon the composite PMIs. Services sectors show a moderate trend for improvement monthly although stability across the averages from three-, to six-, to 12-months is most evident for services. The services queue percentiles are still relatively robust with an average standing in their 65th percentile. Manufacturing sectors are generally doing worse with an average percentile standing at their 47th percentile, below their medians and with a median diffusion reading slightly below fifty at 49.8 in April.

Goods and services sectors continue to perform in different fashion; the goods sector, the internationally traded sector, continues to be under more pressure. Of course, inflation statistics have improved but if the U.S. is setting the lead for inflation performance, that performance has stalled and there's evidence of inflation progress slowing in other places. This will be something that we will want to watch because it will bear importantly on how central banks perform and what they do in the future.

PMI Composite Readings Improve Slightly Amid Cross-currents

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Nonfarm payrolls increased 175,000 (1.8% y/y) in April after rising 315,000 in March, revised from 303,000, and 236,000 in February, revised from 270,000. Expectations had been for a 250,000 rise in the Action Economics Forecast Survey. The three-month average change of 242,000 is the slowest since December of	 last year.

Average hourly earnings increased 0.2% in April after an unrevised 0.3% March gain and a 0.1% uptick in February, revised from 0.2%. The 3.9% y/y earnings increase remains below the 5.9% high in March 2022. It is the weakest rise since June 2021.

The unemployment rate, measured in the household survey, rose to 3.9% and reversed its decline to 3.8% in March. An unchanged 3.8% had been expected. Household employment rose 25,000 after increasing 498,000 in March. The labor force rose 87,000 after a 469,000 March gain. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons edged up to 7.4%. It was the highest rate since November 2021.

In the **payroll survey**, private-sector employment increased 167,000 (1.7% y/y) in April after rising 243,000 in March. Construction sector employment increased 9,000 (3.3% y/y) last month following a 40,000 March gain. Factory sector jobs rose 8,000 (0.1% y/y) after falling 4,000. Mining & logging sector jobs fell 3,000 (+0.3% y/y) during April after rising 3,000 in March.

Private service-producing sector employment improved 153,000 in April (1.7% y/y) after a 204,000 March rise. Increases varied greatly amongst service sector categories. Education & health service jobs rose 95,000 (4.3% y/y) after rising 88,000 in March while leisure & hospitality employment rose 5,000 (2.3% y/y) after a 53,000 gain. Trade, transportation & utilities employment gained 52,000 (0.7% y/y) after rising 31,000 while financial activities jobs rose 6,000 (0.5% y/y) after rising 5,000 in March. Information sector employment fell 8,000 (-1.4% y/y) following a 4,000 gain and professional & business service jobs decreased 4,000 (0.5% y/y) after a 10,000 March rise. Within that category, the number of temporary jobs fell 16,400 (-6.0% y/y) and have fallen consistently since a March 2022 high.

Government sector payrolls improved a negligible 8,000 last month (2.8% y/y) after increasing 72,000 in March. Local government jobs held steady (2.4% y/y) after rising 51,000 in March and state government employment rose 6,000 (3.7% y/y) after an 11,000 gain. The number of federal government jobs increased 2,000 (2.9% y/y) following a 10,000 rise.

The 0.2% rise in private-sector average hourly earnings reflected a 0.2% gain (5.1% y/y) in the goods-producing sector which followed a 0.6% improvement in March. Earnings in construction strengthened 0.6% (5.2% y/y) while factory sector earnings eased 0.1% (+4.8% y/y). In the private services-sector, earnings rose 0.2% last month (3.7% y/y) after a 0.3% gain. Information sector earnings edged 0.1% higher (3.4% y/y) following a 0.4% improvement. Financial sector earnings increased 0.4% (6.0% y/y) for the third straight month. Private education & health services earnings rose slightly (2.8% y/y) after holding steady in March. Trade, transportation and utilities pay rose 0.1% (3.4% y/y) in April after a 0.2% rise.

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The length of the average workweek in the private sector eased to 34.3 hours in April after rising to 34.4 hours in March. The workweek in the goods-producing sector fell to 39.7 hours, down from a five-month high of 39.9 hours in March. The construction sector average workweek fell to 38.7 hours from 39.3. The factory sector workweek held steady at 40.0 hours for the third straight month while the average workweek in the private service sector was 33.3 hours, also for the third consecutive month. The aggregate weekly hours index in the private sector, a key indicator of production and income, eased 0.1% in April (1.7% y/y) after rising 0.4% in both of the prior two months.

In the **household survey**, the jobless rate climbed to 3.9% as the size of the labor force rose more quickly than employment. The labor force participation rate held steady at 62.7%. The rate for teenagers declined to 37.6%, while for individuals aged 20-24 it rose to 72.4%. For rate for workers aged 25-54, it edged higher to 83.5% but for workers 55 and over, it fell slightly to 38.4 hours.

The employment/population ratio for all workers slipped to 60.2% in April, standing slightly below where it was twelve months earlier. It remained below its high of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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- Job increase slows to weakest in just over one year.
- Earnings increase moderates.
- Jobless rate moves up as employment increase is negligible.

U.S. Payroll Employment & Wage Growth Moderate in April; Jobless Rate Edges Up

Andrew Cates

**Consensus interest rate forecasts**
Despite heightened concerns about the potential for lower US interest rates in the coming months, recent forecasts still show a broad consensus that an easing cycle will unfold in the period ahead across most major economies. The latest Blue Chip Financial Forecasts survey, for instance, indicates that policy rate reductions of approximately 100 basis points are anticipated from the Fed over the next 12 months. Additionally, the European Central Bank and the Bank of England are expected to implement cumulative cuts of 166 and 111 basis points, respectively, during the same timeframe. In contrast, Japan is expected to see further rate hikes, specifically an increase of 17 basis points over the year ahead.

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**US data surprises and 2 year bond yields**
The anxiety in financial markets about the Fed’s scope to lower interest rates can be largely traced to the US economy’s resilience – and its tight labour market in particular – together with sticky inflation. The former, however, namely economic resilience, has arguably being challenged in recent days by some, though by no means all, US data releases. These include, for example, a weaker-than expected consumer confidence report and ISM survey of manufacturing. Citigroup’s US growth surprise index has, against that backdrop, turned sharply lower.

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**US and euro area data surprises versus the euro**
A corresponding trend has also unfolded in the FX market. While US data have been a little more disappointing this contrasts with euro area data, which have been more resilient. Yet, thanks to still-firm US/Europe yield differentials, the US dollar has remained fairly resilient versus the euro (see chart 3).

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**Japan’s economy**
This week’s disappointing retail sales data from Japan could call into question the scope for further policy rate hikes from the Bank of Japan (BoJ) in the coming months. Retail sales specifically slowed to 1.2% y/y in March from 4.7% in February. That slowdown, moreover, was broadly-based, with reduced sales activity seen across various product categories.

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**Airport traffic in China**
The latest monthly dataflow from China have been a little more upbeat but that was not the message from this week’s official PMI surveys for April. Other less widely monitored data are also yielding sobering messages about the current economic environment. For instance, while aircraft movements at Beijing Airport have risen from their low points, they still remain well below pre-COVID pandemic levels (see chart 5). Similarly, specific data on cargo volumes and passenger traffic lead to the same conclusion.

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**Global warming and water levels**
Finally, on more structural matters, climate change continues to generate profound shifts in the economic landscape, influencing everything from agricultural productivity to energy markets and global supply chains. One manifestation of these shifts is low water levels in many areas and for example, in the Panama Canal. More specifically Gatun Lake has seen prolonged drought conditions, exacerbated by the El Niño phenomenon and broader climate change anomalies. The drought has resulted in lower-than-average rainfall and delayed rainy seasons, leading to reduced water availability not only for canal operations but also for over half of Panama's population relying on this water source. To that supply chain point above, the canal has also had to reduce the number of ships it can accommodate per day.

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Lingering concerns about the US Fed's inclination to lower interest rates in coming months have continued to unsettle financial markets over the past few days. That said, comments from Fed Chair Powell after this week’s FOMC meeting have calmed some of those nerves. In our charts this week we delve into the latest Blue Chip consensus on policy rates across the world’s major economies (chart 1). We also compare market expectations for US policy rates, inferred from 2-year Treasury yields, with a trend toward more negative US data surprises in recent days (chart 2). In addition we contrast that more negative US growth trend with the relative resilience of the euro area dataflow and some recent downward pressure on the EUR/USD exchange rate (chart 3). Turning to Asia, we assess Japan's economy with a focus on some recent disappointing retail sales data (chart 4), and provide insights into China's economic activity through aircraft movements at Beijing Airport (chart 5). Finally, and with a nod to climate change and its impact, we look at reduced water levels on the Panama Canal and how these contrast with above-average land and sea temperatures over the past few years (chart 6).

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Charts of the Week: Policy Surprises Versus Data Surprises

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The U.S. trade deficit in goods and services (BOP basis) of $69.4 billion in March compared to a $69.5 billion in February, revised from $68.9 billion, and an unrevised $67.6 billion in January, according to the U.S. Census Bureau. The deficit remained nearly the largest since April 2023 which was $72.2 billion. A $69.1 billion deficit had been expected in the Action Economics Forecast Survey. Exports fell 2.0% and were roughly unchanged y/y, reversing a 2.2% February rise. Imports declined 1.6% (+3.1% y/y) in March, following three straight months of moderate gain.

The deficit in goods trade (BOP basis) increased to $92.5 billion in March from $91.7 billion in February. Goods exports fell 2.9% (-2.8% y/y) after rising 2.8% in February. Imports of goods declined 1.6% (+2.5% y/y) following three straight monthly increases. The services trade surplus increased to $23.1 billion in March from $22.2 billion in February but remained down from a peak surplus of $25.2 billion last August. Services exports eased 0.2% (+6.0% y/y) following four consecutive monthly increases. Services imports declined 1.7% (+5.4% y/y) after rising 4.7% in February.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars), widened to $88.6 billion in March, the largest deficit since April of last year, from $87.4 billion in February. Real exports of goods declined 3.2% (-0.7% y/y) after rising 2.0% in February. Real imports of goods fell 1.5% (+2.5% y/y) after three straight monthly increases. In the first quarter of this year, a widening of the trade deficit (net exports) subtracted 0.86 percentage points from GDP growth after adding 0.25 percentage points to growth in Q4 2023.

The customs value goods trade deficit widened to $91.5 billion in March from $90.5 billion in February. The latest figure compared to a $91.8 billion deficit in the advance report released on April 25. Customs value exports fell 3.0% (-1.7% y/y) in March after a 2.8% February increase. Automotive vehicles, parts & engines rose 0.6% (-1.7% y/y) while nonfood consumer goods excluding autos declined 1.8% (-5.1% y/y). Capital goods exports excluding autos weakened 3.7% (+3.1% y/y) while exports of industrial supplies & materials fell 3.0% (-4.1% y/y). Foods, feeds & beverages exports were off 8.2% (-1.5% y/y).

Customs value imports of goods declined 1.6% (+2.6% y/y) in March after increasing for three straight months. Automotive vehicles, parts & engines imports fell 11.1% (+6.1% y/y) while capital goods imports excluding autos rose 0.1% (7.4% y/y). Foods, feeds & beverage imports declined 3.5% (+5.2% y/y). Imports of industrial supplies & materials fell 2.9% (-7.0% y/y) but nonfood consumer goods excluding autos rose 4.8% (4.1% y/y). Meanwhile, petroleum imports declined 2.5% and were unchanged y/y in March, following a 1.6% February rise. Nonpetroleum imports weakened 1.5% (+2.8% y/y) following three straight monthly increases.

The rise in services exports reflected a 0.7% increase (12.4% y/y) in personal, cultural & recreational services and a 1.3% decline (+24.9% y/y) in travel services exports. Exports of construction services declined 1.3% (+2.6% y/y) while government goods & services exports declined 0.9% (-23.0% y/y). The increase in services imports was due to construction services imports which rose 1.0% (35.1% y/y) but travel services imports fell 2.6% (+21.7% y/y). Imports of transport services declined 5.8% (-0.1% y/y) while charges for the use of intellectual property eased 0.1% (+3.2 y/y) in March.

The U.S. goods trade deficit with China widened to a seasonally adjusted $24.1 billion in March from $21.9 billion in February. Exports fell 3.6% (-10.3% y/y) while imports rose 4.8% (unchanged y/y). The goods trade deficit with the European Union deepened to $19.5 billion from $17.6 billion in February as exports fell 3.4% (-6.4% y/y), off for the third straight month, and imports rose 1.8% (4.2% y/y). The trade deficit with Japan narrowed to a seasonally adjusted $5.3 billion in March after narrowing to $6.2 billion in the previous month. Exports declined 1.9% (+3.0% y/y) while imports fell 8.7% (-2.2% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's **USECON** database. Detailed figures on international trade are available in the **USINT** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Exports and imports both fall.
- Adjusted for inflation, goods trade deficit increases to eleven-month high.
- Goods trade deficits with China & Europe deepen.

Economy in Brief: February 2002

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