Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030630b.jpg" width="353">
The European Commission reported a slight improvement in the June measures of overall economic sentiment and confidence in the industrial and consumer sectors. The overall measure of economic sentiment was up 0.16% to 98.2 in June from May, but was still 1.31% below a year ago.
Industrial and consumer confidence measures are reported as the percent balance between the optimists and the pessimists. The pessimists have outweighed the optimists since early 2001 in both sectors. Both balances improved after the September 11, 2001 shock until mid 2002, but continued in the negative. Industrial confidence has since shown little trend, but consumer confidence has declined sharply and although it has improved in the last few months, it is still well below the lows reached in late 2001.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"></th>
<th scope="col">June 2003</th>
<th scope="col">May 2003</th>
<th scope="col">June 2002</th>
<th scope="col">M/M</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Overall Economic Sentiment(1995=100)</td>
<td>98.2</td>
<td>98.1</td>
<td>99.5</td>
<td>0.16</td>
<td>-1.31</td>
<td>99.0</td>
<td>100.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">Industrial Confidence (% balance)</td>
<td>-12</td>
<td>-13</td>
<td>-10</td>
<td>1</td>
<td>-2</td>
<td>-11</td>
<td>-8</td>
<td>5</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence (% balance)</td>
<td>-19</td>
<td>-20</td>
<td>-8</td>
<td>1</td>
<td>-11</td>
<td>-11</td>
<td>-5</td>
<td>1</td>
</tr>
</tbody>
</table>
</body>
</html>

The European Commission reported a slight improvement in the June measures of overall economic sentiment and confidence in the industrial and consumer sectors. The overall measure of economic sentiment was up 0.16% to 98.2 in June [...]

A Slight Improvement in Confidence in the Eurozone

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030630a.jpg" width="353">
The Chicago Purchasing Manager&#146;s Business Barometer Index improved for the second consecutive month in June to 52.5. The reading was right on Consensus estimates for 52.5.
The improvement lagged the dramatic increase in the Empire State Manufacturing survey but was about in line with the rise in the Philadelphia Fed survey, both reported earlier this month.
Over the last five years there has been a 62% correlation between the Chicago PMI and the month to month change in factory sector industrial production.
The most dramatic gains in the sub-indexes of the Chicago PMI survey were in inventories and vendor deliveries. The orders (54.8) and employment (43.8) indexes rose just slightly and the production index (56.5) fell. 
The prices paid index fell to the lowest level since January of last year.
The latest report on the Chicago Purchasing Managers Business Barometer is available <a href="http://napm-chicago.org/current.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Barometer</td>
<td>52.5</td>
<td>52.2</td>
<td>55.8</td>
<td>52.7</td>
<td>41.4</td>
<td>51.8</td>
</tr>
<tr>
<td class="firstcol">Prices Paid</td>
<td>49.1</td>
<td>53.7</td>
<td>58.4</td>
<td>56.9</td>
<td>50.4</td>
<td>65.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Chicago Purchasing Managers Business Barometer Index improved for the second consecutive month in June to 52.5. The reading was right on Consensus estimates for 52.5. The improvement lagged the dramatic increase in the Empire [...]

Chicago Purchasing Agents' Index Improved

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030627a.jpg" width="353">
Personal income rose an expected 0.3% last month. The gain followed an upwardly revised 0.2% increase in April.
The PCE price deflator fell 0.1% in May for the second consecutive monthly decline. Less food and energy, the price deflator was unchanged (1.2% y/y) in May and at an annual rate is up 0.7% YTD.
Recent increases in personal income were powered by strong gains in proprietors income, up 1.0% (7.8% y/y) in May and up 1.1% in April. Growth in wages and salaries has been tepid, up 0.1% (2.0% y/y) following no change in April.
Disposable personal income rose 0.3% (3.7% y/y) following 0.2% gains in the prior three months. Personal tax payments are down 0.2% YTD.
Personal consumption expenditures rose by 0.1% for the second consecutive month. The gain was versus Consensus expectations for a 0.2% rise. Spending on durable goods fell 0.7% (5.2% y/y) as light vehicle sales fell moderately. Another drop in gasoline prices pulled nondurable spending down for the second month. Spending on services rose 0.5% (4.6% y/y), the strongest monthly gain since January.
Proceedings of a conference sponsored by the Federal Reserve Bank of New York in May 7, 1999 titled &quot;Unequal Incomes, Unequal Outcomes? Economic Inequality and Measures of Well-Being&quot; can be found <a href="http://www.newyorkfed.org/rmaghome/econ_pol/1999.htm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.3%</td>
<td>0.2%</td>
<td>3.4%</td>
<td>2.7%</td>
<td>3.3%</td>
<td>8.0%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.1%</td>
<td>0.1%</td>
<td>4.6%</td>
<td>4.5%</td>
<td>4.5%</td>
<td>7.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>3.5%</td>
<td>3.4%</td>
<td>4.1%</td>
<td>3.7%</td>
<td>2.3%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">PCE Price Deflator</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>1.7%</td>
<td>1.4%</td>
<td>2.0%</td>
<td>2.5%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Down but Firmer Than Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 27, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030627b.jpg" width="353">
The final June reading of Consumer Sentiment from the University of Michigan was 89.7, down 2.6% versus May. That was firmer than the mid-month reading of 87.2 and firmer than Consensus expectations for a reading of 88.0.
The June drop in Consumer Sentiment contrasted with the reading of Consumer Confidence from the Conference Board that was virtually unchanged m/m. Through June, both measures were up 3.5% YTD.
The index of consumer expectations fell 5.5% m/m versus a mid-month reading that showed a 7.9% decline. The index of current conditions rose 1.6% m/m versus the mid-month read of a 1.3% drop.
Over the last ten years there has been a 64% correlation between the level of consumer sentiment and the y/y change in real PCE. The correlation over the last five years has been 82%.
The University of Michigan survey is not seasonally adjusted.It is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Sentiment</td>
<td>89.7</td>
<td>92.1</td>
<td>-5.6%</td>
<td>89.6</td>
<td>89.2</td>
<td>107.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Personal income rose an expected 0.3% last month. The gain followed an upwardly revised 0.2% increase in April. The PCE price deflator fell 0.1% in May for the second consecutive monthly decline. Less food and energy, the price [...]

Personal Income & Spending Rose, Prices Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030626a.jpg" width="353">
Real GDP growth in 1Q03 was revised lower to 1.4% (AR) from the preliminary estimate of 1.9% growth. The downward revision was greater than Consensus expectations for 1.9% growth.
Revisions to most components were minor including a downward revision to inventory investment and an upward revision to imports. Spending on equipment and software was revised up.
Inflation as measured by the GDP chain price deflator was revised down slightly to 2.4% (AR). The chain price deflator for domestic final demand rose at a 3.5% rate versus a 1.3% gain last year. The acceleration primarily reflected higher energy prices and a strong 7.4% rate of gain in the residential investment price deflator.
Corporate profits w/adjustment for inventory valuation and depreciation grew at a revised 10.7% rate (2.4% y/y) versus the initial estimate of 4.0% growth. The tax liability on profits surged 30.7% and was revised up. Nevertheless, after tax operating profits grew at a 3.5% rate versus the initial estimate of a 3.3% decline.
Corporate profits of nonfinancial corporations w/IVA and CCA, a figure derived from the income side of NIPA, grew at a 10.6% rate (7.5% y/y) in 1Q03.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained &#39;96 $, % AR</a></th>
<th scope="col">1Q&#39;03 (Final)</th>
<th scope="col">1Q&#39;03 (Prelim.)</th>
<th scope="col">4Q&#39;02</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.4%</td>
<td>1.9%</td>
<td>1.4%</td>
<td>2.0%</td>
<td>2.4%</td>
<td>0.3%</td>
<td>3.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-0.5%</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>-1.2%</td>
<td>0.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>2.3%</td>
<td>2.4%</td>
<td>1.1%</td>
<td>1.7%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>0.8%</td>
<td>0.9%</td>
<td>-1.6%</td>
<td>-0.4%</td>
<td>-0.5%</td>
<td>-0.1%</td>
<td>-0.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>1.4%</td>
<td>1.4%</td>
<td>2.6%</td>
<td>2.1%</td>
<td>2.4%</td>
<td>1.6%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>2.4%</td>
<td>2.5%</td>
<td>1.8%</td>
<td>1.6%</td>
<td>1.1%</td>
<td>2.4%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims down Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 26, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030626b.jpg" width="353">
Initial claims for unemployment insurance fell 5.2% last week to 404,000. The w/w decline was much greater than Consensus expectations for claims of 418,000. Claims in the prior week were revised up.
Jobless claims are down 12.0% from the weekly peak in late April.
The four-week moving average of initial claims fell to 428,250 (+9.3% y/y).
Continuing claims for unemployment insurance rose 1.2% w/w. The prior week&#39;s level was revised down slightly.
During the last ten years there has been a 84% (inverse) correlation between the level of continuing claims for unemployment insurance and the y/y change in nonfarm payrolls.
The insured rate of unemployment rose to 3.0% from 2.9%.

<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">6/21/03</th>
<th scope="col">6/14/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>404.0</td>
<td>426.0</td>
<td>4.1%</td>
<td>404.3</td>
<td>406.0</td>
<td>299.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,741</td>
<td>3.2%</td>
<td>3,575</td>
<td>3,022</td>
<td>2,114</td>
</tr>
</tbody>
</table>
Help Wanted Advertising Still Depressed 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 26, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030626c.jpg" width="353">
The Conference Board&#39;s National Index of Help-Wanted Advertising remained unchanged in May at the 42 year low.
During the last ten years there has been a 71% correlation between the level of help-wanted advertising and the monthly change in nonfarm payrolls. The correlation with the y/y change in employment has been 92%.
The proportion of labor markets with rising want-ad volume rose to a still low 37% after the collapse in April to 20%. The three month moving average of this indicator fell to 35%.
All of the figures mentioned above are seasonally adjusted.
The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month.
Visit the <a href="http://www.conference-board.org/economics/index.cfm">Conference Board</a> for more information.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">May &#39;02</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">National Help Wanted Index</td>
<td>36</td>
<td>36</td>
<td>44</td>
</tr>
</tbody>
</table>
</body>
</html>

Real GDP growth in 1Q03 was revised lower to 1.4% (AR) from the preliminary estimate of 1.9% growth. The downward revision was greater than Consensus expectations for 1.9% growth. Revisions to most components were minor including a [...]

1Q GDP Revised Down, Profits Stronger

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030625a.jpg" width="353">
Durable goods orders slipped 0.3% in May versus the Consensus expectation for a 1.0% rise. April figures were little revised.
Sharp declines in orders for transportation equipment, off 1.6%, and electrical equipment, down 2.2%, were offset by gains in orders for computers and electronic products. Excluding the transportation sector altogether, durable orders fell 0.4% (-3.3% y/y.
Nondefense capital goods orders fell 0.9% and have been virtually flat since early last year. Excluding aircraft and parts, nondefense capital goods orders fell 0.5% (-0.1% y/y).
During the last ten years there has been a 74% correlation between the y/y change in orders for durable goods and the change in industrial production of durable goods.
Shipments of durable goods fell 0.3% (-4.0% y/y) and it was the third monthly decline this year.
Durable inventories fell 0.2% (-1.4% y/y) for the fifth consecutive monthly decline.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Durable Goods Orders</td>
<td>-0.3%</td>
<td>-2.4%</td>
<td>-2.7%</td>
<td>-0.1%</td>
<td>-11.4%</td>
<td>3.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nondefense Capital Goods</td>
<td>-0.9%</td>
<td>0.0%</td>
<td>-1.5%</td>
<td>-5.3%</td>
<td>-16.5%</td>
<td>7.9%</td>
</tr>
</tbody>
</table>
Mortgage Applications Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 25, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030625b.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association fell 8.7% last week. The decline pulled the index to the lowest level in five weeks.
Applications to refinance fell 10.5% w/w and are down 17.8% from the peak in late May.
Applications for home purchase fell 1.9% w/w and are down 10.7% from the late May peak. Nevertheless, applications so far in June are about even with the record May level.
During the last ten years there has been a 52% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Interest rates on a conventional 30-Year mortgage ticked higher w/w with the effective rate at 5.43% versus 6.13% averaged in December. The effective rate on a 15-year mortgage also rose slightly w/w to 4.87% versus 5.55% averaged in December.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders.
Visit the Mortgage Bankers Association site at <a href="http://www.mbaa.org/">www.mbaa.org.</a>

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">6/20/03</th>
<th scope="col">6/13/03</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>1,554.5</td>
<td>1,701.7</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>411.2</td>
<td>419.1</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>8,204.6</td>
<td>9,162.7</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>
New Home Sales Surge 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 25, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030625d.jpg" width="353">
Sales of new single family homes in May jumped 12.5% m/m to 1.157M, a new record. The surge followed generally sideways movement during the prior nine months. Consensus expectations were for a 1.035M May sales rate.
Sales strength was concentrated in the West where sales rose 19.7% (20.9% y/y) and in the South where sales rose 15.9% (25.1% y/y).
Elsewhere in the country sales where mixed: down 9.0% (-1.4% y/y) in the Northeast and up 1.6% (3.4% y/y) in the Midwest.
The median price of a new home rose to $195,200 (7.8% y/y) and the prior month was revised up.
The new home sales data reflect current sales versus the existing home sale figures which reflect closings on past sales.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E90401/@E90401.HTM">Homes Sales (000s, AR)</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>1,157</td>
<td>1,028</td>
<td>17.9%</td>
<td>977</td>
<td>907</td>
<td>880</td>
</tr>
</tbody>
</table>
Existing Home Sales Stronger Than Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 25, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030625c.jpg" width="353">
Sales of existing single family homes rose 1.2% last month to 5.920M. The gain pulled sales close to the record level set this past January. Consensus expectations were for 5.84M.
Home sales in May were mixed across the country&#39;s regions: up in the Northeast and up in the Midwest but down just slightly in the South and the West.
The median price of an existing home rose to $167,000 (+7.7% y/y).
The figures reflect closings of past home sales.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;5,920</td>
<td>&nbsp;5,850</td>
<td>4.4%</td>
<td>5,598</td>
<td>5,282</td>
<td>5,158</td>
</tr>
</tbody>
</table>
Fed Funds Rate Cut a Quarter Point by FOMC 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 25, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030625e.jpg" width="353">
The Federal Reserve lowered the target rate for federal funds 25 basis points to 1.00%, the lowest level since 1958. The discount rate also was lowered by a quarter point to 2.00%.
The action was less aggressive than expected by most economists and it was not unanimous. San Francisco Bank President Parry preferred a 50 basis point reduction.
The press release which accompanied the Fed&#146;s action contained the following statement. &quot;The economy ... has yet to exhibit sustainable growth. With inflationary expectations subdued, the Committee judged that a slightly more expansive monetary policy would add further support for an economy which it expects to improve over time.&quot;
With regard to the risks to the economic outlook, the Fed stated that &quot;the upside and downside risks to the attainment of sustainable growth are roughly equal.&quot; The Fed statement added that &quot;the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation from its already low level.&quot;
<a href="http://www.federalreserve.gov/BoardDocs/Press/monetary/2003/20030625/default.htm">Here</a> is the complete text of the Fed&#39;s latest press release.
A paper presented by Federal Reserve Board Governor Donald L. Kohn and Senior Economist Brian P. Sack titled &quot;Central Bank Talk: Does it Matter and Why?&quot; can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2003/20030620/default.htm">here</a>.
&quot;Why Predict Past FOMC Actions&quot; from the Federal Reserve Bank of St. Louis is found <a href="http://research.stlouisfed.org/publications/mt/20030601/cover.pdf">here</a>.

</body>
</html>

Durable goods orders slipped 0.3% in May versus the Consensus expectation for a 1.0% rise. April figures were little revised. Sharp declines in orders for transportation equipment, off 1.6%, and electrical equipment, down 2.2%, were [...]

Durable Goods Orders Slip

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030624c.jpg" width="353">
Contrary to consensus estimates of improvement, consumer confidence in Italy continued to fall in June and is currently at its lowest point since November, 1996. The seasonally adjusted index was 104.9 (1980=100), 0.66% below May and 10.19% below June of 2002. The survey, conducted by the ISAE (Instituto de Studi e Analisi Economica), is the first of the monthly indicators of confidence issued by the countries of the Euro Zone.
Underlying data in the June survey reveal that only 17% of consumers expect improvement in the general economic situation and only 13% expect unemployment to fall over the next twelve months. Except for a small portion that are unsure, the others expect conditions to remain about the same or worsen. These conditions suggest that consumers may be restrained in their spending and dampen or even reduce overall economic growth.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Italy</th>
<th scope="col">June2003</th>
<th scope="col">May2003</th>
<th scope="col">June2002</th>
<th scope="col">M/M</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence (1980=100, SA)</td>
<td>104.9</td>
<td>105.6</td>
<td>116.8</td>
<td>-0.66</td>
<td>-10.19</td>
<td>-55.56</td>
<td>2.71</td>
<td>2.04</td>
</tr>
</tbody>
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Italy: Expectations Over Next 12 Months</th>
<th scope="col">June2003</th>
<th scope="col">&nbsp;</th>
<th scope="col">June2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">General Economic Situation</td>
<td>% of Respondents</td>
<td>Unemployment</td>
<td>% of Respondents</td>
</tr>
<tr>
<td class="firstcol">Improving</td>
<td>17</td>
<td>Sharply Increasing</td>
<td>6</td>
</tr>
<tr class="odd">
<td class="firstcol">Stable</td>
<td>44</td>
<td>Slightly Increasing</td>
<td>31</td>
</tr>
<tr>
<td class="firstcol">Worsening</td>
<td>33</td>
<td>Stable</td>
<td>43</td>
</tr>
<tr class="odd">
<td class="firstcol">Unsure</td>
<td>6</td>
<td>Falling</td>
<td>13</td>
</tr>
<tr>
<td class="firstcol">Total</td>
<td>100</td>
<td>Unsure</td>
<td>7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>Total</td>
<td>100</td>
</tr>
</tbody>
</table>
</body>
</html>

Contrary to consensus estimates of improvement, consumer confidence in Italy continued to fall in June and is currently at its lowest point since November, 1996. The seasonally adjusted index was 104.9 (1980=100), 0.66% below May and [...]

Italian Consumer Confidence Continues to Slide

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030624b.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence was about flat in June. The index fell 0.1% m/m to 83.5. Consensus expectations were for a decline to 82.5.
Since the low of this past March, Confidence has risen 36.0%. That rise is versus a 12.4% gain in the University of Michigan&#39;s Consumer Sentiment during the same period.
The slip in confidence in June reflected a 3.6% decline in the present situation index, down for the second consecutive month. The index of expectations rose 1.5% for the third monthly gain this year.
Jobs were viewed as hard to get by 32.0% of survey respondents, down slightly from the record 32.9% in May. Expectations for employment opportunities in six months improved to the highest level in twelve months.
During the last five years there has been a 75% correlation between the level of Consumer Confidence and the y/y change in real consumer spending. 
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"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1401/@EF1401.HTM">Conference Board</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>83.5</td>
<td>83.6</td>
<td>-21.4%</td>
<td>96.6</td>
<td>106.6</td>
<td>139.0</td>
</tr>
</tbody>
</table>
Chain Store Sales Up Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 24, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030624a.jpg" width="353">
Chain store sales added 0.6% last week to the 0.3% gain of the week prior according to the BTM-UBSW survey.
Sales so far in June are 0.1% above the May average.
During the last five years there has been a 59% correlation between the year-to-year percent change in chain store sales and the change in nonauto retail sales less gasoline.
The BTM leading indicator of chain store sales rose 0.4% in the second week of June and continued the improving trend begun in early May.
The BTM-UBSW retail chain-store sales index is constructed from the sales results reported by seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">6/21/03</th>
<th scope="col">6/14/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>419.4</td>
<td>417.0</td>
<td>0.6%</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Conference Boards Index of Consumer Confidence was about flat in June. The index fell 0.1% m/m to 83.5. Consensus expectations were for a decline to 82.5. Since the low of this past March, Confidence has risen 36.0%. That rise is [...]

Consumer Confidence About Flat

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030623a.jpg" width="353">
Inflation, as measured by consumer prices, generally continues to be subdued in the Pacific Rim countries. Even Indonesia, which experienced consumer price increases of approximately 12% in 2001 and 2002, reported a 0.5% increase in May. Price increases have also declined significantly in the Philippines. In Malaysia, Singapore and Thailand consumer prices increases have been under 2% over the last three years.
Instead of inflation, deflation has been the worry in Hong Kong, China and Taiwan. The problem is most acute in Hong Kong. Consumer prices in Hong Kong declined 1.1% in May from April and were 2.5% below May of 2002. Prices have been declining since mid-1998. Consumer prices declined 0.12% in May in Taiwan and are only 0.3% above a year ago. Mainland China appears to have reversed a deflationary trend with consumer prices rising in each month of the current year.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Prices</th>
<th scope="col">May2003</th>
<th scope="col">Apr2003</th>
<th scope="col">May 2002</th>
<th scope="col">M/M</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Hong Kong (10/99-9/00=100)</td>
<td>92.6</td>
<td>93.6</td>
<td>95.0</td>
<td>-1.07</td>
<td>-2.53</td>
<td>-3.01</td>
<td>-1.59</td>
<td>-3.75</td>
</tr>
<tr>
<td class="firstcol">Singapore (11/97-10/98=100)</td>
<td>101.9</td>
<td>102.5</td>
<td>101.9</td>
<td>-0.59</td>
<td>0.00</td>
<td>-0.46</td>
<td>1.01</td>
<td>1.36</td>
</tr>
<tr class="odd">
<td class="firstcol">Taiwan (2001=100)</td>
<td>100.0</td>
<td>100.1</td>
<td>99.7</td>
<td>-0.12</td>
<td>0.30</td>
<td>-0.20</td>
<td>0.00</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Thailand (1998=100)</td>
<td>106.2</td>
<td>105.8</td>
<td>104.2</td>
<td>0.38</td>
<td>1.92</td>
<td>0.30</td>
<td>1.67</td>
<td>1.54</td>
</tr>
<tr class="odd">
<td class="firstcol">Malaysia (1994=100)</td>
<td>104.1</td>
<td>104.0</td>
<td>103.1</td>
<td>0.10</td>
<td>0.97</td>
<td>1.80</td>
<td>1.41</td>
<td>1.53</td>
</tr>
<tr>
<td class="firstcol">Philippines (1994=100)</td>
<td>171.1</td>
<td>170.7</td>
<td>166.5</td>
<td>0.23</td>
<td>2.76</td>
<td>3.12</td>
<td>6.12</td>
<td>4.29</td>
</tr>
<tr class="odd">
<td class="firstcol">Indonesia (1996=100)</td>
<td>277.1</td>
<td>277.0</td>
<td>259.2</td>
<td>0.50</td>
<td>6.92</td>
<td>11.88</td>
<td>11.51</td>
<td>3.71</td>
</tr>
<tr>
<td class="firstcol"></td>
<td>May2003</td>
<td>Apr2003</td>
<td>Mar2003</td>
<td>Feb2003</td>
<td>Jan2003</td>
<td>2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr class="odd">
<td class="firstcol">China (Percent Change)</td>
<td>0.7</td>
<td>1.0</td>
<td>0.9</td>
<td>0.2</td>
<td>0.4</td>
<td>-0.8</td>
<td>-0.7</td>
<td>0.4</td>
</tr>
</tbody>
</table>
</body>
</html>

Inflation, as measured by consumer prices, generally continues to be subdued in the Pacific Rim countries. Even Indonesia, which experienced consumer price increases of approximately 12% in 2001 and 2002, reported a 0.5% increase in [...]

Inflation and Deflation in the Pacific Rim

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

Resilient US economy is pushing up longer-term inflation expectations and interest rates

Positive US economic data surprises leading to upward adjustment of interest rate expectations

Recent aggressive policy easing in China has given a massive boost to equity prices

FOMC expects much more easing now than in June

US is clear world leader in business capital spending on artificial intelligence

Blue Chip forecasters expect US to lead aggressive policy rate cuts over coming year—apart from Japan

Ratio of job openings to the number unemployed in the US now below pre-pandemic level

U.S. layoffs not showing as much cooling in labor markets as unemployment rate

While goods prices have moderated, service price inflation remains elevated and sticky

Since Jan 2023, BCEI US outlook has improved, worsened for Japan and the euro area

Persistent negative US economic surprises leading to big rate-cut expectations

Germany is Euro area weakling

Flash PMIs show good start to Q3 in US; loss of momentum in the euro area

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

250117R32.jpg

250117S32.jpg

Industrial production (IP) rose a larger-than-expected 0.9% m/m (0.5% y/y) in December following an upwardly revised 0.2% increase in November (-0.1% initially) and a downwardly revised 0.5% decline in October (-0.4% previously), data from the Federal Reserve Board showed. A 0.3% m/m December increase had been expected in the Action Economics Forecast Survey. The December IP index at 103.2 was the highest since June 2024; it was 4.2% above a low of 99.0 in September 2021 and 8.1% above a low of 95.5 in February 2021. The Fed estimated that increases in aircraft & parts output contributed 0.2 percentage point to December IP growth after the resolution of the Boeing strike. In Q4 2024, IP fell 0.2% q/q after falling 0.2% q/q in Q3 2024, dropping at a 0.6% annualized rate following a 0.8% Q3 annualized rate of decline. IP fell 0.3% in 2024 after rising 0.2% in 2023 and 3.4% in 2022.

By **industry groups**, manufacturing production gained 0.6% (0.03% y/y) in December following an upwardly revised 0.4% increase in November (+0.2% initially) and two consecutive m/m declines. Durable goods production rose 0.4% (-1.2% y/y) in December following a 0.9% rebound in November. This reflected m/m output rises of 6.3% (-5.6% y/y) in aerospace & miscellaneous transportation equipment, 1.7% (-1.9% y/y) in primary metals, 0.9% (-0.4% y/y) in fabricated metal products, and 0.5% (3.0% y/y) in electrical equipment, appliances & components. Notably, aircraft & parts production climbed 11.4% (-9.2% y/y), the largest m/m gain since May 2020, following a 0.7% November rebound. In contrast, the following durable goods categories fell m/m in December, including output drops of 2.0% (-3.7% y/y) in furniture & related products, 1.0% (-4.9% y/y) in miscellaneous durables goods, 0.7% (+3.8% y/y) in computer & electronic products, 0.6% (-5.7% y/y) in motor vehicles & parts, 0.6% (-1.3% y/y) in nonmetallic mineral products, 0.2% (+0.7% y/y) in machinery, and 0.2% (+2.7% y/y) in wood products.

Nondurable goods production rose 0.7% (1.4% y/y) in December after edging up 0.1% in November and October. The December rise reflected m/m output increases of all nondurable goods categories, including 1.6% (1.2% y/y) in petroleum & coal products, 1.5% (5.5% y/y) in printing & related support activities, 1.2% (-7.2% y/y) in apparel & leather goods, 0.8% (5.4% y/y) in chemicals, 0.6% (-1.0% y/y) in food, beverages & tobacco, 0.3% (1.3% y/y) in paper, 0.2% (-4.2% y/y) in plastics & rubber products, and 0.1% (2.3% y/y) in textiles & product mills.

Mining activity rose 1.8% (0.3% y/y) in December following an upwardly revised 0.5% decline in November (-0.9% initially). Utilities output rose 2.1% (4.3% y/y) following an upwardly revised 0.7% November drop (-1.3% initially). They increased for the second time in three months.

By **market groups**, business equipment output rose 1.4% (-4.3% y/y) in December following a 1.4% rise in November and two successive m/m decreases. Materials production advanced 1.2% (1.4% y/y) after virtually unchanged. Construction supplies production increased 0.9% (0.9% y/y) after holding steady. Consumer goods output rose 0.5% (0.3% y/y) in December after a 0.5% rebound, reflecting a 0.4% decline (-5.3% y/y) in durable consumer goods and a 0.7% gain (1.9% y/y) in nondurable consumer goods.

In **special classifications**, factory output of selected high-tech industries rose 1.1% (7.9% y/y) in December after holding steady in November (+0.3% initially) and four straight m/m rises. Manufacturing production excluding selected high-tech industries grew 0.6% (-0.2% y/y) following a 0.4% November rebound and two consecutive m/m declines. Manufacturing production excluding selected high-tech and motor vehicles & parts rose 0.7% (0.3% y/y) after a 0.2% November increase and three straight m/m decreases.

Capacity utilization rose to 77.6% in December, the highest since August, after holding at 77.0% in November (76.8% initially). The Action Economics Forecast Survey forecasted 77.0%. The December reading was 2.1 percentage points below its long-run (1972–2023) average. Manufacturing capacity utilization rose to 76.6% in December, the highest since September, from 76.2% in November (76.0% initially); the December rate was 1.7 percentage points below its long-run average.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

250117T32.jpg

250117U32.jpg

- Dec. IP +0.9% m/m (+0.5% y/y), up for the second straight month; IP Index at a 6-month high.
- Mfg. IP +0.6% m/m, w/ durable goods up 0.4% and nondurable goods up 0.7%.
- Mining activity +1.8% and utilities output +2.1%, up for the second month in three.
- Key categories in market groups all gain.
- Capacity utilization increases to a 4-month-high 77.6%.

U.S. Industrial Production Exceeds Expectations in December

250117F18.jpg

250117G18.jpg

Total housing starts jumped 15.8% m/m to a higher-than-expected 1.499 million units at a seasonally adjusted annual rate (SAAR) in December after declines of 3.7% to 1.294 million in November (-1.8% m/m, 1.289 million initially) and 0.8% to 1.344 million in October (-3.2% m/m, 1.312 million previously), data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected 1.320 million starts for December. The December reading was the first m/m rise since August and the highest level since February 2024. The year-on-year rate was at -4.4% in December, the smallest y/y decline since September and less severe than -14.3% in November; it was +17.0% y/y in December 2023. Starts were 18.0% below a recent peak of 1.828 million in April 2022. During all of 2024, housing starts fell 4.0% after falling 8.4% in 2023 and 3.3% in 2022.

Single-family starts rose 3.3% (-2.6% y/y) to 1.050 million in December on top of a 7.7% rise to 1.016 million in November (1.011 million initially), registering the fourth m/m rise in five months and the highest level since February 2024. They reached a high of 1.222 million in November 2021 and a high of 1.286 in December 2020. Multi-family starts surged 61.5% (-8.4% y/y) to 449,000, the highest level since December 2023, reversing a 30.7% November decrease to 278,000. They reached a high of 624,000 units in November 2022 and a high of 627,000 units in April 2022.

Housing starts gained in all the major regions except in the West. Starts in the Northeast jumped 40.2% (22.7% y/y) to a three-month-high 157,000 in December, the third m/m increase in four months, after a 2.8% rebound in November. Starts in the Midwest recovered 20.0% (1.0% y/y) to 204,000, up for the second month in three, following a 32.5% November slump. Starts in the South advanced 17.7% (0.1% y/y) to 853,000, the highest level since February 2024, following a 10.2% November rise and two consecutive m/m declines. To the downside, starts in the West fell 0.7% (-26.2% y/y) to 285,000 on top of an 11.7% decrease, registering the third m/m fall in four months and the lowest level since July 2024. Notably, the South continued to post the largest level figure (853,000) for housing starts among the four regions. It showed a peak of 1.048 million in April 2022.

Building permits slid 0.7% (-3.1% y/y) to 1.483 million in December, the third m/m slide in four months, following a 5.2% rise to 1.493 million in November (compared to 1.493 million recently revised on December 23 and 1.505 million initially reported on December 18). They reached a high of 1.915 million in January 2022 and a high of 1.883 million in January 2021. Single-family permits rose 1.6% (-2.5% y/y) to 992,000, the third straight m/m rise and the highest level since February 2024, after a 0.5% increase to 976,000. They reached a high of 1.251 million in January 2022 and a high of 1.250 in January 2021. Multi-family permits fell 5.0% (-4.3% y/y) to 491,000, down for the third month in four, after having recovered 15.4% to 517,000. They reached a peak of 813,000 units in February 2023 and a high of 799,000 units in June 2022.

The housing starts and permits figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

250117H18.jpg

250117I18.jpg

- Housing starts +15.8% (-4.4% y/y) to 1.499 mil. in Dec. vs. -3.7% (-14.3% y/y) to 1.294 mil. in Nov.
- Single-family starts highest since Feb. ’24; multi-family starts highest since Dec. ’23.
- Housing starts up m/m and y/y in the Northeast, Midwest and South but down in the West.
- Building permits fall for the third month in four, due to a drop in multi-family permits.

U.S. Housing Starts Rebound in December; Highest Level Since February 2024

Robert Brusca

250117E.jpg

U.K. sales volume for retail sales has been slipping roughly since mid-2024. The 3-month volume index is falling at a 4.4% annual rate over three months. Sales are up at a scant 0.2% annual rate over six months and by 3.5% year-over-year. Passenger car registrations show weakness falling at a 7.6% annual rate over three months, gaining at a 4.6% pave over six months, and then showing contraction at a minor -0.1% rate over 12 months.

**Volume Trends**
Apart from the sequential data, the monthly volume results show a decline in December, a gain in November and a drop in October. The monthly nominal data show small nominal gain in November and December against a sharper nominal decline in October.

U.K. nominal sales QTD relative nominal decline in the fourth quarter with retail sales volumes also show decline dropping at a 2.9% annual rate overall. Passenger car registrations are falling at a 12.4% annual rate in the fourth quarter.

**Surveys and Confidence**
U.K. surveys on retailing for the ‘time of year’ and the ‘volume of orders’ from the Confederation of British Industry (CBI) show sputtering monthly results. The CBI reading for time of year (TOY) and volume of orders (VoO) both show net decline of three months. VoO also falls over six months whereas TOY sales are higher over six months. Both TOY and VoO sales are higher over 12 months. TOY sales are up by 2-index points while VoO sales are up by 28 of their index points. While the year-on-year survey results show short-term agreement, their year-on-year signals seem different. But their long-term ranking results alone again show similarity at the TOY sales log a 21.8 percentile standing vs. VoO that is even weaker at a14-percentile mark. It is an even weaker full-sample standing despite the better 12-month gain. We often see this sort of thing in data comparisons. But if surveys are well-constructed, they usually track but there often are still disparities. That is true here as well and we can nit-pick the details but the overarching message here is that conditions are weak. Consumer confidence from GfK has been volatile over the span but when we rank the confidence index, it stands at 40.5 percentile level, which is stronger than for the surveys but still below its median and barely over half the standing of real retail sales growth.

**Rankings/Standings**
The consumer confidence standing is interesting at 40.5% but it is not ‘close’ to the volume ranking which is at its 77-percentile. The confidence ranking is still slightly below its median. The retail sales ranking is applied to real sales and their 12-month growth rate. The ranking of sales volume is much higher than any ranking registered by CBI surveys or by consumer confidence. Passenger car registrations are weak, too, at a 47.2 percentile standing. In contrast, nominal retail sales have a 60.6 percentile standing. Part of that is the boost they get from the 80.9 percentile standing from the CPI-H, from inflation.

250117.jpg

United Kingdom

U.K. Retail Sales Volumes Slide

Andrew Cates

**Global bond markets**
The sell-off in bond markets has been a global phenomenon. This is illustrated in chart 1 showing the movement in 10-year government bond yields in the US, UK and Germany over the past 12 months. Still, as the chart’s scaling indicates, divergences in yield levels between the US and UK versus Germany suggest different dynamics have been at play. The US and UK, for example, have been leading the sell-off compared with Germany (and other eurozone members).

250116Z1.jpg

**Global inflation expectations**
That suggests that inflation expectations coupled with inflation uncertainty have been a driver of higher yields. Chart 2 below shows the evolution of consensus forecasts for CPI inflation in 2025 across the US, UK, the euro area (and Japan) throughout 2024. Notably, expectations for inflation in the US and UK inflation rose steadily over the year. In contrast, euro area inflation forecasts remained relatively stable, hovering close to the ECB’s target of around 2%. We will focus more on this again below but for the record Japan’s inflation forecasts saw a gradual uptick, at the same time, but remained modest, increasing from 1.5% to just above 2%.

250116Z2.jpg

**Overseas demand**
The role of overseas demand for US government debt in driving US yields higher could also have been significant. Chart 3 below shows the evolution of foreign holdings of US Treasury securities from 2013 to 2024, segmented by key regions: Japan, China, Europe, and the rest of the world. Over the period, total foreign holdings steadily increased, surpassing $9 trillion by 2024. Notably, Japan has now emerged as the largest single holder of US Treasuries, with its share growing significantly, while China’s holdings, though substantial, have showed some decline in recent years. But a new US administration led by President-elect Trump could now be further disrupting this picture. A potential pivot toward more protectionist policies alongside some question marks about the independence of the Fed and the dollar’s role as the world’s reserve currency could be combining to undermine overseas demand for safe-haven assets in the United States.

250116Z3.jpg

**Japan**
Japan is worthy of some further separate comment in this regard. That’s because its capital flows are highly significant for global financial markets due to Japan's status as one of the world’s largest net creditor nations. Changes in Japanese capital flows—such as a shift back to domestic assets driven by rising yields or inflation expectations—usually create ripple effects, influencing global bond yields, currency markets (particularly the yen), and risk sentiment. This is why, notwithstanding relatively stable consensus inflation forecasts for 2025 that we noted above, the sharp rise in longer-term market-based inflation forecasts is noteworthy. Chart 5 below illustrates Haver’s calculations for the 5-year breakeven inflation rate in Japan from 2019 to 2024, and shows a sustained increase in those expectations in recent years. That follows several years of subdued expectations driven by entrenched deflationary pressures and weak demand. That the 5-year breakeven inflation rate crossed 2% toward the end of last year is also noteworthy given the Bank of Japan’s inflation objectives. For it potentially signals that monetary policy is still loose and that a further campaign to normalise policy beckons in the months ahead.

250116Z4.jpg

**Quantitative tightening** 
Central bank monetary policies more generally are also worthy of some discussion and particularly their balance sheet policies. Chart 5 below depicts the relationship between central banks' asset holdings as a percentage of GDP (a four-quarter change of an unweighted average for the US, Japan, and the euro area) and the real 10-Year bond yield in the US. The chart underscores the close connection between central bank asset purchases and real yields. In combination with looser US fiscal policy – and a higher degree of government bond issuance – the underlying supply and demand dynamics in the US Treasury market (and other government debt markets) have been shifting. Reduced demand from central banks, in other words, has coincided with additional supply from governments, and thereby amplifying upward pressure on real yields. 


250116Z5.jpg

**US and UK inflation**
The key takeaway from this discussion is that a confluence of factors has driven global yields higher in recent weeks. Inflation and monetary policy concerns, fiscal policy uncertainty, and shifts in capital flows have all likely contributed. As highlighted earlier, the trajectory of yields from here will hinge on incoming economic data and how policymakers respond. On that first point, however, it was notable that this week brought some encouraging news: the latest CPI inflation reports from both the US and UK came in weaker than expected. Notably, the details were also reassuring, with service-sector inflation showing further signs of moderation in both economies (see chart 6 below). This could ease some of the pressure on central banks to keep monetary policy restrictive in the period immediately ahead.

250116Z6.jpg

A steep sell-off in global bond markets has dominated financial headlines over the past week or so, drawing intense scrutiny from investors and policymakers alike (chart 1). The implications of this for the global economy, however, will depend on the underlying drivers that have been fuelling the rout. With our charts this week, we examine the data to identify some of the likely culprits. Inflation concerns are front and centre, with rising consumer prices in recent months (chart 2) reigniting fears of tighter monetary policy. Waning overseas demand, particularly from Japan and China (charts 3 and 4), may also be playing a significant role. Meanwhile, quantitative tightening (chart 5) has possibly siphoned liquidity from financial markets, while fiscal policy uncertainties are further rattling investor confidence. The easy conclusion is that all these factors—ranging from inflationary pressures to fiscal risks—are complicit to varying degrees. However, whether this marks the beginning of a broader reckoning or merely a passing squall hinges on how incoming data now evolve and how policymakers respond to these challenges. On that first point, weaker-than-expected inflation data from the US and UK this week appear to have stopped the rot for now (chart 6). On the latter, a new US administration could add another layer of unpredictability and the coming weeks could prove pivotal in shaping market expectations and the trajectory of the global economy.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/6C34mSDIvw6rPyTLMDSYso?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Yielding Conclusions

250116N9.jpg

250116O9.jpg

Total retail sales increased a less-than-expected 0.4% m/m in December after an upwardly revised rises of 0.8% in November (+0.7% initially) and 0.6% in October (+0.5% previously), data from the U.S. Census Bureau showed. The December m/m reading was the fourth consecutive m/m gain and the fifth in six months. A 0.6% m/m December increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 3.9% in December from 4.1% in November. The latest y/y figure, below 5.2% in December 2023, was also lower than a high of 17.1% in February 2022 and significantly below a peak of 52.5% in April 2021. During all of 2024, retail sales rose 2.6% after gaining 3.6% in 2023 and 9.1% in 2022.

Excluding motor vehicles & parts, retail sales rose 0.4% (2.9% y/y) in December after an unrevised 0.2% increase in November, registering the fourth successive m/m rise and the sixth in seven months. A 0.5% m/m December increase had been expected. Sales of motor vehicles & parts grew 0.7% (8.4% y/y), the fourth straight m/m gain, on top of a 3.1% November increase; this compared to a 3.1% rise (7.2% y/y) in unit light vehicle sales following a 3.0% November increase.

Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, rose 0.7% (4.1% y/y) in December, up for the third month in four, following a 0.4% rise in November. These sales are used in the construction of personal consumption expenditures in NIPA accounts. Nonauto sales excluding gasoline & building materials grew 0.5% (3.8% y/y), the fourth consecutive m/m gain, after a 0.3% November increase.

Sales by category were mostly positive in December. Miscellaneous store sales jumped 4.3% (3.7% y/y) in December, the first m/m gain since September, reversing a 3.9% drop in November. Sporting goods, hobby shop, book & music store sales rose 2.6% (1.8% y/y), the first m/m rise in three months, following a 0.3% November decline. Furniture & home furnishing store sales advanced 2.3% (8.4% y/y), the eighth m/m gain in nine months, on top of a 1.3% November increase. Clothing & accessory store sales rebounded 1.5% (2.4% y/y), the third m/m gain in four months, following a 0.8% November drop. Gasoline station sales rose 1.5% (-1.2% y/y) in December after rising 0.2% in the prior two months. Electronics & appliance store sales rose 0.4% (5.8% y/y), the third straight m/m rise, after a 0.9% November increase. General merchandise store sales rose 0.3% (2.6% y/y), up for the third month in four, after holding steady in November; within this grouping, department store sales edged up 0.1% (-1.8% y/y) after falling 0.4% in November and October. Nonstore retail sales grew 0.2% (6.0% y/y), the third m/m increase in four months, after a 1.7% November gain.

To the downside, building materials & garden equipment store sales slid 2.0% (-1.8% y/y), the third consecutive m/m slide, on top of a 0.8% November decrease.

In the nondiscretionary sales categories, health & personal care store sales fell 0.2% (+3.4% y/y) in December, down for the second month in three, following a 0.3% increase in November. Food & beverage store sales, however, rose 0.8% (3.1% y/y), the third m/m rise in four months, reversing a 0.2% November decline.

Consumers seemed to eat out less frequently in December amid still-high inflation (December CPI +0.4% m/m, +2.9% y/y; core CPI +0.2% m/m, +3.2% y/y). Restaurant & drinking place sales fell 0.3% (+2.4% y/y) in December, the first m/m fall since March 2024, following an upwardly revised 0.1% uptick in November (-0.4% initially).

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economic Forecast Survey in **AS1REPNA**.

250116P9.jpg

250116Q9.jpg

- December total retail sales +0.4% (+3.9% y/y), w/ m/m rises in most categories.
- Ex-auto sales +0.4% (+2.9% y/y); auto sales +0.7% (+8.4% y/y).
- Rebounds in miscellaneous store sales (+4.3%) and sporting goods store sales (+2.6%).
- Drops in building materials & garden equipt. store sales (-2.0%) and restaurant & drinking place sales (-0.3%).

Economy in Brief: June 2003

Jump to: