Carol Stone, CBE

<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/060531c.jpg" width="353">
Economic growth in South Asia was firm in Q1, according to reports out today from government statistics offices in India, Malaysia and Philippines. India, especially, with a 9.3% year/year gain in GDP, saw its strongest quarter since the end of 2003. In Malaysia, growth appears uneventful, with year-on-year gains hovering between 5% and 7%, but after the steep recession of 1998 and the slowdown in 2001, this looks attractive. In the Philippines, the latest quarter was up a modest 0.8% from Q4 but 5.5% from the year earlier. This pace compares to a 4.9% average over the past 5 years. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531d.jpg" width="353">
In India, agriculture continues to dominate the economy, although as seen in the second graph, the trade and transport sector surpassed it in 2002; that industrial segment also continues to grow rapidly now, surging 12.9% in Q1. The same group also includes hotels and communications; we&#39;d suspect that as the Indian infrastructure builds, &quot;communications&quot; would be expanding rapidly. The same holds for construction; it is smaller in absolute size, but has sustained better than 10% average growth for the last five years. Other sectors are chasing along, too. Manufacturing gained 8.9% over the last four quarters, while finance, insurance and business services was up 10.8%.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531e.jpg" width="353">
The Malaysian economy has the interesting feature that exports are larger than total GDP -- by a sizable amount. In Q1, exports were 82.0 billion ringgit (1987 prices) while GDP was 68.1 billion. See the third graph. Imports are sizable too, of course, at 77.8 billion ringgit. So goods and services are imported into the country, processed, and shipped out. This chain of events yielded GDP growth of 2.2% in Q1 alone (from Q4), the largest single quarter since early 2000. The domestic economy is fairly vibrant; it expanded 5.7% in the quarter, pushed by an 11.1% surge in fixed investment. But it is also more volatile, with Q4 down 3.7%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531f.jpg" width="353">
In the Philippines, quarterly movements in individual sectors are frequently uneven. In Q1, total GDP slowed to 0.8% from 1.4% growth in Q4. Agriculture, mining, manufacturing, trade and real estate contributed to the slowing, transportation and private services were steady to somewhat slower, but construction, finance and government picked up considerably. On the demand side, total domestic demand accelerated to 1.4% growth from -0.1% in Q4; net exports also added to growth through a much smaller deficit. But the statistical discrepancy turned sharply negative, so it is hard to identify the genuine demand-side source of the slower pace in total GDP. At the same time, gains in prior quarters meant, as noted above, that the overall economy still saw 5.3% year-on-year growth. See in the last graph how the lurches in quarter-to-quarter performance still produce the respectable yearly pace.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GDP: % Changes*</th>
<th scope="col">Q1 2006</th>
<th scope="col">Q4 2005</th>
<th scope="col">Q3 2005</th>
<th scope="col">Year/ Year</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">India</td>
<td>2.7</td>
<td>1.1</td>
<td>1.8</td>
<td>9.3</td>
<td>8.2</td>
<td>7.3</td>
<td>7.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing </td>
<td>3.4</td>
<td>2.6</td>
<td>1.5</td>
<td>8.9</td>
<td>8.8</td>
<td>8.0</td>
<td>7.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Trade, Hotels,&nbsp; Transport, Etc.</td>
<td>4.4</td>
<td>2.1</td>
<td>2.5</td>
<td>12.9</td>
<td>10.9</td>
<td>11.4</td>
<td>10.9</td>
</tr>
<tr>
<td class="firstcol">Finance, Business Services, Etc.</td>
<td>1.3</td>
<td>1.7</td>
<td>3.1</td>
<td>10.8</td>
<td>9.7</td>
<td>7.8</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Malaysia</td>
<td>2.2</td>
<td>1.1</td>
<td>1.7</td>
<td>5.3</td>
<td>5.2</td>
<td>7.2</td>
<td>5.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Philippines</td>
<td>0.8</td>
<td>1.4</td>
<td>0.7</td>
<td>5.5</td>
<td>5.0</td>
<td>6.2</td>
<td>4.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Economic growth in South Asia was firm in Q1, according to reports out today from government statistics offices in India, Malaysia and Philippines. India, especially, with a 9.3% year/year gain in GDP, saw its strongest quarter since [...]

Q1 GDP Strong in India; Growth Uneven but on Trend in Malaysia & the Philippines

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/060531g.jpg" width="353">
The Nat&#39;l Employment Report published by ADP, the payroll processors for many employers, indicated that nonfarm private payrolls in May increased 122,000.
For April, a 178,000 rise in ADP&#39;s nonfarm private payrolls was accompanied by a 131,000 rise private nonfarm payrolls as published by the Bureau of Labor Statistics. The May figure from BLS will be published Friday.
ADP has compiled the estimate from its database of individual companies&#39; payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.
According to ADP and Macro Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90.
The ADP National Employment Report data is maintained in Haver&#39;s USECON database; historical data go back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector, which grew an average of 11,333 per month over the last year.
The full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/PDF/ADP_NER_Report_May.pdf">here</a>, and the ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.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/@EB/@EB25/@EB25.HTM">LAXEPA@USECON</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nonfarm Private Payroll Employment (Chg.)</td>
<td>122,000</td>
<td>178,000</td>
<td>1.9%</td>
<td>1.7%</td>
<td>1.3%</td>
<td>-0.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Nat'l Employment Report published by ADP, the payroll processors for many employers, indicated that nonfarm private payrolls in May increased 122,000. For April, a 178,000 rise in ADP's nonfarm private payrolls was accompanied by [...]

ADP Nat'l Employment Report: Slimmer Gain in May Payrolls

<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/060531a.jpg" width="353">
The total number of mortgage applications fell another 1.9% last week on the heels of the prior week&#39;s 6.0% decline. The weakness dropped the average level in May 2.2% below April and 30.0% below last June.
Purchase applications fell another 0.2% w/w after the 7.1% w/w drop the prior week. That lowered the May average 0.8% versus April and 17.5% versus last July.
During the last ten years there has been a negative 80% correlation between the interest rate level on 30-year financing and purchase applications while during those years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
A 4.8% w/w drop in applications to refinance added to the 4.3% decline during the prior week. That lowered the May level 4.1% below the April average which fell 4.1% from March. The May level was 43.8% below last June.
The effective interest rate on a conventional 30-year mortgage backed up two basis points to 6.86% and left the May average at 6.86%, up sharply from the 5.81% low last June. The rate on 15-year financing was stable at 6.52%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities and during the last ten years there has been a (negative) 82% correlation between purchase applications and the effective rate on a 30-Year mortgage.
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 <a href="http://www.mbaa.org">here</a>.
Inversion, a speech by St. Louis Federal Reserve Bank President William Poole, can be found <a href="http://www.stlouisfed.org/news/speeches/2006/05_18_06.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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">05/26/06</th>
<th scope="col">05/19/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>541.9</td>
<td>552.6</td>
<td>-23.6%</td>
<td>708.6</td>
<td>735.1</td>
<td>1,067.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>395.5</td>
<td>396.4</td>
<td>-14.5%</td>
<td>470.9</td>
<td>454.5</td>
<td>395.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,409.0</td>
<td>1,480.5</td>
<td>-34.2%</td>
<td>2,092.3</td>
<td>2,366.8</td>
<td>4,981.8</td>
</tr>
</tbody>
</table>
</body>
</html>

The total number of mortgage applications fell another 1.9% last week on the heels of the prior week's 6.0% decline. The weakness dropped the average level in May 2.2% below April and 30.0% below last June. Purchase applications fell [...]

Mortgage Applications Off

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531b.jpg" width="353">
Chain store sales fell sharply last week. The 1.0% w/w decline followed a similar 0.8% drop the prior week, reported the International Council of Shopping Centers (ICSC)-UBS.
Declines during three of the four weeks this month pulled the average level of May sales down 0.6% from the April average which rose 1.6% from March. During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS continued its recent decline with another 0.6% drop. The indicator was down 2.7% versus one year ago and 4.5% from the recent peak in early January.
Inflation, Banking and Economic Growth from the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/com2006/0515.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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">05/27/06</th>
<th scope="col">05/20/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>467.5</td>
<td>472.0</td>
<td>3.6%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


</html>

Chain store sales fell sharply last week. The 1.0% w/w decline followed a similar 0.8% drop the prior week, reported the International Council of Shopping Centers (ICSC)-UBS. Declines during three of the four weeks this month pulled [...]

Chain Store Sales Fell Sharply

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531g.jpg" width="353">
The Nat&#39;l Employment Report published by ADP, the payroll processors for many employers, indicated that nonfarm private payrolls in May increased 122,000.
For April, a 178,000 rise in ADP&#39;s nonfarm private payrolls was accompanied by a 131,000 rise private nonfarm payrolls as published by the Bureau of Labor Statistics. The May figure from BLS will be published Friday.
ADP has compiled the estimate from its database of individual companies&#39; payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.
According to ADP and Macro Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90.
The ADP National Employment Report data is maintained in Haver&#39;s USECON database; historical data go back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector, which grew an average of 11,333 per month over the last year.
The full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/PDF/ADP_NER_Report_May.pdf">here</a>, and the ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.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/@EB/@EB25/@EB25.HTM">LAXEPA@USECON</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nonfarm Private Payroll Employment (Chg.)</td>
<td>122,000</td>
<td>178,000</td>
<td>1.9%</td>
<td>1.7%</td>
<td>1.3%</td>
<td>-0.4%</td>
</tr>
</tbody>
</table>
Chain Store Sales Fell Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 31, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531b.jpg" width="353">
Chain store sales fell sharply last week. The 1.0% w/w decline followed a similar 0.8% drop the prior week, reported the International Council of Shopping Centers (ICSC)-UBS.
Declines during three of the four weeks this month pulled the average level of May sales down 0.6% from the April average which rose 1.6% from March. During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS continued its recent decline with another 0.6% drop. The indicator was down 2.7% versus one year ago and 4.5% from the recent peak in early January.
Inflation, Banking and Economic Growth from the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/com2006/0515.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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">05/27/06</th>
<th scope="col">05/20/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>467.5</td>
<td>472.0</td>
<td>3.6%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Mortgage Applications Off 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 31, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531a.jpg" width="353">
The total number of mortgage applications fell another 1.9% last week on the heels of the prior week&#39;s 6.0% decline. The weakness dropped the average level in May 2.2% below April and 30.0% below last June.
Purchase applications fell another 0.2% w/w after the 7.1% w/w drop the prior week. That lowered the May average 0.8% versus April and 17.5% versus last July.
During the last ten years there has been a negative 80% correlation between the interest rate level on 30-year financing and purchase applications while during those years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
A 4.8% w/w drop in applications to refinance added to the 4.3% decline during the prior week. That lowered the May level 4.1% below the April average which fell 4.1% from March. The May level was 43.8% below last June.
The effective interest rate on a conventional 30-year mortgage backed up two basis points to 6.86% and left the May average at 6.86%, up sharply from the 5.81% low last June. The rate on 15-year financing was stable at 6.52%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities and during the last ten years there has been a (negative) 82% correlation between purchase applications and the effective rate on a 30-Year mortgage.
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 <a href="http://www.mbaa.org">here</a>.
Inversion, a speech by St. Louis Federal Reserve Bank President William Poole, can be found <a href="http://www.stlouisfed.org/news/speeches/2006/05_18_06.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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">05/26/06</th>
<th scope="col">05/19/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>541.9</td>
<td>552.6</td>
<td>-23.6%</td>
<td>708.6</td>
<td>735.1</td>
<td>1,067.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>395.5</td>
<td>396.4</td>
<td>-14.5%</td>
<td>470.9</td>
<td>454.5</td>
<td>395.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,409.0</td>
<td>1,480.5</td>
<td>-34.2%</td>
<td>2,092.3</td>
<td>2,366.8</td>
<td>4,981.8</td>
</tr>
</tbody>
</table>
Q1 GDP Strong in India; Growth Uneven but on Trend in Malaysia & the Philippines 
by <a href="/comment/Stone.html">Carol Stone</a> May 31, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531c.jpg" width="353">
Economic growth in South Asia was firm in Q1, according to reports out today from government statistics offices in India, Malaysia and Philippines. India, especially, with a 9.3% year/year gain in GDP, saw its strongest quarter since the end of 2003. In Malaysia, growth appears uneventful, with year-on-year gains hovering between 5% and 7%, but after the steep recession of 1998 and the slowdown in 2001, this looks attractive. In the Philippines, the latest quarter was up a modest 0.8% from Q4 but 5.5% from the year earlier. This pace compares to a 4.9% average over the past 5 years. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531d.jpg" width="353">
In India, agriculture continues to dominate the economy, although as seen in the second graph, the trade and transport sector surpassed it in 2002; that industrial segment also continues to grow rapidly now, surging 12.9% in Q1. The same group also includes hotels and communications; we&#39;d suspect that as the Indian infrastructure builds, &quot;communications&quot; would be expanding rapidly. The same holds for construction; it is smaller in absolute size, but has sustained better than 10% average growth for the last five years. Other sectors are chasing along, too. Manufacturing gained 8.9% over the last four quarters, while finance, insurance and business services was up 10.8%.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531e.jpg" width="353">
The Malaysian economy has the interesting feature that exports are larger than total GDP -- by a sizable amount. In Q1, exports were 82.0 billion ringgit (1987 prices) while GDP was 68.1 billion. See the third graph. Imports are sizable too, of course, at 77.8 billion ringgit. So goods and services are imported into the country, processed, and shipped out. This chain of events yielded GDP growth of 2.2% in Q1 alone (from Q4), the largest single quarter since early 2000. The domestic economy is fairly vibrant; it expanded 5.7% in the quarter, pushed by an 11.1% surge in fixed investment. But it is also more volatile, with Q4 down 3.7%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060531f.jpg" width="353">
In the Philippines, quarterly movements in individual sectors are frequently uneven. In Q1, total GDP slowed to 0.8% from 1.4% growth in Q4. Agriculture, mining, manufacturing, trade and real estate contributed to the slowing, transportation and private services were steady to somewhat slower, but construction, finance and government picked up considerably. On the demand side, total domestic demand accelerated to 1.4% growth from -0.1% in Q4; net exports also added to growth through a much smaller deficit. But the statistical discrepancy turned sharply negative, so it is hard to identify the genuine demand-side source of the slower pace in total GDP. At the same time, gains in prior quarters meant, as noted above, that the overall economy still saw 5.3% year-on-year growth. See in the last graph how the lurches in quarter-to-quarter performance still produce the respectable yearly pace.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GDP: % Changes*</th>
<th scope="col">Q1 2006</th>
<th scope="col">Q4 2005</th>
<th scope="col">Q3 2005</th>
<th scope="col">Year/ Year</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">India</td>
<td>2.7</td>
<td>1.1</td>
<td>1.8</td>
<td>9.3</td>
<td>8.2</td>
<td>7.3</td>
<td>7.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing </td>
<td>3.4</td>
<td>2.6</td>
<td>1.5</td>
<td>8.9</td>
<td>8.8</td>
<td>8.0</td>
<td>7.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Trade, Hotels,&nbsp; Transport, Etc.</td>
<td>4.4</td>
<td>2.1</td>
<td>2.5</td>
<td>12.9</td>
<td>10.9</td>
<td>11.4</td>
<td>10.9</td>
</tr>
<tr>
<td class="firstcol">Finance, Business Services, Etc.</td>
<td>1.3</td>
<td>1.7</td>
<td>3.1</td>
<td>10.8</td>
<td>9.7</td>
<td>7.8</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Malaysia</td>
<td>2.2</td>
<td>1.1</td>
<td>1.7</td>
<td>5.3</td>
<td>5.2</td>
<td>7.2</td>
<td>5.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Philippines</td>
<td>0.8</td>
<td>1.4</td>
<td>0.7</td>
<td>5.5</td>
<td>5.0</td>
<td>6.2</td>
<td>4.9</td>
</tr>
</tbody>
</table>


</html>

<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/060530a.jpg" width="353">
Consumer confidence, as reported by the Conference Board, fell less than expected in May from what was a four year high in April. The 6.0% decline to 103.2 from a revised 109.9 contrasted with Consensus expectations for a decline to 100.0 and compared to a 9.5% decline in the University of Michigan&#39;s May Index of Consumer Sentiment.
During the last twenty years there has been a 52% correlation between the level of consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060530b.jpg" width="353">
The index of consumers&#39; expectations slumped 9.3% (-10.4% y/y). Expectations for employment in six months slipped but expectations for an increase in income fell to the lowest level (16.6%) since 2003. Expectations for the inflation rate in twelve months rose to 5.6% versus a recent low of 4.8% in March.
Consumers&#39; assessment of the present situation reversed the increase in April with a 2.7% decline (+12.5% y/y). The percentage of respondents who viewed jobs as plentiful (28.6%) fell moderately but the percentage that viewed jobs as hard to get (20.5%) rose to the highest level this year.
Consumers&#39; appraisal of current business conditions fell as a lesser 28% viewed it as good and an increased 15.4% viewed it as bad.
The Conference Board&#146;s survey isconducted 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">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>103.2</td>
<td>109.8</td>
<td>12.4%</td>
<td>100.3</td>
<td>96.1</td>
<td>79.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer confidence, as reported by the Conference Board, fell less than expected in May from what was a four year high in April. The 6.0% decline to 103.2 from a revised 109.9 contrasted with Consensus expectations for a decline to [...]

Consumer Confidence Fell Less Than Expected

<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/060526e.jpg" width="353">
The Bank of Japan today reported on Japan&#39;s international investment position for year-end 2005. Total assets abroad stood at &yen;506.2 trillion, up 16.7% from the end of 2004. All of the major asset categories climbed by significant amounts, such as direct investment abroad, which was up 18.2%, and holdings of equity securities, which rose 26.9%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060526f.jpg" width="353">
We find it interesting that both of the equity components, direct investment and equity securities holdings, constitute only moderate amounts of total assets abroad. Equities were 5.6% of total international assets at the end of 1995; while they have increased, they still constitute just 9.5% of Japanese investors&#39; holdings abroad. Direct investment has ranged between 8.4% and 10.4% of total assets over the 11-year history of these data; at the end of 2005, this item was 9% of the total. It was also right at 9% of Japanese GDP for the year. In contrast, US direct ownership interests abroad constituted 26.2% of total US assets abroad and 20.2% of US GDP in 2004 (latest available).
Foreign investors have interests in Japan, of course, and at the end of 2005, these totaled &yen;325.9 trillion, up a sizable 31.2% from year-end 2004. The gain was concentrated in equity securities, which increased 71.6%, helped by the 40.2% surge in Japanese stock prices (measured by the Nikkei 225). Foreign direct investment in Japan rose 17.9%, but it is a much smaller amount, only &yen;11.9 billion.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060526g.jpg" width="353">
With the big gain in the value of liabilities to foreigners, Japan&#39;s net investment position actually decreased in 2005, falling 2.7% to &yen;180.7 billion. Sometimes such a movement is seen as unhealthy for a country. But on this occasion, it seems more to reflect the emerging improvement in Japan that makes it more attractive for investment.
In releasing these data today, the Bank of Japan added industry and country detail. Haver Analytics will be adding these data to the JAPAN database soon. They will greatly enhance the understanding Japan&#39;s capital flows and values in world markets.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Japan: End of Year, Bil.&yen;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2000</th>
<th scope="col">1995</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Assets Abroad</td>
<td>506,191</td>
<td>433,864</td>
<td>385,538</td>
<td>341,206</td>
<td>270,738</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Direct Investment</td>
<td>45,605</td>
<td>38,581</td>
<td>35,932</td>
<td>31,993</td>
<td>24,520</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Portfolio Investment</td>
<td>249,493</td>
<td>209,247</td>
<td>184,353</td>
<td>150,115</td>
<td>88,257</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Equity</td>
<td>48,200</td>
<td>37,972</td>
<td>29,394</td>
<td>30,133</td>
<td>15,040</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Debt Securities</td>
<td>201,294</td>
<td>171,275</td>
<td>154,959</td>
<td>119,982</td>
<td>73,217</td>
</tr>
<tr>
<td class="firstcol">Domestic Liabilities</td>
<td>325,942</td>
<td>248,067</td>
<td>212,720</td>
<td>208,159</td>
<td>186,666</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Direct Investment</td>
<td>11,903</td>
<td>10,098</td>
<td>9,610</td>
<td>5,782</td>
<td>3,448</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Portfolio Investment</td>
<td>181,959</td>
<td>120,091</td>
<td>92,873</td>
<td>101,609</td>
<td>56,379</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Loans</td>
<td>98,105</td>
<td>90,776</td>
<td>83,665</td>
<td>76,212</td>
<td>97,759</td>
</tr>
<tr>
<td class="firstcol">Net Assets</td>
<td>180,699</td>
<td>185,797</td>
<td>172,818</td>
<td>133,047</td>
<td>84,072</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bank of Japan today reported on Japan's international investment position for year-end 2005. Total assets abroad stood at ¥506.2 trillion, up 16.7% from the end of 2004. All of the major asset categories climbed by significant [...]

Japan's Net Investment Position Eased in 2005 as the Value of Foreign Investment Surged

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

Chinese economy on downtrend could threaten global economy

Working age population labor force participation near all-time high as retirements increase

Blue Chip forecasters look for widespread policy rate cuts just ahead

Flash June PMIs point to a widespread slowdown apart from the US

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

241211L4.jpg

241211M4.jpg

The Consumer Price Index increased 0.3% during November, up from four consecutive months of 0.2% gain. Expectations had been for a 0.2% rise in the Action Economics Forecast Survey. The y/y increase picked up to 2.7% from 2.6% in October and was the quickest rise in four months. The three-month increase rose to 3.0% (AR) from 2.5% but remained below the 4.6% high in April of this year. Prices excluding food & energy rose an expected 0.3% for the fourth consecutive month. Core consumer prices increased 3.7% (AR) during the last three months, up from 1.6% in July, and 3.3% y/y. Food prices rose 0.4% last month (2.4% y/y) after a 0.2% gain while energy prices rose 0.2% (-3.2% y/y) after holding steady in October.

The CPI less food, energy and shelter, another measure of core pricing power, rose 0.3% after a 0.2% gain. The 2.2% y/y rise was increased from a July low of 1.7% but remained below the 7.6% y/y peak in February 2022. It compared to a low of 0.3% y/y in May 2020.

Services costs less energy rose a steady 0.3% in November (4.6% y/y). Shelter costs rose 0.3% following a 0.4% rise in October. Its 4.7% y/y rise compares to an 8.2% peak in March 2023. Owners’ equivalent rent of primary residences increased 0.2% (4.9% y/y), following a 0.4% rise and was the weakest increase since April 2021. Rents of primary residences rose a similarly depressed 0.2% (4.4% y/y) after two consecutive months of 0.3% rise, but the cost of lodging away from home surged 3.2% (3.7% y/y) following a 0.4% October gain. Transportation service prices held steady last month (+7.1% y/y) after rising 0.4% in October, as public transportation prices also were unchanged (2.9% y/y) after a 2.4% October surge. Medical care service costs rose 0.4% (3.7% y/y) the same as in October. Education & communication prices eased 0.2% (+1.8% y/y) for the second straight month. Recreation services prices rose 0.7% (3.5% y/y), the same as in October.

During November, the CPI for goods less food & energy increased 0.3% (-0.6% y/y) after holding steady in October. Home furnishings prices rose 0.7% (-1.0% y/y), as appliance costs also rose 0.7% (-1.0% y/y).  Apparel costs rose 0.2% (1.1% y/y) after a 1.5% decline. Education & communication product costs fell 1.1% (-5.4% y/y) the same as in October while medical care product prices declined 0.1% (NSA, +0.4% y/y) in November. Prices for recreation products weakened 0.5% (-1.5% y/y), the fourth decline in five months. Transportation product prices rose 0.9% (-1.4% y/y) after improving 0.8%. New vehicle prices rose 0.6% (-0.7% y/y) after holding steady while used car & truck prices strengthened 2.0% (-3.4% y/y) after a 2.7% rise.

Food prices rose 0.4% (2.4% y/y) in November following a 0.2% October increase. Egg prices rebounded 8.2% (37.5% y/y) after a 6.4% decline. Meat, poultry & fish prices rebounded 1.1% (1.5% y/y) after falling 0.8% while cereal & bakery product prices weakened 1.1% (-0.5% y/y) after a 1.0% rise. Fruit & vegetable prices rose 0.2% (1.1	% y/y) after increasing 0.4%, while dairy prices eased 0.1% (+1.2% y/y) after rising 1.0% in October. Nonalcoholic beverage prices rose 1.5% (2.8% y/y) after a 0.4% October rise.

Energy prices rose 0.2% (-3.2% y/y) in November after holding steady in October. Gasoline prices rose 0.6	% (-8.1% y/y) after three straight monthly declines. Amongst other energy products, fuel oil & propane prices rose 0.4% (-10.7% y/y) after declining 2.2%. Electricity prices eased 0.4% (3.1% y/y) after a 1.2% gain, while natural gas prices jumped 1.0% (1.8% y/y) following a 0.3% October gain.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

241211N4.jpg

241211O4.jpg

- Food prices pick up.
- Services price gains remain steady.
- Core goods prices pick up.

U.S. CPI Picks Up Modestly in November; Core Prices Rise Steadily

241211F12.jpg

241211G12.jpg

The U.S. Treasury Department reported a U.S. government budget deficit of $624.2 billion budget deficit for the first two months of FY 2025 after a $380.6 billion deficit for the first two months of FY’24. For November alone, the government ran a budget deficit of $366.8 billion, which compared to a deficit of $314.0 billion twelve months earlier. The Action Economics Forecast Survey expected a $356.5 billion deficit in November.

Overall revenues this fiscal year so far declined 7.3% y/y as individual income tax receipts fell 11.6% y/y. The level of corporate tax receipts nearly halved y/y. Social insurance revenues increased 7.4% y/y and excise taxes increased 34.0% y/y in FY’25. Customs duties rose 6.1% y/y in the first two months of FY’15.

Federal government outlays increased 18.3% y/y in early FY’25 after a 16.7% rise early in FY’24. Defense spending rose 13.7% y/y, as it did early in FY’24. Social Security outlays rose 6.9% y/y after rising 12.0% y/y in FY’24. Interest payments rose 8.0% y/y in FY’25 after a 63.7% rise a year earlier. Health program spending rose 12.0% y/y after holding steady early in FY’24 while Medicare payments doubled y/y. Income security outlays rose 31.8% y/y compared to a 15.1% y/y decline in the first two months of FY’24.

Haver's data on Federal Government receipts & outlays are contained in **USECON**. The expectations figure is in the **AS1REPNA** database.


241211H12.jpg

241211I12.jpg

- Personal income tax receipts weaken.
- Corporate tax payments roughly halve y/y.
- Social Security spending fuels outlay growth.

U.S. Government Budget Deficit Deepens So Far in FY 2025

Kathleen Stephansen, CBE

241211A5.jpg

241211B5.jpg

Mortgage applications in the week ended December 6 increased 5.4% (15.9% y/y) after rising 2.8% (18.1% y/y) in the week ended November 29. Applications for loans to purchase a house dropped 4.1% (+3.5% y/y) in the December 6 week, after a rise of 5.6% (11.8% y/y) in the November 29 week, while applications to refinance a loan surged 27.2% (42.2% y/y) in the latest week after declining 0.6% (+33.5% y/y) the week before. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey and the amounts quoted here are seasonally adjusted.

The effective interest rate on a 30-year fixed rate loan was 6.86% in the week ended December 6, down slightly from 6.89% in the November 29 week. The rate on a 5-year ARM dropped 50bps to 5.96% in the latest week from 6.46% in the November 29 week, still higher than 5.84% in mid-September. The rate on a 30-year jumbo loan was 6.94% in the week ended December 6, down slightly from 6.96% in the November 29 week, but slightly higher than 6.90% in mid-October.

The share of applications to refinance an existing mortgage was 46.8% in the December 6 week, sharply higher than the 38.7% share in the November 29 week. The largest share in recent months was 55.7% the week of September 20. The share of applications for ARMs was 5.3% in the latest week, down from 6.0% in the November 29 week. The last time the share was 5.3% was in the week ended February 25, 2022.

The average loan size in the December 6 week was $368,200, down 2.5% from $377,600 in the November 29 week, and up 3.6% from a year ago. The average size of an application for a loan to purchase a house was $416,200 in December 6 week, down from $431,900 in the week before, while the average size of an application to refinance an existing loan increased to $313,600 in the latest week from $291,500 in the November 29 week.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Applications to purchase a house drop, while applications to refinance surge.
- Slight decrease in rates on 30-year fixed-rate loans.
- Average loan size decreases modestly.

U.S. Mortgage Applications Rise in the December 6 Week

241210N1.jpg

241210O1.jpg

U.S. nonfarm business productivity (output per hour) increased an unrevised 2.2% (SAAR) during Q3’24 after a 2.1% rise in Q2 and a 0.7% Q1 gain. The figure matched expectations in the Action Economics Survey. The 2.0% y/y increase remained below its 2.7% gain in 2023 (Q4/Q4) but was improved from a 1.4% decline in 2022. It also was greatly improved versus the 1.2% average between 2009 and 2019. Nonfarm business output increased 3.5% (2.8% y/y) after a 3.0% gain, revised from 3.5%, while hours-worked rose 1.2% (0.7% y/y) after increasing 0.9%.

Compensation growth slowed to 3.1% (4.3% y/y), revised from 4.2%, after a slightly revised 4.8% gain. As a result, unit labor costs grew 0.8% (2.2% y/y) last quarter, revised from 1.9% after a 1.1% decline, revised from a 2.4% increase. The Action Economics survey expected unit labor costs to rise 1.6% last quarter.

In the manufacturing sector, productivity in Q3 improved 0.9% (0.6% (y/y), revised from 1.0%, after rising a minimally changed 0.2% in Q2 and falling 0.7% in Q1. Compensation grew 2.6% (2.4% y/y), revised from 6.4%, following a 5.6% decline in Q2, revised from a 6.2% rise. Unit labor costs rose 1.7% (1.8% y/y), revised from 5.3%, after a 5.8% fall, revised from a 5.8% increase.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

241210P1.jpg

241210Q1.jpg

- Annual increase remains below last year’s gain.
- Compensation growth dips.
- Increase in unit labor costs slows.

U.S. Productivity Growth Is Steady & Unrevised in Q3’24

Winnie Tapasanun

241210T.jpg

241210U.jpg

The NFIB Small Business Optimism Index rose to 101.7 in November, the seventh m/m rise in eight months and the highest level since June 2021, following a 2.2-point increase to 93.7 in October, according to the November 2024 Small Business Economic Trends survey conducted by the National Federation of Independent Business. This was the first time in 35 months that the index was above the 50-year average of 98. The index was also up from its recent low of 88.5 in March 2024, 90.6 in November 2023, and a low of 89.0 in April 2023; nevertheless, having remained below a high of 102.5 in June 2021. Nine of the 10 index components rose, none fell, and one was unchanged. The NFIB Small Business Uncertainty Index fell to 98 in November, the lowest level since August, from a record-high 110 in October; however, it was well above its recent low of 65 in November 2023 and a low of 55 in June 2022.

The outlook for business conditions in the next six months turned positive in the latest survey. The net balance of respondents expecting the economy to improve jumped to 36% in November, the sixth m/m rise in seven months and the highest level since June 2020, after a seven-point increase to -5% in October; it was significantly above a record low of -61% in June 2022. Expected real sales gained to a net 14% in November following a five-point rise to -4% in October, posting the highest level since February 2020. The latest reading was up from a low of -21% in May 2023 and a low of -29% in July 2022. A net -13% of respondents reported higher nominal sales in the past three months, up from -20% reported in October and registering the highest reading since June. The latest reading, however, was down from the most recent positive reading of 1% in May 2022 and a peak of 9% in June 2021.

Plans to make capital outlays rose to 28% in November from 22% in October, up from a low of 19% in September and a low of 19% in April 2023. The November number posted the highest reading since January 2022; nevertheless, having remained below a high of 31% in October 2021. Plans to expand the business advanced to 14% in November following a two-point increase to 6% in October; the latest figure, up from a low of 2% in March 2023, registered the best reading since a high of 15% in June 2021. Meanwhile, expected credit conditions edged up to -5% in November after a two-point increase to -6% in October; the latest number was slightly above its recent high of -6% in February 2024 but below a high of -4% in May 2022 and a high of -3% in November 2021.

On the labor front, labor markets remained relatively tight. Forty-eight percent of respondents reported that qualified workers to fill job openings were hard to find in November, up from 46% in October. These numbers were below a high of 57% in September 2023, a high of 61% in May 2022, and a peak of 62% in September 2021. A net 18% planned to increase employment in November, up from 15% in October and 15% in September, but it was down from a high of 26% in May 2022 and a peak of 32% in August 2021. Notably, 36% reported positions not able to be filled in November, up from 35% in October and registering the highest since August. These figures remained below a high of 51% in May 2022.

Overall earnings trends continued to improve in November while having remained in negative territory since December 2019. The figure increased to -26% in November, still a poor reading, following a one-point uptick to -33% in October; these numbers were below a high of -18% in March 2023.

On the pricing front, inflation pressures, while trending down, remained at an inflationary level. The net percent raising their average selling prices rose to 24% in November after a one-point decline to 21% in October; these numbers, however, were slightly down from 25% in November 2023 and well below a high of 66% in March 2022. The percentage planning to raise prices rose to 28% in November following a one-point increase to 26% in October; these figures were below 34% in November 2023 and a high of 52% in March 2022.

Wage inflation was still relatively high in the November survey. A net 32% of respondents raised compensation during the last three months, slightly up from 31% reported in the October survey. However, it was down from a high of 46% in February 2023 and a peak of 50% in January 2022. A net 28% of firms planned to raise worker compensation in the next three months, up from 23% reported in October and registering the highest reading since December 2023; nevertheless, having remained below a high of 30% in November 2023 and a high of 32% in October 2022.

Inflation continued to be an issue facing small businesses, as reported by 20% of NFIB members in November as the single most important problem. Registering the lowest reading since January 2024, the November figure was down from 23% in October and a peak of 37% in July 2022. The quality of labor was the second important concern with 19% in November, slightly down from 20% in October. Other concerns (in November vs. October) included taxes (14% vs. 16%), the cost of labor (11% vs 8%), and government requirements (8% vs. 8%).

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

241210V.jpg

241210W.jpg

- November NFIB Small Business Optimism Index up 8.0 pts. to 101.7.
- Uncertainty Index down 12 pts. to a three-month-low 98.
- Expectations for economy up 41 pts. to 36%, the highest since June ’20.
- Expected real sales up 18 pts. to 14%, the highest since February ’20.
- Inflation (20%) remains top business problem, followed by Quality of Labor (19%); both slightly down from October.

Economy in Brief: May 2006

Jump to:

Q1 GDP Strong in India; Growth Uneven but on Trend in Malaysia & the Philippines

ADP Nat'l Employment Report: Slimmer Gain in May Payrolls

Mortgage Applications Off

Chain Store Sales Fell Sharply

ADP Nat'l Employment Report: Slimmer Gain in May Payrolls

Consumer Confidence Fell Less Than Expected

Consumer Confidence Fell Less Than Expected

Japan's Net Investment Position Eased in 2005 as the Value of Foreign Investment Surged