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>
 



<div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071130b.jpg" width="353">
Personal consumption expenditures surged 1.1% last month after an upwardly revised 0.4% rise. The November increase beat Consensus expectations for a 0.7% rise. Adjusted for inflation spending rose 0.5% after the upwardly revised 0.1% uptick. Three month growth in real spending rose to 3.4% (AR).
Spending on discretionary items was firm led by a 1.8% (9.6% y/y) jump in real spending on household furniture &amp; appliances. Spending on apparel also rose a firm 0.9% (5.6% y/y) but spending on motor vehicles fell 0.8% (+2.4% y/y). Spending on electricity surged 5.9% (6.9% y/y) but real spending on gasoline fell 0.3% (-0.6% y/y). Medical care spending rose 0.2% and spending on recreation fell 0.1%). Spending on food rose 0.7% (2.2% y/y). Real spending excluding food &amp; energy rose 0.4% (3.2% y/y). These detailed spending figures are available in Haver&#39;s USNA database.
The PCE chain price index surged 0.6%%, lifted by higher energy prices. The core PCE price index gained a steady 0.2% but y/y growth in core prices picked up further to 2.2%. Three month growth in core prices rose to 2.9% (AR) due to faster growth in services prices where the three month growth of 4.0% was the fastest since late 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071130b.jpg" width="353">
Personal income during November rose 0.4% and the gain fell just short of expectations for a 0.5% rise. The October increase was unrevised at 0.2%. Three month growth in income was 4.2% (AR), its worst since June.
Lower interest rates caused a shortfall in interest income of 0.4% (+6.2% y/y) which was the same decline as in October. Conversely, growth in dividend income held steady at 0.9% (12.6% y/y), the same as during the prior two months.
Growth in wages &amp; salaries picked back up to 0.6% (5.2% y/y) after an unchanged reading for October. Three month growth amounted to 5.3%. Factory sector wages rose 0.4% (2.2% y/y) after declining during the prior two months.Wage &amp; salary income in the private service-producing industries rose 0.7% (6.1% y/y) after no change in October. Wages in the government sector again increased 0.4% (4.6% y/y).
Personal current taxes rose a firm 0.7% (8.1% y/y) and that left disposable personal income to rise 0.3% (5.8% y/y). Adjusted for inflation disposable personal income fell 0.3% (+2.1% y/y) for the second month of decline. That left the three month growth in real DPI negative at -0.9%, its worst since June.</div>

<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">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.1%</td>
<td>6.6%</td>
<td>5.9%</td>
<td>6.2%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>1.1%</td>
<td>0.4%</td>
<td>6.7%</td>
<td>5.9%</td>
<td>6.2%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Saving Rate</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.5% (Nov. 06)</td>
<td>0.4%</td>
<td>0.5%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.6%</td>
<td>0.3%</td>
<td>3.6%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment Down in December 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 21, 2007


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207d.jpg" width="353">
The University of Michigan&#39;s consumer sentiment index for all of this month fall 0.9% to 75.5.That was somewhat better than the reading at mid-month and it beat expectations for a December reading of 74.9. Nevertheless it left sentiment down 17.7% y/y.
Somewhat improved expectations caused the better December result. Expected business conditions during the next year fell only 6.8% (-35.2% y/y), an improvement from the -11.0% preliminary reading. Expectations for business conditions during the next five years also improved 6.6% (-16.5% y/y) from the November level and versus the initial read of a m/m decline. Down still is the result versus 3Q. Expectations for personal finances fell further by 2.6% (-9.7% y/y).
The current conditions index in fact was revised lower from the mid-month reading and fell 0.5% after a hefty 6.3% November decline. Current buying conditions for large household goods improved modestly m/m but remained down 13.0% from last December. The view of current personal finances, however, slid 3.0% for the second sharp monthly decline (-17.6% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207d.jpg" width="353">
The rise in gasoline prices raised expectations for inflation during the next twelve months to 4.4% (slightly lower than the mid-month read) from 4.3% in November and from 3.5% one year ago. For the next five to ten years expectations were for a 3.6% rise in prices.
Opinions about government policy dropped 9.8% m/m which brought this opinion measure down 16.9% from one year ago.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media is a 2004 paper from the Federal Reserve Bank of San Francisco and it can be found <a href="http://www.frbsf.org/publications/economics/papers/2004/wp04-09bk.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Dec (Final)</th>
<th scope="col">Dec (Prelim)</th>
<th scope="col">Nov</th>
<th scope="col">Dec&nbsp; y/y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>75.5</td>
<td>74.5</td>
<td>76.1</td>
<td>-17.7% </td>
<td>87.3</td>
<td>88.5</td>
<td>95.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>91.0</td>
<td>92.1</td>
<td>91.5</td>
<td>-15.8%</td>
<td>105.1</td>
<td>105.9</td>
<td>105.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Expectations</td>
<td>65.6</td>
<td>63.2</td>
<td>66.2</td>
<td>-19.2%</td>
<td>75.9</td>
<td>77.4</td>
<td>88.5</td>
</tr>
</tbody>
</table>
</body>
</html>

Personal consumption expenditures surged 1.1% last month after an upwardly revised 0.4% rise. The November increase beat Consensus expectations for a 0.7% rise. Adjusted for inflation spending rose 0.5% after the upwardly revised 0.1% [...]

U.S. Personal Consumption & Prices Firm, Income Light

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221e.jpg" align="left" border="0" height="265" width="353">
The service sector is beginning to ease in France. The index
is down form its peak if 113 in October. As a percent of its range the
December reading is still in the top 17% of its range. The outlook
reading at +3 stands in the 80.6 percentile of its range and is still
in the top 20% of that range. Expected sales for the 3-months ahead are
in the 67th percentile of their range, the top third, roughly.
Employment expectations are still firm in their range. Over the past
three months observed employment is nearly in the top quarter of its
range whereas expected employment in the three months ahead slips to
the top third at a reading of 10 which is in the 68th percentile of its
range. 
 

These readings generally show that the outlook is a bit weaker
than the current or recent past readings have been. And while the
slowdown and drop off is clear on the chart it is also true that the
survey levels are still firm; what we must wait and see is how far this
expected softening may go. 
 

Insee released today a separate survey on industry in which
morale fared much better than for services. It is surprising with the
concerns over the strong euro that it is the service sector where
morale is fading faster. This could have something to do with the
financial turmoil that has been in train, of course. But industry is
holding up much better despite its competitiveness pressures. Even in
that survey, however, there are more concerns among executives about
the outlook for production in their own business sector. French
consumer spending on MFG goods in also November worked its way lower
showing an unexpected drop. This spending results may have been
affected by recent transits strikes. 
 

There is evidence of strain in the French economy. All of
these reports will bear watching as we turn the calendar sheet to a new
month and new a new year. We will come upon this new year with the
economy a bit more challenged than usual in France, across the Euro
Area, in the US and elsewhere. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">France
INSEE Services Survey Jan 2000-date </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr class="grey1">
<td class="firstcol">Climate Indicator</td>
<td>108</td>
<td>111</td>
<td>113</td>
<td>112</td>
<td>83.3</td>
<td>18</td>
<td>113</td>
<td>83</td>
<td>30</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 3-Mo Moving
avg</td>
<td>111</td>
<td>112</td>
<td>113</td>
<td>113</td>
<td>92.8</td>
<td>5</td>
<td>113</td>
<td>85</td>
<td>28</td>
<td>102</td>
</tr>
<tr class="grey1">
<td class="firstcol">Climate: 12-Mo Moving
avg</td>
<td>110</td>
<td>110</td>
<td>110</td>
<td>110</td>
<td>99.6</td>
<td>2</td>
<td>110</td>
<td>91</td>
<td>20</td>
<td>101</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>3</td>
<td>5</td>
<td>7</td>
<td>8</td>
<td>80.6</td>
<td>23</td>
<td>9</td>
<td>-22</td>
<td>31</td>
<td>-1</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Sales</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed 3-mos</td>
<td>14</td>
<td>17</td>
<td>18</td>
<td>18</td>
<td>83.3</td>
<td>7</td>
<td>19</td>
<td>-11</td>
<td>30</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Expected 3-mos</td>
<td>9</td>
<td>13</td>
<td>14</td>
<td>14</td>
<td>67.9</td>
<td>38</td>
<td>18</td>
<td>-10</td>
<td>28</td>
<td>7</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Sales
Price</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed over 3-Mos</td>
<td>0</td>
<td>-2</td>
<td>1</td>
<td>2</td>
<td>33.3</td>
<td>33</td>
<td>8</td>
<td>-4</td>
<td>12</td>
<td>0</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>-2</td>
<td>2</td>
<td>-1</td>
<td>1</td>
<td>30.0</td>
<td>69</td>
<td>5</td>
<td>-5</td>
<td>10</td>
<td>1</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Employment</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed over 3-Mos</td>
<td>14</td>
<td>8</td>
<td>3</td>
<td>8</td>
<td>73.5</td>
<td>5</td>
<td>23</td>
<td>-11</td>
<td>34</td>
<td>5</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>10</td>
<td>11</td>
<td>17</td>
<td>9</td>
<td>68.2</td>
<td>13</td>
<td>17</td>
<td>-5</td>
<td>22</td>
<td>5</td>
</tr>
</tbody>
</table>
</body></html>

The service sector is beginning to ease in France. The index is down form its peak if 113 in October. As a percent of its range the December reading is still in the top 17% of its range. The outlook reading at +3 stands in the 80.6 [...]

Service Sector Hits the Skids in France

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221f.jpg" align="left" border="0" height="265" width="353">



The GFK consumer sentiment report for the UK continues to
plunge and it is one of the clearest signs of trouble in the UK
economy. The CBI survey on retailing earlier had signaled some weakness
and expectations of a softer January to boot. But actual sales data
(released today) showed a gain in November although food accounted for
all the volume increase. While the Bank of England struggles with
policy, consumers seem to have made up their minds about where the
balance of risk lies. 
 At a reading of -14 the GFK index is at its weakest point in
over 10 Years. Still, households rate their financial situation as the
best in 10 years currently. In this environment their plans for making
major purchases are the lowest they have been in 10 Years. Consumers
rate the general economic situation in the past 12-months as the worst
in the past two years and in the bottom four percent over ten years.
They assess inflation as the worst in 10 years. 
 While BOE is concerned about inflation too, a recent wage
survey finds that wages deals have been contained in their recent range
and in fact are not accelerating. Of course while that may be good news
to the BOE, it is another factor pressuring consumers as energy prices
rise. 
 The outlook for the next 12-months score very weak readings
for the household financial situation and the general economic
situation both in the bottom 15 percentile of their respective ranges
for two years and about the bottom quarter of the range over 10-years.
The major purchases index is at the 50% mark for the next 12 months
compared to the past two years&#8217; range, but that is a bottom 25% reading
over the past 10 years. Obviously the consumer sector has been weak and
is weakening again. Stratified by income, both high and low income
respondents see conditions as among their poorest in 10 years. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> GFK
Consumer Survey</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>% of 2Yr</td>
<td>% of 10Yr</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Range</td>
<td>Range</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence</td>
<td>-14</td>
<td>-10</td>
<td>-8</td>
<td>-7</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Current</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>25</td>
<td>25</td>
<td>25</td>
<td>25</td>
<td>100.0%</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Major Purchases</td>
<td>-14</td>
<td>-7</td>
<td>-5</td>
<td>-3</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Last
12 Months</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>-1</td>
<td>0</td>
<td>2</td>
<td>4</td>
<td>37.5%</td>
<td>40.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">General Economic Situation</td>
<td>-36</td>
<td>-32</td>
<td>-30</td>
<td>-29</td>
<td>0.0%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">CPI</td>
<td>74</td>
<td>73</td>
<td>69</td>
<td>64</td>
<td>100.0%</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings</td>
<td>33</td>
<td>35</td>
<td>38</td>
<td>38</td>
<td>52.6%</td>
<td>84.5%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Next
12-Months</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>8</td>
<td>9</td>
<td>13</td>
<td>12</td>
<td>14.3%</td>
<td>14.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">General Economic Situation</td>
<td>-26</td>
<td>-21</td>
<td>-17</td>
<td>-19</td>
<td>0.0%</td>
<td>26.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment</td>
<td>30</td>
<td>31</td>
<td>29</td>
<td>27</td>
<td>35.7%</td>
<td>62.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Major Purchases</td>
<td>-19</td>
<td>-20</td>
<td>-18</td>
<td>-20</td>
<td>50.0%</td>
<td>25.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings</td>
<td>19</td>
<td>20</td>
<td>19</td>
<td>17</td>
<td>63.6%</td>
<td>85.2%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">By
Income</td>
</tr>
<tr class="odd">
<td class="firstcol">Lower</td>
<td>-19</td>
<td>-16</td>
<td>-14</td>
<td>-13</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Upper</td>
<td>-7</td>
<td>-6</td>
<td>-3</td>
<td>-1</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
</body></html>

The GFK consumer sentiment report for the UK continues to plunge and it is one of the clearest signs of trouble in the UK economy. The CBI survey on retailing earlier had signaled some weakness and expectations of a softer January to [...]

UK Consumer Confidence Continues to Plunge

<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/071221c.jpg" width="353">
The University of Michigan&#39;s consumer sentiment index for all of this month fall 0.9% to 75.5.That was somewhat better than the reading at mid-month and it beat expectations for a December reading of 74.9. Nevertheless it left sentiment down 17.7% y/y.
Somewhat improved expectations caused the better December result. Expected business conditions during the next year fell only 6.8% (-35.2% y/y), an improvement from the -11.0% preliminary reading. Expectations for business conditions during the next five years also improved 6.6% (-16.5% y/y) from the November level and versus the initial read of a m/m decline. Down still is the result versus 3Q. Expectations for personal finances fell further by 2.6% (-9.7% y/y).
The current conditions index in fact was revised lower from the mid-month reading and fell 0.5% after a hefty 6.3% November decline. Current buying conditions for large household goods improved modestly m/m but remained down 13.0% from last December. The view of current personal finances, however, slid 3.0% for the second sharp monthly decline (-17.6% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221d.jpg" width="353">
The rise in gasoline prices raised expectations for inflation during the next twelve months to 4.4% (slightly lower than the mid-month read) from 4.3% in November and from 3.5% one year ago. For the next five to ten years expectations were for a 3.6% rise in prices.
Opinions about government policy dropped 9.8% m/m which brought this opinion measure down 16.9% from one year ago.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media is a 2004 paper from the Federal Reserve Bank of San Francisco and it can be found <a href="http://www.frbsf.org/publications/economics/papers/2004/wp04-09bk.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Dec (Final)</th>
<th scope="col">Dec (Prelim)</th>
<th scope="col">Nov</th>
<th scope="col">Dec&nbsp; y/y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>75.5</td>
<td>74.5</td>
<td>76.1</td>
<td>-17.7% </td>
<td>87.3</td>
<td>88.5</td>
<td>95.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>91.0</td>
<td>92.1</td>
<td>91.5</td>
<td>-15.8%</td>
<td>105.1</td>
<td>105.9</td>
<td>105.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Expectations</td>
<td>65.6</td>
<td>63.2</td>
<td>66.2</td>
<td>-19.2%</td>
<td>75.9</td>
<td>77.4</td>
<td>88.5</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan's consumer sentiment index for all of this month fall 0.9% to 75.5.That was somewhat better than the reading at mid-month and it beat expectations for a December reading of 74.9. Nevertheless it left [...]

Michigan Consumer Sentiment Down in December

<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>
 



<div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221a.jpg" width="353">
Personal consumption expenditures surged 1.1% last month after an upwardly revised 0.4% rise. The November increase beat Consensus expectations for a 0.7% rise. Adjusted for inflation spending rose 0.5% after the upwardly revised 0.1% uptick. Three month growth in real spending rose to 3.4% (AR).
Spending on discretionary items was firm led by a 1.8% (9.6% y/y) jump in real spending on household furniture &amp; appliances. Spending on apparel also rose a firm 0.9% (5.6% y/y) but spending on motor vehicles fell 0.8% (+2.4% y/y). Spending on electricity surged 5.9% (6.9% y/y) but real spending on gasoline fell 0.3% (-0.6% y/y). Medical care spending rose 0.2% and spending on recreation fell 0.1%). Spending on food rose 0.7% (2.2% y/y). Real spending excluding food &amp; energy rose 0.4% (3.2% y/y). These detailed spending figures are available in Haver&#39;s USNA database.
The PCE chain price index surged 0.6%%, lifted by higher energy prices. The core PCE price index gained a steady 0.2% but y/y growth in core prices picked up further to 2.2%. Three month growth in core prices rose to 2.9% (AR) due to faster growth in services prices where the three month growth of 4.0% was the fastest since late 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221b.jpg" width="353">
Personal income during November rose 0.4% and the gain fell just short of expectations for a 0.5% rise. The October increase was unrevised at 0.2%. Three month growth in income was 4.2% (AR), its worst since June.
Lower interest rates caused a shortfall in interest income of 0.4% (+6.2% y/y) which was the same decline as in October. Conversely, growth in dividend income held steady at 0.9% (12.6% y/y), the same as during the prior two months.
Growth in wages &amp; salaries picked back up to 0.6% (5.2% y/y) after an unchanged reading for October. Three month growth amounted to 5.3%. Factory sector wages rose 0.4% (2.2% y/y) after declining during the prior two months.Wage &amp; salary income in the private service-producing industries rose 0.7% (6.1% y/y) after no change in October. Wages in the government sector again increased 0.4% (4.6% y/y).
Personal current taxes rose a firm 0.7% (8.1% y/y) and that left disposable personal income to rise 0.3% (5.8% y/y). Adjusted for inflation disposable personal income fell 0.3% (+2.1% y/y) for the second month of decline. That left the three month growth in real DPI negative at -0.9%, its worst since June.</div>

<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">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.1%</td>
<td>6.6%</td>
<td>5.9%</td>
<td>6.2%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>1.1%</td>
<td>0.4%</td>
<td>6.7%</td>
<td>5.9%</td>
<td>6.2%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Saving Rate</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.5% (Nov. 06)</td>
<td>0.4%</td>
<td>0.5%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.6%</td>
<td>0.3%</td>
<td>3.6%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
 




<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221a.jpg" align="left" border="0" height="265" width="353">

Personal consumption expenditures surged
1.1% last month after an upwardly revised 0.4% rise. The November
increase beat Consensus expectations for a 0.7% rise. Adjusted for
inflation spending rose 0.5% after the upwardly revised 0.1% uptick.
Three month growth in real spending rose to 3.4% (AR).
Spending on discretionary items was firm led by a 1.8% (9.6%
y/y) jump in real spending on household furniture &amp; appliances.
Spending on apparel also rose a firm 0.9% (5.6% y/y) but spending on
motor vehicles fell 0.8% (+2.4% y/y). Spending on electricity surged
5.9% (6.9% y/y) but real spending on gasoline fell 0.3% (-0.6% y/y).
Medical care spending rose 0.2% and spending on recreation fell 0.1%).
Spending on food rose 0.7% (2.2% y/y). Real spending excluding food
&amp; energy rose 0.4% (3.2% y/y). These detailed spending figures
are available in Haver's USNA database.
The PCE chain price index surged 0.6%%,
lifted by higher energy prices. The core PCE price index gained a
steady 0.2% but y/y growth in core prices picked up further
to 2.2%. Three month growth in core prices rose to 2.9% (AR) due to
faster growth in services prices where the three month growth of 4.0%
was the fastest since late 2005.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221b.jpg" align="right" border="0" height="265" width="353">
Personal income during November rose 0.4%
and the gain fell just short of expectations for a 0.5% rise. The
October increase was unrevised at 0.2%. Three month growth in income
was 4.2% (AR), its worst since June.
Lower interest rates caused a shortfall in interest income of
0.4% (+6.2% y/y) which was the same decline as in October. Conversely,
growth in dividend income held steady at 0.9% (12.6% y/y), the same as
during the prior two months.
Growth in wages &amp; salaries picked back up to 0.6%
(5.2% y/y) after an unchanged reading for October. Three month growth
amounted to 5.3%. Factory sector wages rose 0.4% (2.2% y/y) after
declining during the prior two months.Wage &amp; salary income in
the private service-producing industries rose 0.7% (6.1% y/y) after no
change in October. Wages in the government sector again increased 0.4%
(4.6% y/y).
Personal current taxes rose a firm 0.7% (8.1% y/y) and that
left disposable personal income to rise 0.3% (5.8%
y/y). Adjusted for inflation disposable personal income fell 0.3%
(+2.1% y/y) for the second month of decline. That left the three month
growth in real DPI negative at -0.9%, its worst since June.
</div>


<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">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.1%</td>
<td>6.6%</td>
<td>5.9%</td>
<td>6.2%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>1.1%</td>
<td>0.4%</td>
<td>6.7%</td>
<td>5.9%</td>
<td>6.2%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Saving Rate</td>
<td>-0.5%</td>
<td>0.3%</td>
<td>0.5% (Nov. 06)</td>
<td>0.4%</td>
<td>0.5%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.6%</td>
<td>0.3%</td>
<td>3.6%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food
&amp; energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment Down
in December 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 21, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221c.jpg" align="left" border="0" height="265" width="353">
The University of Michigan's consumer sentiment index for all
of this month fall 0.9% to 75.5.That was somewhat better than the
reading at mid-month and it beat expectations for a December reading of
74.9. Nevertheless it left sentiment down 17.7% y/y.
Somewhat improved expectations caused the better December
result. Expected business conditions during the next year fell only
6.8% (-35.2% y/y), an improvement from the -11.0% preliminary reading.
Expectations for business conditions during the next five years also
improved 6.6% (-16.5% y/y) from the November level and versus the
initial read of a m/m decline. Down still is the result versus 3Q.
Expectations for personal finances fell further by 2.6% (-9.7% y/y).
The current conditions index in fact was revised lower from
the mid-month reading and fell 0.5% after a hefty 6.3% November
decline. Current buying conditions for large household goods improved
modestly m/m but remained down 13.0% from last December. The view of
current personal finances, however, slid 3.0% for the second sharp
monthly decline (-17.6% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221d.jpg" align="right" border="0" height="265" width="353">
The rise in gasoline prices raised expectations for inflation
during the next twelve months to 4.4% (slightly lower than the
mid-month read) from 4.3% in November and from 3.5% one year ago. For
the next five to ten years expectations were for a 3.6% rise in prices.
Opinions about government policy dropped 9.8% m/m which
brought this opinion measure down 16.9% from one year ago.
The University of Michigan survey is not seasonally
adjusted.The reading is based on telephone interviews with about 500
households at month-end; the mid-month results are based on about 300
interviews. The summary indexes are in Haver's USECON database,
with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media
is a 2004 paper from the Federal Reserve Bank of San
Francisco and it can be found <a href="http://www.frbsf.org/publications/economics/papers/2004/wp04-09bk.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">Dec (Final)</th>
<th scope="col">Dec (Prelim)</th>
<th scope="col">Nov</th>
<th scope="col">Dec&nbsp; y/y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>75.5</td>
<td>74.5</td>
<td>76.1</td>
<td>-17.7% </td>
<td>87.3</td>
<td>88.5</td>
<td>95.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current
Conditions</td>
<td>91.0</td>
<td>92.1</td>
<td>91.5</td>
<td>-15.8%</td>
<td>105.1</td>
<td>105.9</td>
<td>105.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Expectations</td>
<td>65.6</td>
<td>63.2</td>
<td>66.2</td>
<td>-19.2%</td>
<td>75.9</td>
<td>77.4</td>
<td>88.5</td>
</tr>
</tbody>
</table>
UK Consumer Confidence Continuesto
Plunge
 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 21, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221f.jpg" align="left" border="0" height="265" width="353">
The GFK consumer sentiment report for the UK continues to
plunge and it is one of the clearest signs of trouble in the UK
economy. The CBI survey on retailing earlier had signaled some weakness
and expectations of a softer January to boot. But actual sales data
(released today) showed a gain in November although food accounted for
all the volume increase. While the Bank of England struggles with
policy, consumers seem to have made up their minds about where the
balance of risk lies. 
 
At a reading of -14 the GFK index is at its weakest point in
over 10 Years. Still, households rate their financial situation as the
best in 10 years currently. In this environment their plans for making
major purchases are the lowest they have been in 10 Years. Consumers
rate the general economic situation in the past 12-months as the worst
in the past two years and in the bottom four percent over ten years.
They assess inflation as the worst in 10 years. 
 
While BOE is concerned about inflation too, a recent wage
survey finds that wages deals have been contained in their recent range
and in fact are not accelerating. Of course while that may be good news
to the BOE, it is another factor pressuring consumers as energy prices
rise. 
 
The outlook for the next 12-months score very weak readings
for the household financial situation and the general economic
situation both in the bottom 15 percentile of their respective ranges
for two years and about the bottom quarter of the range over 10-years.
The major purchases index is at the 50% mark for the next 12 months
compared to the past two years&#8217; range, but that is a bottom 25% reading
over the past 10 years. Obviously the consumer sector has been weak and
is weakening again. Stratified by income, both high and low income
respondents see conditions as among their poorest in 10 years. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> GFK
Consumer Survey</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>% of 2Yr</td>
<td>% of 10Yr</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Range</td>
<td>Range</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence</td>
<td>-14</td>
<td>-10</td>
<td>-8</td>
<td>-7</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Current</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>25</td>
<td>25</td>
<td>25</td>
<td>25</td>
<td>100.0%</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Major Purchases</td>
<td>-14</td>
<td>-7</td>
<td>-5</td>
<td>-3</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Last
12 Months</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>-1</td>
<td>0</td>
<td>2</td>
<td>4</td>
<td>37.5%</td>
<td>40.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">General Economic Situation</td>
<td>-36</td>
<td>-32</td>
<td>-30</td>
<td>-29</td>
<td>0.0%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">CPI</td>
<td>74</td>
<td>73</td>
<td>69</td>
<td>64</td>
<td>100.0%</td>
<td>100.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings</td>
<td>33</td>
<td>35</td>
<td>38</td>
<td>38</td>
<td>52.6%</td>
<td>84.5%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Next
12-Months</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Financial Situation</td>
<td>8</td>
<td>9</td>
<td>13</td>
<td>12</td>
<td>14.3%</td>
<td>14.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">General Economic Situation</td>
<td>-26</td>
<td>-21</td>
<td>-17</td>
<td>-19</td>
<td>0.0%</td>
<td>26.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment</td>
<td>30</td>
<td>31</td>
<td>29</td>
<td>27</td>
<td>35.7%</td>
<td>62.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Major Purchases</td>
<td>-19</td>
<td>-20</td>
<td>-18</td>
<td>-20</td>
<td>50.0%</td>
<td>25.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings</td>
<td>19</td>
<td>20</td>
<td>19</td>
<td>17</td>
<td>63.6%</td>
<td>85.2%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">By
Income</td>
</tr>
<tr class="odd">
<td class="firstcol">Lower</td>
<td>-19</td>
<td>-16</td>
<td>-14</td>
<td>-13</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Upper</td>
<td>-7</td>
<td>-6</td>
<td>-3</td>
<td>-1</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
Service Sector Hits the Skids in
France 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 21, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071221e.jpg" align="left" border="0" height="265" width="353">
The service sector is beginning to ease in France. The index
is down form its peak if 113 in October. As a percent of its range the
December reading is still in the top 17% of its range. The outlook
reading at +3 stands in the 80.6 percentile of its range and is still
in the top 20% of that range. Expected sales for the 3-months ahead are
in the 67th percentile of their range, the top third, roughly.
Employment expectations are still firm in their range. Over the past
three months observed employment is nearly in the top quarter of its
range whereas expected employment in the three months ahead slips to
the top third at a reading of 10 which is in the 68th percentile of its
range. 
 

These readings generally show that the outlook is a bit weaker
than the current or recent past readings have been. And while the
slowdown and drop off is clear on the chart it is also true that the
survey levels are still firm; what we must wait and see is how far this
expected softening may go. 
 

Insee released today a separate survey on industry in which
morale fared much better than for services. It is surprising with the
concerns over the strong euro that it is the service sector where
morale is fading faster. This could have something to do with the
financial turmoil that has been in train, of course. But industry is
holding up much better despite its competitiveness pressures. Even in
that survey, however, there are more concerns among executives about
the outlook for production in their own business sector. French
consumer spending on MFG goods in also November worked its way lower
showing an unexpected drop. This spending results may have been
affected by recent transits strikes. 
 

There is evidence of strain in the French economy. All of
these reports will bear watching as we turn the calendar sheet to a new
month and new a new year. We will come upon this new year with the
economy a bit more challenged than usual in France, across the Euro
Area, in the US and elsewhere. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">France
INSEE Services Survey Jan 2000-date </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr class="grey1">
<td class="firstcol">Climate Indicator</td>
<td>108</td>
<td>111</td>
<td>113</td>
<td>112</td>
<td>83.3</td>
<td>18</td>
<td>113</td>
<td>83</td>
<td>30</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 3-Mo Moving
avg</td>
<td>111</td>
<td>112</td>
<td>113</td>
<td>113</td>
<td>92.8</td>
<td>5</td>
<td>113</td>
<td>85</td>
<td>28</td>
<td>102</td>
</tr>
<tr class="grey1">
<td class="firstcol">Climate: 12-Mo Moving
avg</td>
<td>110</td>
<td>110</td>
<td>110</td>
<td>110</td>
<td>99.6</td>
<td>2</td>
<td>110</td>
<td>91</td>
<td>20</td>
<td>101</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>3</td>
<td>5</td>
<td>7</td>
<td>8</td>
<td>80.6</td>
<td>23</td>
<td>9</td>
<td>-22</td>
<td>31</td>
<td>-1</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Sales</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed 3-mos</td>
<td>14</td>
<td>17</td>
<td>18</td>
<td>18</td>
<td>83.3</td>
<td>7</td>
<td>19</td>
<td>-11</td>
<td>30</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Expected 3-mos</td>
<td>9</td>
<td>13</td>
<td>14</td>
<td>14</td>
<td>67.9</td>
<td>38</td>
<td>18</td>
<td>-10</td>
<td>28</td>
<td>7</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Sales
Price</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed over 3-Mos</td>
<td>0</td>
<td>-2</td>
<td>1</td>
<td>2</td>
<td>33.3</td>
<td>33</td>
<td>8</td>
<td>-4</td>
<td>12</td>
<td>0</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>-2</td>
<td>2</td>
<td>-1</td>
<td>1</td>
<td>30.0</td>
<td>69</td>
<td>5</td>
<td>-5</td>
<td>10</td>
<td>1</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="11">Employment</td>
</tr>
<tr class="grey1">
<td class="firstcol">Observed over 3-Mos</td>
<td>14</td>
<td>8</td>
<td>3</td>
<td>8</td>
<td>73.5</td>
<td>5</td>
<td>23</td>
<td>-11</td>
<td>34</td>
<td>5</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>10</td>
<td>11</td>
<td>17</td>
<td>9</td>
<td>68.2</td>
<td>13</td>
<td>17</td>
<td>-5</td>
<td>22</td>
<td>5</td>
</tr>
</tbody>
</table>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071220h.jpg" align="left" border="0" height="265" width="353">
&#8230;points lower for E-zone readings to come. 

The Belgian National bank releases its barometer indices ahead
of the EU each month. The Belgian indices turn out to be harbingers of
the EU releases to come. While Belgium is a small European country it
is right in the middle of the Zone and its trends in commerce tend to
mimic those of the Zone itself and of Germany. In December the rise in
the total industry index has given way to drop a decline. MFG has
posted larger drop. The wholesale/retail sector reading is suddenly
sharply lower. It would be a very bad sign if the EU and German indices
were turn as sharply as the Belgian sector index has. Construction also
has turned negative after posting a reasonably strong reading for two
months in a row. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Belgium
National Bank Indices </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>3-Mo Change</td>
<td>6-Mo Change</td>
<td>12-Mo Change</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td style="color: red;">-1.9</td>
<td>1.4</td>
<td style="color: red;">-0.1</td>
<td style="color: red;">-3.4</td>
<td style="color: red;">-7.4</td>
<td style="color: red;">-4.4</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td style="color: red;">-1.8</td>
<td style="color: red;">-0.5</td>
<td style="color: red;">-1.8</td>
<td style="color: red;">-3.2</td>
<td style="color: red;">-8.3</td>
<td style="color: red;">-4.2</td>
</tr>
<tr>
<td class="firstcol">Production</td>
<td>4.0</td>
<td>1.0</td>
<td style="color: red;">-1.0</td>
<td>4.0</td>
<td style="color: red;">-4.0</td>
<td>3.0</td>
</tr>
<tr>
<td class="firstcol">Domestic Orders</td>
<td style="color: red;">-4.0</td>
<td>6.0</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-1.0</td>
<td style="color: red;">-9.0</td>
<td style="color: red;">-7.0</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td>4.0</td>
<td>2.0</td>
<td>3.0</td>
<td style="color: red;">-4.0</td>
<td style="color: red;">-7.0</td>
<td style="color: red;">-1.0</td>
</tr>
<tr>
<td class="firstcol">Prices</td>
<td style="color: red;">-1.0</td>
<td>2.0</td>
<td>3.0</td>
<td style="color: red;">-4.0</td>
<td style="color: red;">-14.0</td>
<td style="color: red;">-12.0</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="7">Current
assessments</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-4.0</td>
<td style="color: red;">-6.0</td>
<td style="color: red;">-1.0</td>
<td style="color: red;">-6.0</td>
<td style="color: red;">-7.0</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-5.0</td>
<td style="color: red;">-5.0</td>
<td style="color: red;">-4.0</td>
<td style="color: red;">-7.0</td>
<td style="color: red;">-3.0</td>
</tr>
<tr>
<td class="firstcol">Inventories</td>
<td>6.0</td>
<td>5.0</td>
<td>2.0</td>
<td>7.0</td>
<td>13.0</td>
<td>5.0</td>
</tr>
<tr>
<td class="firstcol">Wholesales &amp; Retail</td>
<td style="color: red;">-3.3</td>
<td>8.2</td>
<td>6.7</td>
<td style="color: red;">-3.3</td>
<td style="color: red;">-7.5</td>
<td style="color: red;">-1.3</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td style="color: red;">-0.7</td>
<td>3.7</td>
<td>1.0</td>
<td style="color: red;">-4.1</td>
<td style="color: red;">-3.0</td>
<td style="color: red;">-8.4</td>
</tr>
<tr>
<td class="firstcol">Business Services</td>
<td>#N/A</td>
<td>12.8</td>
<td>12.8</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="2">Comparisons:</td>
<td>&nbsp;</td>
<td colspan="3">Changes lag one month</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">EU Index: Industry</td>
<td>#N/A</td>
<td>3.0</td>
<td>2.0</td>
<td style="color: red;">-2.0</td>
<td style="color: red;">-2.0</td>
<td style="color: red;">-3.0</td>
</tr>
<tr>
<td class="firstcol">Germany Index: Industry</td>
<td>#N/A</td>
<td>3.0</td>
<td>3.0</td>
<td style="color: red;">-5.0</td>
<td style="color: red;">-5.0</td>
<td style="color: red;">-8.0</td>
</tr>
<tr>
<td class="firstcol">Compare: BNB Index</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td style="color: red;">-1.9</td>
<td style="color: red;">-2.8</td>
<td style="color: red;">-2.1</td>
</tr>
</tbody>
</table>
</body></html>

…points lower for E-zone readings to come. The Belgian National bank releases its barometer indices ahead of the EU each month. The Belgian indices turn out to be harbingers of the EU releases to come. While Belgium is a small [...]

Belgium Bank Index Weakens Again

<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/071220f.jpg" width="353">
The Philadelphia Federal Reserve Bank reported that it&#39;s Index of General Business Conditions in the manufacturing sector plunged this month to -5.7. The decline into negative territory was to the lowest level since June 2003.
The index is a diffusion index for each component or series. It reflects the increase in activity reported less the decrease.
During the last ten years there has been a 59% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There has been a 42% correlation with q/q growth in real GDP.
The decline did not represent broad based weakness amongst the sub indexes. In fact new orders, shipments, unfilled orders and vendor deliveries each rose. However, the inventories and the employment indexes fell. During the last ten years there has been a 75% correlation between the employment index and the three-month growth in factory payrolls.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071220g.jpg" width="353">
The business conditions index reflects a separate survey question, not the sub indexes.
The prices paid index fell and reversed increases during the prior two months. During the last ten years there has been a 76% correlation between the prices paid index and the three-month growth in the intermediate goods PPI. There has been an 85% correlation with the change in core intermediate goods prices.
The separate index of expected business conditions in six months fell further and added to its plunge during November. The latest was the lowest reading in twelve months. Expectations for new orders plummeted but expectations for the number of employees rose.
The latest Survey of Professional Forecasters from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/econ/spf/index.cfm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Dec. &#145;06</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>-5.7</td>
<td>8.2</td>
<td>5.4&nbsp;</td>
<td>5.1</td>
<td>8.1</td>
<td>11.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>35.0</td>
<td>&nbsp;37.7</td>
<td>&nbsp;25.2</td>
<td>26.3</td>
<td>36.6</td>
<td>40.1</td>
</tr>
</tbody>
</table>
</body>
</html>

The Philadelphia Federal Reserve Bank reported that it's Index of General Business Conditions in the manufacturing sector plunged this month to -5.7. The decline into negative territory was to the lowest level since June 2003. The [...]

Philadelphia Fed Index Lowest Since 2003

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

Announcement of snap French election is causing concern across Europe

The UK economy’s post-pandemic under-performance relative to its pre-pandemic trend

US Beveridge Curve back to near pre-pandemic levels

Negative economic surprises in the US but positive in Europe, especially the UK

Latest PMIs show US losing momentum while RoW is gaining momentum

Sticky services prices behind sticky overall PCE inflation

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

Outlook strengthens for US while it weakens for other major economies

Crude petroleum prices are having a big impact on inflation expectations

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

 Gross Domestic Income is catching up with GDP

FOMC expects GDP growth above trend over the next three years

US core CPI inflation has begun to reaccelerate

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

240916J20.jpg

240916K20.jpg

The General Business Conditions Index from the Federal Reserve Bank of New York jumped to 11.5 in September from -4.7 in August. It as the first positive number since November 2023. A reading of -4.5 had been expected in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions rose to 32.7% from 28.5% in August while the percentage reporting a decline in activity fell to 21.2% from 33.2% last month. The headline index reflects the answer to a single question concerning the state of economic activity. The survey responses were collected between September 3 and September 10.

Haver Analytics calculates a composite index, which is comparable to the ISM manufacturing index. That index rose to 52.0 in September from 47.2 in August. A level of 50 is the breakeven point between expansion and contraction.

The orders index rose to 9.4, its first positive reading in 12 months, from -7.9 in August. The shipments index jumped to 17.9, its highest reading since June 2023, from 0.3. The unfilled orders index rose to 2.1 from -7.4 in August and -11.2 in July. Delivery times shortened as the index improved to -1.1 from -3.2. Inventories jumped to a break-even level of zero from -10.6 in August.

Labor market conditions improved in September. The employment index of -5.7 compared to -6.7 in August, but was the eleventh consecutive month below zero. A lessened 7.1% of respondents reported increases in employment while a smaller 12.8% reported lower employment. The hours-worked index rebounded to 2.9 after falling to -17.8 in August.

Inflation pressures weakened this month. The prices paid index eased to 23.2 in September after falling to 23.4 in August from 26.5 in July. Thirty-one percent of respondents were paying higher input prices, a bit less than in August, while a steady 7.4% reported paying lower input prices. The prices received index also deteriorated to 7.4 from 8.5 in August. Fifteen percent of respondents reported an increase in prices, up from 13.8% in August, while 7.4% reported a decrease in prices, up from 5.3% in August.

Firms grew more optimistic about the outlook. The index for future business conditions of 30.6 this month compared to 22.9 in August and was the highest level since January 2022. The outlook for new orders & shipments surged, but employment eased slightly after surging in August. The future prices paid index jumped to its highest level since February of last year but capital spending plans weakened sharply.

The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

240916L20.jpg

240916M20.jpg

- Index increases to two-year high.
- New orders & shipments lead increase as employment improves modestly.
- Prices paid & received readings ease.

U.S. Empire State Manufacturing Index Strengthens in September

240916E.jpg

The European Monetary Union trade surplus moved lower in July. At €15.46 billion, it is down from €17.02 billion in June. The erosion was due to a larger deficit on nonmanufacturing trade as the manufacturing balance actually improved to €39.1 billion from €37.9 billion. However, on nonmanufacturing trade, the deficit swung to -€23.7 billion from -€20.9 billion.

The chart provides the hint that the move back to surplus may have passed its peak as there is a string of surpluses having swept up to higher levels and now engaged in the process of headed for lower levels.

The trend for exports shows overall exports slowing then declining steadily from a growth rate of 2.5% over 12 months to 0.6% over six months to -8.1% over three months. This transition is driven by the growth rates of manufacturing as well as nonmanufacturing exports; both of which transition from positive growth rates over 12 months to negative growth rates over three months.

On the import side, the patterns are inconsistent although they culminate in weakness over three months. Total imports fall 2.5% year-over-year, advance at an 11.4% annual rate over six months, and then decline at a 3.2% annual rate over three months. Manufacturing imports follow this same progression; however, for nonmanufacturers, growth is at 3.2% over 12 months, that expands to a 15% annual rate over six months, and then collapses to -3.4% over three months. Import trends are chaotic.

Turning to three European countries two of them the largest countries in the European Monetary Union, we find Germany has exports declining progressively and imports doing the same. Both German export and import flows are slowing consistently and declining with imports falling faster than exports. For France, exports are accelerating from 4.3% over 12 months to 5.3% at an annual rate over six months to nearly 12% at an annual rate over three months. French imports, in contrast, don't have a clear trend but they are declining on each of those horizons. The U.K. shows declines in exports and imports year-over-year that are relatively balanced and again declines over six months that are relatively balanced for the two flows. But over three months, U.K. exports advance at an 11.3% annual rate while imports are basically unchanged at a 0.1% annual rate.

Export trends for Finland, Portugal, and Belgium find cross trends, with Finland showing a decline in exports of 17.3% at an annual rate over three months. But Portugal shows exports accelerating from 12-months, to six-months, to three-months, culminating in a 45.9% annual rate pace over three months. Belgium shows an export decline over 12 months that gives way to increases over three months and six months but again without a clear trend.

The trends for the three-month growth rates are positive for the EMU aggregates and for the exports of Finland, Portugal, and Belgium. But trends are negative for exports as well as imports for Germany France and the U.K. Over 12 months, most of the calculations show declines in trade flows, underpinning again the notion that manufacturing has been weak in Europe. That weakness lends itself to weakness in both the exports and imports; European weakness in manufacturing naturally leads to knock-on weakness in trade. That is not surprising. It has been the strength in the services sector that has tended to keep growth alive, especially in Europe.

240916.jpg

Rate cuts by central banks are back in the picture despite somewhat mixed inflation news. This week the Federal Reserve is expected to join the rate cut club even though U.S. economic data are hardly as weak as in other countries. The Fed in the U.S. is preparing to cut rates in the quest to pull a rabbit out of its hat and create a soft landing. It's an interesting choice for the Federal Reserve to cut rates when economic conditions are not greatly calling for it and with inflation still over target for 40-plus months running. And gutsy to do it with a presidential election coming up in November. The Fed rate cut is sure to be controversial although with some people calling for rate cuts as large as 50 basis points and even 75 basis points, it seems one of the strategies is for the Fed to deliver a smaller rate reduction and to have that masquerade as temperance. The calls and forecasts of large cuts may take the attention away from the fact that the Fed actually is going to cut rates going into the election under marginally accommodating conditions.

Europe

EMU Trade Surplus Erodes

Tian Yong Woon

In this week's newsletter, we examine China and highlight growing economic concerns. Investors had already expressed scepticism about China’s growth prospects even before the recent data were released (Chart 1). But this scepticism has been further validated by the latest figures, which show ongoing – and often worse than expected - deterioration (Chart 2). However, there is a hint of optimism: China's exports surpassed expectations in August, although import figures were disappointing (Chart 3). Consumer price pressures are increasing, but not severely, while producer prices continue to decline (Chart 4). As for the labour market, youth unemployment remains in double digits, with a significant rise in July, but potentially due to seasonal factors (Chart 5). Lastly, investor sentiment remains cautious, as indicated by continued outflows from Chinese equities, falling stock prices, and a generally negative market mood (Chart 6).

**The China outlook**
China’s recovery remains uneven, with GDP growth slowing significantly to 4.7% y/y in Q2 versus 5.3% in Q1 (Chart 1). And pockets of instability persist. The property sector, for example, continues to struggle, with house prices having fallen more sharply in recent months despite numerous efforts by the authorities to address excess supply and stimulate demand. China continues to face external challenges as well, particularly in the electric vehicle (EV) sector, among others. Major economies, including the EU and Canada, have recently followed the US in imposing tariffs on imports of China-made EVs. Against this backdrop, Blue Chip Economic Indicators (BCEI) panelists downgraded their outlook for China this month. They now forecast GDP growth of 4.7% for 2024 and 4.3% for 2025, down from respective projections of 4.8% and 4.4% last month. These adjustments suggest that China is now seen unlikely to achieve its 5% growth target for this year. 

240916T1.jpg

**China’s latest dataflow**
China’s latest economic data have been less than reassuring, as key indicators for August have both shown declines and fallen short of expectations. As illustrated in Chart 2, the growth rates for China’s industrial production and retail sales dropped more than anticipated, to 4.5% and 2.1% y/y, respectively, from 5.1% and 2.7% in July. Additionally, fixed asset investment growth eased to 3.4% ytd y/y, and the headline unemployment rate ticked up to 5.3%. In the property sector, house prices for both new and existing residential buildings have experienced even sharper y/y declines. Overall, August’s data reinforces the view that China’s economy is slowing, raising concerns about the feasibility of achieving the 5% growth target with only a few months remaining in the year.

240916T2.jpg

Next, we turn to the latest developments in China’s trade. In August, the trade balance unexpectedly widened as exports surged beyond expectations, while import growth slowed considerably (Chart 3). Notably, the increase in exports was driven by strong growth to regions like the EU, although growth to other markets, such as the US, was more subdued. This robust export performance occurred despite declining export prices and recent trade actions against China, including those related to EV imports. Conversely, import growth showed minimal change compared to a year ago, with significant slowdowns in imports from major trading partners, including the US, the EU, and ASEAN countries. While not entirely conclusive, the slowdown in China’s import growth could suggest weaker domestic demand, especially when considered alongside the recent underwhelming economic data.

240916T3.jpg

We move next to touch on latest developments in China's price dynamics. Consumer inflation in China has been gradually increasing, reaching 0.6% y/y in August (Chart 4). However, this rate remains low relative to inflation rates in other major economies, indicating very subdued price pressures in China. This persistent low inflation aligns with the broader narrative of weak domestic conditions, where insufficient demand fails to drive significant increases in prices. Moreover, China’s producer prices continue to decline, with decreases accelerating to 1.8% y/y in August. This deflationary trend in producer prices is likely contributing to the low inflation in traded goods and consumer prices. Falling producer prices not only impact the local market but also affect global economies that import from China, given its significant role as a major supplier. Historically, there has been a strong positive correlation between China’s producer price inflation and its export price inflation, with producer price inflation trends typically leading export price changes by a few months. 

240916T4.jpg

**Youth unemployment in China**
Delving deeper into China’s labour market situation, we focus on the segment that continues to draw significant concern from investors and economists: youth unemployment. This issue has been a persistent challenge in China, with the old measure of youth unemployment having surged to 21.3% before the publication of this statistic was halted after the June 2023 reading (Chart 5). Since then, China has introduced a new measure of youth unemployment, which excludes students, starting from December 2023. Although this new measure has reported rates significantly lower than those of the old measure, there was a notable spike to 17.1% in July this year, re-igniting prior concerns. It is worth noting that the old measure of youth unemployment typically showed a rising trend leading up to and peaking around July, suggesting that seasonality may be influencing the latest figures. Whether the July spike in the new measure reflects a deeper, underlying deterioration in the labour market for China's youth remains to be seen.

240916T5.jpg

**China’s portfolio flows**
Lastly, we touch on developments in China’s portfolio flows. Portfolio outflows have continued to affect Chinese equities in recent months, with approximately $3.4 billion in net selloffs recorded for the three months ending in July, according to IIF data (Chart 6). Contributing to this trend are concerns about the Chinese economy, including weak consumer sentiment, a struggling property market, and overall weak demand as reflected in recent growth readings. In contrast, China’s bond market has experienced strong portfolio inflows throughout the year, driven by low rate expectations, weak inflation readings, and anticipation of further rate cuts by authorities. However, recent efforts by Chinese authorities to curb excessive buying may have led to negative debt flows in July. Looking ahead, assessing the true extent of foreign investment flows into and out of Chinese equities may become more challenging. This is due to the authorities' decision to halt the publication of daily flow data effective August 18 this year.

240916T6.jpg

Asia

Economic Letter From Asia: Concerning China

240913J1.jpg

240913K1.jpg

Import prices declined 0.3% (NSA, +0.8% y/y) during August after rising an unrevised 0.1% in August. Expectations had been for a 0.1% decline in the Action Economics Forecast Survey. Export prices fell 0.7% both m/m and y/y. The previously reported 0.7% increase in July was revised to +0.5%. The Action Economic Forecast Survey had looked for export prices to ease 0.1% in August.

The August decline in import prices was led by a 3.0% weakening (-4.6% y/y) in fuel & lubricant prices which followed a 1.1% July increase. Excluding this decline, import prices edged 0.1% lower (+1.3% y/y) after a 0.1% July improvement. Foods, feeds & beverages prices eased 0.1% (+4.8% y/y) after strengthening 1.5% in July and 1.1% in June. Motor vehicle & parts prices held steady (+2.3% y/y) following a 0.4% gain. Nonauto consumer goods prices slipped 0.1% in August (+0.5% y/y) after falling 0.2% in both of the prior two months. Capital goods prices inched 0.1% higher (0.3% y/y) after holding steady in July.

The August weakening in export prices reflected 1.8% decline (-5.8% y/y) in foods, feeds & beverages prices which came after falling 1.7% in July. Industrial supplies and materials fell 1.1% (-2.0% y/y), following a 1.8% rise. Capital goods prices slipped 0.2% (+1.4% y/y) after holding steady, while auto export prices improved 0.1% (4.0% y/y) following a 0.3% rise. Nonauto consumer goods prices rose 0.1% (-1.5% y/y) and reversed the July decline. Overall, agricultural export prices fell 2.0% (-6.9% y/y), the same as in July. Prices of nonagricultural exports declined 0.6% (-0.1% y/y) following a 0.8% rise in July.

The import and export price series can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

240913L1.jpg

240913M1.jpg

- Import price weakness is led by lower oil prices.
- Price declines of other imported goods are widespread.
- Export price decline reflects lower food prices.

U.S. Import and Export Prices Drop in August

240913F4.jpg

240913G4.jpg

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) increased 1.8% (1.2% y/y) in July to 95.0 after falling 0.2% to 93.3 in June. The level of home affordability has plunged 46.9% from a peak of 179.0 in April 2020.

The rise in affordability reflected a 1.0% decline (+4.2% y/y) in the median price of an existing single-family home to $428,500. This followed five straight monthly increases to a record $432,900 in June. The price weakening accompanied a drop in the average mortgage rate to 6.93% from 7.00% in June. It remained up sharply from the December 2020 low of 2.73%. The declines lowered the principal & interest payment by 1.7% (+4.3% y/y) to $2,265. That was increased from the most recent low of $984 in February 2020. Monthly mortgage payments averaged 26.3% of income during July versus 26.8% in June. It remained up from a recent low of 14.0% in April 2020.

The decline in housing costs was accompanied by improvement in median family income which increased 0.1% in July (5.5% y/y) to a record $103,278 after rising 0.8% in June.

Housing affordability increased across the country in July. The affordability index rose 4.3% (-3.8% y/y) in the Northeast to 87.9. The index increased 2.5% (1.0% y/y) to 122.3 in the Midwest and it remained the most affordable region of the country to live. In the South, the index rose 1.0% (3.5% y/y) to 98.8 and in the West, where homes are the least affordable, the index rose 0.7% (2.7% y/y) to 69.1.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022 (98.8).

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

240913H4.jpg

240913I4.jpg

- Home prices slip & mortgage rates decline.
- Median income edges up.
- Affordability increases throughout the country.	

Economy in Brief: 2007

Jump to:

U.S. Personal Consumption & Prices Firm, Income Light

Service Sector Hits the Skids in France

UK Consumer Confidence Continues to Plunge

Michigan Consumer Sentiment Down in December

U.S. Personal Consumption & Prices Firm, Income Light

U.S. Personal Consumption & Prices Firm, Income Light

Belgium Bank Index Weakens Again

Philadelphia Fed Index Lowest Since 2003