Louise Curley

<!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>
<br>

<span id="articletext">
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229b.jpg" align="right" border="0" height="265" width="353">Reports of
retail trade in Spain, Sweden and Hong Kong were among today's
statistical releases.&nbsp; Retail sales are sometimes good
indicators of trends in total GDP.&nbsp; In order to test this
hypothesis, we computed the correlation coefficients between the year
over year percent change in the quarterly values of the value index of
retail sales and the year over year percent change in the value of
total GDP over the past ten years*.&nbsp; The first three charts
show these correlations.</p><p> The highest correlation was in Spain where
the correlation coefficient was .94.&nbsp; Hong Kong was next at
.87 and Sweden was the lowest at .64.&nbsp; The correlation
coefficient squared, R<sup>2</sup>, is a measure of the
explanatory power of one variable on the other when all other factors
are held constant.&nbsp; <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229c.jpg" align="right" border="0" height="265" width="353">
Thus, in the case of Spain, based on the
experience of the last ten years, the year to year change in retail
sales explains about 88.4% of the variation in total GDP when all other
factors are held constant.&nbsp; In the case of Hong Kong, the year
to year change retail sales explains 75.7% of the change in total GDP
and in the case of Sweden, only 41%. The precise values are less
important than the order of magnitude.&nbsp; Thus, we should expect
the trend in retail sales in Spain to have a greater impact on the
trend in total GDP than that in Hong Kong or Sweden.</p><p> The fourth chart
shows the year over year changes in monthly retail sales in the three
countries.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229d.jpg" align="right" border="0" height="265" width="353">
On the basis of the past relationship between
retail sales and total GDP the year to year changes in the value of
retail sales in October and November of 9.9% and 11.7% for Hong Kong
suggest there is a good chance that the year to year change in the
fourth quarter total GDP will increase from -1.99% in the third quarter
to perhaps a positive value. The continued negative, though
diminishing, yearly comparisons of retail sales in Spain suggest that
any improvements in year to year comparison for total GDP in the fourth
quarter is likely to be small.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229e.jpg" align="right" border="0" height="265" width="353">
For Sweden, the year to year
increases in retail sales of 5.8% and 5.7% in October and November may
be large enough to have a positive effect on the increase in total GDP
in spite of the fact that the yearly change in retail sales has less
than a major effect on the change in total GDP. *(Computation of the
correlation coefficient can be done in DLXVG3 by clicking on
"Correlation" in the TOOLS menu.)&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Retail Sales,
Value Indexes Y/Y % Change</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
<th scope="col">Apr 09</th>
<th scope="col">Mar 09</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Sweden</td>
<td>5.74</td>
<td>5.80</td>
<td>3.38</td>
<td>1.80</td>
<td>7.51</td>
<td>5.16</td>
<td>0.32</td>
<td>5.21</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-4.99</td>
<td>-6.03</td>
<td>-6.08</td>
<td>-6.51</td>
<td>-7.75</td>
<td>-5.54</td>
<td>-10.91</td>
<td>-10.57</td>
<td>-9.30</td>
</tr>
<tr class="odd">
<td class="firstcol">Hong Kong</td>
<td>11.66</td>
<td>9.87</td>
<td>2.57</td>
<td>-0.07</td>
<td>-5.29</td>
<td>-4.71</td>
<td>-6.20</td>
<td>-4.30</td>
<td>-7.76</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Reports of retail trade in Spain, Sweden and Hong Kong were among today's statistical releases. Retail sales are sometimes good indicators of trends in total GDP. In order to test this hypothesis, we computed the correlation [...]

Retail Trade: Predictor Of Change In Total GDP?

Robert Brusca

<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>
<br>

<span id="articletext">
<p></p>
<p><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229a.jpg" width="353"></p>
<p>Italian business confidence is shooting up strongly but still clings to relatively weak absolute readings. The level of the current reading stands in the 52nd percentile of the range of values occupied since October of 1996. But by rank the current index stands 136th out of 159 readings or in the bottom 12 percentile of all readings over that same span. That is not a very reassuring statistic despite the rise in the index this month. This percentile rank-in-queue measure is uniformly weak across the various components this month. Unfortunately inventories have the highest reading within each commodity category. Of all commodity types consumer goods are doing the best while investment goods and intermediates goods are lagging nearly equally.</p>
<p>The graphic below shows the strength of the current surge depicting both the absolute level of the index and its percentage rise on the same graph. We can hope that the rise continues and that it will bolster the level reading further. But for the rest of the e-Zone a good deal of pessimism remains.</p>
<p>France&#146;s final GDP figure confirms the weak rise in GDP in Q3 although it does show two quarterly gains in a row. In the UK private forecasters have reaffirmed their view of slow growth in the UK for the year to come. Italy&#146;s business survey results seem to fit snugly into this grouping of reports that shows some improvement but still no gusto.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Italy ISAE Business Sentiment
</tr>
</thead>
<tbody>
<tr class="grey4">
<td colspan="5">&nbsp;</td>
<td colspan="2">Since Oct 1996</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Percentile</td>
<td>Rank</td>
<td>Rank%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Biz Confidence</td>
<td>82.6</td>
<td>79.4</td>
<td>77.8</td>
<td>74.6</td>
<td>52.0</td>
<td>139</td>
<td>12.7%</td>
</tr>
<tr class="grey2">
<td colspan="8">TOTAL INDUSTRY</td>
</tr>
<tr class="grey1">
<td colspan="8">&nbsp; &nbsp;Order books &amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Total</td>
<td>-40</td>
<td>-47</td>
<td>-50</td>
<td>-52</td>
<td>33.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Domestic</td>
<td>-41</td>
<td>-47</td>
<td>-49</td>
<td>-49</td>
<td>35.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Foreign</td>
<td>-41</td>
<td>-49</td>
<td>-54</td>
<td>-55</td>
<td>35.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Inventories</td>
<td>-2</td>
<td>-2</td>
<td>-3</td>
<td>1</td>
<td>37.5</td>
<td>125</td>
<td>21.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Production</td>
<td>-38</td>
<td>-45</td>
<td>-49</td>
<td>-47</td>
<td>28.6</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">INTERMEDIATE</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books &amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Total</td>
<td>-52</td>
<td>-55</td>
<td>-57</td>
<td>-55</td>
<td>26.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Domestic</td>
<td>-53</td>
<td>-55</td>
<td>-57</td>
<td>-54</td>
<td>27.4</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Foreign</td>
<td>-49</td>
<td>-56</td>
<td>-56</td>
<td>-59</td>
<td>31.6</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Inventories</td>
<td>-4</td>
<td>-6</td>
<td>-7</td>
<td>-1</td>
<td>37.9</td>
<td>113</td>
<td>29.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Production</td>
<td>-48</td>
<td>-51</td>
<td>-52</td>
<td>-51</td>
<td>25.0</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">INVESTMENT GOODS</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books &amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Total</td>
<td>-45</td>
<td>-56</td>
<td>-62</td>
<td>-61</td>
<td>26.7</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Domestic</td>
<td>-45</td>
<td>-54</td>
<td>-54</td>
<td>-55</td>
<td>30.0</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Foreign</td>
<td>-48</td>
<td>-54</td>
<td>-66</td>
<td>-61</td>
<td>25.3</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Inventories</td>
<td>-3</td>
<td>0</td>
<td>-1</td>
<td>-1</td>
<td>36.8</td>
<td>111</td>
<td>30.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Production</td>
<td>-45</td>
<td>-52</td>
<td>-61</td>
<td>-58</td>
<td>21.6</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">CONSUMER GOODS</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books &amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp;&nbsp; &nbsp; Total</td>
<td>-23</td>
<td>-32</td>
<td>-36</td>
<td>-38</td>
<td>44.9</td>
<td>133</td>
<td>16.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Domestic</td>
<td>-23</td>
<td>-32</td>
<td>-36</td>
<td>-39</td>
<td>50.0</td>
<td>125</td>
<td>21.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Foreign</td>
<td>-31</td>
<td>-36</td>
<td>-41</td>
<td>-42</td>
<td>37.1</td>
<td>141</td>
<td>11.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Inventories</td>
<td>-2</td>
<td>1</td>
<td>-1</td>
<td>1</td>
<td>34.6</td>
<td>111</td>
<td>30.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp; &nbsp;Production</td>
<td>-21</td>
<td>-33</td>
<td>-37</td>
<td>-33</td>
<td>43.9</td>
<td>137</td>
<td>13.9%</td>
</tr>
<tr class="grey3">
<td colspan="8">Total number of months: 159</td>
</tr>
</tbody>
</table>
</body>
</html>


Italian business confidence is shooting up strongly but still clings to relatively weak absolute readings. The level of the current reading stands in the 52nd percentile of the range of values occupied since October of 1996. But by [...]

Italian Business Confidence Advances...But Still Lags

<!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>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229a.jpg" align="left" border="0" height="265" width="353"></p>
<p>Italian business confidence is shooting up strongly but still
clings to relatively weak absolute readings. The level of the current
reading stands in the 52nd percentile of the range of values occupied
since October of 1996. But by rank the current index stands 136th out
of 159 readings or in the bottom 12 percentile of all readings over
that same span. That is not a very reassuring statistic despite the
rise in the index this month. This percentile rank-in-queue measure is
uniformly weak across the various components this month. Unfortunately
inventories have the highest reading within each commodity category. Of
all commodity types consumer goods are doing the best while investment
goods and intermediates goods are lagging nearly equally.</p>
<p>The graphic below shows the strength of the current surge
depicting both the absolute level of the index and its percentage rise
on the same graph. We can hope that the rise continues and that it will
bolster the level reading further. But for the rest of the e-Zone a
good deal of pessimism remains.</p>
<p>France&#8217;s final GDP figure confirms the weak rise in GDP in Q3
although it does show two quarterly gains in a row. In the UK private
forecasters have reaffirmed their view of slow growth in the UK for the
year to come. Italy&#8217;s business survey results seem to fit snugly into
this grouping of reports that shows some improvement but still no gusto.</p>
</span>
Italy ISAE Business Sentiment
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td colspan="5">&nbsp;</td>
<td colspan="2">Since Oct 1996</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Percentile</td>
<td>Rank</td>
<td>Rank%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Biz Confidence</td>
<td>82.6</td>
<td>79.4</td>
<td>77.8</td>
<td>74.6</td>
<td>52.0</td>
<td>139</td>
<td>12.7%</td>
</tr>
<tr class="grey2">
<td colspan="8">TOTAL INDUSTRY</td>
</tr>
<tr class="grey1">
<td colspan="8">&nbsp; &nbsp;Order books
&amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Total</td>
<td>-40</td>
<td>-47</td>
<td>-50</td>
<td>-52</td>
<td>33.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Domestic</td>
<td>-41</td>
<td>-47</td>
<td>-49</td>
<td>-49</td>
<td>35.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Foreign</td>
<td>-41</td>
<td>-49</td>
<td>-54</td>
<td>-55</td>
<td>35.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Inventories</td>
<td>-2</td>
<td>-2</td>
<td>-3</td>
<td>1</td>
<td>37.5</td>
<td>125</td>
<td>21.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Production</td>
<td>-38</td>
<td>-45</td>
<td>-49</td>
<td>-47</td>
<td>28.6</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">INTERMEDIATE</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books
&amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Total</td>
<td>-52</td>
<td>-55</td>
<td>-57</td>
<td>-55</td>
<td>26.8</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Domestic</td>
<td>-53</td>
<td>-55</td>
<td>-57</td>
<td>-54</td>
<td>27.4</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Foreign</td>
<td>-49</td>
<td>-56</td>
<td>-56</td>
<td>-59</td>
<td>31.6</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Inventories</td>
<td>-4</td>
<td>-6</td>
<td>-7</td>
<td>-1</td>
<td>37.9</td>
<td>113</td>
<td>29.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Production</td>
<td>-48</td>
<td>-51</td>
<td>-52</td>
<td>-51</td>
<td>25.0</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">INVESTMENT GOODS</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books
&amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Total</td>
<td>-45</td>
<td>-56</td>
<td>-62</td>
<td>-61</td>
<td>26.7</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Domestic</td>
<td>-45</td>
<td>-54</td>
<td>-54</td>
<td>-55</td>
<td>30.0</td>
<td>146</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Foreign</td>
<td>-48</td>
<td>-54</td>
<td>-66</td>
<td>-61</td>
<td>25.3</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Inventories</td>
<td>-3</td>
<td>0</td>
<td>-1</td>
<td>-1</td>
<td>36.8</td>
<td>111</td>
<td>30.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Production</td>
<td>-45</td>
<td>-52</td>
<td>-61</td>
<td>-58</td>
<td>21.6</td>
<td>147</td>
<td>7.6%</td>
</tr>
<tr class="grey2">
<td colspan="8">CONSUMER GOODS</td>
</tr>
<tr class="grey2">
<td colspan="8">&nbsp; &nbsp;Order books
&amp; Demand</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp;&nbsp; &nbsp;
Total</td>
<td>-23</td>
<td>-32</td>
<td>-36</td>
<td>-38</td>
<td>44.9</td>
<td>133</td>
<td>16.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Domestic</td>
<td>-23</td>
<td>-32</td>
<td>-36</td>
<td>-39</td>
<td>50.0</td>
<td>125</td>
<td>21.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Foreign</td>
<td>-31</td>
<td>-36</td>
<td>-41</td>
<td>-42</td>
<td>37.1</td>
<td>141</td>
<td>11.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Inventories</td>
<td>-2</td>
<td>1</td>
<td>-1</td>
<td>1</td>
<td>34.6</td>
<td>111</td>
<td>30.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp; &nbsp;
&nbsp;Production</td>
<td>-21</td>
<td>-33</td>
<td>-37</td>
<td>-33</td>
<td>43.9</td>
<td>137</td>
<td>13.9%</td>
</tr>
<tr class="grey3">
<td colspan="8">Total number of months: 159</td>
</tr>
</tbody>
</table>
<span id="articletitle">Retail Trade: Predictor Of Change
In Total GDP?</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley</a> December 29, 2009</span>
<span id="articletext">
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229b.jpg" align="right" border="0" height="265" width="353">Reports of
retail trade in Spain, Sweden and Hong Kong were among today's
statistical releases.&nbsp; Retail sales are sometimes good
indicators of trends in total GDP.&nbsp; In order to test this
hypothesis, we computed the correlation coefficients between the year
over year percent change in the quarterly values of the value index of
retail sales and the year over year percent change in the value of
total GDP over the past ten years*.&nbsp; The first three charts
show these correlations.</p>
<p> The highest correlation was in Spain where
the correlation coefficient was .94.&nbsp; Hong Kong was next at
.87 and Sweden was the lowest at .64.&nbsp; The correlation
coefficient squared, R<sup>2</sup>, is a measure of the
explanatory power of one variable on the other when all other factors
are held constant.&nbsp; <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229c.jpg" align="right" border="0" height="265" width="353">
Thus, in the case of Spain, based on the
experience of the last ten years, the year to year change in retail
sales explains about 88.4% of the variation in total GDP when all other
factors are held constant.&nbsp; In the case of Hong Kong, the year
to year change retail sales explains 75.7% of the change in total GDP
and in the case of Sweden, only 41%. The precise values are less
important than the order of magnitude.&nbsp; Thus, we should expect
the trend in retail sales in Spain to have a greater impact on the
trend in total GDP than that in Hong Kong or Sweden.</p>
<p> The fourth chart
shows the year over year changes in monthly retail sales in the three
countries.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229d.jpg" align="right" border="0" height="265" width="353">
On the basis of the past relationship between
retail sales and total GDP the year to year changes in the value of
retail sales in October and November of 9.9% and 11.7% for Hong Kong
suggest there is a good chance that the year to year change in the
fourth quarter total GDP will increase from -1.99% in the third quarter
to perhaps a positive value. The continued negative, though
diminishing, yearly comparisons of retail sales in Spain suggest that
any improvements in year to year comparison for total GDP in the fourth
quarter is likely to be small.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091229e.jpg" align="right" border="0" height="265" width="353">
For Sweden, the year to year
increases in retail sales of 5.8% and 5.7% in October and November may
be large enough to have a positive effect on the increase in total GDP
in spite of the fact that the yearly change in retail sales has less
than a major effect on the change in total GDP. *(Computation of the
correlation coefficient can be done in DLXVG3 by clicking on
"Correlation" in the TOOLS menu.)&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Retail Sales,
Value Indexes Y/Y % Change</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
<th scope="col">Apr 09</th>
<th scope="col">Mar 09</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Sweden</td>
<td>5.74</td>
<td>5.80</td>
<td>3.38</td>
<td>1.80</td>
<td>7.51</td>
<td>5.16</td>
<td>0.32</td>
<td>5.21</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-4.99</td>
<td>-6.03</td>
<td>-6.08</td>
<td>-6.51</td>
<td>-7.75</td>
<td>-5.54</td>
<td>-10.91</td>
<td>-10.57</td>
<td>-9.30</td>
</tr>
<tr class="odd">
<td class="firstcol">Hong Kong</td>
<td>11.66</td>
<td>9.87</td>
<td>2.57</td>
<td>-0.07</td>
<td>-5.29</td>
<td>-4.71</td>
<td>-6.20</td>
<td>-4.30</td>
<td>-7.76</td>
</tr>
</tbody>
</table>
</span>
</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>
<br>

<span id="articletext">
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091228a.jpg" align="right" border="0" height="265" width="353">
Industrial
production in Japan was reported today to have increased 2.6% in
November to 88.3 (2005=100).&nbsp; This was the ninth month in
which production increased from the low of 69.5 reached in February of
this year.&nbsp;&nbsp; It is, however, still 5.2% below
November, 2008 and 19.8% below the recent peak reached in February,
2008.&nbsp; The increase has been fueled primarily by foreign
demand.&nbsp; Exports were up almost 5% in the month of
November.&nbsp; Domestic demand as represented by retail sales, on
the other hand, increased by only 0.2% in November.&nbsp; Retail
sales have shown little growth over the past several years as can be
seem in the first chart that shows industrial production, exports and
retail sales.*&nbsp;</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091228b.jpg" align="right" border="0" height="265" width="353">The outlook for increased
foreign demand
remains favorable in spite of the high yen. In particular, demand from
China, Japan's largest export customer, is rising together with demand
from other Asian countries.&nbsp; The outlook for domestic demand
is more problematic.&nbsp; Also released today was the year over
year change in cash earnings in industries employing 30 or more
persons. This series, shown in the second chart, is a good indicator of
general&nbsp;&nbsp; employment conditions and hence an
important indicator of domestic demand.&nbsp; Cash earnings in
November were 4.5% below a year ago.&nbsp; This is an improvement
over October's 9.5% shortfall and the -23.4% of March, 2009 but it is
unlikely to mean a significant increase in domestic demand in the
immediate future.&nbsp;&nbsp;*In the first chart the data for
industrial production and retail sales are seasonally adjusted and
indexed to a 2005 base.&nbsp; In order to have a comparable series
for exports, we used the series for exports seasonally adjusted by the
Ministry of Finance (VEATTLA@JAPAN)
and indexed these data to a 2005 base using the specialized function in
DLX.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN</th>
<th scope="col"><b><u>Nov 09</u></b></th>
<th scope="col"><b><u>Oct&nbsp; 09</u></b></th>
<th scope="col"><b><u>Sep 09</u></b></th>
<th scope="col"><b><u>M/M% Chg </u></b></th>
<th scope="col"><b><u>Y/Y% Chg&nbsp;</u></b></th>
<th scope="col"><b><u>2008 </u></b></th>
<th scope="col"><b><u> 2007 </u></b></th>
<th scope="col"><b><u> 2006 </u></b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production (SA,
2005=100)</td>
<td>88.3</td>
<td>86.1</td>
<td>93.1</td>
<td>2.56</td>
<td>-5.16</td>
<td>103.8</td>
<td>107.4</td>
<td>104.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Sales&nbsp; (SA,
2005=100)</td>
<td>99.2</td>
<td>99.0</td>
<td>99.9</td>
<td>0.20</td>
<td>-0.70</td>
<td>100.2</td>
<td>100.1</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports&nbsp; (SA, 2005=100)</td>
<td>91.7</td>
<td>87.4</td>
<td>97.1</td>
<td>4.89</td>
<td>-5.57</td>
<td>123.6</td>
<td>128.1</td>
<td>114.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td><b><u>M/M Pt Chg</u></b></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Y/Y change in Cash Earnings (%)</td>
<td>-4.5</td>
<td>-9.4</td>
<td>-8.5</td>
<td>4.9</td>
<td>4.0</td>
<td>-2.4</td>
<td>0.8</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Industrial production in Japan was reported today to have increased 2.6% in November to 88.3 (2005=100). This was the ninth month in which production increased from the low of 69.5 reached in February of this year. It is, however, [...]

Rising Exports Fuel Rise in Japanese Industrial Production

<!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>
<br>

<span id="articletext">
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091228a.jpg" align="right" border="0" height="265" width="353">Industrial
production in Japan was reported today to have increased 2.6% in
November to 88.3 (2005=100).&nbsp; This was the ninth month in
which production increased from the low of 69.5 reached in February of
this year.&nbsp;&nbsp; It is, however, still 5.2% below
November, 2008 and 19.8% below the recent peak reached in February,
2008.&nbsp; The increase has been fueled primarily by foreign
demand.&nbsp; Exports were up almost 5% in the month of
November.&nbsp; Domestic demand as represented by retail sales, on
the other hand, increased by only 0.2% in November.&nbsp; Retail
sales have shown little growth over the past several years as can be
seem in the first chart that shows industrial production, exports and
retail sales.*&nbsp;</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091228b.jpg" align="right" border="0" height="265" width="353">The
outlook for increased
foreign demand
remains favorable in spite of the high yen. In particular, demand from
China, Japan's largest export customer, is rising together with demand
from other Asian countries.&nbsp; The outlook for domestic demand
is more problematic.&nbsp; Also released today was the year over
year change in cash earnings in industries employing 30 or more
persons. This series, shown in the second chart, is a good indicator of
general&nbsp;&nbsp; employment conditions and hence an
important indicator of domestic demand.&nbsp; Cash earnings in
November were 4.5% below a year ago.&nbsp; This is an improvement
over October's 9.5% shortfall and the -23.4% of March, 2009 but it is
unlikely to mean a significant increase in domestic demand in the
immediate future.&nbsp;&nbsp;*In the first chart the data for
industrial production and retail sales are seasonally adjusted and
indexed to a 2005 base.&nbsp; In order to have a comparable series
for exports, we used the series for exports seasonally adjusted by the
Ministry of Finance (VEATTLA@JAPAN)
and indexed these data to a 2005 base using the specialized function in
DLX.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN</th>
<th scope="col"><b><u>Nov 09</u></b></th>
<th scope="col"><b><u>Oct&nbsp; 09</u></b></th>
<th scope="col"><b><u>Sep 09</u></b></th>
<th scope="col"><b><u>M/M% Chg </u></b></th>
<th scope="col"><b><u>Y/Y% Chg&nbsp;</u></b></th>
<th scope="col"><b><u>2008 </u></b></th>
<th scope="col"><b><u> 2007 </u></b></th>
<th scope="col"><b><u> 2006 </u></b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production (SA,
2005=100)</td>
<td>88.3</td>
<td>86.1</td>
<td>93.1</td>
<td>2.56</td>
<td>-5.16</td>
<td>103.8</td>
<td>107.4</td>
<td>104.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Sales&nbsp; (SA,
2005=100)</td>
<td>99.2</td>
<td>99.0</td>
<td>99.9</td>
<td>0.20</td>
<td>-0.70</td>
<td>100.2</td>
<td>100.1</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports&nbsp; (SA, 2005=100)</td>
<td>91.7</td>
<td>87.4</td>
<td>97.1</td>
<td>4.89</td>
<td>-5.57</td>
<td>123.6</td>
<td>128.1</td>
<td>114.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td><b><u>M/M Pt Chg</u></b></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Y/Y change in Cash Earnings (%)</td>
<td>-4.5</td>
<td>-9.4</td>
<td>-8.5</td>
<td>4.9</td>
<td>4.0</td>
<td>-2.4</td>
<td>0.8</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Rising Exports Fuel Rise inJapanese Industrial Production

Tom Moeller

<!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>
<br>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126j.jpg" style="width: 312px; height: 265px;">
</p>
The U.S. House Price Index from the Federal Housing and
Finance Agency (FHFA) continued to show improvement last fall. The
Purchase Only Index for November rose 0.7% after its 0.4% October
increase. Moreover, the year-to-year change turned positive for the
first time since late-2007. Since their peak in early-2007 home prices
nationwide have fallen 10.3%. The FHFA uses data provided by Fannie Mae
and Freddie Mac and is not value-weighted.<p></p>
<p>The HPI is calculated using a repeat sales index. That means
that the HPI measures changes in the price of the same property over
time but does not measure changes in property types over time. So if,
for example, the price of a larger, new home was not growing very
rapidly, but the number of people transitioning from smaller homes to
larger homes greatly increased, median house prices would go up (people
buying more expensive houses) much more than the HPI. In this way, the
HPI is a better measure of how any particular home is appreciating
while the median house price is a better measure of what the typical
home buyer is paying.</p>
<p>Notable monthly gains in home prices during November were
logged in the Pacific, South Atlantic and Mountain regions of the
country and the y/y declines moderated significantly.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126k.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126l.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>FHFA
U.S. House Price Index Purchase Only (%)</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>Total</b></td>
<td>0.7</td>
<td>0.4</td>
<td>-0.3</td>
<td>0.5</td>
<td>-5.8</td>
<td>1.3</td>
<td>6.0</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; New England</b></td>
<td>-0.3</td>
<td>0.7</td>
<td>0.5</td>
<td>0.3</td>
<td>-4.7</td>
<td>-1.7</td>
<td>1.1</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp; Middle
Atlantic</b></td>
<td>-0.1</td>
<td>1.3</td>
<td>-1.3</td>
<td>-1.6</td>
<td>-2.3</td>
<td>1.9</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; East North
Central</b></td>
<td>0.1</td>
<td>-0.9</td>
<td>0.9</td>
<td>0.1</td>
<td>-4.4</td>
<td>-1.3</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp; West North
Central</b></td>
<td>-0.0</td>
<td>0.4</td>
<td>-0.0</td>
<td>2.1</td>
<td>-2.8</td>
<td>1.0</td>
<td>3.2</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; South
Atlantic</b></td>
<td>2.0</td>
<td>-1.5</td>
<td>0.0</td>
<td>-0.1</td>
<td>-7.3</td>
<td>1.3</td>
<td>7.1</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp; East South
Central</b></td>
<td>-0.4</td>
<td>2.3</td>
<td>-1.6</td>
<td>1.5</td>
<td>-1.5</td>
<td>3.8</td>
<td>7.2</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; West South
Central</b></td>
<td>0.3</td>
<td>0.6</td>
<td>-0.3</td>
<td>2.5</td>
<td>0.6</td>
<td>4.7</td>
<td>7.2</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp; Mountain</b></td>
<td>0.7</td>
<td>0.7</td>
<td>-1.3</td>
<td>-4.9</td>
<td>-6.2</td>
<td>3.9</td>
<td>10.6</td>
</tr>
<tr>
<td class="firstcol"><b>&nbsp; Pacific</b></td>
<td>2.3</td>
<td>2.2</td>
<td>-0.8</td>
<td>2.9</td>
<td>-17.3</td>
<td>0.1</td>
<td>9.8</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) continued to show improvement last fall. The Purchase Only Index for November rose 0.7% after its 0.4% October increase. Moreover, the year-to-year change [...]

FHFA Home Price Index Ticks Up Both M/M And Y/Y

<!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>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126h.jpg" style="width: 312px; height: 265px;">German
business confidence improved in January in contrast to that of
investors and consumers, but it is still relatively subdued.&nbsp;
The IFO institute, which surveys some 7000 executives in manufacturing,
construction, wholesale and retail trade, reports its results in two
ways: in index form with (2000=100) and as a percent balance between
those who see improvement and those who see deterioration.&nbsp;
The index is useful in tracking the ups and downs in confidence, but
the percent balances give some insight into the degree of confidence of
the&nbsp; participants.&nbsp; For example, in January, the
index of current conditions increased to 91.2 from 90.4 in December and
the percent balance increased to -21.0% from -22.6%.&nbsp; Thus
both measures showed an improvement in the appraisal of current
conditions, but the percent balance also showed that there were still
21% more respondents who appraised current conditions negatively than
those who appraised them positively.</p>
<p> The IFO's
headline measure of confidence, the Business Climate for all industry,
is a combination of the replies of the participants regarding current
conditions and expectations for the future.&nbsp; The percent
balances for the Business Climate, Current Conditions and Expectations
for the future are shown in the first chart.</p>
<p> The
Business Climate for all industry has improved steadily since March of
this year when it was -42.8% to -9.0% in January.&nbsp; There has
been little change in construction climate.&nbsp; The pessimists
still exceed the optimists by 21.5%.&nbsp; The climate in retail
trade has fared better than that of construction, but the pessimists
still exceed the optimists by 12.8%.&nbsp; The strongest
improvements in confidence have taken place in manufacturing and
wholesale trade climates, where the pessimists now exceed the optimists
by only 4.7% in wholesale trade and 6.6% in manufacturing. These trends
are shown in the second chart.</p>
<p> Most of the percent balance data in the
latest survey are still negative indicating that the predominant mood
of most German business executives is still pessimistic, or at best,
skeptical. There is, however, one notable change.&nbsp; The latest
survey shows that, for the first time since August 2007, there is a
small, but significant, excess, 3.7%, of optimists over pessimists
regarding business expectations.&nbsp;&nbsp; In November there
was a balance between optimists and pessimists and in December an
excess of optimists of 0.2%.&nbsp;&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col">IFO
Business Survey (% balance)</th>
<th scope="col"><b>Jan 10&nbsp;</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 08</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug 09</b></th>
<th scope="col"><b>Jul 09</b></th>
<th scope="col"><b>Jun 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Business Climate</td>
<td>-9.0</td>
<td>-11.5</td>
<td>-12.9</td>
<td>-16.5</td>
<td>-17.8</td>
<td>-19.2</td>
<td>-25.4</td>
<td>-28.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Current Conditions</td>
<td>-21.0</td>
<td>-22.6</td>
<td>-24.9</td>
<td>-28.4</td>
<td>-29.0</td>
<td>-30.6</td>
<td>-34.1</td>
<td>-38.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Expectations</td>
<td>3.7</td>
<td>0.2</td>
<td>0.0</td>
<td>-3.9</td>
<td>-5.9</td>
<td>-7.0</td>
<td>-16.1</td>
<td>-18.1</td>
</tr>
<tr>
<td colspan="9" class="firstcol">Business
Climate</td>

</tr>
<tr class="odd">
<td class="firstcol">Manufacturing</td>
<td>-6.6</td>
<td>-9.3</td>
<td>-11.4</td>
<td>-16.5</td>
<td>-19.4</td>
<td>-21.2</td>
<td>-29.0</td>
<td>-33.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-21.5</td>
<td>-26.8</td>
<td>-27.3</td>
<td>-25.2</td>
<td>-25.6</td>
<td>-23.8</td>
<td>-25.2</td>
<td>-23.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Wholesale Trade</td>
<td>-4.7</td>
<td>-6.9</td>
<td>-8.1</td>
<td>-10.6</td>
<td>-12.0</td>
<td>-14.0</td>
<td>-21.8</td>
<td>-24.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade</td>
<td>-12.8</td>
<td>-12.3</td>
<td>-12.9</td>
<td>-17.0</td>
<td>-12.6</td>
<td>-14.9</td>
<td>-17.6</td>
<td>-17.1</td>
</tr>
</tbody>
</table>
</span>
</body></html>

German business confidence improved in January in contrast to that of investors and consumers, but it is still relatively subdued. The IFO institute, which surveys some 7000 executives in manufacturing, construction, wholesale and [...]

Less Pessimism Among German Business Executives

<!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>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126d.jpg" style="width: 353px; height: 265px;" align="right">The
consumer's mood regarding the economy has improved, but after the jump
last spring little headway developed. The Conference Board indicated
that consumer confidence during January rose 4.3% from December after
similar gains during the prior two months. Due to earlier declines,
however, these increases left confidence roughly equal to last May. The
Conference Board data can be found in Haver's <b>CBDB</b>
database.</p><p> Despite the loss of forward momentum confidence remained up
roughly one-half from last January. During the last ten years there has
been an 87% correlation between the level of consumer confidence and
the y/y change in real consumer spending.</p>
<p> Consumers' assessment of the
current economic conditions jumped by one-quarter this month but only
back to last summer's high. It remained near the historic low. Jobs
were seen as hard to get by 47.4% of respondents and jobs were seen as
plentiful by only 4.3%. That was up just slightly from the series'
historic low. Business conditions were seen as good by only 9.0% and
that also was near the series' low. Consumers who thought business
conditions were bad rose slightly to 46.1%. While off somewhat from its
high the reading was still nearly the highest since 1983.&nbsp;·
The expectations component of confidence improved slightly m/m and the
index remained near the highest level since late-2007. Most expected
business conditions &amp; employment to remain the same and that's
a vast improvement from the deterioration seen last winter.
Expectations for the inflation rate in twelve months held stable at
5.3%, the lowest level since 2007 and down from last year's high of
7.7%. Interest rates in twelve months were expected to be higher by an
increased 52.3% of respondents, while a reduced 12.5% expected rates to
fall. A greatly increased 36.3% of respondents expected stock prices to
rise. </p>
<p> Consumers continued to manage their spending plans
cautiously. A reduced 1.8% plan to buy a home during the next six
months while just 24.7% plan to buy a major appliance. That's versus
30.9% back in 2007. Only 5.1% plan to buy an automobile versus 6.0% in
2007. Just 2.0% plan to buy a new one.</p>
<p> <b>Real Time
Underlying Inflation Gauges for Monetary Policymakers</b> from
the Federal Reserve Bank of New York is available&nbsp; <a href="http://www.newyorkfed.org/research/staff_reports/sr420.pdf">here</a>.&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100126f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><strong>Conference
Board&nbsp;(SA, 1985=100)</strong></th>
<th scope="col"><strong>January</strong></th>
<th scope="col"><strong>December</strong></th>
<th scope="col"><strong>November</strong></th>
<th scope="col"><strong>Y/Y %</strong></th>
<th scope="col"><strong>2009</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><strong>Consumer
Confidence Index</strong></td>
<td>55.9</td>
<td>53.6</td>
<td>50.6</td>
<td>49.5</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol"><strong>&nbsp;
Present Situation</strong></td>
<td>25.0</td>
<td>20.2</td>
<td>21.2</td>
<td>-15.8</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol"><strong>&nbsp;
Expectations</strong></td>
<td>76.5</td>
<td>75.9</td>
<td>70.3</td>
<td>80.0</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The consumer's mood regarding the economy has improved, but after the jump last spring little headway developed. The Conference Board indicated that consumer confidence during January rose 4.3% from December after similar gains during [...]

U.S. Consumer Confidence Improves Modestly

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

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

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

241004A5.jpg

241004B5.jpg

Nonfarm payrolls increased 254,000 (1.5% y/y) in September after rising 159,000 in August, revised from 142,000, and 144,000 in July, revised from 89,000. Expectations had been for a 150,000 rise in the Action Economics Forecast Survey. The three-month average change of 186,000 is the strongest since May.

Average hourly earnings increased 0.4% last month following a gain of 0.5% in August, revised from 0.4%. The y/y earnings gain edged up to 4.0% from 3.9% in August and 3.6% in July, but remained below the 5.9% high in March 2022. A 0.3% September increase had been expected.

The unemployment rate, measured in the household survey, edged down to 4.1% in September from 4.2% in August. It reached a low of 3.4% in April of last year. An unchanged 4.2% had been expected. Household employment rose 430,000 after increasing 168,000 in July. The labor force increased 150,000 after a 120,000 July gain. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons declined to 7.7% from 7.9%.

In the **payroll survey**, private-sector employment increased 223,000 (1.4% y/y) in September after rising 114,000 in August. Construction sector employment increased 25,000 (2.8% y/y) last month after rising 31,000 in August. Factory sector payrolls eased 7,000 (-0.2% y/y) after falling 27,000. Mining & logging sector jobs rose 3,000 (-0.6% y/y) during September after rising 1,000 in each of the prior two months.

Private service-producing employment strengthened 202,000 in September (1.5% y/y) after a 109,000 August rise. Increases varied greatly amongst service sector categories. Private education & health service jobs rose 81,000 (3.8% y/y) after rising 60,000 in August while leisure & hospitality employment rose 78,000 (2.0% y/y) after a 53,000 gain. Professional & business service jobs rose 17,000 (0.4% y/y) after easing 4,000 in both August and July. Within that category, the number of temporary jobs fell 13,800 (-6.0% y/y) and have fallen consistently since a March 2022 high. Trade, transportation & utilities employment gained 13,000 (0.6% y/y) after falling 5,000 while financial activities jobs rose 5,000 in September (0.4% y/y) after improving 10,000 in August. Information sector employment increased 4,000 in last month (-0.2% y/y) after falling 7,000 in August.

Government sector payrolls improved 31,000 in September (2.1% y/y) after increasing 45,000 in August. Local government jobs improved 16,000 (2.0% y/y) after rising 33,000 in August while state government employment rose 13,000 (2.5% y/y) after an 11,000 gain. The number of federal government jobs increased 2,000 (1.7% y/y) following a 1,000 rise.

The 0.4% September rise in private-sector average hourly earnings reflected a 0.5% gain (4.9% y/y) in the goods-producing sector which followed a 0.4% improvement in August. Earnings in construction improved 0.4% (4.6% y/y) while factory sector earnings rose 0.5% (5.1% y/y), following a 0.4% gain. In the private services-sector, earnings rose 0.3% last month (3.7% y/y) after a 0.5% gain. Professional & business service sector earnings strengthened 0.8% (5.0% y/y) after a 0.6% rise. Leisure & hospitality earnings improved 0.2% (4.3% y/y) after rising 0.3%. Financial sector earnings increased 0.2% (4.2% y/y) after a 0.5% gain. Private education & health services earnings improved 0.3% (3.1% y/y) for the fourth straight month. Trade, transportation and utilities pay edged 0.1% higher (2.8% y/y) in September after a 0.4% rise. Information sector earnings declined 0.4% (+3.6% y/y) after strengthening 1.1% in July.

241004C5.jpg

241004D5.jpg

The length of the average workweek in the private sector eased to 34.2 hours in September after rising in August to 34.3 hours. The workweek in the goods-producing sector of 39.9 hours compared to 39.8 hours in August. The construction sector average workweek lengthened to 39.2 hours from 39.0. The factory sector workweek held steady at 40.0 hours while the average workweek in the private service sector slipped to 33.1 hours. The aggregate weekly hours index in the private sector, a key indicator of production and income, slipped 0.1% in September (+0.9% y/y) after rising 0.3%. The Q3 average increased 0.2% (AR) from Q2’24.

In the **household survey**, the jobless rate fell to 4.1% as employment rose 0.3% and the size of the labor force edged 0.1% higher. The labor force participation rate was 62.7% for the third straight month. The rate for teenagers rebounded to 37.2%, while for individuals aged 20-24, it was little-change at 70.6%. For rate for workers aged 25-54, the rate fell to 83.8% but for workers 55 and over, it held steady at 38.6 hours.

The employment/population ratio for all workers rose to 60.2% in September and has been moving sideways since early last year. It remained below its high of 61.1% in February 2020, just prior to the pandemic.

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

241004X5.jpg

241004F5.jpg

- Surprising job strength is narrowly based.
- Earnings increase is better-than-expected; August pay growth lifted.
- Jobless rate slips to three-month low.

U.S. Payroll Employment Accelerates in September and Wage Growth Firms; Jobless Rate Edges Lower

241004E.jpg

French industrial output rose sharply in August, a gain of 1.6% after declining by 0.2% in July. Output in August was led by consumer goods; nondurable goods output increased 4.2% month-to-month in August while consumer durable goods output increased by 3% month-to-month. Output of capital goods was also strong during the month, with a 1.6% gain, although intermediate goods output continued to be weak, falling by 0.4% in August and dropping for the second month in a row.

Sequentially French output explodes over three months although it's relatively mild mannered over 12 months and over six months. The strength in French output is relatively recent. Manufacturing output gains 0.3% over 12 months; over six months it is falling at a 0.5% annual rate but that transforms into a 31.1% annual rate over three months as output sharply recovered in June and in August.

**Sequential growth for MFG components**
Components find consumer durable goods output falling by 6.3% over 12 months, gaining at a 4% annual rate over six months then rising at a strong 14.9% annual rate over three months showing steady acceleration. Consumer nondurable goods output rises by 5.9% over 12 months; output slows to gain at a 4.3% annual rate over six months then it expands sharply to grow at a 19% annual rate over three months. French capital goods output is up only 0.3% over 12 months, but it then expands at a 1.5% annual rate over six months and gains at a 14.2% annual rate over three months showing steadily accelerating growth on this time sequence. Intermediate goods output falls by 3.4% over 12 months, falls more sharply, at a 6.6% annual rate over six months, then cuts that weakness to only a 0.2% annual rate drop over three months.

**Quarter-to-date**
With two months into the third quarter, manufacturing output is rising at 1.6% annual rate, with consumer nondurable output up at a 7% annual rate and consumer durable goods output up at a 3.8% annual rate. Capital goods output is up at a 4.3% annual rate; intermediate goods output is falling at a 5% annual rate in the quarter-to-date.

During this period when output has been experiencing some mild increases, they have transformed into strong increases over three months. Yet, motor vehicle registrations have been consistently weak. That important big ticket consumer item has not taken off.

241004.jpg

**Manufacturing: IP vs. PMI**
The chart shows that manufacturing output as measured by the IP index has been relatively flat. But output as signaled by the S&P PMI survey has showed building weakness in French manufacturing. The PMI trend to weakness was being arrested early in 2024 but then the incipient rebound turned into more weakness. Just this month there has been some small rebound and stabilization in the MFG PMI.

It's here from the PMI, that data give much more of a sense of French output being weak than we get from looking at the industrial output report itself. French industrial output has been fairly flat, but with a small uptrend in place.

Smoothed year-on-year gains show that French output generally saw year-on-year expansion from early-2022 to May 2024. Since then, output has been more erratic with a deep decline logged in May IP. The sector has subsequently been digging itself back out. This month’s surge in output is continuing evidence of that recovery in progress. We do not get the same sense of weakness from looking at French IP data that we form looking at French PMI data.

France

French IP Ignites for a Month

Andrew Cates

**Policy rate expectations**
Blue Chip panellists continue to forecast that policy rates in most major economies will decline sharply in coming months. The ECB, for example, is expected to lower its key policy rates by around 105 basis points over the next 12 months while the BoE is expected to lower its Bank rate by 125 bps over the same time frame. These forecasts contrast with the US where policy rates are expected to be lowered by 125 basis point between now and this time next year. The BoJ in the meantime continues to remain an outlier in this generic global trend with Japan’s policy rate specifically expected to climb by 45bps over the next 12 months.

241004Z1.jpg

**The US labour market**
Ahead of the payrolls data for September that are due later this week there have been some mixed messages on the state of the US labour market in recent days. September’s ADP report concerning private sector employment, for example, was a little stronger than expected. On the weaker side, the latest Job Openings and Labour Turnover (JOLTS) survey revealed a steep decline in the number of people in the US workforce that have been quitting their jobs, a strong signal that the labour market is loosening. As chart 2 below suggests, that ought to additionally imply weaker wages pressures in the period ahead as well.

241004Z2.jpg

**Geopolitical risks and oil prices**
Soft landing narratives have been aided by evidence suggesting that labour markets are cooling, that wage pressures are ebbing and that broader inflationary pressures are fading. But, as noted above, the escalation of geopolitical turbulence in the Middle East is now challenging these views. A widely watched gauge of geopolitical risks has bolted sharply higher in recent days off the heels of this turbulence, as evidenced in chart 3 below. And energy markets – oil prices in particular – appear to now be responding to this instability as well.

241004Z3.jpg

**The real consumer price of energy versus US productivity growth**
It goes without saying that energy prices exert a powerful influence over the world economy. Aside from headline inflation linkages, high real energy prices have arguably been a key factor that’s kept productivity growth in many major economies muted over the past few years. As chart 4 below indicates, longer-term upswings in US productivity growth have tended to be preceded by weaker real energy prices. Equally, longer-term downswings in productivity have typically followed periods when real energy prices have been rising.

241004Z4.jpg

**Globalisation versus de-globalisation** 
A further disruption of supply chains is also a looming threat to the world economy if the instability in the Middle East were to intensify. In the background to this, and thanks to several additional factors that have undermined world trade in recent years, a de-globalisation of the world economy has been unfolding. That said, latest data from the World Bank suggest we should not get too carried with that de-globalisation narrative. The level of world trade in services, for example, reached a record high in 2023.

241004Z5.jpg

**Indebtedness and interest rates**
There is no doubt that ongoing geopolitical instability, combined with other factors such as heightened protectionism, could accelerate a broader trend toward de-globalization in the coming period. This, along with other structural challenges such as high energy prices and ageing demographics, may be hindering long-term productivity growth. Offsetting factors do exist, most notably the productivity potential of Artificial Intelligence. However, until those offsets fully materialize, many policymakers are likely to again rely on monetary policy tools and other re-leveraging initiatives to boost economic growth to politically acceptable levels. The strong negative correlation between long-term US real interest rates and global indebtedness in chart 6 below highlights how these policy efforts have become central to maintaining economic stability, often at the expense of increasing financial vulnerabilities.

241004Z6.jpg

In recent weeks, financial markets have generally aligned with expectations of a soft landing for the global economy, facilitated by more accommodative policies from central banks (see chart 1). This week’s dataflow have largely reinforced these views (see chart 2) as have the communications from many policymakers. However, the escalation of geopolitical turbulence in the Middle East in recent days is now challenging this narrative. By potentially choking supply chains and raising risk premiums in energy markets, there could be growth and inflation-related consequences for the world economy in the coming weeks (see charts 3). This also serves as a reminder that there are longer-term headwinds that are placing a brake on global growth at present, including high real energy prices (chart 4), de-globalization pressures (chart 5) and lingering debt-related imbalances (see chart 6). And many of these issues could be exacerbated if the turmoil in the Middle East were to intensify.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/7KICKDIZCtV4hBZetWzQxd?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Geopolitical Scarring

Winnie Tapasanun

241003N10.jpg

241003O10.jpg

The U.S. ISM Services PMI rose to 54.9 in September, the highest level since February 2023, after a 0.1-point uptick to 51.5 in August, according to today’s report by the Institute for Supply Management, indicating expansion in the services sector for the third straight month, in seven of nine months in 2024, and for the 49th time in 52 months. The September index was up from a four-year-low 48.8 in June, 53.4 in September 2023, and a low of 49.0 in December 2022; however, having remained down from a record-high 67.1 in November 2021. The 12-month average was 51.8, reflecting strong growth in the U.S. services sector. The Action Economics Forecast Survey had expected 51.7 for September.

Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index rose to 53.9 in September after a 0.2-point increase to 51.0 in August, showing expansion for fourth time in five months. The latest figure was higher than a four-year-low 48.8 in June, 52.8 in September 2023, and a low of 48.9 in December 2022; nevertheless, having remained well below a record-high 66.3 in November 2021. These series date back to July 1997.

In the latest services survey, the business activity index rebounded to 59.9 in September from 53.3 in August, indicating business activity expanded for the 51st time in 52 months and at the highest level since May. The index was up from its recent low of 49.6 in June and a low of 52.7 in December 2022 but below a record-high 69.5 in November 2021. An increased 30.1% of respondents (NSA) reported higher activity in September while a lessened 8.2% reported an activity decline. The new orders index advanced to 59.4 in September from 53.0 in August, indicating expansion in new orders for the 50th time in 52 months and at the fastest pace since February 2023. The index was up from its recent low of 47.3 in June and a low of 45.0 in December 2022 but down from a record-high 69.5 in October 2021. An increased 30.9% of respondents (NSA) reported higher orders in September while a lessened 10.4% reported a decline. Meanwhile, the supplier deliveries index (NSA) rose to 52.1 in September from 49.6 in August, indicating slower supplier delivery performance after two months in faster territory.

On the labor front, the employment index decreased to 48.1 in September on top of a 0.9-point decline to 50.2 in August, showing employment activity in the services sector contracted after two months of expansion. The latest reading, while above a low of 43.8 in December 2023, was below a high of 54.1 in August 2023 and a high of 58.3 in April 2021. A lessened 13.0% of respondents (NSA) indicated higher employment in September while 14.4% reported a decline.

On the inflation front, the prices index rose to 59.4 in September after a 0.3-point increase to 57.3 in August, indicating prices paid by services organizations for materials and services had risen (i.e., above 50) since June 2017 and at the fastest rate since January’s high of 64.0. The index was up versus its recent low of 53.4 in March and a low of 54.8 in June 2023; however, having remained significantly below a record-high 83.8 in March 2022. An increased 22.7% of respondents (NSA) reported price rises in September while a lessened 6.0% reported price declines.

Additionally, the new export orders index increased to 56.7 in September following a 7.6-point drop to 50.9 in August, indicating new export orders expanded for the 10th time in 11 months at a faster rate. The imports index rebounded to 52.7 in September from 50.3 in August, registering the third consecutive month of expansion after contracting in June and May. The inventories index advanced to 58.1 in September from 52.9 in August, indicating inventories expanded for the second successive month and at the fastest pace since May 2023. The inventory sentiment index fell to 54.0 in September after declining to 54.9 in August, showing continued expansion since May 2023 but at the slowest rising rate since June 2023. The backlog of orders index increased to 48.3 in September after dropping to 43.7 in August, posting the third contraction in four months. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes (25% each): Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector; below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver's **USECON** database, with additional detail in the **SURVEYS** database. The expectations figure from Action Economics is in the **AS1REPNA** database.

241003P10.jpg

241003Q10.jpg

- 54.9 in September vs. 51.5 in August, higher than expected; 3.1 pts. above the 12-month avg. of 51.8.
- Business Activity (59.9, a four-month high), New Orders (59.4, the highest since Feb. ’23), Employment (48.1, the first contraction since June), and Supplier Deliveries (52.1 vs. 49.6).
- Prices Index rises 2.1 pts. to 59.4, the highest since January.

U.S. ISM Services PMI Jumps in September; Highest Level Since February ’23

241003J2.jpg

241003K2.jpg

New orders for manufactured goods eased 0.2% (+0.9% y/y) during August, after strengthening 4.9% in July, revised from 5.0%, according to the Census Bureau. Orders declined 3.3% in June. The Action Economics Forecast Survey expected a 0.2% increase in total factory orders. Excluding the transportation sector, orders eased 0.1% (+0.5% y/y) after rising 0.3% in July.

New orders for durable goods were unchanged during August (+1.5% y/y), unrevised from the advance release, and followed a 9.8% July gain. The weakness in durable goods orders reflected a 0.8% easing (+2.5% y/y) in transportation sector orders. This followed a 34.6% jump in July, which was buoyed by higher civilian aircraft orders. Motor vehicle & parts orders eased 0.7% (-1.8% y/y) after a 1.0% decline. Orders for all factory products outside the transportation sector slipped 0.1% (+0.5% y/y) in August following a 0.3% July increase. Elsewhere, primary metals orders rose 0.2%, up 0.1% y/y. Machinery orders gained 0.4% (0.1% y/y), while computer & electronics rose 0.4% (2.8% y/y). Electrical equipment orders rose 2.4% (2.8% y/y), following a 0.8% decline.

Shipments by all manufacturing industries eased 0.5% in August (+1.0% y/y) after rising 0.8% in July. Durable goods shipments fell 0.6% (+1.7% y/y) after two months of roughly 1.1% gain. Transportation product shipments fell 2.0% (+5.0% y/y) after a 3.4% rise. Shipments excluding the transportation sector eased 0.2% (+0.2% y/y) after rising 0.3% in July. Machinery shipments rose 0.3% in August (-0.9% y/y) while computer & equipment shipments eased 0.2% (-0.1% y/y). Electrical equipment & appliance shipments rose 0.4% (+0.7% y/y). Nondurable goods shipments, which equal orders, fell 0.5% (+0.3% y/y) after increasing 0.6% in July. Food product shipments eased 0.1% (+1.3% y/y) while apparel shipments rose 0.4% (-2.4% y/y) after two months of decline. Textile product shipments weakened 1.7% both m/m and y/y after falling 0.3% in July. Paper product shipments rose 0.3% (2.1% y/y), following a 0.8% increase. Petroleum & coal product shipments declined 2.3% (-10.9% y/y) in August, after rising 0.5%. Basic chemical shipments rose 0.3% (5.8% y/y) after a 0.8% July increase.

There are no unfilled orders figures for nondurable goods industries. Unfilled orders for durable goods rose 0.4% (4.1% y/y) in August after a 0.2% rise. Transportation unfilled orders rose 0.5% (6.8% y/y) after increasing 0.3% in July. Excluding transportation, unfilled orders rose 0.2% (-0.4% y/y) after holding steady in July. Unfilled orders for durable goods less transportation have been trending sideways since 2022. Unfilled orders for machinery eased 0.1% (-3.7% y/y) while electrical equipment & appliance backlogs rose 0.4% (-0.0%) after a 0.2% decline.

Inventories of all manufactured products rose 0.1% in August (0.6% y/y) after holding steady in July. Durable goods inventories edged 0.1% higher (1.3% y/y) after holding steady in July. Transportation equipment inventories edged 0.1% higher (4.7% y/y) and inventories less transportation rose 0.2% (-0.4% y/y) after holding steady for five straight months. Nondurable goods inventories rose 0.2% (-0.5% y/y) after remaining unchanged for two months, though petroleum inventories rose 0.8% (-1.9% y/y) in August after easing 0.1% in July.

Manufacturers’ orders and shipments of durable and nondurable goods, along with unfilled orders and inventories, are compiled by the U.S. Census Bureau. They are available in Haver’s **USECON** database. The Action Economics forecast data are in the **AS1REPNA** database.

241003L2.jpg

241003M2.jpg

- Improved y/y in orders momentum remains in place.
- Shipments weighed down by a decline in nondefense aircraft sales.
- Unfilled orders and inventories rise modestly.

Economy in Brief: 2009

Jump to:

Retail Trade: Predictor Of Change In Total GDP?

Italian Business Confidence Advances...But Still Lags

Italian Business Confidence Advances...But Still Lags

Rising Exports Fuel Rise in Japanese Industrial Production

Rising Exports Fuel Rise inJapanese Industrial Production

FHFA Home Price Index Ticks Up Both M/M And Y/Y

Less Pessimism Among German Business Executives

U.S. Consumer Confidence Improves Modestly