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/071025c.jpg" width="353">
Durables goods orders fell sharply in September by 1.7% following a 5.3% drop during in August. That was revised slightly deeper from the initial report. Much of series&#39; volatility is due to orders in the transportation sector. Excluding transportation (which still can be volatile), orders rose a slight 0.3% after an unrevised 1.8% decline during August. 
The very short term trend in the non-transportation series shows some improvement, but that is due to a 3.3% jump back in July for which the latest two months&#39; results can be viewed as a payback. But before that jump the longer term trend in orders growth was down, as was the trend in overall orders for durable goods. 
Weakness in orders for electrical equipment, appliances and components most assuredly reflects weakness in the consumer sector. That also is true of computers where the latest three month growth recovered to a bare 1.6%, up from negative growth in the prior two periods and down from the peak in orders growth of 15.3% early his year. 
To a limited degree, orders for nondefense capital goods less the very volatile aircraft component are holding up. These orders rose 0.4% last month after a 0.1% August decline. Three month growth of 0.4% is up from negative growth just recently and is a big recovery from the excessive declines between 1% and 2% early this year. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071025d.jpg" width="353">
Machinery orders led that relative strength and rose 4.3% last month and the three month average growth is 5.5%. Orders for primary metals rose 1.6% and the average rise over the last three months also is an average 1.6%, up from negative growth earlier 
Growth in shipments, however have weakened even more. Overall shipments growth is down to -0.0% on average over the last three months and less transportation it&#39;s +0.1%. That&#39;s versus growth rates over 1% earlier this year. </div><div align="left">
Inventories are lean. Average growth over the last three months totals only 0.1% versus average growth rates in excess of 1% late last year. 
Unfilled orders also have picked somewhat to a recent average growth rate of 0.9% but that&#39; down from 14.1% during all of 2006. </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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">September </th>
<th scope="col">August</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">Durable Goods Orders</td>
<td>-1.7%</td>
<td>-5.3%</td>
<td>-6.6%</td>
<td>6.3%</td>
<td>9.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>0.3%</td>
<td>-1.8%</td>
<td>0.1%</td>
<td>7.6%</td>
<td>8.8%</td>
<td>7.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>4.4%</td>
<td>-10.2%</td>
<td>-11.4%</td>
<td>10.6%</td>
<td>17.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>0.4%</td>
<td>-0.1%</td>
<td>.2%</td>
<td>8.5%</td>
<td>11.1%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
</body>
</html>

Durables goods orders fell sharply in September by 1.7% following a 5.3% drop during in August. That was revised slightly deeper from the initial report. Much of series' volatility is due to orders in the transportation sector. [...]

U.S. Durable Goods Orders Down Big for Second Month

<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/071025a.jpg" width="353">
Initial claims for unemployment insurance remained high at 331,000 last week versus an upwardly revised level of 339,000 during the prior week.
The decline in claims last week fell short of Consensus expectations for a decline of 17,000 claims. The four week moving average of initial claims rose sharply to 324,750 (+5.0% y/y).
This month initial claims have averaged 326,000 per week, up 4.2% against an average of 313,000 during September.
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071025b.jpg" width="353">
Continuing claims for unemployment insurance rose by 0.3% for second consecutive week. The increase during the prior week was downwardly revised.
The continuing claims numbers lag the initial claims figures by one week.
The insured rate of unemployment held steady at 1.9%, off the peaks in August of 2.0% which were reached for only two weeks during month-end. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">10/20/07 </th>
<th scope="col">10/13/07 </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>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;331</td>
<td>339</td>
<td>6.8%</td>
<td>313</td>
<td>331</td>
<td>343</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,530</td>
<td>3.9%</td>
<td>2,545</td>
<td>3.3%</td>
<td>2,459</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance remained high at 331,000 last week versus an upwardly revised level of 339,000 during the prior week. The decline in claims last week fell short of Consensus expectations for a decline of [...]

U.S. Initial Claims for Jobless Insurance Remained High

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024b.jpg" width="353">
Oh, my.
A month ago here, Robert Brusca made a fairly calm assessment of home sales in most of the country. &quot;...holding their year-to-year declines to less than 10%&quot; for instance. Only the drop in the West was nettlesome to him.
This month is different. Total existing home sales across the country fell 8.0% from August amounts. All regions had sharp declines, the smallest in the South, 6.0%. And the Northeast, which had held up pretty well, dropped the most, by 10.0%. All the regions now have quite substantial year-on-year declines, ranging from 16.9% in the Northeast to 31.4% in the West.
The National Association of Realtors counts these sales at time of closing. So the September transactions would have gone to contract in June mostly, with some from May or July and a few in other months. That is, the bulk of these sales reflect market conditions earlier in the summer, before the worst of July and August&#39;s financial market distresses. So possibly the reaction to that is yet to appear in these data. Alternatively, as some analysts suggest this morning, the reduced number of closed sales may also reflect an increase in the rate at which previously contracted sales fell through as market conditions worsened. The latter condition would actually be preferable going forward, since it would mean that some of the dislocations have already been absorbed. One can hope.
Meantime, of course, we can make numerous historically unattractive comparisons. Using single-family-home data, which has a far longer history than total existing home sales, we see that the current sales volume is the lowest since January of 1998; the not-seasonally- adjusted figures show the lowest September value, 356,000, since 1997 at 351,000. Sales have been down on a year-to-year basis for 19 months, the most protracted contraction in these data since the double-digit interest rate period in 1980-81. Home prices are presently down on a year-to-year basis for 14 consecutive months, a completely unprecedented situation in the nearly 40-year history of the series; the longest previous period of yearly price decline was two months at the end of 1990. Prices were sluggish during 1992 and late in 1994, but still dipped below year-earlier levels on only isolated occasions.
<img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024c.jpg"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024d.jpg">
<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 colspan=3 scope="col">Sept 2007</th>
<th scope="col">Aug 2007</th>
<th scope="col">Year Ago</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td>&nbsp</td>
<td class="firstcol">Number</td>
<td>M/M%</td>
<td>Y/Y%</td>
<td colspan=5></td>
</tr>
<tr>
<td class="firstcol">Total Sales</td>
<td>5,040</td>
<td>-8.0</td>
<td>-22.7</td>
<td>5,480</td>
<td>6,230</td>
<td>6,478</td>
<td>7,076</td>
<td>6,778</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>-10.0</td>
<td>-16.9</td>
<td>1,000</td>
<td>1,040</td>
<td>1,086</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,190</td>
<td>-7.0</td>
<td>-20.2</td>
<td>1,280</td>
<td>1,420</td>
<td>1,483</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,050</td>
<td>-6.0</td>
<td>-22.4</td>
<td>2,180</td>
<td>2,520</td>
<td>2,563</td>
<td>2,702</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>910</td>
<td>-9.9</td>
<td>-31.4</td>
<td>1,010</td>
<td>1,260</td>
<td>1,346</td>
<td>1,617</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,380</td>
<td>-8.6</td>
<td>-22.9</td>
<td>4,790</td>
<td>5,460</td>
<td>5,677</td>
<td>6,180</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>211,700</td>
<td>n.m.</td>
<td>-4.9</td>
<td>224,400</td>
<td>220,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>
</body>
</html>

Oh, my. A month ago here, Robert Brusca made a fairly calm assessment of home sales in most of the country. "...holding their year-to-year declines to less than 10%" for instance. Only the drop in the West was nettlesome to him. This [...]

Existing Home Sales Drop 8% in September; All Regions Feel the Pain

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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024e.jpg" width="353">
The NTC indexes are clear on the Euro area. It is weak. Manufacturing is showing progressively less lift. The service sector, hard hit in September, is up in October, but, were it not for the weak September this October reading would be the weakest on record (meaning since January &#145;06 of course). But the manufacturing PMI has much longer history. It is on its lows over the past 22 months but is in its 48Th percentile since its inception going back to 1997, a period that includes a recession. Seeing the manufacturing reading on a two year low and below its range midpoint over the long haul is unsettling. On top of that the manufacturing PMI level is at 51.47 barely above the neutral reading of 50. The current manufacturing level stands that reading at about 97% of its full sample average and median. The charts make it clear that slippage is in train. The rebound in October for services is not something to take to the bank with manufacturing losing momentum especially since the services index is still bearing a low reading. Expect the ECB to remain afraid and on hold after these reports.


<colgroup><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr><th colspan=11 scope="col">FLASH Readings</th>
</tr>
</thead>

<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">NTC PMIs for the Euro area 13</td>
<td colspan="3">Averages</td>
<td colspan="3">22-Month Range</td>
</tr>

<td class="firstcol">&nbsp;</td>
<td>Oct 07</td>
Sep 07
Aug 07
Jul 07
3Mo
6Mo
12Mo
High
Low
%Range

<tr>
<td class="firstcol">MFG</td>
<td>51.47</td>
<td>53.21</td>
<td>54.16</td>
<td>54.84</td>
<td>52.95</td>
<td>54.03</td>
<td>54.91</td>
<td>57.61</td>
<td>51.47</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>55.56</td>
<td>54.04</td>
<td>57.91</td>
<td>58.09</td>
<td>55.84</td>
<td>56.80</td>
<td>57.04</td>
<td>61.21</td>
<td>54.04</td>
<td>21.2%</td>
</tr>




</html>

The NTC indexes are clear on the Euro area. It is weak. Manufacturing is showing progressively less lift. The service sector, hard hit in September, is up in October, but, were it not for the weak September this October reading would [...]

NTC Indexes for the Euro area are Very Weak; MFG Signal is Fading

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024a.jpg" width="353">
The ISAE business index did improve slightly in October from September. But the index, as well as its momentum, remain solidly in a down trend&#133; The ISAE business survey components tell a tale of a sector that is fading. For overall industry the total order books and demand responses are at the 50% mark market and are dead neutral. Domestic and foreign demand are each rated a tick or so above neutral. Inventories are soaring and high. Production, as result, is below neutral at a reading of 49. The detail shows a story that has become old hat for the Euro area. The weakness is in intermediate goods and in consumer goods. Intermediate goods readings are below the 50% mark for the most part while consumer goods ratings cluster in the BOTTOM THIRD of their respective ranges. The sense of firmness that the overall measure retains is a function totally of capital goods where readings remains elevated at about the top third of their respective ranges with the notable exception of foreign orders for capital goods that are now little better that neutral. Cleary Italy is flashing some warning signals. The Euro area PMI for MFG was doing much the same today. 


<colgroup></colgroup>
<thead>
<tr>
<th colspan=11 scope="col">Italy ISAE Business Sentiment</th>
</tr>
</thead>

<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Since January 1999</td>
<td colspan=4></td>
</tr>

<td class="firstcol">&nbsp;</td>
<td>Oct 07</td>
Sep 
Aug 
Jul 
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>

<tr class="grey2">
<td class="firstcol">Biz Confidence</td>
<td>92.9</td>
<td>92.4</td>
<td>94</td>
<td>93.5</td>
<td>58.4</td>
<td>38</td>
<td>102</td>
<td>80</td>
<td>21</td>
<td>92</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>TOTAL INDUSTRY</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-7</td>
<td>-6</td>
<td>-1</td>
<td>-2</td>
<td>50.0</td>
<td>37</td>
<td>13</td>
<td>-27</td>
<td>40</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>-9</td>
<td>-9</td>
<td>-8</td>
<td>-2</td>
<td>51.2</td>
<td>36</td>
<td>11</td>
<td>-30</td>
<td>41</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-10</td>
<td>-7</td>
<td>-7</td>
<td>-6</td>
<td>52.3</td>
<td>40</td>
<td>11</td>
<td>-33</td>
<td>44</td>
<td>-13</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>8</td>
<td>8</td>
<td>8</td>
<td>8</td>
<td>79.2</td>
<td>20</td>
<td>13</td>
<td>-11</td>
<td>24</td>
<td>4</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-3</td>
<td>-5</td>
<td>-7</td>
<td>7</td>
<td>49.0</td>
<td>37</td>
<td>22</td>
<td>-27</td>
<td>49</td>
<td>-5</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>INTERMEDIATE</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-9</td>
<td>-8</td>
<td>-7</td>
<td>0</td>
<td>49.1</td>
<td>41</td>
<td>19</td>
<td>-36</td>
<td>55</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Domestic</td>
<td>-11</td>
<td>-10</td>
<td>-8</td>
<td>-3</td>
<td>43.8</td>
<td>42</td>
<td>16</td>
<td>-32</td>
<td>48</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-9</td>
<td>-8</td>
<td>-14</td>
<td>-1</td>
<td>53.4</td>
<td>42</td>
<td>18</td>
<td>-40</td>
<td>58</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>4</td>
<td>4</td>
<td>3</td>
<td>7</td>
<td>65.5</td>
<td>27</td>
<td>14</td>
<td>-15</td>
<td>29</td>
<td>0</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-5</td>
<td>-5</td>
<td>-11</td>
<td>4</td>
<td>44.8</td>
<td>39</td>
<td>27</td>
<td>-31</td>
<td>58</td>
<td>-7</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>INVESTMENT GOODS</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>8</td>
<td>11</td>
<td>15</td>
<td>12</td>
<td>64.2</td>
<td>21</td>
<td>32</td>
<td>-35</td>
<td>67</td>
<td>-6</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>4</td>
<td>8</td>
<td>8</td>
<td>5</td>
<td>64.4</td>
<td>19</td>
<td>25</td>
<td>-34</td>
<td>59</td>
<td>-11</td>
</tr>
<tr class="grey2">
<td class="firstcol"> Foreign</td>
<td>-3</td>
<td>2</td>
<td>5</td>
<td>3</td>
<td>53.6</td>
<td>38</td>
<td>23</td>
<td>-33</td>
<td>56</td>
<td>-8</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>14</td>
<td>11</td>
<td>10</td>
<td>9</td>
<td>83.8</td>
<td>7</td>
<td>20</td>
<td>-17</td>
<td>37</td>
<td>2</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>13</td>
<td>10</td>
<td>16</td>
<td>20</td>
<td>66.7</td>
<td>17</td>
<td>35</td>
<td>-31</td>
<td>66</td>
<td>-1</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>CONSUMER GOODS</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-13</td>
<td>-17</td>
<td>-15</td>
<td>-4</td>
<td>33.3</td>
<td>62</td>
<td>15</td>
<td>-27</td>
<td>42</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>-16</td>
<td>-19</td>
<td>-18</td>
<td>-7</td>
<td>31.4</td>
<td>67</td>
<td>8</td>
<td>-27</td>
<td>35</td>
<td>-11</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-17</td>
<td>-13</td>
<td>-18</td>
<td>-7</td>
<td>38.3</td>
<td>53</td>
<td>12</td>
<td>-35</td>
<td>47</td>
<td>-15</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>9</td>
<td>5</td>
<td>5</td>
<td>9</td>
<td>76.9</td>
<td>17</td>
<td>15</td>
<td>-11</td>
<td>26</td>
<td>4</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-12</td>
<td>-14</td>
<td>-17</td>
<td>3</td>
<td>36.1</td>
<td>73</td>
<td>11</td>
<td>-25</td>
<td>36</td>
<td>-7</td>
</tr>
<tr class="grey1">
<td class="firstcol"></td>
<td colspan="5">Total number of months:</td>
<td>100</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>





</html>

The ISAE business index did improve slightly in October from September. But the index, as well as its momentum, remain solidly in a down trend The ISAE business survey components tell a tale of a sector that is fading. For overall [...]

Italy's Biz Index in a Small, Unconvincing Rebound

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024a.jpg" width="353">
The ISAE business index did improve slightly in October from September. But the index, as well as its momentum, remain solidly in a down trend&#133; The ISAE business survey components tell a tale of a sector that is fading. For overall industry the total order books and demand responses are at the 50% mark market and are dead neutral. Domestic and foreign demand are each rated a tick or so above neutral. Inventories are soaring and high. Production, as result, is below neutral at a reading of 49. The detail shows a story that has become old hat for the Euro area. The weakness is in intermediate goods and in consumer goods. Intermediate goods readings are below the 50% mark for the most part while consumer goods ratings cluster in the BOTTOM THIRD of their respective ranges. The sense of firmness that the overall measure retains is a function totally of capital goods where readings remains elevated at about the top third of their respective ranges with the notable exception of foreign orders for capital goods that are now little better that neutral. Cleary Italy is flashing some warning signals. The Euro area PMI for MFG was doing much the same today. 


<colgroup></colgroup>
<thead>
<tr>
<th colspan=11 scope="col">Italy ISAE Business Sentiment</th>
</tr>
</thead>

<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Since January 1999</td>
<td colspan=4></td>
</tr>

<td class="firstcol">&nbsp;</td>
<td>Oct 07</td>
Sep 
Aug 
Jul 
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>

<tr class="grey2">
<td class="firstcol">Biz Confidence</td>
<td>92.9</td>
<td>92.4</td>
<td>94</td>
<td>93.5</td>
<td>58.4</td>
<td>38</td>
<td>102</td>
<td>80</td>
<td>21</td>
<td>92</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>TOTAL INDUSTRY</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-7</td>
<td>-6</td>
<td>-1</td>
<td>-2</td>
<td>50.0</td>
<td>37</td>
<td>13</td>
<td>-27</td>
<td>40</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>-9</td>
<td>-9</td>
<td>-8</td>
<td>-2</td>
<td>51.2</td>
<td>36</td>
<td>11</td>
<td>-30</td>
<td>41</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-10</td>
<td>-7</td>
<td>-7</td>
<td>-6</td>
<td>52.3</td>
<td>40</td>
<td>11</td>
<td>-33</td>
<td>44</td>
<td>-13</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>8</td>
<td>8</td>
<td>8</td>
<td>8</td>
<td>79.2</td>
<td>20</td>
<td>13</td>
<td>-11</td>
<td>24</td>
<td>4</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-3</td>
<td>-5</td>
<td>-7</td>
<td>7</td>
<td>49.0</td>
<td>37</td>
<td>22</td>
<td>-27</td>
<td>49</td>
<td>-5</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>INTERMEDIATE</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-9</td>
<td>-8</td>
<td>-7</td>
<td>0</td>
<td>49.1</td>
<td>41</td>
<td>19</td>
<td>-36</td>
<td>55</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Domestic</td>
<td>-11</td>
<td>-10</td>
<td>-8</td>
<td>-3</td>
<td>43.8</td>
<td>42</td>
<td>16</td>
<td>-32</td>
<td>48</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-9</td>
<td>-8</td>
<td>-14</td>
<td>-1</td>
<td>53.4</td>
<td>42</td>
<td>18</td>
<td>-40</td>
<td>58</td>
<td>-12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>4</td>
<td>4</td>
<td>3</td>
<td>7</td>
<td>65.5</td>
<td>27</td>
<td>14</td>
<td>-15</td>
<td>29</td>
<td>0</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-5</td>
<td>-5</td>
<td>-11</td>
<td>4</td>
<td>44.8</td>
<td>39</td>
<td>27</td>
<td>-31</td>
<td>58</td>
<td>-7</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>INVESTMENT GOODS</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>8</td>
<td>11</td>
<td>15</td>
<td>12</td>
<td>64.2</td>
<td>21</td>
<td>32</td>
<td>-35</td>
<td>67</td>
<td>-6</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>4</td>
<td>8</td>
<td>8</td>
<td>5</td>
<td>64.4</td>
<td>19</td>
<td>25</td>
<td>-34</td>
<td>59</td>
<td>-11</td>
</tr>
<tr class="grey2">
<td class="firstcol"> Foreign</td>
<td>-3</td>
<td>2</td>
<td>5</td>
<td>3</td>
<td>53.6</td>
<td>38</td>
<td>23</td>
<td>-33</td>
<td>56</td>
<td>-8</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>14</td>
<td>11</td>
<td>10</td>
<td>9</td>
<td>83.8</td>
<td>7</td>
<td>20</td>
<td>-17</td>
<td>37</td>
<td>2</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>13</td>
<td>10</td>
<td>16</td>
<td>20</td>
<td>66.7</td>
<td>17</td>
<td>35</td>
<td>-31</td>
<td>66</td>
<td>-1</td>
</tr>
<tr class="grey1">
<td class="firstcol" colspan=11>CONSUMER GOODS</td>

</tr>
<tr class="grey2">
<td class="firstcol" colspan=11>Order books &amp; Demand</td>

</tr>
<tr class="grey2">
<td class="firstcol">Total</td>
<td>-13</td>
<td>-17</td>
<td>-15</td>
<td>-4</td>
<td>33.3</td>
<td>62</td>
<td>15</td>
<td>-27</td>
<td>42</td>
<td>-10</td>
</tr>
<tr class="grey2">
<td class="firstcol">Domestic</td>
<td>-16</td>
<td>-19</td>
<td>-18</td>
<td>-7</td>
<td>31.4</td>
<td>67</td>
<td>8</td>
<td>-27</td>
<td>35</td>
<td>-11</td>
</tr>
<tr class="grey2">
<td class="firstcol">Foreign</td>
<td>-17</td>
<td>-13</td>
<td>-18</td>
<td>-7</td>
<td>38.3</td>
<td>53</td>
<td>12</td>
<td>-35</td>
<td>47</td>
<td>-15</td>
</tr>
<tr class="grey2">
<td class="firstcol">Inventories</td>
<td>9</td>
<td>5</td>
<td>5</td>
<td>9</td>
<td>76.9</td>
<td>17</td>
<td>15</td>
<td>-11</td>
<td>26</td>
<td>4</td>
</tr>
<tr class="grey2">
<td class="firstcol">Production</td>
<td>-12</td>
<td>-14</td>
<td>-17</td>
<td>3</td>
<td>36.1</td>
<td>73</td>
<td>11</td>
<td>-25</td>
<td>36</td>
<td>-7</td>
</tr>
<tr class="grey1">
<td class="firstcol"></td>
<td colspan="5">Total number of months:</td>
<td>100</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>


NTC Indexes for the Euro area are Very Weak; MFG Signal is Fading 
by <a href="/comment/Brusca.html">Robert Brusca</a> October 24, 2007


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024e.jpg" width="353">
The NTC indexes are clear on the Euro area. It is weak. Manufacturing is showing progressively less lift. The service sector, hard hit in September, is up in October, but, were it not for the weak September this October reading would be the weakest on record (meaning since January &#145;06 of course). But the manufacturing PMI has much longer history. It is on its lows over the past 22 months but is in its 48Th percentile since its inception going back to 1997, a period that includes a recession. Seeing the manufacturing reading on a two year low and below its range midpoint over the long haul is unsettling. On top of that the manufacturing PMI level is at 51.47 barely above the neutral reading of 50. The current manufacturing level stands that reading at about 97% of its full sample average and median. The charts make it clear that slippage is in train. The rebound in October for services is not something to take to the bank with manufacturing losing momentum especially since the services index is still bearing a low reading. Expect the ECB to remain afraid and on hold after these reports.


<colgroup><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr><th colspan=11 scope="col">FLASH Readings</th>
</tr>
</thead>

<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">NTC PMIs for the Euro area 13</td>
<td colspan="3">Averages</td>
<td colspan="3">22-Month Range</td>
</tr>

<td class="firstcol">&nbsp;</td>
<td>Oct 07</td>
Sep 07
Aug 07
Jul 07
3Mo
6Mo
12Mo
High
Low
%Range

<tr>
<td class="firstcol">MFG</td>
<td>51.47</td>
<td>53.21</td>
<td>54.16</td>
<td>54.84</td>
<td>52.95</td>
<td>54.03</td>
<td>54.91</td>
<td>57.61</td>
<td>51.47</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>55.56</td>
<td>54.04</td>
<td>57.91</td>
<td>58.09</td>
<td>55.84</td>
<td>56.80</td>
<td>57.04</td>
<td>61.21</td>
<td>54.04</td>
<td>21.2%</td>
</tr>


Existing Home Sales Drop 8% in September; All Regions Feel the Pain 
by <a href="/comment/Stone.html">Carol Stone</a> October 24, 2007


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024b.jpg" width="353">
Oh, my.
A month ago here, Robert Brusca made a fairly calm assessment of home sales in most of the country. &quot;...holding their year-to-year declines to less than 10%&quot; for instance. Only the drop in the West was nettlesome to him.
This month is different. Total existing home sales across the country fell 8.0% from August amounts. All regions had sharp declines, the smallest in the South, 6.0%. And the Northeast, which had held up pretty well, dropped the most, by 10.0%. All the regions now have quite substantial year-on-year declines, ranging from 16.9% in the Northeast to 31.4% in the West.
The National Association of Realtors counts these sales at time of closing. So the September transactions would have gone to contract in June mostly, with some from May or July and a few in other months. That is, the bulk of these sales reflect market conditions earlier in the summer, before the worst of July and August&#39;s financial market distresses. So possibly the reaction to that is yet to appear in these data. Alternatively, as some analysts suggest this morning, the reduced number of closed sales may also reflect an increase in the rate at which previously contracted sales fell through as market conditions worsened. The latter condition would actually be preferable going forward, since it would mean that some of the dislocations have already been absorbed. One can hope.
Meantime, of course, we can make numerous historically unattractive comparisons. Using single-family-home data, which has a far longer history than total existing home sales, we see that the current sales volume is the lowest since January of 1998; the not-seasonally- adjusted figures show the lowest September value, 356,000, since 1997 at 351,000. Sales have been down on a year-to-year basis for 19 months, the most protracted contraction in these data since the double-digit interest rate period in 1980-81. Home prices are presently down on a year-to-year basis for 14 consecutive months, a completely unprecedented situation in the nearly 40-year history of the series; the longest previous period of yearly price decline was two months at the end of 1990. Prices were sluggish during 1992 and late in 1994, but still dipped below year-earlier levels on only isolated occasions.
<img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024c.jpg"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071024d.jpg">
<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 colspan=3 scope="col">Sept 2007</th>
<th scope="col">Aug 2007</th>
<th scope="col">Year Ago</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td>&nbsp</td>
<td class="firstcol">Number</td>
<td>M/M%</td>
<td>Y/Y%</td>
<td colspan=5></td>
</tr>
<tr>
<td class="firstcol">Total Sales</td>
<td>5,040</td>
<td>-8.0</td>
<td>-22.7</td>
<td>5,480</td>
<td>6,230</td>
<td>6,478</td>
<td>7,076</td>
<td>6,778</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>-10.0</td>
<td>-16.9</td>
<td>1,000</td>
<td>1,040</td>
<td>1,086</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,190</td>
<td>-7.0</td>
<td>-20.2</td>
<td>1,280</td>
<td>1,420</td>
<td>1,483</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,050</td>
<td>-6.0</td>
<td>-22.4</td>
<td>2,180</td>
<td>2,520</td>
<td>2,563</td>
<td>2,702</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>910</td>
<td>-9.9</td>
<td>-31.4</td>
<td>1,010</td>
<td>1,260</td>
<td>1,346</td>
<td>1,617</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,380</td>
<td>-8.6</td>
<td>-22.9</td>
<td>4,790</td>
<td>5,460</td>
<td>5,677</td>
<td>6,180</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>211,700</td>
<td>n.m.</td>
<td>-4.9</td>
<td>224,400</td>
<td>220,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>


</html>

Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071023b.jpg" width="353">
Consumer confidence held steady in the Netherlands and in Italy in October. The Dutch measure of consumer confidence had declined 16 percentage points in September, probably reflecting the turmoil in financial markets resulting from the disarray in the sub prime mortgage market in the U.S. The Italian consumer apparently, brushed off the trouble in the financial markets. Italian consumer confidence actually rose 0.7% in September to 89.9 (2000=1000) and remained there in October. The first chart shows the month to month changes in consumer confidence in the two countries. In the case of the Netherlands, the month to month changes are expressed in percentage point differences of the percent balance, and in Italy in percentage changes in an index number. The fact that the Dutch measure seems to be more volatile than that of the Italian, does not necessarily mean that the Dutch consumers are more volatile than their Italian counterparts. Percentage point changes in percent balances tend to be more volatile than percentage changes in an index number.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071023c.jpg" width="353">
The Netherlands has also released its measure of business confidence today. Businessmen in the Netherlands have generally been more optimistic than consumers as can be seen in the second chart. Except for period from December 2006 through August of this year, business confidence has far been far higher than that of the consumer over the past five years. Business confidence increased in October to 8.6% from 7.5% in September.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071023d.jpg" width="353">
Italian business confidence will not be reported until later in the week, but the past trends of business and consumer confidence shows that businessmen, like those in the Netherlands tend to be more optimistic than consumers as can be seen in the third chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">CONSUMER AND BUSINESS CONFIDENCE&nbsp;</th>
<th scope="col">Oct 07</th>
<th scope="col">Sep 07&nbsp;</th>
<th scope="col">Oct 06&nbsp;</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</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">Netherlands (Percent Balance)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Business Confidence</td>
<td>8.6</td>
<td>7.5</td>
<td>9.0</td>
<td>1.1</td>
<td>-0.4</td>
<td>6.7</td>
<td>0.6</td>
<td>-0.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Confidence</td>
<td>-1</td>
<td>-1</td>
<td>8</td>
<td>0</td>
<td>-9</td>
<td>-1</td>
<td>-22</td>
<td>-25</td>
</tr>
<tr class="odd">
<td class="firstcol"> Italy (2000=100) </td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Business Confidence</td>
<td>n.a.</td>
<td>92.2</td>
<td>97.3*</td>
<td>n.a.</td>
<td>-5.2</td>
<td>95.8</td>
<td>97.5</td>
<td>89.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Confidence</td>
<td>89.9</td>
<td>89.9</td>
<td>91.0</td>
<td>0.0</td>
<td>-1.3</td>
<td>91.1</td>
<td>87.3</td>
<td>85.0</td>
</tr>
<tr>
<td colspan="9">* September, 2006</td>
</tr>
<tr>
<td colspan="9">n.a. not available</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer confidence held steady in the Netherlands and in Italy in October. The Dutch measure of consumer confidence had declined 16 percentage points in September, probably reflecting the turmoil in financial markets resulting from [...]

Consumer Confidence Holds Steady in October in the Netherlands and Italy

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

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

Service Health

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

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Winnie Tapasanun

260618N12.jpg

260618O12.jpg

The current general activity diffusion index rebounded to a slightly stronger-than-expected 10.3 in June following a 27.1-point drop to -0.4 in May, the latest Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia showed, indicating a return to expansion in manufacturing activity in the Third Federal Reserve District this month. A reading of 10.0 for June had been expected by the Action Economics Forecast Survey. June marked the fifth m/m increase in six months, showing a sharp improvement from -1.4 in June 2025. In June, 32.1% of firms reported increases in current general activity (up from 22.5% in May), while 21.9% reported decreases (down from 22.9%); 45.4% reported no change (down from 54.6%). Survey responses were collected from June 8 to June 15.

Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index rose to 53.1 in June after a 4.8-point decline to a contraction-level 49.7 in May, indicating manufacturing activity expanded for the third time in four months; it was slightly above 51.0 in June 2025.

In the latest survey, the new orders index surged to 27.3 in June following a 34.7-point plunge to -1.7 in May, signaling new orders expanded for the sixth time in seven months. The shipments index rebounded to 14.9 this month from 4.9 in May, registering the seventh consecutive expansion. The unfilled orders index advanced to 10.5 from -2.5, indicating expansion for the first time since July 2025 and the highest level since January 2025. In contrast, the inventories index dropped to -8.5 in June from 6.6 in May, showing inventories contracted for the second time in three months and at the lowest level since July 2024. Meanwhile, the delivery times index increased to -2.6 this month from -10.4 in May (the lowest reading since March 2024).

On the labor front, the number of employees index rose to 7.9 in June from -2.8 in May, indicating employment expanded for the first time in three months and at the highest level since January. In June, a higher 17.0% of respondents reported increases in employment, while 9.2% reported declines; 73.8% reported no change in employment levels. The average employee workweek index fell to -6.5 this month, the first negative reading and lowest since February, from 1.2 in May.

Inflation indicators were mixed in June. The prices paid index rose to 53.2 this month following an 11.4-point drop to 47.9 in May. A higher 53.5% of respondents reported increases in input prices in June, while only 0.4% reported decreases. The prices received index fell to 20.3, a four-month low, after a 7.2-point May decline to 26.3. In June, 20.3% of respondents reported increases in prices received, while 0.0% reported decreases.

The future indexes remained in positive territory, signaling continued overall growth over the next six months, with most future indicators rising. The future general activity diffusion index edged down to 50.2 in June from 53.2 in May, staying positive since February 2024. Future indexes for new orders (60.8 vs. 53.5) and shipments (60.3 vs. 45.7) increased in June (vs. May) and remained positive. Notably, the future capital expenditures index rose to 41.2 this month, the highest level since June 2021, from 30.9 in May. The following future indexes slipped in June (vs. May) but stayed in positive territory: employment (30.8 vs. 31.7), unfilled orders (17.3 vs. 19.2), and inventories (10.0 vs. 11.8). Prices continued to increase, with the future prices paid index easing to a still-elevated 63.2 in June from 70.0 in May and the future prices received index rising to 67.2, the highest level since August 2021, from 60.5.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The indexes range from -100 to +100 with positive values indicating an increase in activity. The series from the survey dating back to May 1968 can be found in Haver’s **SURVEYS** database. The expectations forecast figures are from the Action Economics Forecast Survey in **AS1REPNA**.

260618P12.jpg

260618Q12.jpg

- Current General Activity Index up 10.7 pts. to 10.3 in June; fifth rise in six months.
- New Orders (27.3), sixth expansion in seven mths.; Shipments (14.9), seventh straight expansion; Unfilled Orders (10.5), first expansion since July ’25.
- Employment (7.9), a five-month high after two mths. of contraction.
- Inflation indicators: Prices Paid up (53.2); Prices Received down (20.3, a four-month low).
- Future General Activity Index down to a still-expansion-level 50.2; most subindexes up and positive; future price indexes remaining above long-run avgs.

U.S. Philadelphia Fed Index Returns to Positive Territory in June

Andrew Cates

**US Outperformance Holds; Europe and China Continue to Disappoint**
One of the most persistent features of the global macro landscape in 2026 has been the widening divergence between growth outcomes in the United States and those in Europe and China. Citigroup’s global growth surprise indices—which measure the gap between actual economic releases and consensus expectations—capture this divergence with unusual clarity. US data have continued to surprise on the upside, supported by resilient consumer spending, a stronger-than-expected labour market and the ongoing AI-driven capital spending boom. The picture elsewhere is less encouraging. Growth surprises have turned negative across the euro area, reflecting the cumulative toll of elevated energy costs, weak industrial activity and subdued business confidence. And China's growth surprise index has also fallen sharply in recent weeks, with weaker-than-expected retail sales and fixed asset investment data for May this week reinforcing concerns that domestic demand remains fragile and that policy support is yet to gain meaningful traction.

260618Z1.jpg

**The Oil Risk Premium in the UK Has Been Fading**
One of the more notable features of UK markets this year has been the close relationship between oil prices and two-year gilt yields. The link is not mechanical, but in an economy heavily exposed to imported energy, swings in oil prices can materially alter the inflation outlook and, by extension, expectations for Bank of England policy. That relationship was on display again this week. A softer-than-expected UK CPI reading for May—helped in part by easing energy price pressures—led investors to scale back expectations that inflation would remain persistently above target, pushing two-year gilt yields to their lowest level in six weeks. The question now is whether this marks the start of a more sustained easing in inflation pressures or merely a temporary reprieve. Much will depend on whether the recent decline in oil prices following the US-Iran ceasefire agreement proves durable.

260618Z2.jpg

**The AI Investment Boom Is Rewriting the Rule Book for the Chip Industry**
If the divergence in global growth surprises noted above tells a story of a world economy under strain, the semiconductor sales data tell a very different one — of a technology-driven investment cycle that is accelerating almost regardless of the broader macro environment. Global semiconductor sales have surged to record levels over the past twelve months, driven primarily by insatiable demand for the chips that underpin AI infrastructure: graphics processing units, high-bandwidth memory, and advanced logic chips. Data centre capital expenditure from the hyperscalers continues to exceed even the most optimistic forecasts from a year ago, and the investment pipeline shows no sign of moderating. The gains are concentrated in AI-adjacent products; legacy chips for consumer electronics and industrial applications remain relatively soft.

260618Z3.jpg

**Copper Holds Firm As Oil Retreats**
The commodity markets are telling two quite different stories this week, and the contrast is instructive. Oil has moved sharply lower on the US-Iran MoU news as investors trim the conflict risk premium that has been embedded in energy markets since March — a welcome development for inflation and central bank optionality alike. But the three commodities shown in this chart tell a different story. Copper, one of the most reliable proxies for global electricity infrastructure investment, remains near multi-year highs, reflecting the extraordinary volume of data centre construction, grid expansion and electrification spending flowing through the global economy. Aluminium — energy-intensive to produce and increasingly in demand for the structural components of both data centres and electric vehicles — has, until quite recently, held its ground. Lithium hydroxide, the battery-grade refining product that sits at the heart of the energy storage supply chain, has seen some cyclical softness but remains structurally underpinned by the scale of demand being projected for grid-scale storage and electric mobility over the next decade.

260618Z4.jpg

**Is Energy Availability a Binding Constraint on Growth?**
This next chart is a scatter plot that maps electricity generation per capita against GDP growth per capita across a broad sample of countries over the past five years. The positive relationship is striking. Economies with higher electricity generation per capita, including the United States, have generally delivered stronger GDP growth, while those with more constrained electricity systems have tended to lag. The obvious objection is reverse causality: richer economies generate more electricity because they have more to power. That is partly true. But the broader evidence is difficult to dismiss. The US shale revolution delivered an abundance of cheap energy that supported a sustained period of industrial outperformance relative to many advanced economies. Mainstream commentary often attributed this advantage to factors such as labour market flexibility or technological innovation, but energy costs were arguably at least as important.

260618Z5.jpg

**Corporate America Is Investing from a Position of Unusual Financial Strength**
The surge in US corporate investment—particularly in AI infrastructure, data centres and semiconductors—has inevitably drawn comparisons with the late-1990s dot-com boom. Yet the financial balance data suggest an important difference. During the dot-com era, US non-financial corporates moved into a financial deficit approaching 4% of GDP, relying heavily on external financing to fund investment. Today, despite another ambitious investment cycle, the sector remains in surplus, currently around 1.8% of GDP. Corporate America is investing aggressively, but it is still generating more cash than it is spending. The boom is being financed largely through profits rather than debt. Risks remain—not least the growing fiscal burden on the federal government—but the balance-sheet fragilities that turned previous investment booms into systemic crises appear far less pronounced. If a major constraint emerges in the years ahead, it may be energy and resources rather than leverage.

260618Z6.jpg

The signing of a Memorandum of Understanding (MoU) between the United States and Iran earlier this week has offered financial markets their most significant moment of geopolitical relief since the Middle East conflict escalated in early March. Oil prices fell sharply on the news, short-dated bond yields moved lower across several major economies, and risk assets recovered ground. But relief, as investors have learnt repeatedly over the past three months, is arguably not the same as resolution. The MoU sets a framework for negotiations rather than a final settlement, and the history of US-Iran diplomacy is not one that encourages complacency. Meanwhile, the Federal Reserve — concluding its June meeting yesterday under new chair Kevin Warsh — held rates steady but delivered a distinctly hawkish dot plot that shifted the median year-end projection from a cut to a hike, a reminder that the easing cycle the market had been pricing is no longer the base case. Against this backdrop, this week's charts take stock of where the global economy presently stands — and what the underlying data, beneath the geopolitical noise, are telling us. The picture that emerges is one of divergence. The United States continues to outperform consensus growth expectations while Europe and China disappoint (chart 1). UK short-dated yields have tracked oil prices with unusual consistency this year, and today's softer-than-expected CPI print for May — arriving just as the MoU has knocked crude lower — potentially changes the policy calculus for the Bank of England (chart 2). Global semiconductor sales, meanwhile, are storming ahead regardless of the geopolitical noise, powered by AI infrastructure spending that shows no sign of fatigue (chart 3). A cross-section of commodity prices tells two stories simultaneously: the geopolitical risk premium is draining out of oil, but the metals and materials the AI economy actually needs — copper, uranium, critical minerals — are holding firm (chart 4). Meanwhile a cross-country scatter of electricity generation and GDP growth over the past five years raises a question that deserves more attention than it typically gets: is energy availability a constraint on growth, or merely a consequence of it? The evidence, we would argue, points firmly in one direction (chart 5). And finally, for all the comparisons being drawn between the current investment boom and the late 1990s, the financial balance of the US corporate sector tells a rather different story — one that matters for how any correction might unfold (chart 6).

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/7rw2v1Ri8gUVHbFrZfgANL?utm_source=generator&si=75d98727e9524d75" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Between Relief and Reality

Sandy Batten

260617V1.jpg

260617W1.jpg

Total retail sales rose a much larger-than-expected 0.9% m/m (6.9%y/y) in May following a slightly downwardly revised 0.4% monthly gain in April (previously 0.5% m/m), according to data released by the U.S. Census Bureau. The Action Economics Forecast Survey looked for a 0.5% m/m gain. Excluding autos, other sales increased 0.8% m/m (7.5% y/y) after an unrevised 0.7% m/m increase in April. Expectations were for a 0.5% monthly rise.

Elevated retail gasoline prices continued to boost the value of gasoline sales in May. Gasoline sales increased 3.4% m/m (26.5% y/y) in May on top of a 2.8% m/m increase in April. However, both monthly increases were slower than the 14.2% monthly jump reported in March. Gasoline sales accounted for 31% of total sales in May. However, sales were solid even without gasoline sales. Total sales excluding gasoline rose 0.7% m/m in April, up from 0.2% m/m in April. Sales excluding both autos and gasoline increased 0.5% m/m in May, the same monthly gain as in April.

The control group of sales (total sales excluding food services, autos, gasoline and building materials that the BEA uses to construct PCE in the national accounts) posted another solid increase in May, rising 0.7% m/m (6.3% y/y) following an unrevised 0.5% monthly increase in April. The strong performance at the end of Q1 followed by solid gains in April and May put the April-May level of control group sales up 8.6% at an annual rate from the Q1 average, pointing to another solid contribution by consumption to overall GDP growth in Q2. Consumer spending remains surprisingly resilient notwithstanding the recent hit to disposable income from the marked increase in energy prices.

Sales generally increased across major sectors in May. Auto sales rebounded, rising 1.2% m/m in May and more than reversing the 0.9% monthly decline in April. This was the third gain in auto sales in the past four months. Furniture sales rose 1.0% m/m but sales at electronics and appliance stores slipped 0.5% m/m. Building material sales gained 1.0% m/m on top of a 1.1% monthly increase in April. Clothing sales rose 0.3% m/m. Sales at general merchandise stores gained 0.4% m/m in May. Miscellaneous sales jumped 2.3% m/m in May, their first monthly gain in three months. Sales by nonstore retailers continued their strong performance, increasing 1.5% m/m in May on top of a 1.1% monthly rise in April. Over the first five months of this year, nonstore retail sales have risen 7.2%, not annualized. By contrast, food sales were unchanged in May from April while sales at restaurants edged down 0.1% m/m in May, their first monthly decline in four months.

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

260617X1.jpg

260617Y1.jpg

- Total sales increased 0.9% m/m in May, nearly twice expectations.
- Auto sales rebounded, rising 1.2% m/m in May, more than reversing a 0.9% monthly decline in April. 
- Gasoline sales rose 3.4% m/m in May.
- Excluding auto and gasoline sales, remaining sales increased by a solid 0.5% m/m in May, the same monthly increase as in April.
- Sales of the retail control group that is used to construct PCE rose 0.7% m/m in May and are 8.6% annualized above the Q1 average.

U.S. Retail Sales Jumped More than Expected in May

260617A49.jpg

260617B49.jpg

Mortgage applications fell 3.8% w/w (+8.6% y/y) in the week ending June 12 following a 10.8% rebound in the week ending June 5, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The latest reading was the fourth w/w fall in five weeks, lowering the index to 269.5. Applications for loans to purchase a house slid 3.4% (+3.0% y/y) in the June 12 week, down for the fourth time in five weeks, after a 7.3% rise in the previous week. Applications for loan refinancing dropped 4.5% (+17.0% y/y) in the June 12 week, the seventh w/w decline in eight weeks, following a 15.3% jump in the June 5 week.

The effective interest rate on a 30-year fixed-rate loan was unchanged at 6.78% in the week ending June 12; it was above a low of 6.24% in the February 27 week but below a peak of 8.12% in the week of October 20, 2023. The rate on 15-year fixed-rate mortgages edged up 2bps to 6.18% in the June 12 week, the highest in three weeks, from 6.16% in the previous week; it was up from a low of 5.60% in the week of September 20, 2024 but down from a high of 7.44% in the week of October 27, 2023. Meanwhile, the rate on 30-year jumbo loans declined 4bps to 6.78% in the June 12 week from 6.82% in the prior week; it was above a low of 6.25% in the February 27 week but below a high of 7.99% in the week of October 27, 2023. The rate on a 5-year ARM fell 7bps to 6.16% in the June 12 week, the first w/w decline in six weeks, from 6.23% in the previous week (the highest since the week of August 15, 2025); it was above a low of 5.38% in the February 20 week but below a high of 7.31% in the week of October 27, 2023.

The share of applications for refinancing an existing loan edged up to 40.3% of total applications in the week ending June 12—the fourth w/w increase in five weeks and the highest level since the May 15 week—after rising to 40.2% in the week ending June 5; it remained below a peak of 61.9% in the January 16 week but above a low of 34.6% in the week of May 23, 2025. The adjustable-rate mortgage (ARM) share of activity slipped to 8.5% in the June 12 week from 8.6% in the prior week; it was below a peak of 12.9% in the week of September 12, 2025 but above a low of 4.7% in the week of January 3, 2025.

The average size of a mortgage loan fell 1.5% w/w (+3.7% y/y) to $394,100 in the June 12 week, the lowest level since the April 3 week, after a 0.4% rebound to $399,900 in the June 5 week. The average size of a purchase loan dropped 1.9% (+4.0% y/y) to $456,600 in the June 12 week following a 2.8% recovery to $465,300 in the prior week. The average size of a loan to refinance a mortgage fell 0.4% (+7.0% y/y) to $301,400 in the June 12 week on top of a 2.3% decline to $302,500 in the previous week, marking the third consecutive w/w fall, the sixth decline in seven weeks, and the lowest level since the week of July 25, 2025.

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

- Purchase applications -3.4% w/w, down for fourth time in five weeks; refinance applications -4.5% w/w, seventh fall in eight weeks.
- Effective interest rate on 30-year fixed loans unchanged at 6.78%, up from a late-February low of 6.24%.
- Average loan size down for the second time in three weeks, lowest since the April 3 week.

U.S. Mortgage Applications Down 3.8% in the June 12 Week, Fourth Drop in Five Weeks

260617E.jpg

It's an interesting time for the Bank of England to be meeting; it has its next policy meeting on June 18. Top money center central banks have been meeting, and the European Central Bank delivered a rate hike, with what is believed to be a likelihood of another hike before the end of the year. The Bank of Japan as just met and executed a 25-basis-point rate hike that brought the overnight interest rate up to 1% for the first time in 31 years. The Federal Reserve meets today and although the Fed is not expected to make an interest rate change, it is widely expected to remove the language that implies the next rate change is likely to be a reduction. Against that background, there is a pending deal to be signed on Friday between the United States and Iran to end the hostilities, to open the Strait of Hormuz, and to allow a normalization—or at least a transition toward normalization—of traffic flow through the Strait of Hormuz and the restoration of the delivery of the world's oil supplies.

Against this background, the Bank of England will be making its rate decision. Part of this background shows other central banks having taken steps to become less accommodative or more vigilant against inflation risks and what have been ongoing overshoots of inflation targets by monetary policy globally. The Bank of England is part of this phenomenon as its rate of inflation, measured by the CPIH, is 3% year-over-year, a full percentage point above where it's supposed to be. However, both the CPIH and the HICP treatments for measuring U.K. inflation show inflation edging slightly lower—from 3% for the CPIH over 12 months to 2.7% over three months annualized. For the HICP, it moves from 2.9% over 12 months to a 2.7% annual rate over three months. Both of these are small moves but in the right direction. In addition, the CPIH core measure, excluding food, energy, alcohol, and tobacco, shows inflation declining from 2.9% over 12 months to 2.6% at an annual rate over six months, and to 1.7% at an annual rate over three months.

In short, inflation progress in the U.K. is very much in gear for the headline; inflation is quite moderately easing, however. For the core, the move lower is impressive and considerable. The question is whether the MPC at the Bank of England will find these movements sufficient in and of themselves to stay their hand and hold interest rate policy, or whether the Committee will join the ranks of central banks hiking interest rates to make sure that inflation makes that turn lower.

The situation in the Strait of Hormuz is hopeful, but not definitive, and there have been a number of ceasefires in the Middle East that have been called and then broken up relatively quickly. This time, markets are reacting to this particular announcement much more decisively and treating it as if this one is the ‘Real McCoy’ with oil prices having fallen down into the mid $70/barrel range and other indicators showing that markets are convinced that prices are moving lower too. Are the Bank of England's MPC members buying onto this as well? Or are they going to treat this as perhaps one last opportunity to get interest rates up and to make sure that the inflation rate goes down?

U.K. inflation on a monthly basis shows a slight tendency to accelerate in May, with inflation diffusion measuring inflation acceleration month-to-month at 58.3%, above the neutral reading of 50. However, diffusion had been at 50% in April and at 41.7% in March. Acceleration has been broadly blunted. In addition, the May increase in the CPIH was only 0.1%, the same as in April, with March having posted a much stronger increase of 0.4%.

Looking at trends sequentially over 12 months, six months and three months, diffusion is only 25% over 12 months; it is 50% over six months and 25% over three months. These metrics reinforce the view that inflation is not broadly accelerating but rather decelerating and moving back into line.

Taking the year-over-year inflation rate, it's a ranking of overall inflation rates back to January 2000. The headline CPIH is still high at a 74.4 percentile standing; that means it has been higher than 3% about 25% of the time and lower about 75% of the time. The average ranking across the various metrics in the table is 61%. That's above a ranking of 50% that delineates the median for the period. And despite the fast fall in the CPIH core rate, the year-over-year core is at 2.9% and has an 81.2 percentile ranking, meaning it has been higher since January 2000, less than 20% of the time. However, that 12-month rate of 2.9% is now down to 1.7% over three months. There are too many ways to look at inflation, at the environment, at what other central banks have done, and at trends to know with any certainty what the BOE will do.

260617.jpg

The Bank of England has had a long period of overshooting its inflation target. It certainly will want to make sure that it's on a clear path toward getting inflation back to 2%. There's a question here about how much the Bank of England will want to trust the trend that it sees, how much it wants to trust the fast drop in the core rate, and then how much it wants to believe that the deal struck with Iran to open the Strait of Hormuz is going to prove durable. There are no real answers to these questions; they're going to be based upon opinions and perceptions, and they're also going to be based upon the pressure that the Bank of England feels about needing to make sure that it gets inflation back to 2% after its long period of intransigence. We'll find this out tomorrow.

Economy in Brief

Jump to:

U.S. Durable Goods Orders Down Big for Second Month

U.S. Initial Claims for Jobless Insurance Remained High

U.S. Initial Claims for Jobless Insurance Remained High

Existing Home Sales Drop 8% in September; All Regions Feel the Pain

NTC Indexes for the Euro area are Very Weak; MFG Signal is Fading

Italy's Biz Index in a Small, Unconvincing Rebound

Italy's Biz Index in a Small, Unconvincing Rebound

Consumer Confidence Holds Steady in October in the Netherlands and Italy