Louise Curley

The Netherlands released June data on consumer and business confidence today and Italy released data on business confidence, having released data on consumer confidence last week. In Italy confidence is expressed as an index with [...]

Business and Consumer Confidence in Italy and the Netherlands

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625b.jpg" width="353">
Consumer Price Indexes for four countries--China, India, Singapore and Vietnam--were released today and can be found in the Haver Data Base. EMERGEPR, together with similar data for other Asian nations. Data are available, through May, except for India.
Inflation, as measured by the year to year increase in the Consumer Price Index, has varied widely in the various countries of Asia. Inflation in the first five months of this year are shown for selected Asian countries in the table below, together with the annual rates for 2004, 2005 and 2006.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625a.jpg" width="353">
Deflationary tendencies that were evident in the Greater China Area appear to have lessened in Hong Kong and China, but still persist in Taiwan. These trends are shown in the first chart.
Among the high inflation countries, Vietnam, Indonesia and India, for example, inflation in Vietnam after decelerating somewhat last year has increased in the current months of this year. Inflation in India has trended upward since mid 2005. Inflation in Indonesia jumped in late 2005 as a result of natural disasters and fell precipitately in late 2006. Inflation there is now moderately below the levels reached in early 2005 and no clear trend is apparent, as can be seen in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625c.jpg" width="353">
The third chart shows the course of inflation in countries that have experienced moderating inflation in recent years. Thailand, like Indonesia experienced exceptionally high inflation in late 2005 and early 2006 followed by a sharp fall later in the year. Among these countries inflation in Singapore and, to a lesser extent, in South Korea is trending upward.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INFLATION IN ASIA Y/Y % CHANGE IN CPI&nbsp;</th>
<th scope="col">May 07</th>
<th scope="col">Apr&nbsp; 07&nbsp;</th>
<th scope="col">Mar 07&nbsp;</th>
<th scope="col">Feb&nbsp; 07&nbsp;</th>
<th scope="col">Jan 07&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">China</td>
<td>3.42</td>
<td>3.05</td>
<td>3.33</td>
<td>2.75</td>
<td>2.21</td>
<td>1.71</td>
<td>1.78</td>
<td>3.78</td>
</tr>
<tr>
<td class="firstcol">Hong Kong</td>
<td>1.27</td>
<td>1.27</td>
<td>2.36</td>
<td>0.79</td>
<td>1.97</td>
<td>2.02</td>
<td>0.91</td>
<td>-0.38</td>
</tr>
<tr class="odd">
<td class="firstcol">Taiwan</td>
<td>-0.03</td>
<td>0.67</td>
<td>0.84</td>
<td>1.74</td>
<td>0.35</td>
<td>0.60</td>
<td>2.31</td>
<td>1.61</td>
</tr>
<tr>
<td class="firstcol"> Vietnam </td>
<td>7.22</td>
<td>7.07</td>
<td>6.70</td>
<td>6.48</td>
<td>6.43</td>
<td>7.39</td>
<td>8.28</td>
<td>7.76</td>
</tr>
<tr class="odd">
<td class="firstcol">Indonesia</td>
<td>6.01</td>
<td>6.29</td>
<td>6.22</td>
<td>6.30</td>
<td>6.26</td>
<td>13.10</td>
<td>10.46</td>
<td>6.06</td>
</tr>
<tr>
<td class="firstcol">India</td>
<td>n.a.</td>
<td>6.67</td>
<td>6.72</td>
<td>7.56</td>
<td>6.72</td>
<td>6.18</td>
<td>4.24</td>
<td>3.77</td>
</tr>
<tr class="odd">
<td class="firstcol">South Korea</td>
<td>2.35</td>
<td>2.45</td>
<td>2.16</td>
<td>2.17</td>
<td>1.68</td>
<td>2.24</td>
<td>2.75</td>
<td>3.59</td>
</tr>
<tr>
<td class="firstcol">Singapore</td>
<td>1.09</td>
<td>0.59</td>
<td>0.79</td>
<td>0.59</td>
<td>0.20</td>
<td>0.96</td>
<td>0.47</td>
<td>1.67</td>
</tr>
<tr class="odd">
<td class="firstcol">Thailand</td>
<td>1.91</td>
<td>1.84</td>
<td>2.04</td>
<td>2.32</td>
<td>3.05</td>
<td>4.64</td>
<td>4.54</td>
<td>2.77</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer Price Indexes for four countries--China, India, Singapore and Vietnam--were released today and can be found in the Haver Data Base. EMERGEPR, together with similar data for other Asian nations. Data are available, through [...]

Inflation Trends in Asia, ex Japan

Robert Brusca

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625d.jpg" width="353">
Edge lower by 0.3%- two of four regions drop.
The monthly series of existing housing sales continues to show weakness but it also shows that weakness has been diminishing. Above we plot a three-month moving average of Yr/yr growth rates. It shows that all regions except the SOUTH have put their period of biggest declines behind them. The South, with ongoing problems in the Gulf region continues to show some of the nation&#146;s worst housing trends. Each region has experienced a rebound then another episode of weakness. The question is whether this new episode of weakness will remain muted or gather momentum. The raw monthly patterns look more like regions that are losing their weakness. The final stage of recovery for housing will be for the various regions to have some m/m increases and for growth rates to move sideways and eventually higher.
From roughly December 2005 Sept 2006 housing was in its worst period of this cycle across regions. Since then three of four regions are looking like they are trying to stabilize.
Prices have been recovering too but that is a seasonal trend. Median housing prices are down 2.1% Yr/Yr and average prices are lower by just 0.8%.
The smaller regions rebounded this month while the two larger regions continued to slow.
The progressive growth rates do not show a particular pattern except that over six months the pace of slowing was cut back or even became an increase but then turned to a larger decline in the recent three-months. Charts on the levels of variables give us better guidance on where trends are going and those actually look more stable than charts constructed from growth rates.
Moreover prices are not accelerating their drop. In the Midwest Yr/Yr median prices fell for 11 straight months and now have risen in two of the past three months. Overall median prices are still dropping and are lower in 10 straight months.
The large Southern region of the county, beset problems in the Gulf states has the largest y/y drop in existing home prices at 3.3% It has seen a 10-month string of monthly declines in Yr/Yr average and median prices. It is helping to drive the weakness in US overall prices. Even the West that remains weak has seen average prices rise Yr/Yr in half of the months dating back to June 2006. Median prices in the West are weaker having last risen Yr/Yr in Feb 2007.
The number of homes for sales actually rose last month pushing the number of months supply up to 8.9 months from 8.4 previously and from as low as 6.4 months one year ago. We do not place much stock in these figures for existing homes since by and large these are owner occupied homes and are not being sold by a business. The fact that prices are not plunging as supply increases suggests that there is a somewhat better balance in the market than what the homes-for-sale data suggest. Indeed, own-home sellers face far different market forces than builders selling empty new homes.
We are left with the feeling that regional events are getting in that way of these national comparisons. Hurricanes that battered the Gulf states and overbuilding in places like Florida and Las Vegas are having outsized impact on the data. Even so we can see that housing prices are by and large stabilizing and the while existing home sales are still declining, the pace of decline is being contained and is not accelerating. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Existing Home Sales Summary
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="6">(Existing Home Sales: In Thousands&#39; -- Nat&#39;n&#39;l Ass&#39;n of Realtors)</td>
</tr>
<tr class="even">
<td class="firstcol">Month</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>5,990</td>
<td>1100</td>
<td>1410</td>
<td>2300</td>
<td>1180</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>6,010</td>
<td>1040</td>
<td>1400</td>
<td>2380</td>
<td>1190</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>6,150</td>
<td>1140</td>
<td>1390</td>
<td>2410</td>
<td>1210</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>6,680</td>
<td>1220</td>
<td>1560</td>
<td>2570</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jan.07</td>
<td>6,440</td>
<td>1060</td>
<td>1520</td>
<td>2540</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Dec.06</td>
<td>6,270</td>
<td>1070</td>
<td>1460</td>
<td>2490</td>
<td>1250</td>
</tr>
<tr class="odd">
<td class="firstcol">Nov.06</td>
<td>6,250</td>
<td>1080</td>
<td>1420</td>
<td>2470</td>
<td>1280</td>
</tr>
<tr class="odd">
<td class="firstcol">Oct.06</td>
<td>6,270</td>
<td>1030</td>
<td>1420</td>
<td>2520</td>
<td>1300</td>
</tr>
<tr class="odd">
<td class="firstcol">Sep.06</td>
<td>6,230</td>
<td>1040</td>
<td>1420</td>
<td>2520</td>
<td>1260</td>
</tr>
<tr class="odd">
<td class="firstcol">Aug.06</td>
<td>6,310</td>
<td>1060</td>
<td>1430</td>
<td>2520</td>
<td>1290</td>
</tr>
<tr class="odd">
<td class="firstcol">Jul.06</td>
<td>6,320</td>
<td>1050</td>
<td>1430</td>
<td>2530</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jun.06</td>
<td>6,490</td>
<td>1090</td>
<td>1490</td>
<td>2550</td>
<td>1360</td>
</tr>
<tr class="odd">
<td class="firstcol">May.06</td>
<td>6,680</td>
<td>1140</td>
<td>1510</td>
<td>2610</td>
<td>1410</td>
</tr>
<tr>
<td colspan="6">Percent Changes: Existing Home Sales</td>
</tr>
<tr class="even">
<td class="firstcol">Mo/Mo%</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>-0.3%</td>
<td>5.8%</td>
<td>0.7%</td>
<td>-3.4%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>-2.3%</td>
<td>-8.8%</td>
<td>0.7%</td>
<td>-1.2%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>-7.9%</td>
<td>-6.6%</td>
<td>-10.9%</td>
<td>-6.2%</td>
<td>-8.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>3.7%</td>
<td>15.1%</td>
<td>2.6%</td>
<td>1.2%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">3-Mo:ar</td>
<td>-41.3%</td>
<td>-39.3%</td>
<td>-38.5%</td>
<td>-42.0%</td>
<td>-42.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-mo:ar</td>
<td>-8.3%</td>
<td>3.7%</td>
<td>-1.4%</td>
<td>-13.8%</td>
<td>-15.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">1-Year</td>
<td>-10.3%</td>
<td>-3.5%</td>
<td>-6.6%</td>
<td>-11.9%</td>
<td>-16.3%</td>
</tr>
<tr>
<td class="firstcol">Prices:</td>
<td colspan="5">Median Prices</td>
</tr>
<tr class="odd">
<td class="firstcol">One Mo:</td>
<td>1.8%</td>
<td>-0.1%</td>
<td>2.9%</td>
<td>2.3%</td>
<td>-0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">One Year:</td>
<td>-2.1%</td>
<td>0.5%</td>
<td>-1.7%</td>
<td>-3.8%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Edge lower by 0.3%- two of four regions drop. The monthly series of existing housing sales continues to show weakness but it also shows that weakness has been diminishing. Above we plot a three-month moving average of Yr/yr growth [...]

Existing Home Sales

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625d.jpg" width="353">
The monthly series of existing housing sales continues to show weakness but it also shows that weakness has been diminishing. On the left we plot a three-month moving average of year/year growth rates. It shows that all regions except the SOUTH have put their period of biggest declines behind them. The South, with ongoing problems in the Gulf region, continues to show some of the nation&#146;s worst housing trends. Each region has experienced a rebound then another episode of weakness. The question is whether this new episode of weakness will remain muted or gather momentum. The raw monthly patterns look more like regions that are losing their weakness. The final stage of recovery for housing will be for the various regions to have some month/month increases and for growth rates to move sideways and eventually higher.
From roughly December 2005 through September 2006 housing was in its worst period of this cycle across regions. Since then three of four regions are looking like they are trying to stabilize.
Prices have been recovering too but that is a seasonal trend. Median housing prices are down 2.1% Yr/Yr and average prices are lower by just 0.8%.
The smaller regions rebounded this month while the two larger regions continued to slow.
The progressive growth rates do not show a particular pattern except that over six months the pace of slowing was cut back or even became an increase but then turned to a larger decline in the recent three months. Charts on the levels of variables give us better guidance on where trends are going and those actually look more stable than charts constructed from growth rates.
Moreover prices are not accelerating their drop. In the Midwest Yr/Yr median prices fell for 11 straight months and now have risen in two of the past three months. Overall median prices are still dropping and are lower in 10 straight months.
The large Southern region of the county, beset by problems in the Gulf states, has the largest Yr/Yr drop in existing home prices at 3.3% It has seen a 10-month string of monthly declines in Yr/Yr average and median prices. It is helping to drive the weakness in US overall prices. Even the West that remains weak has seen average prices rise Yr/Yr in half of the months dating back to June 2006. Median prices in the West are weaker having last risen Yr/Yr in February 2007.
The number of homes for sales actually rose last month pushing the number of months supply up to 8.9 months from 8.4 previously and from as low as 6.4 months one year ago. We do not place much stock in these figures for existing homes since by and large these are owner occupied homes and are not being sold by a business. The fact that prices are not plunging as supply increases suggests that there is a somewhat better balance in the market than what the homes-for-sale data suggest. Indeed, own-home sellers face far different market forces than builders selling empty new homes.
We are left with the feeling that regional events are getting in the way of these national comparisons. Hurricanes that battered the Gulf states and overbuilding in places like Florida and Las Vegas are having outsized impact on the data. Even so we can see that housing prices are, by and large, stabilizing and that, while existing home sales are still declining, the pace of decline is being contained and is not accelerating.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Existing Home Sales Summary
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="6">(Existing Home Sales: In Thousands&#39; -- Nat&#39;n&#39;l Ass&#39;n of Realtors)</td>
</tr>
<tr class="even">
<td class="firstcol">Month</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>5,990</td>
<td>1100</td>
<td>1410</td>
<td>2300</td>
<td>1180</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>6,010</td>
<td>1040</td>
<td>1400</td>
<td>2380</td>
<td>1190</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>6,150</td>
<td>1140</td>
<td>1390</td>
<td>2410</td>
<td>1210</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>6,680</td>
<td>1220</td>
<td>1560</td>
<td>2570</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jan.07</td>
<td>6,440</td>
<td>1060</td>
<td>1520</td>
<td>2540</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Dec.06</td>
<td>6,270</td>
<td>1070</td>
<td>1460</td>
<td>2490</td>
<td>1250</td>
</tr>
<tr class="odd">
<td class="firstcol">Nov.06</td>
<td>6,250</td>
<td>1080</td>
<td>1420</td>
<td>2470</td>
<td>1280</td>
</tr>
<tr class="odd">
<td class="firstcol">Oct.06</td>
<td>6,270</td>
<td>1030</td>
<td>1420</td>
<td>2520</td>
<td>1300</td>
</tr>
<tr class="odd">
<td class="firstcol">Sep.06</td>
<td>6,230</td>
<td>1040</td>
<td>1420</td>
<td>2520</td>
<td>1260</td>
</tr>
<tr class="odd">
<td class="firstcol">Aug.06</td>
<td>6,310</td>
<td>1060</td>
<td>1430</td>
<td>2520</td>
<td>1290</td>
</tr>
<tr class="odd">
<td class="firstcol">Jul.06</td>
<td>6,320</td>
<td>1050</td>
<td>1430</td>
<td>2530</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jun.06</td>
<td>6,490</td>
<td>1090</td>
<td>1490</td>
<td>2550</td>
<td>1360</td>
</tr>
<tr class="odd">
<td class="firstcol">May.06</td>
<td>6,680</td>
<td>1140</td>
<td>1510</td>
<td>2610</td>
<td>1410</td>
</tr>
<tr>
<td colspan="6">Percent Changes: Existing Home Sales</td>
</tr>
<tr class="even">
<td class="firstcol">Mo/Mo%</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>-0.3%</td>
<td>5.8%</td>
<td>0.7%</td>
<td>-3.4%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>-2.3%</td>
<td>-8.8%</td>
<td>0.7%</td>
<td>-1.2%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>-7.9%</td>
<td>-6.6%</td>
<td>-10.9%</td>
<td>-6.2%</td>
<td>-8.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>3.7%</td>
<td>15.1%</td>
<td>2.6%</td>
<td>1.2%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">3-Mo:ar</td>
<td>-41.3%</td>
<td>-39.3%</td>
<td>-38.5%</td>
<td>-42.0%</td>
<td>-42.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-mo:ar</td>
<td>-8.3%</td>
<td>3.7%</td>
<td>-1.4%</td>
<td>-13.8%</td>
<td>-15.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">1-Year</td>
<td>-10.3%</td>
<td>-3.5%</td>
<td>-6.6%</td>
<td>-11.9%</td>
<td>-16.3%</td>
</tr>
<tr>
<td class="firstcol">Prices:</td>
<td colspan="5">Median Prices</td>
</tr>
<tr class="odd">
<td class="firstcol">One Mo:</td>
<td>1.8%</td>
<td>-0.1%</td>
<td>2.9%</td>
<td>2.3%</td>
<td>-0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">One Year:</td>
<td>-2.1%</td>
<td>0.5%</td>
<td>-1.7%</td>
<td>-3.8%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

The monthly series of existing housing sales continues to show weakness but it also shows that weakness has been diminishing. On the left we plot a three-month moving average of year/year growth rates. It shows that all regions except [...]

Existing Home Sales Edge Lower by 0.3% - Two of Four Regions Drop

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625d.jpg" width="353">
The monthly series of existing housing sales continues to show weakness but it also shows that weakness has been diminishing. On the left we plot a three-month moving average of year/year growth rates. It shows that all regions except the SOUTH have put their period of biggest declines behind them. The South, with ongoing problems in the Gulf region, continues to show some of the nation&#146;s worst housing trends. Each region has experienced a rebound then another episode of weakness. The question is whether this new episode of weakness will remain muted or gather momentum. The raw monthly patterns look more like regions that are losing their weakness. The final stage of recovery for housing will be for the various regions to have some month/month increases and for growth rates to move sideways and eventually higher.
From roughly December 2005 through September 2006 housing was in its worst period of this cycle across regions. Since then three of four regions are looking like they are trying to stabilize.
Prices have been recovering too but that is a seasonal trend. Median housing prices are down 2.1% Yr/Yr and average prices are lower by just 0.8%.
The smaller regions rebounded this month while the two larger regions continued to slow.
The progressive growth rates do not show a particular pattern except that over six months the pace of slowing was cut back or even became an increase but then turned to a larger decline in the recent three months. Charts on the levels of variables give us better guidance on where trends are going and those actually look more stable than charts constructed from growth rates.
Moreover prices are not accelerating their drop. In the Midwest Yr/Yr median prices fell for 11 straight months and now have risen in two of the past three months. Overall median prices are still dropping and are lower in 10 straight months.
The large Southern region of the county, beset by problems in the Gulf states, has the largest Yr/Yr drop in existing home prices at 3.3% It has seen a 10-month string of monthly declines in Yr/Yr average and median prices. It is helping to drive the weakness in US overall prices. Even the West that remains weak has seen average prices rise Yr/Yr in half of the months dating back to June 2006. Median prices in the West are weaker having last risen Yr/Yr in February 2007.
The number of homes for sales actually rose last month pushing the number of months supply up to 8.9 months from 8.4 previously and from as low as 6.4 months one year ago. We do not place much stock in these figures for existing homes since by and large these are owner occupied homes and are not being sold by a business. The fact that prices are not plunging as supply increases suggests that there is a somewhat better balance in the market than what the homes-for-sale data suggest. Indeed, own-home sellers face far different market forces than builders selling empty new homes.
We are left with the feeling that regional events are getting in the way of these national comparisons. Hurricanes that battered the Gulf states and overbuilding in places like Florida and Las Vegas are having outsized impact on the data. Even so we can see that housing prices are, by and large, stabilizing and that, while existing home sales are still declining, the pace of decline is being contained and is not accelerating.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Existing Home Sales Summary
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="6">(Existing Home Sales: In Thousands&#39; -- Nat&#39;n&#39;l Ass&#39;n of Realtors)</td>
</tr>
<tr class="even">
<td class="firstcol">Month</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>5,990</td>
<td>1100</td>
<td>1410</td>
<td>2300</td>
<td>1180</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>6,010</td>
<td>1040</td>
<td>1400</td>
<td>2380</td>
<td>1190</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>6,150</td>
<td>1140</td>
<td>1390</td>
<td>2410</td>
<td>1210</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>6,680</td>
<td>1220</td>
<td>1560</td>
<td>2570</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jan.07</td>
<td>6,440</td>
<td>1060</td>
<td>1520</td>
<td>2540</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Dec.06</td>
<td>6,270</td>
<td>1070</td>
<td>1460</td>
<td>2490</td>
<td>1250</td>
</tr>
<tr class="odd">
<td class="firstcol">Nov.06</td>
<td>6,250</td>
<td>1080</td>
<td>1420</td>
<td>2470</td>
<td>1280</td>
</tr>
<tr class="odd">
<td class="firstcol">Oct.06</td>
<td>6,270</td>
<td>1030</td>
<td>1420</td>
<td>2520</td>
<td>1300</td>
</tr>
<tr class="odd">
<td class="firstcol">Sep.06</td>
<td>6,230</td>
<td>1040</td>
<td>1420</td>
<td>2520</td>
<td>1260</td>
</tr>
<tr class="odd">
<td class="firstcol">Aug.06</td>
<td>6,310</td>
<td>1060</td>
<td>1430</td>
<td>2520</td>
<td>1290</td>
</tr>
<tr class="odd">
<td class="firstcol">Jul.06</td>
<td>6,320</td>
<td>1050</td>
<td>1430</td>
<td>2530</td>
<td>1320</td>
</tr>
<tr class="odd">
<td class="firstcol">Jun.06</td>
<td>6,490</td>
<td>1090</td>
<td>1490</td>
<td>2550</td>
<td>1360</td>
</tr>
<tr class="odd">
<td class="firstcol">May.06</td>
<td>6,680</td>
<td>1140</td>
<td>1510</td>
<td>2610</td>
<td>1410</td>
</tr>
<tr>
<td colspan="6">Percent Changes: Existing Home Sales</td>
</tr>
<tr class="even">
<td class="firstcol">Mo/Mo%</td>
<td>Total</td>
<td>North-East</td>
<td>Mid-West</td>
<td>South</td>
<td>West</td>
</tr>
<tr class="odd">
<td class="firstcol">May.07</td>
<td>-0.3%</td>
<td>5.8%</td>
<td>0.7%</td>
<td>-3.4%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Apr.07</td>
<td>-2.3%</td>
<td>-8.8%</td>
<td>0.7%</td>
<td>-1.2%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mar.07</td>
<td>-7.9%</td>
<td>-6.6%</td>
<td>-10.9%</td>
<td>-6.2%</td>
<td>-8.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Feb.07</td>
<td>3.7%</td>
<td>15.1%</td>
<td>2.6%</td>
<td>1.2%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">3-Mo:ar</td>
<td>-41.3%</td>
<td>-39.3%</td>
<td>-38.5%</td>
<td>-42.0%</td>
<td>-42.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-mo:ar</td>
<td>-8.3%</td>
<td>3.7%</td>
<td>-1.4%</td>
<td>-13.8%</td>
<td>-15.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">1-Year</td>
<td>-10.3%</td>
<td>-3.5%</td>
<td>-6.6%</td>
<td>-11.9%</td>
<td>-16.3%</td>
</tr>
<tr>
<td class="firstcol">Prices:</td>
<td colspan="5">Median Prices</td>
</tr>
<tr class="odd">
<td class="firstcol">One Mo:</td>
<td>1.8%</td>
<td>-0.1%</td>
<td>2.9%</td>
<td>2.3%</td>
<td>-0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">One Year:</td>
<td>-2.1%</td>
<td>0.5%</td>
<td>-1.7%</td>
<td>-3.8%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
 Inflation Trends in Asia, ex Japan   
by <a href="/comment/Curley.html">Louise Curley</a> June 25, 2007


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625b.jpg" width="353">
Consumer Price Indexes for four countries--China, India, Singapore and Vietnam--were released today and can be found in the Haver Data Base. EMERGEPR, together with similar data for other Asian nations. Data are available, through May, except for India.
Inflation, as measured by the year to year increase in the Consumer Price Index, has varied widely in the various countries of Asia. Inflation in the first five months of this year are shown for selected Asian countries in the table below, together with the annual rates for 2004, 2005 and 2006.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625a.jpg" width="353">
Deflationary tendencies that were evident in the Greater China Area appear to have lessened in Hong Kong and China, but still persist in Taiwan. These trends are shown in the first chart.
Among the high inflation countries, Vietnam, Indonesia and India, for example, inflation in Vietnam after decelerating somewhat last year has increased in the current months of this year. Inflation in India has trended upward since mid 2005. Inflation in Indonesia jumped in late 2005 as a result of natural disasters and fell precipitately in late 2006. Inflation there is now moderately below the levels reached in early 2005 and no clear trend is apparent, as can be seen in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070625c.jpg" width="353">
The third chart shows the course of inflation in countries that have experienced moderating inflation in recent years. Thailand, like Indonesia experienced exceptionally high inflation in late 2005 and early 2006 followed by a sharp fall later in the year. Among these countries inflation in Singapore and, to a lesser extent, in South Korea is trending upward.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INFLATION IN ASIA Y/Y % CHANGE IN CPI&nbsp;</th>
<th scope="col">May 07</th>
<th scope="col">Apr&nbsp; 07&nbsp;</th>
<th scope="col">Mar 07&nbsp;</th>
<th scope="col">Feb&nbsp; 07&nbsp;</th>
<th scope="col">Jan 07&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">China</td>
<td>3.42</td>
<td>3.05</td>
<td>3.33</td>
<td>2.75</td>
<td>2.21</td>
<td>1.71</td>
<td>1.78</td>
<td>3.78</td>
</tr>
<tr>
<td class="firstcol">Hong Kong</td>
<td>1.27</td>
<td>1.27</td>
<td>2.36</td>
<td>0.79</td>
<td>1.97</td>
<td>2.02</td>
<td>0.91</td>
<td>-0.38</td>
</tr>
<tr class="odd">
<td class="firstcol">Taiwan</td>
<td>-0.03</td>
<td>0.67</td>
<td>0.84</td>
<td>1.74</td>
<td>0.35</td>
<td>0.60</td>
<td>2.31</td>
<td>1.61</td>
</tr>
<tr>
<td class="firstcol"> Vietnam </td>
<td>7.22</td>
<td>7.07</td>
<td>6.70</td>
<td>6.48</td>
<td>6.43</td>
<td>7.39</td>
<td>8.28</td>
<td>7.76</td>
</tr>
<tr class="odd">
<td class="firstcol">Indonesia</td>
<td>6.01</td>
<td>6.29</td>
<td>6.22</td>
<td>6.30</td>
<td>6.26</td>
<td>13.10</td>
<td>10.46</td>
<td>6.06</td>
</tr>
<tr>
<td class="firstcol">India</td>
<td>n.a.</td>
<td>6.67</td>
<td>6.72</td>
<td>7.56</td>
<td>6.72</td>
<td>6.18</td>
<td>4.24</td>
<td>3.77</td>
</tr>
<tr class="odd">
<td class="firstcol">South Korea</td>
<td>2.35</td>
<td>2.45</td>
<td>2.16</td>
<td>2.17</td>
<td>1.68</td>
<td>2.24</td>
<td>2.75</td>
<td>3.59</td>
</tr>
<tr>
<td class="firstcol">Singapore</td>
<td>1.09</td>
<td>0.59</td>
<td>0.79</td>
<td>0.59</td>
<td>0.20</td>
<td>0.96</td>
<td>0.47</td>
<td>1.67</td>
</tr>
<tr class="odd">
<td class="firstcol">Thailand</td>
<td>1.91</td>
<td>1.84</td>
<td>2.04</td>
<td>2.32</td>
<td>3.05</td>
<td>4.64</td>
<td>4.54</td>
<td>2.77</td>
</tr>
</tbody>
</table>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070622e.jpg" width="353">
The South African economy is moving ahead vigorously, according to Q1 GDP data released yesterday by the South African Reserve Bank. Growth actually slowed to &quot;just&quot; 4.7% from Q4 at an annual rate, following 5.6%. Year-on-year growth was 5.4%. The trend has hovered around a 5% pace since 2004, a pick-up from about 3-1/2% in the previous four years. In the first graph, we show GDP and consumption since 1980, along with recession shading for South African business cycles. Recent GDP growth has been lower than in some periods, but much more consistent, so that highs are not soon offset by lows. The last recession ended in late 1998. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070622f.jpg" width="353">
Investment has been the driving force over the last couple of years and expanded at nearly a 22% annual rate in Q1. Further detail (see second graph) shows substantial increases in nonresidential buildings and infrastructure, and additional detail on these expenditures by industry indicates that they are in transportation, communication and utilities. Some of these are coming off a low base, but expanding very rapidly, a sign of the vigor of development efforts in South Africa. Gross value added in the construction industry parallels this growth.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070622g.jpg" width="353">
Consumer spending is hardly weak, either, with gains across the last five quarter exceeding 7% and even 8%. These are concentrated in goods, with spending on services less rapid. If there&#39;s a problem in South Africa&#39;s spending mix, it&#39;s in net exports. Exports themselves are fairly strong; they declined a bit in Q1 from Q4, but are still up 16.2% on the year-ago period. Imports are even stronger, though, with four-quarter growth right at 20%. Obviously much of the consumer and investment spending is sourced from foreign goods and services. A quick look at trade data shows marked growth in imports of metals, machinery, textiles, chemicals and even food products. As the South African economy moves ahead, we&#39;d guess that this dependence on foreign goods would diminish. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">SOUTH AFRICA</th>
<th scope="col">Q1 2007*</th>
<th scope="col">Q4 2006*</th>
<th scope="col">Q3 2006*</th>
<th scope="col">Q1 2006 Yr/Yr</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">Real GDP</td>
<td>4.7</td>
<td>5.6</td>
<td>4.5</td>
<td>5.4</td>
<td>5.0</td>
<td>5.1</td>
<td>4.8</td>
</tr>
<tr>
<td class="firstcol">Private Consumption</td>
<td>7.4</td>
<td>7.8</td>
<td>7.6</td>
<td>7.6</td>
<td>7.3</td>
<td>6.6</td>
<td>6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Investment</td>
<td>21.8</td>
<td>16.4</td>
<td>14.0</td>
<td>15.6</td>
<td>12.7</td>
<td>9.6</td>
<td>8.9</td>
</tr>
<tr>
<td class="firstcol">Net Exports (Bil.Rand)</td>
<td>-100.3</td>
<td>-95.8</td>
<td>-75.1</td>
<td>-72.5</td>
<td>-81.8</td>
<td>-36.9</td>
<td>-26.6</td>
</tr>
<tr class="odd">
<td class="firstcol">GVA: Construction</td>
<td>21.3</td>
<td>16.5</td>
<td>16.1</td>
<td>16.6</td>
<td>13.7</td>
<td>11.9</td>
<td>11.1</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>4.7</td>
<td>8.3</td>
<td>4.7</td>
<td>5.7</td>
<td>4.8</td>
<td>5.0</td>
<td>4.7</td>
</tr>
</tbody>
</table>
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The South African economy is moving ahead vigorously, according to Q1 GDP data released yesterday by the South African Reserve Bank. Growth actually slowed to "just" 4.7% from Q4 at an annual rate, following 5.6%. Year-on-year growth [...]

South Africa Maintains 5% GDP Growth Trend, with 20% Gains in Fixed Investment

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<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070622h.jpg">
Germany&#39;s IFO index fell sharply in June from 108.6 to 107. It stood at 108.6 for two months in a row and peaked in this cycle back in December 2006 at 108.7. No wonder the IFO says that levels are still high and that the economy is still strong. But looked at another way, all this ebullience misses the point. The IFO survey has been weakening for some time. And here I refer to weakening in terms of its rate of growth. The IFO Climate headline hit a growth peak in June 2006, at just a tic higher than the pace it posted in November, a month before it hit its numeric peak for the index level. The index growth rate had been trapped in a narrow range around 16%. IFO growth had been strong and stayed in a narrow band from April to December of 2006. But, since then, the rate of growth has been dropping - sometimes sharply - as the chart above shows. 
Both current conditions and expectations have lopped digits off their growth rates over this period. Expectations fell first dropping from a growth rate of 12.4% in April 2006 to below zero by October of the same year. Since April expectations growth has been waffling around the unchanged line. Current conditions growth, however, has continued to erode at a more or less steady pace. From March to May that erosion took a pause but in June current conditions are sharply lower again and the decline in the rate of growth is &#145;back on&#146; track and has fallen to zero from over 14% in June of 2006. 
The drop in the overall climate reading spreads across main sectors as the IFO sector diffusion readings tell us. Readings are still &#39;high valued&#146; as the percentage of range figures tell us at the far right of the table. Diffusion readings of climate peaked in April 2007; confidence peaked in December 2006, expectations peaked in March 2006. Still the month to month drop in June was sharp for most sectors; the decline in services was moderate.
And although IFO Chief Economist Gernot Nerb says he is not worried about exports and says that the export readings in the IFO survey are strong the truth is that those conditions have eroded dramatically across industry groups.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Summary of IFO Sector Diffusion readings
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">CLIMATE Sum</td>
<td>Current</td>
<td>Last Mo</td>
<td colspan="6">Since Jan 1991*</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>Jun-07</td>
<td>May-07</td>
<td>average</td>
<td>Median</td>
<td>Max</td>
<td>Min</td>
<td>range</td>
<td>% range</td>
</tr>
<tr class="odd">
<td class="firstcol">All Sectors</td>
<td>13.2</td>
<td>16.3</td>
<td>-8.8</td>
<td>-9.5</td>
<td>16.6</td>
<td>-30.6</td>
<td>47.2</td>
<td>92.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; MFG</td>
<td>23.9</td>
<td>27.5</td>
<td>-1.1</td>
<td>0.3</td>
<td>27.5</td>
<td>-35.5</td>
<td>63.0</td>
<td>94.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Construction</td>
<td>-16.0</td>
<td>-14.6</td>
<td>-29.2</td>
<td>-32.2</td>
<td>0.3</td>
<td>-50.7</td>
<td>51.0</td>
<td>68.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>14.3</td>
<td>18.3</td>
<td>-14.8</td>
<td>-16.5</td>
<td>23.3</td>
<td>-39.6</td>
<td>62.9</td>
<td>85.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Retail</td>
<td>-5.0</td>
<td>-3.2</td>
<td>-14.8</td>
<td>-14.8</td>
<td>25.3</td>
<td>-40.3</td>
<td>65.6</td>
<td>53.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services</td>
<td>26.0</td>
<td>26.5</td>
<td>8.2</td>
<td>7.8</td>
<td>28.5</td>
<td>-15.7</td>
<td>44.2</td>
<td>94.3%</td>
</tr>
<tr class="odd">
<td colspan="4">* May 2001 for Services</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

Germany's IFO index fell sharply in June from 108.6 to 107. It stood at 108.6 for two months in a row and peaked in this cycle back in December 2006 at 108.7. No wonder the IFO says that levels are still high and that the economy is [...]

IFO Index Drops to 107 from 108.6

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070622d.jpg" width="353">
European orders fell by 0.4% in April, less than expected, as bulk orders rose and boosted the headline. And while bulk orders do &#145;count&#146; they can often blur the trend and mask changes. That is probably the effect right now as European industrial orders are headed for a fall while everyone is ignoring that FACT. That&#146;s right, not an opinion, but a FACT of history. The trend for orders GROWTH is already lower and orders GROWTH follows closely movements in the euro exchange rate and follows that inversely. The EURO &#150; broadly defined, weighted by trade and inflation adjusted - has been rising and still is. In terms of its level the EURO is VERY strong. Orders have showed some resiliency. But the chart on the left shows that there always are flares of countertrend movements that eventually prove to be not sustainable. AND orders, while on an upswing, are still contained within the confines of a descending channel much like a rally in a bear chart for bonds or stocks. 
For now order trends in the EU are still looking OK (see table). But MFG sales within the Euro area have slowed and slowed sharply for consumer goods and even have slowed for the nearly bullet-proof Capital Goods sector. Domestic orders have showed a sharper fall-off than foreign orders but foreign orders are still obeying the BIG PICTURE law that says with a strong euro they too must fall (it is this series that is plotted on the chart, but the overall series plots almost as well). For the moment two factors are supporting orders in EU. One is this short-term monthly bump up in bulk orders. This sort of thing comes and goes. We expect orders will bulk up from time to time but by smaller amounts moving forward. The other factor is the fact that a lot of the Euro area orders are to non-euro area or aspiring euro area countries that are close by, maintain a tight &#145;peg&#146; to the euro and where historic ties continue to confer advantages to EMU producers. The longer the Euro remains strong, the more likely that competition (apparently the new &#145;dirty word&#146; in the EU) will take hold in such places. Eurol exports to the US already have dropped very sharply. That is a function of slower US growth but also of the nose-bleed euro FX valuations. The strong euro is leaving plenty of &#145;fingerprints&#146; around. 
The table shows that on most measures orders growth over the past three months is still pretty strong. In April, however, there are three sizeable declines among the four largest economies in the EU. Of course one of the reasons that the three-month growth rates for these countries are still firm is that in one of the previous months each had a sizeable increase in orders. You cannot hang your hat on any monthly number as evidence of a trend change. Instead we appeal to the chart above. 
The chart plots the real broad (trade-weighted) euro VS foreign order performance in the euro area since March of 2000. The relationship is reasonably tight and quite clear: euro up orders down; euro down orders up. Any questions? The euro is up and orders are still in a downtrend although they &#145;flared&#146; to the top of their downward sloping channel this month. Betting that this relationship between orders and the euro will not repeat itself seems to be a grasp at a straw. 
Moreover, if we plot orders against the LEVEL of the real exchange rate you see another reason to be a pessimist on order/export strength. The LEVEL of the real FX rate is extremely high. If short term movements in the rate matter, the level surely must matter. Some of the euro&#146;s strength could have been seen in advance and hedged. But the longer the euro stays strong the more that profit margins are squeezed or eliminated and the less help that hedging can offer. We conclude that while it is volatile, the slowing trend in EMU orders is for real. Don&#146;t you?

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
E-zone and UK Industrial Orders &amp; Sales Trends
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">SAAR except m/m</td>
<td colspan="3">% m/m</td>
<td>Apr-07</td>
<td>Apr-07</td>
<td>Apr-07</td>
<td>Apr-06</td>
<td>Apr-05</td>
</tr>
<tr class="grey3">
<td class="firstcol">Euro area Detail</td>
<td>Apr-07</td>
<td>Mar-07</td>
<td>Feb-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG Orders</td>
<td>-0.4%</td>
<td>2.9%</td>
<td>-0.6%</td>
<td>7.2%</td>
<td>8.8%</td>
<td>9.0%</td>
<td>9.5%</td>
<td>4.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG Sales</td>
<td>0.0%</td>
<td>0.3%</td>
<td>0.5%</td>
<td>3.3%</td>
<td>6.6%</td>
<td>6.3%</td>
<td>7.5%</td>
<td>2.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>2.1%</td>
<td>3.5%</td>
<td>7.5%</td>
<td>2.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Capital</td>
<td>0.4%</td>
<td>0.6%</td>
<td>0.7%</td>
<td>6.8%</td>
<td>8.2%</td>
<td>8.1%</td>
<td>4.0%</td>
<td>1.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Intermediate</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.4%</td>
<td>5.2%</td>
<td>5.7%</td>
<td>7.9%</td>
<td>7.1%</td>
<td>2.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">MFG Orders</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Total Orders</td>
<td>-0.4%</td>
<td>2.9%</td>
<td>-0.6%</td>
<td>7.2%</td>
<td>8.8%</td>
<td>9.0%</td>
<td>9.5%</td>
<td>4.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">EA13 Domestic MFG orders</td>
<td>-0.7%</td>
<td>2.3%</td>
<td>-0.4%</td>
<td>5.2%</td>
<td>5.7%</td>
<td>7.9%</td>
<td>5.9%</td>
<td>0.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">EA13 Foreign MFG orders</td>
<td>-1.1%</td>
<td>4.4%</td>
<td>0.0%</td>
<td>13.4%</td>
<td>13.9%</td>
<td>11.0%</td>
<td>14.6%</td>
<td>3.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Countries:</td>
<td>Apr-07</td>
<td>Mar-07</td>
<td>Feb-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany</td>
<td>-1.0%</td>
<td>1.0%</td>
<td>4.2%</td>
<td>17.5%</td>
<td>11.3%</td>
<td>9.7%</td>
<td>14.5%</td>
<td>1.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France</td>
<td>2.1%</td>
<td>5.2%</td>
<td>-7.8%</td>
<td>-3.9%</td>
<td>12.0%</td>
<td>18.3%</td>
<td>-0.1%</td>
<td>1.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy</td>
<td>-1.1%</td>
<td>4.8%</td>
<td>0.4%</td>
<td>17.2%</td>
<td>4.2%</td>
<td>2.3%</td>
<td>15.7%</td>
<td>2.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK</td>
<td>-5.6%</td>
<td>3.3%</td>
<td>9.9%</td>
<td>31.8%</td>
<td>11.0%</td>
<td>-0.6%</td>
<td>4.6%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

European orders fell by 0.4% in April, less than expected, as bulk orders rose and boosted the headline. And while bulk orders do count they can often blur the trend and mask changes. That is probably the effect right now as [...]

European Orders Fall by 0.4% in April

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

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

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Sandy Batten

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Housing starts and permits data were released for both February and March today. Release of these data has been delayed by the federal government shutdown in October 2025. Total starts fell 3.0% m/m in February to 1.356 million units from a downwardly revised 1.398 million in January (previously 1.487 million) but then rebounded to 1.502 million (+10.8% m/m) in March. The March level was the highest since December 2024 and 10.8% higher than a year earlier. The Action Economics Forecast Survey expected a 5.9% decline in March from January to a level of 1.4 million units. The 7.2% q/q increase in starts in Q1 is the first quarterly increase since Q1 2025. Residential investment has been a drag on overall GDP growth over the past year. The sharp Q1 increase raises hope that residential investment could make a small contribution to Q1 GDP growth in tomorrow’s report.

Single-family starts rose 4.8% m/m in February and 9.7% m/m in March to be 8.9% higher than a year ago. Multi-family starts plunged 17.0% m/m in February following an 18.2% monthly surge in January. They rebounded in March, rising 13.2% m/m to be up 15.5% y/y. The strong performance of starts in March following weakness earlier this year most likely reflects some catch-up as building conditions improved in March after having been very challenging in January and February.

Across the four major geographic regions, starts in the Northeast increased 24.8% m/m in March but fell 21.2% m/m in February. They were up 18.9% y/y. In the Midwest, starts increased 12.2% m/m in Mach on top of a 20.9% monthly gain in February. The March figure was down 0.9% from a year ago. In the South, starts rose 9.1% m/m in March but fell 3.6% m/m in February. In March they were up 14.1% from a year ago. In the West, starts rose 7.2% m/m in March after monthly declines of 7.7% in January and 3.7% in February. Compared with a year ago, they were up 8.0%.

The performance of building permits in February and March mirrored that of starts. Total permits rose 11.0% m/m in February but fell 10.8% m/m in March to be down 7.4% from a year ago. Single-family permits rose 6.2% m/m in February and then fell 3.8% m/m in March. They were 7.9% lower than a year ago. Multi-family permits rebounded 19.2% m/m in February after an 11.1% m/m fall in January. In March, they plunged 21.5% m/m and were down 6.3% from a year earlier.

In March, permits fell in each of the four major regions. In the Northeast, permits plunged 29.0% m/m in March following a 5.9% monthly gain in February. In the Midwest, permits declined 3.1% m/m in February and another 2.3% m/m in March. In the South, permits slumped 7.7% m/m in March but this following a 11.8% monthly jump in February. The March decline was the third in the past four months. In the West, permits fell 14.2% m/m in March following a 21.8% monthly surge in February and a 13.8% m/m slump in January.

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

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- Data for both February and March were included in today’s report to catch up from delays due to the federal government shutdown last October.
- Starts fell 3.0% m/m in February but rebounded 10.8% m/m in March.
- The 7.2% q/q increase in Q1 was the largest quarterly gain since the economy reopened after the pandemic shutdown in 2020.
- In contrast, permits jumped 11.0% m/m in February but fell 10.8% m/m in March and were up only 1.0% q/q in Q1.

U.S. Housing Starts Fell in February but Rebounded in March

Winnie Tapasanun

260429V35.jpg

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New orders for durable goods rose a stronger-than-expected 0.8% m/m in March, the first monthly rise since November, after declines of 1.2% in February (-1.4% initially) and 0.4% in January (-0.5% previously), according to today’s advance report by the U.S. Census Bureau. The Action Economics Forecast Survey had expected a 0.5% m/m March increase. The year-on-year rate decelerated to 0.8% in March, the lowest since December 2024 (-4.5%), from 7.6% in February, though remaining positive since January 2025. Durable goods orders excluding the transportation sector rose 0.9% (7.6% y/y) in March, the 11th consecutive m/m rise, after a 1.2% gain in February. Durable goods orders excluding defense, however, fell 0.3% (-1.8% y/y), the third m/m fall in four months, following a 1.2% February drop.

The m/m rise in March durable goods orders was driven by a 16.9% m/m jump in orders for defense aircraft & parts, the fourth gain in five months, following a 0.5% increase in February and a 26.9% slump in January. Orders for nondefense aircraft & parts dropped 21.1%, adding to a 33.3% February plunge and a 1.7% January decline. Orders excluding aircraft climbed 1.9% (9.2% y/y), the fourth straight m/m rise and the eighth in nine months, after a 1.8% February gain.

Durable goods orders for transportation rebounded 0.8% (-10.4% y/y) in March, the first m/m increase in four months, following a 5.6% drop in February. In addition to March’s m/m jump in defense aircraft orders and drop in nondefense aircraft orders, motor vehicles & parts orders rose 1.2% (7.9% y/y), the fourth successive m/m rise, after a 3.7% February gain. Orders for computers & electronic products jumped 3.7% (15.0% y/y), the largest of seven consecutive m/m increases, following a 1.3% February rise. Machinery orders grew 0.8% (10.4% y/y), the 11th straight m/m gain, on top of a 2.3% February advance. Orders for electrical equipment, appliances & components rose 0.7% (6.5% y/y), the first m/m rise in three months, reversing a 0.7% February decline. Orders for primary metals grew 0.4% (10.2% y/y), the fourth consecutive m/m increase, after a 2.4% February gain. Orders for all other durable goods rose 0.3% (1.2% y/y), up for the seventh straight month, after a 0.5% February rise. Orders for fabricated metal products rose 0.2% (7.2% y/y), the eighth m/m increase in nine months, following a 1.1% February gain.

Capital goods orders recovered 1.7% (-6.7% y/y) in March, the first m/m rise since November, after a 6.5% decrease in February. Nondefense capital goods orders slid 1.2% (-15.4% y/y), the sixth m/m slide in seven months, after a 7.9% February drop. Core capital goods orders (i.e., nondefense capital goods orders excluding aircraft) rose 3.3% (9.4% y/y), the eighth m/m gain in nine months, following a 1.6% February rise. Defense capital goods orders surged 18.0% (80.0% y/y) after a 2.3% February rebound. Notably, core capital goods shipments (core capex shipments)—a reliable coincident indicator of business spending on equipment in the national accounts—rose 1.2% (7.0% y/y), the sixth m/m rise in seven months, after a 1.3% February increase.

Shipments of all manufactured goods rose 1.4% (5.5% y/y) in March, the fifth m/m rise in six months, after a 1.7% gain in February. Durable goods shipments increased 0.7% (7.6% y/y), up for the sixth time in seven months, after a 1.6% February rise. Nondurable goods shipments advanced 2.1% (3.4% y/y), the strongest of four consecutive m/m increases, after a 1.9% February gain.

Unfilled orders of durable goods edged up 0.1% (9.5% y/y) in March, the eighth straight m/m increase, after a 0.1% uptick in February. Excluding transportation, unfilled orders rose 0.3% (2.5% y/y), also up for the eighth consecutive month, following a 0.3% February rise.

Manufacturing inventories advanced 0.6% (1.3% y/y) in March, the largest of five successive m/m increases, after a 0.1% uptick in February. Durable goods inventories grew 0.2% (1.9% y/y) in March, the sixth consecutive m/m rise, following a 0.1% increase in February, while nondurable goods inventories climbed 1.3% (0.4% y/y) after inching up 0.1%.

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.

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- March headline orders +0.8% m/m, first increase in four mths.; +0.8% y/y, lowest since Dec. ’24.
- Defense aircraft & parts +16.9% m/m following February’s +0.5%.
- Transportation orders +0.8%, first m/m rise since Nov.; orders ex transp. +0.9%, 11th straight m/m increase.
- Core capital goods shipments +1.2%, sixth m/m gain in seven mths., pointing to a solid contribution to Q1’26 GDP from business equipt. spending.
- Durable goods shipments +0.7%; unfilled orders +0.1%; inventories +0.2%.

U.S. Durable Goods Orders Rise in March, Led by a Jump in Defense Aircraft Orders

Kathleen Stephansen, CBE

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Mortgage applications fell 1.6% w/w (+33.4% y/y) in the week ending April 24, after rising 7.9% w/w (29.9% y/y) in the week ending April 17, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house rose 1.2% w/w (21.2% y/y) in the April 24 week, following a jump of 10.1% w/w (14.5% y/y) in the April 17 week.  Applications for loan refinancing declined 4.4% w/w (+50.7% y/y) after rising 5.8% w/w (51.9% y/y) in the week of April 17. 

The effective interest rate on a 30-year fixed-rate loan rose 1bps to 6.54% in the week ending April 24 from 6.53% in the week ending April 17. The rate on 15-year fixed-rate mortgages was unchanged at 5.92% in the latest week from the prior week. The 30-year Jumbo rate was also unchanged at 6.56% in the April 24 week from the April 17 week, while the rate on a 5-year ARM jumped 21bps to 6.02% in the latest week from 5.81% in the week ending April 17.

The share of applications for refinancing an existing loan declined to 42.5% of total applications in the week of April 24, from 44.2% in the April 17 week. The adjustable-rate mortgage (ARM) share of activity rose to 8.3% in the week ending April 24 from 8.0% in the week ending April 17.

The average size of a mortgage loan rose 2.0% w/w (6.2% y/y) to $407,900 in the week ending April 24, after rising 1.2% w/w (3.4% y/y) to $399,900 in the week ending April 17. The average size of a purchase loan rose 1.0% w/w (4.6% y/y) to $460,200 in the latest week, after edging down 0.1% w/w (+3.6% y/y) to $455,600 in the April 17 week. The average size of a loan to refinance a mortgage rose 2.3% w/w (16.3% y/y) to $337,100 in the April 24 week, after rising 2.4% w/w (10.7% y/y) to $329,500 in the April 17 week.

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

- Applications for loans to purchase rose, while applications for loan refinancing declined in the latest week.
- Interest rate on 30-year fixed-rate loans rose 1bps to 6.54%. 
- Average loan size edged up.

U.S. Mortgage Applications Edged Down in the April 24 Week

260429E.jpg

Globally, money supplies are accelerating. Three- and six-month money growth rates equal or exceed the year-on-year pace everywhere, and the 12-month growth rates accelerate over the recent 12 months compared to the 12-month pace of one year ago—except for the United Kingdom, where data lag by one month. This deviation may amount to the lack of topicality since money, credit, and inflation all are caught in an updraft prompted by rising oil prices. The oil price (Brent) is up at a 468% annual rate over three months, and over 12 months the oil price is up by 31.7%, compared to a 5.5% rise over 12 months one-year ago.

**Rising oil prices do NOT create inflation**
Now we all know that rising oil prices do not create inflation. So, thankfully, the 468% rise in oil prices is not driving up the inflation rate. But unfortunately, it is helping to drive up the price level. So, we are drawing a distinction between the price level and the inflation rate.

The year-over-year change in a price metric, like the CPI, is just that: the year-on-year gain. We often refer to this as ‘THE’ inflation rate. But that is only if the price level was at—and continued to rise at (about)—that same pace. Inflation is an ongoing rise in the price level. No one in their right mind thinks oil prices are going to rise by 468% year-over-year persistently. But of course, oil is a cost to producers and a price to consumers. It is a price that must be paid and cost that must be borne. The question is how much this bump-up in oil prices will contribute to the prices of the items we track in our various national price indexes in the future. Here I will refer to the CPI as the price index. And then we ask if that one-time rise in the relative price of oil will continue to bump up prices by the same amount month-after-month in the future. If it is, it is creating inflation. If not, it is creating a realignment of relative prices. The rise in relative prices is real. It may be painful to some and remunerative to others. The effects are complex.

But the spike in oil prices is not inflation. Even though we are tracking an unknown price rise that is continuing to waffle, I will speak of it as though we know the ultimate rise and speak of that as a one-time surge.

Expressed in this way, you should be able to see the oil price spurt as painful and as something that may be a temporary boost to inflation. If the price stays high, it will boost the price level based on the pass-through by commodity. After the oil price spurt, prices may be higher, but inflation will go back to ‘where it was.’

But all that happens if and only if monetary policy does not accommodate—does not monetize—the rise in oil prices. Unfortunately, we see money supplies are accelerating. Central banks have stepped up their rate of printing money as oil prices have risen, in order to stabilize interest rates. Printing more money, or increasing the money stock faster, is inflationary.

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**A dilemma**
Everywhere central banks have taken the bait, and to cushion the impact on oil prices, they are letting money supplies accelerate. They do this because of a focus on interest rates, as monetary policy has a ‘rule’ that has been developed that monetary policy should not respond to supply shocks. Should money supply respond and accelerate? Well, the answer to that is clear: no. So, we have a dilemma.

**Supply-demand argument**
Actually, the supply side edict is more complicated. Even those who note the monetary policy can’t solve supply problems realize that if a price spike is large enough or lasts long enough, it might, in the short run, impact prices with enough force to affect inflation expectations. Yet, for now we see no acknowledgement of this dilemma.

The expectations argument is the more sophisticated modern approach. Unfortunately, it refers to concepts we do not readily observe. Money supply growth, on the other hand we can measure. We see that money supply is accelerating, and that should make us worry about inflation. That in turn should, through one of several possible channels, get central banks to reign in money supply growth. To do that, they have to stop all this talk of ‘looking through’ the oil price increase, and they have to at least consider raising rates now. While the ECB and BOE have referred to this as a policy choice, the Federal Reserve in the U.S. has been far more circumspect and has just approved the election of a new chairman who thinks he can cut rates. I wonder whether, once he takes the helm at the Fed, he will continue to hold that view?

Economists are not watching money supply the way they used to. Central bankers need to have their eyes open as to the inflation risk, especially in the post Covid period, after which inflation targets had been consistently muddled by overshooting inflation.

Denial takes on many forms. The lesson learned is about money supply. The lesson is about not accommodating shocks to lessen their impact. But the focus on interest rates has muddied the meaning of that lesson in practice.

Globally, Money Supplies Accelerate... No Problemo?

Michael J. Moran

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The Conference Board’s index of Consumer Confidence inched higher in April from an upwardly revised reading in March. The combined changes left the measure 1.1% higher than the preliminary tally in March. Despite the improvement, the index remained in the low end of the range for the current expansion. The index in April totaled 92.8, down from an average of 96.1 in 2025 and an annual cyclical high of 105.4 in 2023.

The Improvement in April reflected a pickup in the expectations component, which rose 1.7%. The current conditions component inched 0.2% lower. Overall views on current conditions slipped despite more favorable assessments of the labor market. The so-called measure of the jobs gap (share of respondents indicating that jobs are plentiful less the share saying that jobs are hard to get) rose 1.4 percentage points higher to 7.5%. The pickup reflected a drop in the share indicating that jobs are hard to get (down 1.5 percentage points to 19.8%). The share indicating that jobs are plentiful eased 0.1 percentage point to 27.3%.

Although expectations improved in April, from a long-term perspective they could be viewed as the more important factor restraining the headline measure of confidence. As shown in the left chart below, the expectations component of confidence shows considerably less volatility than the current conditions component does. The contrasting patterns suggest that individuals realize that the economy will undergo possibly sharp cyclical swings, but they expect conditions at some point to return to an underlying norm.

The current conditions index in the current cycle has indeed dropped noticeably, but it is still above the long run average (123.8 in April versus the average of approximately 108 from 1990 to 2025). The expectations component, as usual, has eased less than the current conditions component, but its shift has pushed the measure to the low end of its long-run range (72.2 in April versus an average of approximately 88).

Interestingly, concern about the labor market seems to be a factor affecting expectations. While current views on the labor market are favorable (plentiful less hard to get jobs gap of 7.5%), Individual are concerned about the future. The survey asks respondents if they expect more jobs or fewer jobs six months hence. The share indicating fewer jobs has moved well into the upper end of the historical range. Such observations in the past were typically seen only during recession (chart, below right). An unfavorable view on interest rates also seems to be playing a role in depressing the expectations component. More than 60% of respondents to the current survey expect higher interest rates 12 months from now.

The results from the Conference Board survey of consumers differ markedly from those of the University of Michigan Survey Research Center. The Michigan results show consumer sentiment at a record low, while the Conference Board index is only slightly below its long-run average. The difference most likely reflects the nature of the questions in the surveys. The Conference Board focuses on business and employment conditions, while Michigan emphasizes personal finances. The focus on finances, along with questions on inflation, probably picks up concerns about affordability.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Expectations improved slightly in April, but are still subdued relative to norms.
- Moderately favorable view of current conditions.

Economy in Brief

Jump to:

Business and Consumer Confidence in Italy and the Netherlands

Inflation Trends in Asia, ex Japan

Existing Home Sales

Existing Home Sales Edge Lower by 0.3% - Two of Four Regions Drop

Existing Home Sales Edge Lower by 0.3% - Two of Four Regions Drop

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IFO Index Drops to 107 from 108.6

European Orders Fall by 0.4% in April