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/061003d.jpg" width="353">
Comparisons of retail sales among countries are beset by different definitions and by different units. Some countries report sales only in index form, others only in their national currencies. Some countries include sales of motor vehicle and parts; others do not. Some counties report sales both including and excluding motor vehicles and parts.
Today three countries--France, Australia and Hong Kong--reported retail sales. Yesterday Germany reported. The easiest comparison to make is between Germany and France. The volume of retail sales is reported in the EUROSTAT data base where concepts are harmonized. One can be reasonably certain that the difference in trends of retail sales in the two countries, shown in Chart 1, is a substantive one and not due to statistical quirks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003f.jpg" width="353">
If one wishes to compare retail sales in Germany with those in Hong Kong one should note that the German concept excludes motor vehicles and parts while the Hong Kong concept includes them. Fortunately, however in the GERMANY data base, there is a memorandum item--Retail Sales including motor vehicle and parts. This series has a base of 2003 and the retail sales series in Hong Kong from the EMERGEPR data base has a base of October, 2004-September, 2005. One could change the Hong Kong index to base 2003=100 or, as we did change both to 2000=100 to be comparable with the other charts. The two series with base 2000=100 are shown in Chart 2.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003e.jpg" width="353">
Another problem comes up when one series is in local currency and another in index form. Such is the case if one want to compare retail sales in France and Australia. The Australian data are given in millions of Australian Dollars, while the French data are given in terms of value and volume indexes. Both concepts, fortunately, exclude motor vehicles and parts. One simple approach is to take the Australian data from the ANZ data base, and, by using the advanced function, put the data in index form with 2000=100, the same base as the French value index that is found in the FRANCE data base.This comparison is shown in Chart 3.
The second and third charts, like the first show comparisons that reflect substantive differences and not statistical quirks. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Retail Sales</th>
<th scope="col">Aug&nbsp; 06</th>
<th scope="col">Jul 06</th>
<th scope="col">Aug 05</th>
<th scope="col">M/M %&nbsp;&nbsp;</th>
<th scope="col">Y/Y %&nbsp;&nbsp;&nbsp;</th>
<th scope="col">2005&nbsp;&nbsp;</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GERMANY&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>104.3</td>
<td>104.3</td>
<td>104.1</td>
<td>0.00</td>
<td>0.19</td>
<td>103.2</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Val Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)</td>
<td>105.6</td>
<td>105.5</td>
<td>104.5</td>
<td>0.09</td>
<td>1.05</td>
<td>103.7</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales, incl&nbsp; motor vehicles &amp; pts (2000=100)</td>
<td>107.1</td>
<td>106.3</td>
<td>104.4</td>
<td>0.75</td>
<td>2.59</td>
<td>103.9</td>
<td>101.8</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol"> FRANCE</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Val Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>116.3</td>
<td>116.1</td>
<td>114.1</td>
<td>0.68</td>
<td>2.25</td>
<td>114.7</td>
<td>113.2</td>
<td>109.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)&nbsp;</td>
<td>n.a.</td>
<td>123.5</td>
<td>120.6</td>
<td>n.a</td>
<td>n.a</td>
<td>121.3</td>
<td>119.3</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">AUSTRALIA</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Retail Sales (Mil A$)</td>
<td>18.176</td>
<td>18031</td>
<td>17212.3</td>
<td>0.25</td>
<td>5.60</td>
<td>217396</td>
<td>198214</td>
<td>175956</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Retail Sales 2000=100)</td>
<td>146.4</td>
<td>146.0</td>
<td>138.6</td>
<td>0.25</td>
<td>5.60</td>
<td>137.2</td>
<td>133.1</td>
<td>124.5 vA</td>
</tr>
<tr class="odd">
<td class="firstcol">HONG KONG</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales (2000=100)</td>
<td>118.8</td>
<td>117.4</td>
<td>109.4</td>
<td>1.20</td>
<td>8.61</td>
<td>109.6</td>
<td>102.7</td>
<td>92.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Comparisons of retail sales among countries are beset by different definitions and by different units. Some countries report sales only in index form, others only in their national currencies. Some countries include sales of motor [...]

Avoiding Pitfalls in Comparing Retail Sales Among Countries

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003c.jpg" width="353">
For September, announced job cuts reported by Challenger, Grey &amp; Christmas jumped for the second month. The 35,037 increase to 100,315 was to the highest level since January. The three month moving average of layoff announcements also rose 19.5% to its highest level since April.
During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.
A sharply higher level of layoffs in automotive (464.2% y/y), commodities (77.2% y/y), consumer goods (9.5% y/y), industrial goods (-16.1% y/y), and insurance (396.0% y/y) boosted the total. These were offset by declines in retail (-82.7% y/y), financial (-26.5% y/y), real estate and transportation (-90.8% y/y).
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Challenger also reported that announced hiring plans more than tripled m/m (87.9% y/y).
Remarks by Fed Governor Randall S. Kroszner titled What Drives Productivity Growth? Implications for the Economy and Prospects for the Future can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2006/20060927/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>100,315</td>
<td>65,278</td>
<td>39.6%</td>
<td>1,072,054</td>
<td>1,039,935</td>
<td>1,236,426</td>
</tr>
</tbody>
</table>
</body>
</html>

For September, announced job cuts reported by Challenger, Grey & Christmas jumped for the second month. The 35,037 increase to 100,315 was to the highest level since January. The three month moving average of layoff announcements also [...]

Challenger Layoffs Up Sharply

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003b.jpg" width="353">
The International Council of Shopping Centers (ICSC)-UBS indicated that chain store sales fell last week. The 0.3% decline was the fourth drop in as many weeks and pulled the average of sales in September 0.5% below August.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The retail price for a gallon of regular unleaded gasoline also fell last week. The seven cent w/w decline to an average $2.31 (-21.1% y/y) was to the lowest level since late February. 
The earlier decline in spot market prices, however, recently stabilized. In trading yesterday, the NY harbor price for regular unleaded gasoline was $1.55 per gallon versus an average $1.54 last week and $1.53 the prior period. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003a.jpg" width="353">
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS reversed all of the prior week&#39;s decline with a 0.7% rise, the third gain in the last four weeks. The indicator in September rose 0.7% from the August average, the first m/m rise since June.
The latest Short-Term Energy Outlook from the U.S. Energy Information Administration is available <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.
Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/br/br_q3-2006-1_consumer_confidence.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">09/30/06</th>
<th scope="col">09/23/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>463.0</td>
<td>464.2</td>
<td>3.3%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


</html>

The International Council of Shopping Centers (ICSC)-UBS indicated that chain store sales fell last week. The 0.3% decline was the fourth drop in as many weeks and pulled the average of sales in September 0.5% below August.

Chain Store Sales & Gasoline Prices Fell Again

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003b.jpg" width="353">
The International Council of Shopping Centers (ICSC)-UBS indicated that chain store sales fell last week. The 0.3% decline was the fourth drop in as many weeks and pulled the average of sales in September 0.5% below August.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The retail price for a gallon of regular unleaded gasoline also fell last week. The seven cent w/w decline to an average $2.31 (-21.1% y/y) was to the lowest level since late February. 
The earlier decline in spot market prices, however, recently stabilized. In trading yesterday, the NY harbor price for regular unleaded gasoline was $1.55 per gallon versus an average $1.54 last week and $1.53 the prior period. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003a.jpg" width="353">
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS reversed all of the prior week&#39;s decline with a 0.7% rise, the third gain in the last four weeks. The indicator in September rose 0.7% from the August average, the first m/m rise since June.
The latest Short-Term Energy Outlook from the U.S. Energy Information Administration is available <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.
Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/br/br_q3-2006-1_consumer_confidence.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">09/30/06</th>
<th scope="col">09/23/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>463.0</td>
<td>464.2</td>
<td>3.3%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Challenger Layoffs Up Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003c.jpg" width="353">
For September, announced job cuts reported by Challenger, Grey &amp; Christmas jumped for the second month. The 35,037 increase to 100,315 was to the highest level since January. The three month moving average of layoff announcements also rose 19.5% to its highest level since April.
During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.
A sharply higher level of layoffs in automotive (464.2% y/y), commodities (77.2% y/y), consumer goods (9.5% y/y), industrial goods (-16.1% y/y), and insurance (396.0% y/y) boosted the total. These were offset by declines in retail (-82.7% y/y), financial (-26.5% y/y), real estate and transportation (-90.8% y/y).
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Challenger also reported that announced hiring plans more than tripled m/m (87.9% y/y).
Remarks by Fed Governor Randall S. Kroszner titled What Drives Productivity Growth? Implications for the Economy and Prospects for the Future can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2006/20060927/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>100,315</td>
<td>65,278</td>
<td>39.6%</td>
<td>1,072,054</td>
<td>1,039,935</td>
<td>1,236,426</td>
</tr>
</tbody>
</table>
 Avoiding Pitfalls in Comparing Retail Sales Among Countries   
by <a href="/comment/Curley.html">Louise Curley</a> October 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003d.jpg" width="353">
Comparisons of retail sales among countries are beset by different definitions and by different units. Some countries report sales only in index form, others only in their national currencies. Some countries include sales of motor vehicle and parts; others do not. Some counties report sales both including and excluding motor vehicles and parts.
Today three countries--France, Australia and Hong Kong--reported retail sales. Yesterday Germany reported. The easiest comparison to make is between Germany and France. The volume of retail sales is reported in the EUROSTAT data base where concepts are harmonized. One can be reasonably certain that the difference in trends of retail sales in the two countries, shown in Chart 1, is a substantive one and not due to statistical quirks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003f.jpg" width="353">
If one wishes to compare retail sales in Germany with those in Hong Kong one should note that the German concept excludes motor vehicles and parts while the Hong Kong concept includes them. Fortunately, however in the GERMANY data base, there is a memorandum item--Retail Sales including motor vehicle and parts. This series has a base of 2003 and the retail sales series in Hong Kong from the EMERGEPR data base has a base of October, 2004-September, 2005. One could change the Hong Kong index to base 2003=100 or, as we did change both to 2000=100 to be comparable with the other charts. The two series with base 2000=100 are shown in Chart 2.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061003e.jpg" width="353">
Another problem comes up when one series is in local currency and another in index form. Such is the case if one want to compare retail sales in France and Australia. The Australian data are given in millions of Australian Dollars, while the French data are given in terms of value and volume indexes. Both concepts, fortunately, exclude motor vehicles and parts. One simple approach is to take the Australian data from the ANZ data base, and, by using the advanced function, put the data in index form with 2000=100, the same base as the French value index that is found in the FRANCE data base.This comparison is shown in Chart 3.
The second and third charts, like the first show comparisons that reflect substantive differences and not statistical quirks. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Retail Sales</th>
<th scope="col">Aug&nbsp; 06</th>
<th scope="col">Jul 06</th>
<th scope="col">Aug 05</th>
<th scope="col">M/M %&nbsp;&nbsp;</th>
<th scope="col">Y/Y %&nbsp;&nbsp;&nbsp;</th>
<th scope="col">2005&nbsp;&nbsp;</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GERMANY&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>104.3</td>
<td>104.3</td>
<td>104.1</td>
<td>0.00</td>
<td>0.19</td>
<td>103.2</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Val Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)</td>
<td>105.6</td>
<td>105.5</td>
<td>104.5</td>
<td>0.09</td>
<td>1.05</td>
<td>103.7</td>
<td>101.6</td>
<td>100.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales, incl&nbsp; motor vehicles &amp; pts (2000=100)</td>
<td>107.1</td>
<td>106.3</td>
<td>104.4</td>
<td>0.75</td>
<td>2.59</td>
<td>103.9</td>
<td>101.8</td>
<td>100.2</td>
</tr>
<tr class="odd">
<td class="firstcol"> FRANCE</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Val Retail Sales, ex motor vehicles &amp; pts (2000=100)</td>
<td>116.3</td>
<td>116.1</td>
<td>114.1</td>
<td>0.68</td>
<td>2.25</td>
<td>114.7</td>
<td>113.2</td>
<td>109.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Vol Retail Sales, ex motor vehicles &amp; pts&nbsp; (2000=100)&nbsp;</td>
<td>n.a.</td>
<td>123.5</td>
<td>120.6</td>
<td>n.a</td>
<td>n.a</td>
<td>121.3</td>
<td>119.3</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">AUSTRALIA</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Retail Sales (Mil A$)</td>
<td>18.176</td>
<td>18031</td>
<td>17212.3</td>
<td>0.25</td>
<td>5.60</td>
<td>217396</td>
<td>198214</td>
<td>175956</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Retail Sales 2000=100)</td>
<td>146.4</td>
<td>146.0</td>
<td>138.6</td>
<td>0.25</td>
<td>5.60</td>
<td>137.2</td>
<td>133.1</td>
<td>124.5 vA</td>
</tr>
<tr class="odd">
<td class="firstcol">HONG KONG</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Val Retail Sales (2000=100)</td>
<td>118.8</td>
<td>117.4</td>
<td>109.4</td>
<td>1.20</td>
<td>8.61</td>
<td>109.6</td>
<td>102.7</td>
<td>92.6</td>
</tr>
</tbody>
</table>


</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002j.jpg" width="353">
The Bank of Japan&#39;s Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers&#39; current conditions) from 21% in June to 24% in September and was 5 percentage points above June, 2005. A weakening of the yen and a fall in oil prices since the June survey has contributed to the increase in economic activity. Confidence in current conditions also improved for medium sized manufactures--from 13% to 14%--while that for small manufacturers declined--from 7% to 6%. The trends of the diffusion indexes of actual conditions in the large and small manufacturers are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002g.jpg" width="353">
While Japanese manufacturers were more confident in their appraisal of current conditions, they were less confident in their appraisal of the future. The diffusion index for large manufacturers&#39; appraisal of the future fell from 22% to 21%, that for medium manufacturers fell from 13% to 11% while that for small firms remained unchanged at 7%. The contrast between the optimistic appraisal of current conditions and less sanguine appraisal of the future for large corporations is shown in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002i.jpg" width="353">
The IFO Survey of German business released last week showed the same general trends as the Tankan Survey--an improved appraisal of current conditions and less sanguine view of the outlook. We suggested, in that in case of Germany, that the decline in the appraisal of the future was more likely to reflect caution rather than alarm as current conditions had rec<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002h.jpg" width="353">ently been much better than anticipated. (See Chart 3) In the case of Japan, actual business conditions for all industries have been better than expectations since the series began in 2004 until the second and third quarters of this year when they equaled expectations. (See Chart 4)
With the economy in the United States slowing, attention is being brought to bear on the prospects for growth in the next two largest industrial economies. While these surveys suggest some deceleration in growth may be in the cards for Japan and Germany, the trend of growth in both countries continues to recover from the depressed years of the recent past. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J809/@J809.HTM">Japan TANKAN (%)</a></th>
<th scope="col">3Q 06</th>
<th scope="col">2Q 06</th>
<th scope="col">3Q&nbsp; 05</th>
<th scope="col">Q/Q Dif&nbsp;&nbsp;</th>
<th scope="col">Y/Y&nbsp; Dif&nbsp;</th>
<th scope="col">2006&nbsp;&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">ACTUAL CONDITIONS&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>24</td>
<td>21</td>
<td>19</td>
<td>3</td>
<td>5</td>
<td></td>
<td>18</td>
<td>21</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>14</td>
<td>13</td>
<td>5</td>
<td>1</td>
<td>9</td>
<td></td>
<td>7</td>
<td>10</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>6</td>
<td>7</td>
<td>3</td>
<td>-1</td>
<td>3</td>
<td></td>
<td>3</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">FORECASTS</td>
<td>4Q 06</td>
<td>3Q 06</td>
<td>4Q&nbsp; 05</td>
<td>Q/Q Dif&nbsp;&nbsp;</td>
<td>Y/Y&nbsp; Dif&nbsp;</td>
<td>2006&nbsp;&nbsp;</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>21</td>
<td>22</td>
<td>18</td>
<td>-1</td>
<td>3</td>
<td>21</td>
<td>16</td>
<td>15</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>11</td>
<td>13</td>
<td>6</td>
<td>-2</td>
<td>7</td>
<td>11</td>
<td>4</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>7</td>
<td>7</td>
<td>1</td>
<td>0</td>
<td>6</td>
<td>7</td>
<td>1</td>
<td>-2</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bank of Japan's Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers' current conditions) from 21% in June to 24% in September and was 5 [...]

Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future

<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/061002d.jpg" width="353">
The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% below 2Q.
Residential building dropped another 1.4%, the fifth sharp slide in as many months. New single family building dropped 2.7% (-9.3% y/y) and the August level was down 12.5% from the peak in February. Moving in the other direction the value of spending on improvements rose 1.1%% (0.8% y/y).
During the last twenty years there has been an 84% correlation between the q/q change in the value of residential building and its contribution to growth in real GDP.
Nonresidential building jumped 3.4% after an upwardly revised 1.3% July rise. Office construction surged 3.1% (27.5% y/y) while multi-retail building jumped 10.8% (51.1% y/y). Building by the factory sector surged 8.2% (28.4% y/y) to the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002e.jpg" width="353">
Public construction spending reversed all of the prior month&#39;s revised decline with a 1.1% increase due to across the board gains. Construction activity on highways &amp; streets, nearly one third of the value of public construction spending, rose 0.4% (17.6% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.
Are Investors More Risk-Averse During Recession? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20061001/cover.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3%</td>
<td>-1.0%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>11.5%</td>
<td>5.6%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>-1.0%</td>
<td>2.9%</td>
<td>12.0%</td>
<td>14.3%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-1.4%</td>
<td>-2.2%</td>
<td>-5.1%</td>
<td>13.9%</td>
<td>18.6%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>3.4%</td>
<td>1.3%</td>
<td>23.8%</td>
<td>7.4%</td>
<td>5.3%</td>
<td>-4.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>-1.2%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% [...]

U.S. Construction Spending Up Unexpectedly

<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/061002a.jpg" width="353">
The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five points from the year ago peak of 58.1 Consensus expectations had been for a more moderate decline m/m to 53.5.
During the last ten years there has been a 67% correlation between the level of the ISM index and three month growth in factory sector industrial production.
At 61.0 the price index, which is not included in the composite, dropped to its lowest level since last November. During the last ten years there has been an 89% correlation between the level of the price index and the three month change in the PPI for intermediate goods less food &amp; energy.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002c.jpg" width="353">
The percentage of respondents reporting higher prices fell to its lowest level (36%) since February.
A lower employment component, which fell to 49.4 from a four month high of 54.0 in August, accounted for much of the m/m decline in the composite. During the last ten years there has been a 77% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.
The inventories index also fell sharply m/m while all of the other component series fell modestly with the exception of new orders which was unchanged m/m. The new orders index, however, at 54.2 is down sharply from the December 2003 high of 71.6.
The new export orders index fell modestly m/m to 55.3 and is down roughly three points from the recent high in January of 58.5. The series peak was in early 2004 near 60. During the last ten years there has been a 69% correlation between the level of the export order index and the q/q growth in goods exports from the GDP accounts. The imports index rose back to the middle of its range since early 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002b.jpg" width="353">
Explaining Cyclical Movements in Employment: Creative Destruction or Changes in Utilization from the Board of Governors of the Federal Reserve System is available <a href="http://www.federalreserve.gov/pubs/feds/2006/200623/200623abs.html">here</a>.
Economic Revitalization Through the Arts: The Creative Economy from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/commdev/c&amp;b/2006/spring/revitalization.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>52.9</td>
<td>54.5</td>
<td>58.0</td>
<td>55.5</td>
<td>60.5</td>
<td>53.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index (NSA)</td>
<td>61.0</td>
<td>73.0</td>
<td>78.0</td>
<td>66.4</td>
<td>79.8</td>
<td>59.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five [...]

ISM Composite & Price Indexes Down

<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/061002a.jpg" width="353">
The September composite index of manufacturing sector activity from the Institute for Supply Management fell to 52.9 from 54.5 during the prior month. The decline was the fourth in the last five months and left the index down five points from the year ago peak of 58.1 Consensus expectations had been for a more moderate decline m/m to 53.5.
During the last ten years there has been a 67% correlation between the level of the ISM index and three month growth in factory sector industrial production.
At 61.0 the price index, which is not included in the composite, dropped to its lowest level since last November. During the last ten years there has been an 89% correlation between the level of the price index and the three month change in the PPI for intermediate goods less food &amp; energy.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002c.jpg" width="353">
The percentage of respondents reporting higher prices fell to its lowest level (36%) since February.
A lower employment component, which fell to 49.4 from a four month high of 54.0 in August, accounted for much of the m/m decline in the composite. During the last ten years there has been a 77% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.
The inventories index also fell sharply m/m while all of the other component series fell modestly with the exception of new orders which was unchanged m/m. The new orders index, however, at 54.2 is down sharply from the December 2003 high of 71.6.
The new export orders index fell modestly m/m to 55.3 and is down roughly three points from the recent high in January of 58.5. The series peak was in early 2004 near 60. During the last ten years there has been a 69% correlation between the level of the export order index and the q/q growth in goods exports from the GDP accounts. The imports index rose back to the middle of its range since early 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002b.jpg" width="353">
Explaining Cyclical Movements in Employment: Creative Destruction or Changes in Utilization from the Board of Governors of the Federal Reserve System is available <a href="http://www.federalreserve.gov/pubs/feds/2006/200623/200623abs.html">here</a>.
Economic Revitalization Through the Arts: The Creative Economy from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/commdev/c&amp;b/2006/spring/revitalization.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>52.9</td>
<td>54.5</td>
<td>58.0</td>
<td>55.5</td>
<td>60.5</td>
<td>53.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index (NSA)</td>
<td>61.0</td>
<td>73.0</td>
<td>78.0</td>
<td>66.4</td>
<td>79.8</td>
<td>59.6</td>
</tr>
</tbody>
</table>
U.S. Construction Spending Up Unexpectedly 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002d.jpg" width="353">
The August value of construction put in place rose a modest 0.3% after a little revised 1.0% drop during July. Consensus expectations had been for a 0.4% decline. Despite the latest increase the level of 3Q activity remained 1.0% below 2Q.
Residential building dropped another 1.4%, the fifth sharp slide in as many months. New single family building dropped 2.7% (-9.3% y/y) and the August level was down 12.5% from the peak in February. Moving in the other direction the value of spending on improvements rose 1.1%% (0.8% y/y).
During the last twenty years there has been an 84% correlation between the q/q change in the value of residential building and its contribution to growth in real GDP.
Nonresidential building jumped 3.4% after an upwardly revised 1.3% July rise. Office construction surged 3.1% (27.5% y/y) while multi-retail building jumped 10.8% (51.1% y/y). Building by the factory sector surged 8.2% (28.4% y/y) to the highest level since 2001.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002e.jpg" width="353">
Public construction spending reversed all of the prior month&#39;s revised decline with a 1.1% increase due to across the board gains. Construction activity on highways &amp; streets, nearly one third of the value of public construction spending, rose 0.4% (17.6% y/y).
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.
Are Investors More Risk-Averse During Recession? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20061001/cover.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.3%</td>
<td>-1.0%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>11.5%</td>
<td>5.6%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1%</td>
<td>-1.0%</td>
<td>2.9%</td>
<td>12.0%</td>
<td>14.3%</td>
<td>6.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-1.4%</td>
<td>-2.2%</td>
<td>-5.1%</td>
<td>13.9%</td>
<td>18.6%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>3.4%</td>
<td>1.3%</td>
<td>23.8%</td>
<td>7.4%</td>
<td>5.3%</td>
<td>-4.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>1.1%</td>
<td>-1.2%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future  
by <a href="/comment/Curley.html">Louise Curley</a> October 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002j.jpg" width="353">
The Bank of Japan&#39;s Tankan Survey released this morning shows a greater than expected increase in the headline series (Diffusion index for large manufacturers&#39; current conditions) from 21% in June to 24% in September and was 5 percentage points above June, 2005. A weakening of the yen and a fall in oil prices since the June survey has contributed to the increase in economic activity. Confidence in current conditions also improved for medium sized manufactures--from 13% to 14%--while that for small manufacturers declined--from 7% to 6%. The trends of the diffusion indexes of actual conditions in the large and small manufacturers are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002g.jpg" width="353">
While Japanese manufacturers were more confident in their appraisal of current conditions, they were less confident in their appraisal of the future. The diffusion index for large manufacturers&#39; appraisal of the future fell from 22% to 21%, that for medium manufacturers fell from 13% to 11% while that for small firms remained unchanged at 7%. The contrast between the optimistic appraisal of current conditions and less sanguine appraisal of the future for large corporations is shown in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002i.jpg" width="353">
The IFO Survey of German business released last week showed the same general trends as the Tankan Survey--an improved appraisal of current conditions and less sanguine view of the outlook. We suggested, in that in case of Germany, that the decline in the appraisal of the future was more likely to reflect caution rather than alarm as current conditions had rec<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061002h.jpg" width="353">ently been much better than anticipated. (See Chart 3) In the case of Japan, actual business conditions for all industries have been better than expectations since the series began in 2004 until the second and third quarters of this year when they equaled expectations. (See Chart 4)
With the economy in the United States slowing, attention is being brought to bear on the prospects for growth in the next two largest industrial economies. While these surveys suggest some deceleration in growth may be in the cards for Japan and Germany, the trend of growth in both countries continues to recover from the depressed years of the recent past. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J809/@J809.HTM">Japan TANKAN (%)</a></th>
<th scope="col">3Q 06</th>
<th scope="col">2Q 06</th>
<th scope="col">3Q&nbsp; 05</th>
<th scope="col">Q/Q Dif&nbsp;&nbsp;</th>
<th scope="col">Y/Y&nbsp; Dif&nbsp;</th>
<th scope="col">2006&nbsp;&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">ACTUAL CONDITIONS&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>24</td>
<td>21</td>
<td>19</td>
<td>3</td>
<td>5</td>
<td></td>
<td>18</td>
<td>21</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>14</td>
<td>13</td>
<td>5</td>
<td>1</td>
<td>9</td>
<td></td>
<td>7</td>
<td>10</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>6</td>
<td>7</td>
<td>3</td>
<td>-1</td>
<td>3</td>
<td></td>
<td>3</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">FORECASTS</td>
<td>4Q 06</td>
<td>3Q 06</td>
<td>4Q&nbsp; 05</td>
<td>Q/Q Dif&nbsp;&nbsp;</td>
<td>Y/Y&nbsp; Dif&nbsp;</td>
<td>2006&nbsp;&nbsp;</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Corporations&nbsp;</td>
<td>21</td>
<td>22</td>
<td>18</td>
<td>-1</td>
<td>3</td>
<td>21</td>
<td>16</td>
<td>15</td>
</tr>
<tr class="odd">
<td class="firstcol"> &nbsp; Medium Corporations</td>
<td>11</td>
<td>13</td>
<td>6</td>
<td>-2</td>
<td>7</td>
<td>11</td>
<td>4</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol"> &nbsp; Small Corporations</td>
<td>7</td>
<td>7</td>
<td>1</td>
<td>0</td>
<td>6</td>
<td>7</td>
<td>1</td>
<td>-2</td>
</tr>
</tbody>
</table>
</body>
</html>

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

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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. 

London

Singapore

Tokyo

New York

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

Sandy Batten

251219j5.jpg

Existing home sales rose 0.5% m/m (-1.0% y/y) in November to 4.13 million homes (SAAR) following a 1.5% monthly gain in October and a 1.3% monthly rise in September, according to the National Association of Realtors (NAR). It was the highest level of sales since February and matched expectations in the Action Economics Forecast Survey. The average effective 30-year mortgage interest rate was unchanged at 6.54% last month, but this is down markedly from 7.10% in May and accounts for some of the revival in home sales over the past several months. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales rose 0.8% m/m (-0.8% y/y) in November to 3.75 million units after a 1.1% m/m rise in October and a 1.4% monthly gain in September. Sales of condos and co-ops slumped 2.6% m/m (-2.6% y/y) to 380,000 in November following a 5.4% monthly jump in October.

Compared to a month ago, sales rose 4.1% m/m in the Northeast, increased 1.1% m/m in the South, were unchanged in the West and fell 2.0% m/m in the Midwest. Compared to a year ago, sales were unchanged in both the Northeast and the South, fell 3.0% y/y in the Midwest and declined 1.3% y/y in the West.

The median price of all existing homes (NSA) declined 1.4% m/m (+1.2% y/y) to $409,200 in November. The median price of an existing single-family home fell 1.4% m/m (+1.2% y/y) to $414,300 in November. Prices of single-family homes in the Northeast edged up 0.9% from a year ago. Prices in the Midwest jumped 5.8% y/y; prices in the South rose 1.0% y/y. In contrast, prices in the West declined 0.8% from a year ago.

Inventories of homes for sale continued to weaken in November. The number of existing homes for sale (NSA) slumped 5.9% m/m (+7.5% y/y) to 1.43 million units in November. The supply of homes on the market at the current selling rate (NSA) slid to 4.2 months, its lowest reading since March.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's USECON database. Regional price and affordability data and national inventory data are available in the REALTOR database. Mortgage interest rates can be found in the WEEKLY database. The expectations figure is from the Action Economics Forecast Survey, reported in the AS1REPNA database.


251219k5.jpg

251219l5.jpg

- Existing home sales increased 0.5% m/m in November, the third consecutive monthly gain.
- Month-over-month sales increased in the Northeast and South, were unchanged in the West, and fell in the Midwest.
- Year-over-year sales were unchanged in the Northeast and South and decreased in the Midwest and West.


U.S. Existing Home Sales Edged Up in November

Andrew Cates

**Faster-than-Expected Monetary Easing**
Our first potential upside risk for 2026 is that monetary policy across most major advanced economies is loosened further and by more than markets and forecasters currently anticipate. Monetary policy cycles have a history of being underestimated in both length and magnitude—in large part because of the powerful feedback loops between interest rates, inflation, and economic behaviour. On the way up, higher policy rates feed into mortgage costs, debt-service burdens, rents, and the general cost of doing business, reinforcing wage pressures and inflation persistence. But these same channels work in reverse on the way down. As rates fall, debt servicing eases, housing and rental inflation softens, and cost pressures across the economy unwind more rapidly than expected—allowing inflation to decelerate faster and creating scope for further easing. A risk, therefore, is that if disinflation becomes self-reinforcing, central banks find themselves cutting rates more aggressively than currently priced, not because of economic distress, but because restrictive policy proves increasingly unnecessary.

251218Z1.jpg

**Energy Supply Dynamics Prove More Supportive**
The second chart reinforces the message from the first: easing monetary policy may be accompanied—and amplified—by a more benign energy backdrop. Recent projections from the EIA point to a renewed build-up in OECD crude oil and liquids inventories over the year ahead, a dynamic that has historically been associated with downward pressure on oil prices. If inventories continue to rise as supply growth outpaces demand, spot prices for crude could undershoot current forecasts, keeping energy inflation subdued. That, in turn, would reinforce disinflationary forces already in play—lowering headline CPI, easing cost pressures for firms and households, and giving central banks greater confidence to loosen policy further. In that sense, softer oil prices would not just be a standalone positive shock, but part of a reinforcing feedback loop alongside rate cuts, supporting real incomes, financial conditions, and global growth into 2026.


251218Z2.jpg

**AI-Driven Productivity Gains Materialise More Quickly** 
The third chart shows a clear pickup in US nonfinancial productivity growth, reviving the debate around whether AI-driven efficiency gains may arrive sooner than many forecasters expect. While the longer-term productivity potential of AI remains uncertain and uneven across sectors, there are reasons to think that at least some near-term gains could prove more tangible than currently assumed. Rather than transformative breakthroughs, early benefits are likely to come from incremental improvements—automation of routine processes, better scheduling and logistics, more efficient use of capital and labour, and modest reductions in overhead costs—areas where US firms are already well positioned to implement new technologies quickly. If these gains accumulate and diffuse more broadly, the implications would still be meaningful. Even a modest, sustained uplift in productivity would help contain unit labour costs, support real income growth, and raise the economy’s speed limit without generating renewed inflation pressure. In that scenario, productivity would not need to “revolutionise” the economy to matter: incremental efficiency gains could nonetheless provide a supportive backdrop for growth, earnings, and policy easing into 2026—representing a genuine upside risk to the outlook.


251218Z3.jpg

**The US Economy Proves Resilient Again**
The next chart highlights a further upside risk to the 2026 outlook: the possibility that the US economy once again outperforms its peers. Unlike the typical pre-recession backdrop, there is little evidence of meaningful financial stress in the US private sector. After a prolonged period of balance-sheet repair, private-sector debt ratios have been trending lower in recent years, while the sector as a whole is running a healthy financial surplus. This stands in stark contrast to previous late-cycle episodes, which were characterised by rising leverage, widening deficits, and growing dependence on credit expansion. The absence of private-sector excesses reduces the economy’s vulnerability to higher rates and external shocks, and helps explain why growth has remained more durable than expected. If households and firms continue to prioritise balance-sheet strength rather than forced deleveraging, the usual mechanisms that tip the economy into recession may fail to materialise. In that environment, even modest easing in financial conditions could translate into renewed spending and investment, allowing the US to sustain above-trend growth into 2026—representing another upside risk to the global outlook.


251218Z4.jpg

**India’s Growth Engine Accelerates Further** 
Chart 5 points to another potential upside risk for 2026 emanating from India’s economy. After a period of relative pessimism earlier in the year, consensus growth forecasts for 2026 have been revised modestly higher, even as inflation projections have continued to drift lower. This combination—firmer growth expectations alongside easing inflation pressures—creates scope for a more supportive policy backdrop than markets currently assume. With real interest rates no longer rising and financial conditions stabilising, India’s investment cycle, already underpinned by public infrastructure spending and improving corporate balance sheets, could prove more durable than forecast. If these trends persist, India may deliver growth that is both stronger and more internally driven than expected, providing a meaningful demand impulse to the broader global economy. Given India’s increasing weight in global growth, even small upside surprises would have outsized effects on trade, commodity demand, and regional activity—reinforcing the case that the global outlook for 2026 may be skewed to the upside.


251218Z5.jpg

**The Global South Becomes a More Independent Source of Demand** 
The final chart points to a broader upside risk for the global economy in 2026: that economies across the so-called Global South generate more durable momentum than currently assumed. With a few notable exceptions—such as China and Thailand—many emerging economies continue to benefit from stronger growth in their working-age populations and/or faster real GDP per capita growth than their advanced-economy counterparts. These demographic and income dynamics are helping to underpin domestic consumption, support labour-force expansion, and attract capital inflows, as reflected in the pattern of net FDI across countries. In contrast, much of the advanced world faces binding demographic constraints and lower steady-state growth rates, limiting the scope for demand to re-accelerate organically. If growth in the Global South proves more resilient and internally driven—rather than overly dependent on exports to advanced economies—it could provide a more stable and geographically diversified source of global demand. In that scenario, global growth in 2026 would be less reliant on a narrow set of advanced economies, reinforcing the case that risks to the outlook may be skewed to the upside.


251218Z6.jpg

_This marks our final Charts of the Week publication for 2025 The next edition will be released on Thursday 8 January._

Last week’s Charts of the Week focused on the darker tail risks hanging over the 2026 outlook: the possibility of monetary policy mis-calibration, that geopolitics and trade fragmentation further disrupt supply chains, and that elevated debt levels—particularly in the public sector—reassert themselves as a drag on growth. This week’s charts take a deliberately different tack. Taken together, they highlight a set of upside risks that are possibly underappreciated in current forecasts. For example, policy easing across advanced economies may extend further than expected as disinflation feeds on itself (chart 1); oil prices could surprise on the downside as inventories rebuild (chart 2); US productivity may deliver incremental but meaningful gains sooner than assumed (chart 3); the US economy itself could continue to benefit from an absence of private-sector financial stress (chart 4); India’s growth momentum might firm again as inflation pressures recede (chart 5); and, more broadly, parts of the Global South appear increasingly capable of generating their own demand impulse, supported by favourable demographics and income growth (chart 6). None of these forces is guaranteed, and each carries its own caveats—but together they suggest that, having spent much of the past year fixated on downside risks, the risks to global growth in 2026 may be more evenly balanced than is widely assumed.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/6tL5l7g70DuLWxKOokuRit?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: The Upside Risks

Kathleen Stephansen, CBE

251218A4.jpg

251218B4.jpg

Initial claims for unemployment insurance dropped 13,000 to 224,000 during the week of December 13, from 237,000 during the week of December 6, revised from 236,000. The four-week moving average of initial claims was 217,500, an increase of 500 from the previous week, which was revised to 217,000 from 216,750.

Federal government employees initially filed 1091 (NSA) jobless insurance claims in the week ended December 6, after filing 643 claims in the week ended November 29.

Continuing claims for unemployment insurance rose 67,000 to 1,897,000 in the week ending December 6, following a sharp decline of 107,000 to 1,830,000 in the prior week, revised from 1,838,000. The four-week moving average was 1,902,000 in the week ending December 6, a decrease of 14,000 from 1,916,00 in the week ended November 29, revised from 1,918,000. The insured unemployment rate stood at 1.2% in the week of December 6, unchanged from the prior week.

Federal government employees’ continuing benefits rose to 14,077 (NSA) in the week of November 29 from 12,732 (NSA) in the week ended November 22.

The insured unemployment rate varied greatly across individual states and territories. In the week ending November 29, the highest unemployment rates were in Washington (2.48%), New Jersey (2.42%), California (2.26%), Minnesota (2.16%), and Massachusetts (2.10%). The lowest rates were in Florida (0.34%), South Dakota (0.40%), North Carolina (0.41%), Louisiana (0.44%), Alabama (0.46%), Virginia (0.47%), and Tennessee (0.49%). Rates in other notable states include New York (1.81%), Illinois and Pennsylvania (both 1.67%), and Texas (1.22%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.



251218C4.jpg

251218D4.jpg

- Initial claims dropped from the prior week.
- Continuing claims rebounded from the prior week sharp decline.
- The insured unemployment rate was unchanged.


U.S. Initial Claims for Unemployment Insurance Eased in Latest Week

251217A2.jpg

251217B2.jpg

Mortgage applications dropped 3.8% w/w (+40.9% y/y) in the week of December 12 after a rise of 4.8% w/w (45.4% y/y) in the week of December 5, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 2.8% w/w (+12.3% y/y) in the latest week after declining 2.4% w/w (+17.2% y/y) in the week of December 5. Applications for loan refinancing dropped 3.6% w/w (+86.0% y/y) in the week of December 12, following the 14.3% (87.8% y/y) jump in the week ended December 5.

The effective interest rate on a 30-year fixed-rate loan rose 6bps to 6.56% in the week ending December 12, from 6.50% in the week ending December 5. The rate on 15-year fixed-rate mortgages rose 4bps to 5.91% in the latest week from 5.87% in the December 5 week. The rate on 30-year jumbo edged down 2bps to 6.55% in the December 12 week from 6.57% in the prior week. The rate on a 5-year ARM eased 4bps to 5.76% in the latest week from 5.80% in the December 5 week.

The share of applications for refinancing an existing loan rose to 59.0% of total applications in the December12 week from 58.2% in the week ending December 5. The adjustable-rate mortgage (ARM) share of activity rose to 7.2% in the latest week from 7.0% in the December 5 week.

The average size of a mortgage loan rose 1.5% (6.4% y/y) to $400,000 in the December 12 week, following a decline of 0.7% (+7.1% y/y) to $394,200 in the December 5 week. The average size of a purchase loan edged up 0.6% (-0.3% y/y) to $424,200 in the latest week, after dropping 0.4% (+1.3% y/y) to $421,700 in the December 5 week. The average size of a loan to refinance a mortgage rose 2.4% (19.8% y/y) to $383,300 in the week ending December 12 after rising 0.2% (19.4% y/y) to $374,500 in the December 5 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.

- Purchase applications fell 2.8% w/w; refinancing loan applications fell 3.6% w/w.
- Effective interest rate on 30-year fixed loans rose to 6.56%.
- Average loan size rose moderately.

U.S. Mortgage Applications Retreated in the Week of December 12

Robert Brusca

251217E.jpg

U.K. inflation has moderated in November, posting a 0.1% drop on the HICP, a 0.1% gain in the CPI-H headline measure as well as a 0.1% gain in the CPI-H core (excluding energy, food, alcohol, and tobacco). The sequential trend in core inflation points lower and is eroding but continues to run over the 2% mark set as a target by the Bank of England for overall inflation (over 12 months). The headline is excessive as well but also eroding.

Sequentially the CPI-H gains 3.5% over 12 months, slows to a 2.8% annual rate over six months and then dips to 1.4% annual rate over three months. The CPI-H core rises by 3.6% over 12 months, ticks down to a 3.0% pace over six months, and then runs at a 2.4% annualized pace over three months.

The trend for the CPI core, and for the headline, both are quite good and would be completely consistent with the Bank of England cutting rates, a move that is widely expected – although the 12-month pace for each is excessive.

Not only is inflation showing signs of falling into the Bank of England's target zone, but the economy has been weak although the unemployment rate currently is only hovering around the 4% mark. Still, recent economic data have been weak, and the recent monthly GDP report posted a negative reading, further unsettling the outlook. The October monthly GDP change was estimated at -0.1% while the year-over-year increase in GDP in October produced a gain of just 1.1%. These metrics have put the U.K. economy on recession watch at a time when there has been a sharp revision in the budget process that will be much more constrictive. A sharp pullback in the manufacturing of motor vehicles is blamed for the sudden weakness in GDP in October. The three-month drop in GDP is the first such drop since December 2023.

Meanwhile, the headline and the core inflation statistics are progressing. The table calculates breadth statistics on how widespread inflation acceleration has been and we see that it has not been prevalent (over 50%) in September or November, although breadth did touch the 58% mark in October. Sequentially, inflation acceleration has been tamed: over 12 months (when it is neutral), six months, and three months. Over 12 months, inflation accelerated in only 50% of the categories. And inflation according to the CPI headline and in the core over six months continues to show deceleration to accompany narrowing breadth - only 8.3%. That reading indicates that there was more inflation deceleration than acceleration by a wide margin over six months. At 50%, inflation acceleration and deceleration forces are balanced. Readings below 50% indicate relatively more deceleration, and that is now the more common condition. Inflation acceleration is extremely rare across categories over six months and three months.

251217.jpg

On balance, inflation by the headline and by the core measures is well disciplined and falling into line although still excessive over 12 months. The breadth statistics reinforce the view that inflation is broadly coming to heel at the same time the real economy data are showing a cooling in the economy- and perhaps an excessive slowing at that. The new budget should put the economy under additional downward pressure, further restraining inflation and causing growth to moderate. In this situation, a rate cut from the Bank of England is the odds-on bet. Perhaps the only question now is how large a cut? How much will the Bank think that circumstance have changed and that key trends have been altered in a significant way? Will policy react mostly to lower trend tempered by an excessive 12-month pace, or will it be willing to look farther forward and weight heavily the deteriorating economic trend as well?

Economy in Brief

Jump to:

Avoiding Pitfalls in Comparing Retail Sales Among Countries

Challenger Layoffs Up Sharply

Chain Store Sales & Gasoline Prices Fell Again

Chain Store Sales & Gasoline Prices Fell Again

Japan's "Tankan" Like Germany's "IFO" Confident of the Present but Cautious of the Future

U.S. Construction Spending Up Unexpectedly

ISM Composite & Price Indexes Down

ISM Composite & Price Indexes Down