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/060324a.jpg" width="353">
New home sales fell 10.5% in February, the largest one-month decline since February 1995. Sales were 1.08 million (SAAR), the lowest volume since March 2003. Following January&#39;s 5.3% drop, sales over the two months were down 15.3%, the largest two-month fall since February 1994.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060324b.jpg" width="353">
Builders have not yet caught up, of course, with the change in the sales pace, and inventories of unsold homes rose again last month, reaching 548,000. At February&#39;s sales rate, that equals a 6.3-month supply. Four months ago, this ratio was 4.5 months. This too marks a sharp turn.
How disturbing is this sudden downdraft in home sales? There are some mitigating factors. The sales drop was not nationwide. They actually rose in the northeast, 12.7%, and midwest, 5.2%. The jump in the inventory position, while large, serves mainly to highlight how very low stocks were the last several years. As seen in our graph, the long-run average supply is 5.9+ months (calculated on DLXVG3 by taking the 518-month moving average, that is, the full span of the data). <img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060324c.jpg" width="353">Also, the roundly 4-month average from 1998 to 2004 is (very) roughly the length of time it takes to build a house. So for that period at least, it seems that builders were selling homes just about as fast as they could produce them. Additionally, existing home sales, down in previous months, had a nice rebound in February, as documented here yesterday by Tom Moeller. So total housing demand did not fall in the month.
Finally, home prices are showing some signs of hesitation, with a fourth consecutive monthly decline in February. Part of this price measure relates to the geographic distribution of the sales; they fell most sharply in the West, one of the high-priced regions, while they grew in the Midwest, a lower-priced region, giving a downward bias to the national price measure. Prices are available by region only quarterly, so we cannot yet tell what is happening within each area.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E904.HTM">U.S. New Homes</a></th>
<th scope="col">Feb 2006</th>
<th scope="col">Jan 2006</th>
<th scope="col">Feb 2005</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 Sales (SAAR, Thous)</td>
<td>1,080</td>
<td>1,207</td>
<td>1,247</td>
<td>1,280</td>
<td>1,200</td>
<td>1,091</td>
</tr>
<tr>
<td class="firstcol">Inventory of Unsold Homes&nbsp; (SA, Thous)</td>
<td>548</td>
<td>525</td>
<td>513</td>
<td>469</td>
<td>395</td>
<td>348</td>
</tr>
<tr class="odd">
<td class="firstcol">Months&#39; Supply (SA)</td>
<td>6.3</td>
<td>5.3</td>
<td>4.4</td>
<td>4.5</td>
<td>4.0</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA,$)</td>
<td>230,400</td>
<td>234,200</td>
<td>237,800</td>
<td>234,058</td>
<td>217,817</td>
<td>191,385</td>
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New home sales fell 10.5% in February, the largest one-month decline since February 1995. Sales were 1.08 million (SAAR), the lowest volume since March 2003. Following January's 5.3% drop, sales over the two months were down 15.3%, [...]

New Home Sales Fall 10.5% in February; Inventories Rose and Prices Declined

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323d.jpg" width="353">
Besides its wide array of macroeconomic databases, Haver Analytics also features a number of industry offerings. Just this morning, for example, Chemical Week magazine released its weekly report on chemical prices. These are maintained in Haver&#39;s CHEMWEEK database. Far from being esoteric trivia, the chemicals in this collection are main building blocks of products and fuels consumers use every day. If not ingredients in the items themselves, several of these chemicals are important in the manufacturing process.
The database consists of 29 major chemicals. We list just four in the table below as a sampling. The prices we show here averages; &quot;highs&quot; and &quot;lows&quot; are also available. These are US spot prices; spot prices are also given for European markets and contract prices for several specific delivery months are available for most items for both US and European markets.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323e.jpg" width="353">
The particular items we show here are multipurpose chemicals. Many plastics are made from polyvinyl chloride and combinations of propylene with various other substances. Both have experienced a near doubling over the past couple of years, but have shown some signs of stabilizing so far this year. PVC is a hard plastic, frequently used now in pipes, as in household plumbing, and other building products, such as vinyl siding. Its price has been steady now since last April at $930 per metric ton. However, the price rose in steep steps from just $370/MT in early 2002.
Propylene is an ingredient in other products, such as aerosol sprays, other plastics and fibers and synthetic rubber. Its price has more than tripled since early 2002, when it traded at just $0.13/pound, compared with as much as $0.52 briefly in late November and $0.41 most currently.
Methanol, or wood alcohol, was once thought to be a potential substitute or complement to gasoline in motor vehicle fuels. Racecars and some specialty vehicles do run on it. However, it is also highly toxic, causing safety concerns. So other items, such as ethanol, are developing more as alternative fuels. This shift in potential usage may be reflected in the price trend for methanol. It has risen markedly, from $0.57/gallon in late 2003 to $0.94 recently, but on a relative basis, it has moved much less than other chemicals, as is evident in the second graph.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323f.jpg" width="353">
Finally, the price of caustic soda is also up dramatically. Caustic soda is more familiarly known as lye and its more formal chemical name is sodium hydroxide. It is a very widely used in the manufacture of such diverse items as aluminum, textiles, soap and paper and in petroleum refining. As recently as the spring of 2004, this key substance was selling for as little as $65 a ton. But in November, it reached $587.50 before falling back to &quot;just&quot; $335 in the last couple of weeks.
The mere wide ranges covered by these price movements highlight the value of the CHEMWEEK database. Unlike many commodities that have tighter markets, these chemical prices often seem to move in fits and spurts, sometimes doubling virtually &quot;overnight&quot;. So monitoring them would seem vital for industry analysts and even macroeconomists.
Further, several are closely tied to petroleum prices. In the third graph, for instance, we show the simple spot price for crude oil, West Texas Intermediate, from the WEEKLY and OILWKLY databases. It has a high 86% correlation with PVC prices since 1999 and as high or for even longer periods with numerous other chemicals. So the role of oil is closely intertwined not only with heating and driving costs, but also with the raw material and processing costs for many other products.

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<th scope="col" class="firstcol">US Spot Prices</th>
<th scope="col">Mar 22, 2006</th>
<th scope="col">Feb 22, 2006</th>
<th scope="col">End-Dec 2005*</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
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<td class="firstcol">PVC General Purpose, $/metric ton</td>
<td>930</td>
<td>930</td>
<td>930</td>
<td>914</td>
<td>810</td>
<td>585</td>
</tr>
<tr>
<td class="firstcol">Propylene, Chemical Grade, $/lb</td>
<td>0.41</td>
<td>0.41</td>
<td>0.42</td>
<td>0.41</td>
<td>0.31</td>
<td>0.20</td>
</tr>
<tr class="odd">
<td class="firstcol">Methanol, $/gal</td>
<td>0.94</td>
<td>0.94</td>
<td>0.91</td>
<td>0.86</td>
<td>0.82</td>
<td>0.73</td>
</tr>
<tr>
<td class="firstcol">Caustic Soda, $/short ton</td>
<td>335</td>
<td>345</td>
<td>415</td>
<td>369</td>
<td>176</td>
<td>139</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: Crude Oil, $/bbl**</td>
<td>62.69</td>
<td>60.00</td>
<td>59.49</td>
<td>56.29</td>
<td>41.31</td>
<td>31.14</td>
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Besides its wide array of macroeconomic databases, Haver Analytics also features a number of industry offerings. Just this morning, for example, Chemical Week magazine released its weekly report on chemical prices. These are [...]

Chemical Prices Surge with Petroleum, But Some Stabilize or Even Decline Recently

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323b.jpg" width="353">
The U.S. federal government posted a deeper budget deficit during February of $119.2B versus last February&#39;s deficit of $113.9B. Nevertheless, the fiscal year to date budget deficit narrowed to $217.5B versus 223.4B during the first five months of FY05.
Net revenues collapsed 50.9% m/m as is often the case during February but rose 10.5% during the first five months versus FY04. Individual income tax receipts (44% of total receipts) rose 10.8% y/y and corporate income taxes (10% of total receipts) rose 29.6% y/y during fiscal year 2005&#39;s first five months.
The improved job market raised employment taxes (36% of total receipts) 6.0% y/y though estate &amp; gift taxes fell 0.4% y/y. 
U.S. net outlays continued strong and rose 7.6% y/y fiscal year to date. Defense (19% of total outlays) for the first five months of FY06 rose 7.6% from the year prior. The growth in Medicare spending (12% of total outlays) accelerated to 8.5% y/y and spending on social security (21% of total outlays) grew 5.6%. s
Agriculture spending grew 10.6%. Also strong was spending on community &amp; regional development which nearly tripled this fiscal year to date versus last. Spending on health programs (10% of the total) rose 2.1% while spending on education &amp; training (4% of the total) fell 1.9% y/y. Interest expense (8% of the total) grew 24.3% with higher interest rates.
The Current Budget Projections from the US Congressional Budget Office released March 3rd are available <a href="http://www.cbo.gov/budget/budproj.shtml"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2005</th>
<th scope="col">FY 2004</th>
<th scope="col">FY 2003</th>
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<td class="firstcol">Budget Balance</td>
<td>$-119.2B</td>
<td>$21.0B</td>
<td>$-113.9B (2/05)</td>
<td>$-318.3B</td>
<td>$-412.7B</td>
<td>$-377.6B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Revenues</td>
<td>$112.9B</td>
<td>$230.0B</td>
<td>11.9%</td>
<td>14.5%</td>
<td>5.5%</td>
<td>-3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Net Outlays</td>
<td>$232.1B</td>
<td>$209.0B</td>
<td>8.0%</td>
<td>7.8%</td>
<td>6.2%</td>
<td>7.4%</td>
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The U.S. federal government posted a deeper budget deficit during February of $119.2B versus last February's deficit of $113.9B. Nevertheless, the fiscal year to date budget deficit narrowed to $217.5B versus 223.4B during the first [...]

February U.S. Budget Deficit Deeper, Fiscal YTD Narrower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323c.jpg" width="353">
 The National Association of Realtors reported that total existing home sales rose 5.2% m/m to 6.910M last month following a 2.7% January decline that was about half the drop initially estimated. Consensus expectations had been for sales last month of 6.50M. 
Sales of single-family homes rose 4.7% after a 1.2% January decline that was revised from -6.8% reported initially. The data cover sales closed in the latest and previous months, and contrast to the new home sales data which count sales at the signing of a contract. 
February single family home sales rose sharply in the Northeast (+2.4% y/y). Sales in the Midwest also were strong (+2.1% y/y) and sales in the West rose for the first month in six (-10.9% y/y). Sales in the South fell m/m but rose y/y by 4.2%.
The median price of an existing single-family home fell 0.5%. At $208,500 the median price is 5.1% below the August peak. Prices are not seasonally adjusted.
The latest release from the National Association of Realtors is available <a href="http://www.realtor.org/research.nsf/pages/EHSPage?OpenDocument">here</a>.
The Road to Price Stability from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/pubs/feds/2006/200605/200605pap.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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 Home Sales</td>
<td>&nbsp;6,910</td>
<td>6,570</td>
<td>-0.3%</td>
<td>7,064</td>
<td>6,722</td>
<td>6,176</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single Family Home Sales</td>
<td>6,060</td>
<td>5,790</td>
<td>-0.2%</td>
<td>6,170</td>
<td>5,912</td>
<td>5,443</td>
</tr>
<tr class="odd">
<td class="firstcol">Single Family Median Home Price ($,000) </td>
<td>$208.5 </td>
<td>$209.6 </td>
<td>11.6% </td>
<td>$206.3</td>
<td>$182.8 </td>
<td>$169.1 </td>
</tr>
</tbody>
</table>


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The National Association of Realtors reported that total existing home sales rose 5.2% m/m to 6.910M last month following a 2.7% January decline that was about half the drop initially estimated. Consensus expectations had been for [...]

U.S. Existing Home Sales Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323a.jpg" width="353">
Last week, initial claims for unemployment insurance reversed all of the upwardly revised increase the prior period. The 11,000 person decline to 302,000 compared with Consensus expectations for 305,000 claims.
The latest figure covers the survey period for March nonfarm payrolls and claims rose 24,000 (8.6%) from the February period.
During the last ten years there has been a (negative) 75% correlation between the level of initial jobless insurance claims and the m/m change in payroll employment.
The four-week moving average of initial claims rose to 303,500 (-7.3% y/y), its highest level since early January.
Continuing unemployment insurance claims reversed most of the prior week&#39;s sharp drop, which was revised deeper, and rose 38,000 to 2.472M.
The insured rate of unemployment was stable at 1.9% for the sixth week.
Using Cyclical Regimes of Output Growth to Predict Jobless Recoveries from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/review/06/03/Dueker.pdf"> here</a>.
Also from the St. Louis Fed is Entrepreneurship and the Policy Environment and the article can be found <a href="http://research.stlouisfed.org/publications/review/06/03/GeorgellisWall.pdf"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">03/18/06</th>
<th scope="col">03/11/06</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">Initial Claims</td>
<td>302</td>
<td>313</td>
<td>-8.5%</td>
<td>332</td>
<td>343</td>
<td>402</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,472</td>
<td>-7.6%</td>
<td>2,663</td>
<td>2,924</td>
<td>3,532</td>
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</tbody>
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Last week, initial claims for unemployment insurance reversed all of the upwardly revised increase the prior period. The 11,000 person decline to 302,000 compared with Consensus expectations for 305,000 claims. The latest figure [...]

Initial Jobless Insurance Claims Drop

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323c.jpg" width="353">
 The National Association of Realtors reported that total existing home sales rose 5.2% m/m to 6.910M last month following a 2.7% January decline that was about half the drop initially estimated. Consensus expectations had been for sales last month of 6.50M. 
Sales of single-family homes rose 4.7% after a 1.2% January decline that was revised from -6.8% reported initially. The data cover sales closed in the latest and previous months, and contrast to the new home sales data which count sales at the signing of a contract. 
February single family home sales rose sharply in the Northeast (+2.4% y/y). Sales in the Midwest also were strong (+2.1% y/y) and sales in the West rose for the first month in six (-10.9% y/y). Sales in the South fell m/m but rose y/y by 4.2%.
The median price of an existing single-family home fell 0.5%. At $208,500 the median price is 5.1% below the August peak. Prices are not seasonally adjusted.
The latest release from the National Association of Realtors is available <a href="http://www.realtor.org/research.nsf/pages/EHSPage?OpenDocument">here</a>.
The Road to Price Stability from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/pubs/feds/2006/200605/200605pap.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/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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 Home Sales</td>
<td>&nbsp;6,910</td>
<td>6,570</td>
<td>-0.3%</td>
<td>7,064</td>
<td>6,722</td>
<td>6,176</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single Family Home Sales</td>
<td>6,060</td>
<td>5,790</td>
<td>-0.2%</td>
<td>6,170</td>
<td>5,912</td>
<td>5,443</td>
</tr>
<tr class="odd">
<td class="firstcol">Single Family Median Home Price ($,000) </td>
<td>$208.5 </td>
<td>$209.6 </td>
<td>11.6% </td>
<td>$206.3</td>
<td>$182.8 </td>
<td>$169.1 </td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Drop 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 23, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323a.jpg" width="353">
Last week, initial claims for unemployment insurance reversed all of the upwardly revised increase the prior period. The 11,000 person decline to 302,000 compared with Consensus expectations for 305,000 claims.
The latest figure covers the survey period for March nonfarm payrolls and claims rose 24,000 (8.6%) from the February period.
During the last ten years there has been a (negative) 75% correlation between the level of initial jobless insurance claims and the m/m change in payroll employment.
The four-week moving average of initial claims rose to 303,500 (-7.3% y/y), its highest level since early January.
Continuing unemployment insurance claims reversed most of the prior week&#39;s sharp drop, which was revised deeper, and rose 38,000 to 2.472M.
The insured rate of unemployment was stable at 1.9% for the sixth week.
Using Cyclical Regimes of Output Growth to Predict Jobless Recoveries from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/review/06/03/Dueker.pdf"> here</a>.
Also from the St. Louis Fed is Entrepreneurship and the Policy Environment and the article can be found <a href="http://research.stlouisfed.org/publications/review/06/03/GeorgellisWall.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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">03/18/06</th>
<th scope="col">03/11/06</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">Initial Claims</td>
<td>302</td>
<td>313</td>
<td>-8.5%</td>
<td>332</td>
<td>343</td>
<td>402</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,472</td>
<td>-7.6%</td>
<td>2,663</td>
<td>2,924</td>
<td>3,532</td>
</tr>
</tbody>
</table>
February U.S. Budget Deficit Deeper, Fiscal YTD Narrower 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 23, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323b.jpg" width="353">
The U.S. federal government posted a deeper budget deficit during February of $119.2B versus last February&#39;s deficit of $113.9B. Nevertheless, the fiscal year to date budget deficit narrowed to $217.5B versus 223.4B during the first five months of FY05.
Net revenues collapsed 50.9% m/m as is often the case during February but rose 10.5% during the first five months versus FY04. Individual income tax receipts (44% of total receipts) rose 10.8% y/y and corporate income taxes (10% of total receipts) rose 29.6% y/y during fiscal year 2005&#39;s first five months.
The improved job market raised employment taxes (36% of total receipts) 6.0% y/y though estate &amp; gift taxes fell 0.4% y/y. 
U.S. net outlays continued strong and rose 7.6% y/y fiscal year to date. Defense (19% of total outlays) for the first five months of FY06 rose 7.6% from the year prior. The growth in Medicare spending (12% of total outlays) accelerated to 8.5% y/y and spending on social security (21% of total outlays) grew 5.6%. s
Agriculture spending grew 10.6%. Also strong was spending on community &amp; regional development which nearly tripled this fiscal year to date versus last. Spending on health programs (10% of the total) rose 2.1% while spending on education &amp; training (4% of the total) fell 1.9% y/y. Interest expense (8% of the total) grew 24.3% with higher interest rates.
The Current Budget Projections from the US Congressional Budget Office released March 3rd are available <a href="http://www.cbo.gov/budget/budproj.shtml"> 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/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2005</th>
<th scope="col">FY 2004</th>
<th scope="col">FY 2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$-119.2B</td>
<td>$21.0B</td>
<td>$-113.9B (2/05)</td>
<td>$-318.3B</td>
<td>$-412.7B</td>
<td>$-377.6B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Revenues</td>
<td>$112.9B</td>
<td>$230.0B</td>
<td>11.9%</td>
<td>14.5%</td>
<td>5.5%</td>
<td>-3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Net Outlays</td>
<td>$232.1B</td>
<td>$209.0B</td>
<td>8.0%</td>
<td>7.8%</td>
<td>6.2%</td>
<td>7.4%</td>
</tr>
</tbody>
</table>
Chemical Prices Surge with Petroleum, But Some Stabilize or Even Decline Recently 
by <a href="/comment/Stone.html">Carol Stone</a> March 23, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323d.jpg" width="353">
Besides its wide array of macroeconomic databases, Haver Analytics also features a number of industry offerings. Just this morning, for example, Chemical Week magazine released its weekly report on chemical prices. These are maintained in Haver&#39;s CHEMWEEK database. Far from being esoteric trivia, the chemicals in this collection are main building blocks of products and fuels consumers use every day. If not ingredients in the items themselves, several of these chemicals are important in the manufacturing process.
The database consists of 29 major chemicals. We list just four in the table below as a sampling. The prices we show here averages; &quot;highs&quot; and &quot;lows&quot; are also available. These are US spot prices; spot prices are also given for European markets and contract prices for several specific delivery months are available for most items for both US and European markets.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323e.jpg" width="353">
The particular items we show here are multipurpose chemicals. Many plastics are made from polyvinyl chloride and combinations of propylene with various other substances. Both have experienced a near doubling over the past couple of years, but have shown some signs of stabilizing so far this year. PVC is a hard plastic, frequently used now in pipes, as in household plumbing, and other building products, such as vinyl siding. Its price has been steady now since last April at $930 per metric ton. However, the price rose in steep steps from just $370/MT in early 2002.
Propylene is an ingredient in other products, such as aerosol sprays, other plastics and fibers and synthetic rubber. Its price has more than tripled since early 2002, when it traded at just $0.13/pound, compared with as much as $0.52 briefly in late November and $0.41 most currently.
Methanol, or wood alcohol, was once thought to be a potential substitute or complement to gasoline in motor vehicle fuels. Racecars and some specialty vehicles do run on it. However, it is also highly toxic, causing safety concerns. So other items, such as ethanol, are developing more as alternative fuels. This shift in potential usage may be reflected in the price trend for methanol. It has risen markedly, from $0.57/gallon in late 2003 to $0.94 recently, but on a relative basis, it has moved much less than other chemicals, as is evident in the second graph.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060323f.jpg" width="353">
Finally, the price of caustic soda is also up dramatically. Caustic soda is more familiarly known as lye and its more formal chemical name is sodium hydroxide. It is a very widely used in the manufacture of such diverse items as aluminum, textiles, soap and paper and in petroleum refining. As recently as the spring of 2004, this key substance was selling for as little as $65 a ton. But in November, it reached $587.50 before falling back to &quot;just&quot; $335 in the last couple of weeks.
The mere wide ranges covered by these price movements highlight the value of the CHEMWEEK database. Unlike many commodities that have tighter markets, these chemical prices often seem to move in fits and spurts, sometimes doubling virtually &quot;overnight&quot;. So monitoring them would seem vital for industry analysts and even macroeconomists.
Further, several are closely tied to petroleum prices. In the third graph, for instance, we show the simple spot price for crude oil, West Texas Intermediate, from the WEEKLY and OILWKLY databases. It has a high 86% correlation with PVC prices since 1999 and as high or for even longer periods with numerous other chemicals. So the role of oil is closely intertwined not only with heating and driving costs, but also with the raw material and processing costs for many other products.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">US Spot Prices</th>
<th scope="col">Mar 22, 2006</th>
<th scope="col">Feb 22, 2006</th>
<th scope="col">End-Dec 2005*</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">PVC General Purpose, $/metric ton</td>
<td>930</td>
<td>930</td>
<td>930</td>
<td>914</td>
<td>810</td>
<td>585</td>
</tr>
<tr>
<td class="firstcol">Propylene, Chemical Grade, $/lb</td>
<td>0.41</td>
<td>0.41</td>
<td>0.42</td>
<td>0.41</td>
<td>0.31</td>
<td>0.20</td>
</tr>
<tr class="odd">
<td class="firstcol">Methanol, $/gal</td>
<td>0.94</td>
<td>0.94</td>
<td>0.91</td>
<td>0.86</td>
<td>0.82</td>
<td>0.73</td>
</tr>
<tr>
<td class="firstcol">Caustic Soda, $/short ton</td>
<td>335</td>
<td>345</td>
<td>415</td>
<td>369</td>
<td>176</td>
<td>139</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: Crude Oil, $/bbl**</td>
<td>62.69</td>
<td>60.00</td>
<td>59.49</td>
<td>56.29</td>
<td>41.31</td>
<td>31.14</td>
</tr>
</tbody>
</table>


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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060322f.jpg" width="353">
New orders for manufactured goods in Euro-Zone countries fell 5.9% in January, according to a report published today by Eurostat. This drop followed sizable increases of 4.9% and 5.3% in November and December, respectively, however, and the year-on-year gain is a hefty 9.7%.
Much of the month-to-month movement is due to transport equipment, particularly ships and aircraft. As seen in the table below, this category, comprising NACE industry groups 34 and 35, surged 10%+ in each November and December, so a 14.4% drop in January is hardly surprising. In fact, a new subtotal devised by Eurostat excludes NACE 35: ships, railroad equipment and aircraft. This segment&#39;s orders rose a mere 0.2% in January, although prior strength means those orders were up a substantial 10.7% from January 2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060322g.jpg" width="353">
These gains in orders have to be encouraging for European business leaders and policymakers. As we have reported here recently, industrial production itself is mixed at best, with stagnation characterizing many of the nations in that region. Employment has continued a downward trend in several majors countries, even while uptrends are starting to develop in others. These basic indicators, though, show that steps toward growth are tenuous.
So orders have begun to look better. Further, a diversity of industries is participating. As seen below, chemicals and machinery both have increasing order books, and textiles and wood products do as well.Notably, then, it is beneficial to look beyond headline series to details of these indicator reports to assess the current position of an industry or even of an entire regional economy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">SA, Indexes, 2000=100, % chg</th>
<th scope="col">Jan 2006</th>
<th scope="col">Dec 2005</th>
<th scope="col">Nov 2005</th>
<th scope="col">Year/Year*</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>-5.9</td>
<td>5.3</td>
<td>4.9</td>
<td>9.7</td>
<td>4.6</td>
<td>7.3</td>
<td>0.2</td>
</tr>
<tr>
<td class="firstcol">Total ex NACE 35**</td>
<td>0.2</td>
<td>1.5</td>
<td>2.7</td>
<td>10.7</td>
<td>3.7</td>
<td>6.5</td>
<td>0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Selected Industries:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Transport Equip.</td>
<td>-14.4</td>
<td>10.6</td>
<td>10.4</td>
<td>11.2</td>
<td>6.0</td>
<td>10.5</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Chemicals &amp; Products</td>
<td>-0.3</td>
<td>1.0</td>
<td>2.3</td>
<td>7.1</td>
<td>4.9</td>
<td>5.5</td>
<td>0.5</td>
</tr>
<tr>
<td class="firstcol">Machinery &amp; Equipment</td>
<td>1.9</td>
<td>-0.8</td>
<td>0.2</td>
<td>10.8</td>
<td>5.6</td>
<td>6.8</td>
<td>-1.4</td>
</tr>
</tbody>
</table>
</body>
</html>

New orders for manufactured goods in Euro-Zone countries fell 5.9% in January, according to a report published today by Eurostat. This drop followed sizable increases of 4.9% and 5.3% in November and December, respectively, however, [...]

Total European Factory Orders Down in January, But Most Industries Have Gains

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

AI boosting US investment in data centers

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Tian Yong Woon

In this week’s Letter, we take stock of the latest economic data from China, assessing what it tells us about the outlook for growth and policy. We also continue our coverage of the Middle East conflict, focusing on its broader implications for Asia through energy markets, trade routes, and regional risk sentiment.On China, while Q1 GDP data exceeded expectations, putting the economy on a firm footing to meet its annual growth target (chart 1), a closer look at the underlying monthly indicators suggests the headline resilience may be masking a more uneven underlying picture (chart 2). 

As for the Middle East, the latest round of regional March CPI prints largely confirms the initial pass-through from higher oil prices to consumer inflation. If energy prices remain elevated, second-round effects will likely become more evident in the coming months (chart 3). Turning to the Strait of Hormuz, shipping data point to a gradual recovery in flows. However, conflicting signals on the strait’s status—alongside renewed US–Iran tensions—continue to cloud the outlook for a sustained normalization in global oil supply (chart 4). In response, global players have begun to adapt, including rerouting shipments via the longer but safer Cape of Good Hope route, and exploring alternative export channels through Red Sea ports, even though these remain exposed to regional risks (chart 5). Finally, the conflict has prompted a reassessment of the global outlook. In its latest World Economic Outlook, the IMF delivered broad-based growth downgrades across economies, with only a handful of exceptions (chart 6).

**China**
China released a raft of data late last week, with March figures particularly pertinent as they capture the initial effects of the Middle East conflict that erupted in late February. Notably, Q1 GDP exceeded expectations, with the economy expanding 5% y/y despite incorporating March data (chart 1). This suggests China has secured a firm early footing toward its 4.5%–5% growth target for the year—a slight step down from last year’s “about 5%” goal. But a closer look at the March data reveals several nuances. On the external front, export growth slowed sharply year-to-date, falling behind import growth, thereby dragging on trade balance growth. 

260420T1.jpg

On a more downbeat note, growth in retail sales, industrial production, and fixed asset investment all moderated in March (chart 2). While this may partly reflect spillovers from the Middle East conflict, it likely also points to underlying domestic factors, including the fading impact of earlier, possibly one-off, policy support measures. That said, not all signals point to deterioration. Industrial profits have shown signs of improvement, likely supported in part by authorities’ efforts to curb intense price competition, also termed as “involution”, amid excess supply. This has contributed to a gradual easing in producer price deflation, which is beginning to feed through to a modest improvement in consumer inflation.

260420T2.jpg

**The Middle East conflict – Impacts**
Among economies that have reported March CPI so far, chart 3 shows that Asian inflation prints have more often than not come in higher y/y than in February. While specific domestic factors are also at play, the uptick has largely coincided with a rebound in energy-related inflation, in line with the global price surge following the Middle East supply shock. Given the pervasive role of energy as a key input across economic activity—from manufacturing to trade—what we are observing thus far likely reflects primarily first-round effects. Should energy prices remain elevated, second-round effects are likely to emerge in subsequent inflation prints.

260420T3.jpg

Whether energy prices remain elevated in the near term ultimately hinges on the same factor that drove the initial surge: oil flows through the critical Strait of Hormuz. On that front, IMF data suggest shipping volumes have continued to edge higher, though recent headlines have kept crude prices volatile. For instance, earlier assurances by Iranian authorities that the strait was “fully open” triggered a sharp decline in crude oil prices. However, weekend reports of a renewed closure—alongside news that the US had seized an Iranian-flagged vessel—serve as a stark reminder that tensions remain elevated and that disruptions to oil flows may well be set to persist. 

260420T4.jpg

**The Middle East conflict – Considerations**
That said, the global response has not been passive. Economies have increasingly sought alternative energy sources and rerouted oil shipments via other channels. Over a longer horizon, both producers constrained by exports through the Strait of Hormuz and importers heavily reliant on the route are likely developing contingency plans to hedge against the risk of a prolonged disruption at this critical chokepoint. For instance, amid heightened geopolitical tensions in the Middle East, more shipments are being diverted along the longer—but relatively safer—route via the Cape of Good Hope, bypassing the region. At the same time, there has been growing consideration of redirecting exports through Red Sea ports by shifting flows away from Hormuz-linked terminals. However, these alternatives are not without limitations. They remain exposed to regional risks, while capacity constraints—particularly in existing pipeline infrastructure—mean they could not fully offset a disruption to flows through the strait.

260420T5.jpg

Lastly, we turn to the IMF’s latest World Economic Outlook, released last week. Reflecting the growth-dampening effects of the Middle East crisis, the IMF downgraded its real GDP forecasts for most economies, resulting in a modest downward revision to global growth overall. Across Asian and major non-Asian economies (chart 6), only India and Japan saw upgrades, likely supported by offsetting domestic or structural drivers. European economies registered the steepest downgrades, while China and the US, though also revised lower, appear relatively more insulated. Importantly, these projections assume the conflict remains contained in duration, intensity, and scope, and begins to fade by mid-year. Should it persist or escalate beyond that, further downside risks to growth are likely to materialize.

260420T6.jpg

Asia

Economic Letter from Asia: Barrel of Doubt

Robert Brusca

260420E.jpg

The German PPI rose by 2.4% month-to-month in March. That was, of course, boosted by oil prices as Brent crude soared, gaining 46.9% month-over-month (yikes!). However, very little of that got into German ex-energy prices, which did rise, but by only 0.4%. Still, do not be fooled by that ‘only.’ That 0.4% rise is the largest rise of that magnitude since February 2023—a period of about 2¼ years. So be wary of what might be in train here; 0.4% does not seem so large, but it annualizes to about a 5% pace.

In addition, 12 months to six months to three months, the headline PPI is accelerating—from a 12-month drop, to a well-behaved 2.1% pace of expansion over six months, and then to an elevated 3.9% annual rate over three months.

The core PPI is a bit more copacetic, but it shows clear acceleration, rising from a 12-month pace of 1.3%, to a 1.8% pace over six months, and to 2.4% annualized over three months.

**Consumer prices in Germany**
The sky is not falling. So far, there is no evidence of inflation in consumer goods: the consumer goods index does not even rise over 12 months, six months, or three months—though it is flat over three months. Investment goods, by contrast, show clear price acceleration, rising from 1.9% over 12 months, to 2.6% over six months, and to 4.1% over three months. Intermediate goods show the inflation wallop as prices rise by 1.5% over 12 months, to a 5.1% pace over six months, and at an 8.1% annual rate pace over three months. That annualized intermediate goods gain is something to watch. It is driven by oil, but other commodities and goods are caught up in supply chain woes as well.

For reference, the headline CPI shows acceleration, rising from a 12-month pace of 2.7% to a 5% annualized rate over three months. The ex-energy CPI, however, remains subdued, rising 2.3% over 12 month and at a more modest 2% annualized pace over three months.

260420.jpg

**Global conditions will call the tune**
The Strait of Hormuz, once shut, was opened. Then, once open, it was again shut. So, we are back at square one with the Trump deadline on Tuesday fast approaching. Soon something will have to give, and that something will affect oil, oil prices, and inflation. Conditions in the Strait and in the oil market globally are distorted by warfare and the threat of it.

Oil is an extremely important commodity and that is doubly so in Europe where nations have still not fully adjusted to the loss of the Russian pipelines.

But fertilizer and helium are two other commodities reported to be put in short supply because of the closing of the Strait. Iran is trying to gain a toehold here for leverage and survival—and to be able to claim victory; meanwhile, they have lost nearly all their military prowess, but they retain the means to enforce their policies on the domestic population—at least for now.

Trump has been declaring that they gave him everything he asked for, but then they close the strait and the U.S. kept its blockage of Iran’s ports in place. There is still a lot going on here. Despite the rhetoric, there is a lot that is unsettled and not agreed to, and a lot that could still go wrong or escalate. This puts both inflation and growth outlooks in jeopardy.

Germany

German PPI Takes Partial Flight

Michael J. Moran

260416A.jpg

260416B.jpg

The industrial production index fell 0.5% in March, noticeably weaker than the expected increase of 0.1%. In addition, the March results were joined by slight net downward revisions in prior months (sharp upward revision in February offset by a larger downward adjustment in January and tweaks in earlier months). A good portion of the March softness was the result of a drop of 2.3% in utility output, which is not deeply concerning because changes in this sector typically are driven by weather conditions. However, mining activity also was soft (-1.2%), and manufacturing production dipped 0.1%.

Within manufacturing, auto production played a large role in the dip, registering a decline of 3.7%. However, the auto sector had plenty of company on the soft side, as furniture, textiles, apparel, and printing all posted declines of more than 1.0%. Given these drags, manufacturing output excluding autos rose only 0.1%. There was a nearly even split between expanding and contracting industries within manufacturing: 11 boosting production and 9 reducing activity.

The dip in manufacturing activity in March might seem inconsequential in light of solid advances in January and February (up 0.6% and 0.4%, respectively). However, the gains early in the year followed a weak fourth quarter, leaving an unimpressive trend.

Trends in industrial activity are often more apparent by focusing on the level of production indexes rather than month-to-month (or quarter-to-quarter) changes. As shown the chart below, the level of the manufacturing index stirred for a time in 2025, but it lost momentum in the closing months of the year. Changes so far in 2026 have not pushed the index above the September 2025 peak. The 6-month moving average of the manufacturing index is now running sideways.

The capacity utilization rate in manufacturing has naturally reflected movement in production. Utilization rose in 2025 as production strengthened, but it retraced most of the upward movement once momentum in production faded. The utilization rate in manufacturing stood at 75.2% in March, down slightly from the average of 75.4% in 2025.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

260416C.jpg

260416D.jpg

- Downward noise in utility output; slow activity in manufacturing and mining.
- Flat underlying trend in recent months.

Industrial Production: Soft in March

Winnie Tapasanun

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The current general activity diffusion index unexpectedly jumped to 26.7 in April from 18.1 in March and 16.3 in February, the latest Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia showed, indicating continued expansion in manufacturing activity in the Third Federal Reserve District this month and at the highest level since January 2025. April was the fourth successive m/m increase and the fifth in six months, showing a sharp improvement from -12.9 in April 2025. A reading of 15.0 for April had been expected by the Action Economics Forecast Survey. In April, 32.6% of firms reported increases in current general activity (down from 39.2% in March), while 5.9% reported decreases (down from 21.1%); 61.5% reported no change (up from 34.6%). Survey responses were collected from April 6 to April 13.

Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index eased to 54.5 in April after a 6.2-point rebound to 54.8 in March, indicating manufacturing activity expanded for the fourth time in five months; it was above a contraction-level 44.8 in April 2025.

In the latest survey, the new orders index surged to 33.0 in April from 8.6 in March, signaling new orders expanded for the fifth straight month and at the highest level since November 2021. The shipments index advanced to 34.0 this month from 22.2 in March, marking the fifth consecutive expansion and the highest level since May 2022. In contrast, the unfilled orders index dropped to -10.2 in April from -4.7 in March, extending its ninth straight contraction. The inventories index decreased to -1.9 this month from 1.4 in March, showing the third contraction in four months. Meanwhile, the delivery times index fell to a near‑neutral 1.7 in April from 18.9 in March (the highest reading since April 2022), suggesting a rapid easing of supply‑chain pressures rather than a demand‑driven slowdown.

On the labor front, the number of employees index slid to -5.1 in April from 0.8 in March, indicating employment contracted for the second time in three months and hit its lowest level since June 2025. In April, 10.1% of respondents reported increases in employment, while a higher 15.2% reported declines; 70.4% reported no change in employment levels. The average employee workweek index rose to 7.7 this month, the highest reading since January, from 2.8 in March.

Inflation indicators remained elevated in April. The prices paid index jumped to 59.3 this month, the highest level since August, after a 5.8-point rise to 44.7 in March. A higher 61.4% of respondents reported increases in input prices in April, while only 2.1% reported decreases. The prices received index rose to 33.5, an eight-month high, after a 4.5-point March increase to 21.2. In April, 33.5% of respondents reported increases in prices received, while 0.0% reported decreases.

The future indexes generally remained in positive territory, signaling continued overall growth over the next six months, although most future indicators declined. The future general activity diffusion index rebounded to 40.8 in April from 40.0 in March, staying positive since February 2024. The following future indexes fell in April (vs. March) but remained in positive territory: new orders (45.7 vs. 49.6), shipments (40.8 vs. 53.6), and employment (35.9 vs. 40.4). Future indexes for unfilled orders (-4.1 vs. 15.3) and inventories (-0.7 vs. 16.8) moved into contraction in April after expanding in March. Notably, the future capital expenditures index rose to 35.2 this month, the highest level since August, from 25.8 in March. Prices continued to increase, with the future prices paid index easing to a still‑high 50.2 in April from 53.7 in March and the future prices received index rising to a three-month-high 50.2 from 38.4.

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

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- Current General Activity Index up 8.6 pts. to 26.7 in Apr.; fourth consecutive m/m rise.
- Positive: Shipments (34.0), highest since May ’22; New Orders (33.0), highest since Nov. ’21.
- Negative: Employment (-5.1), lowest since June ’25; Unfilled Orders (-10.2), ninth straight contraction.
- Inflation indicators at eight-month highs and well above long-run nonrecession avgs.
- Future General Activity Index up to 40.8; most subindexes down but still positive; future price indexes still above long-run avgs.

U.S. Philadelphia Fed Index Climbs in April to Highest Level Since Jan. ’25

Sandy Batten

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Initial claims for unemployment insurance declined by 11,000 to 207,000 in the week ending April 11, from 218,000 in the week ending April 4, revised down slightly from 219,000. The four-week average edged up to 209,750 from 209,250. The Action Economics Forecast Survey looked for 215,000 new claims to have been filed.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 31,000 to 1.818 million in the week ending April 4, from 1.787 million in the week ending March 28 (revised down from 1.794 million). The four-week moving average declined to 1.813 million in the latest week from 1.821 million in the March 28 week. The insured unemployment rate remained at 1.2% in the week of April 4. It has remained at that level since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending March 28, the highest unemployment rates were in Rhode Island (2.50%), Massachusetts (2.50%), New Jersey (2.49%), Washington (2.28%), and Minnesota (2.16%). The lowest rates were in Florida (0.31%), Louisiana (0.31%), Alabama (0.36%), North Carolina (0.39%), and Virgin Islands (0.39%). Rates in other notable states include California (2.06%), New York (1.91%), Illinois (1.88%), Michigan (1.75%), Pennsylvania (1.56%), and Texas (1.05%). 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.


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- New claims fell by 11,000 to 207,000.
- Continuing claims jumped 31,000 to 1.818 million.
- The insured unemployment rate was unchanged at 1.2%.

Economy in Brief

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