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/060118d.jpg" width="353">
The consumer price index (CPI-U) fell 0.1% last month on the heels of the 0.6% drop during November. Consensus expectations had been for a 0.2% rise. Despite the latest declines, the 2005 average rise in prices of 3.4% was the strongest since 2000 while the December to December rise of 3.4% equaled the 2004 increase.
Energy prices posted a surprising 2.2% decline last month due to widespread m/m declines in fuel oil (+24.0% y/y) and natural gas (+30.1% y/y) prices. Gasoline prices also fell for the third straight month (+16.1% y/y) to an average $2.19 but have wince risen to an average $2.30 in January.
Food prices likewise were under control and rose just 0.2%, the slimmest increase since August.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118e.jpg" width="353">
Prices less food &amp; energy again rose 0.2%, the third consecutive such increase and matched Consensus expectations. The year to year gain in core prices core prices accelerated during the last two years from the low of 1.5% during 2003 as core goods prices inflated rather than fell. In December, goods prices less food &amp; energy were unchanged and the 2005 increase of 0.5% was the strongest since 2000.
A 0.3% decline in apparel prices (-1.1% y/y) was accompanied by lower prices for new &amp; used vehicles (+0.4% y/y). These declines were offset by higher furniture &amp; bedding prices (0.6% y/y) and higher appliance prices (3.0% y/y). Medical care commodity prices rose 0.2% (3.7% y/y) while educational books &amp; supplies also rose 0.4% (5.1% y/y).
Core services prices increased 0.3% but the full year gain of 2.8% just equaled 2004. The increase in medical care prices faded late in the year (4.4% y/y) and but school tuition &amp; fees posted a strong 6.2% December to December spike. The increase in shelter prices was steady at (2.5% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases fell for the second consecutive month though the full year gain of 2.8% was the strongest since the series inception. Less food &amp; energy prices also fell m/m but the annual increase of 1.8% was the strongest since 2002.
Productivity and Economic Outlook, today&#39;s speech by Fed Governor Susan Schmidt Bies can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2006/20060118/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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Dec</th>
<th scope="col">Nov</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&nbsp;</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>3.4%</td>
<td>3.4%</td>
<td>2.7%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>1.8%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>-0.9%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.4%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-2.2%</td>
<td>-8.0%</td>
<td>17.0%</td>
<td>16.9%</td>
<td>10.9%</td>
<td>12.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.4%</td>
<td>2.5%</td>
<td>3.4%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&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"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>-0.3%</td>
<td>-0.5%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>1.7%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>1.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

The consumer price index (CPI-U) fell 0.1% last month on the heels of the 0.6% drop during November. Consensus expectations had been for a 0.2% rise. Despite the latest declines, the 2005 average rise in prices of 3.4% was the [...]

CPI Fell Again, Unexpectedly; 2005 Strongest Since 2000

<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/060118d.jpg" width="353">
The consumer price index (CPI-U) fell 0.1% last month on the heels of the 0.6% drop during November. Consensus expectations had been for a 0.2% rise. Despite the latest declines, the 2005 average rise in prices of 3.4% was the strongest since 2000 while the December to December rise of 3.4% equaled the 2004 increase.
Energy prices posted a surprising 2.2% decline last month due to widespread m/m declines in fuel oil (+24.0% y/y) and natural gas (+30.1% y/y) prices. Gasoline prices also fell for the third straight month (+16.1% y/y) to an average $2.19 but have wince risen to an average $2.30 in January.
Food prices likewise were under control and rose just 0.2%, the slimmest increase since August.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118e.jpg" width="353">
Prices less food &amp; energy again rose 0.2%, the third consecutive such increase and matched Consensus expectations. The year to year gain in core prices core prices accelerated during the last two years from the low of 1.5% during 2003 as core goods prices inflated rather than fell. In December, goods prices less food &amp; energy were unchanged and the 2005 increase of 0.5% was the strongest since 2000.
A 0.3% decline in apparel prices (-1.1% y/y) was accompanied by lower prices for new &amp; used vehicles (+0.4% y/y). These declines were offset by higher furniture &amp; bedding prices (0.6% y/y) and higher appliance prices (3.0% y/y). Medical care commodity prices rose 0.2% (3.7% y/y) while educational books &amp; supplies also rose 0.4% (5.1% y/y).
Core services prices increased 0.3% but the full year gain of 2.8% just equaled 2004. The increase in medical care prices faded late in the year (4.4% y/y) and but school tuition &amp; fees posted a strong 6.2% December to December spike. The increase in shelter prices was steady at (2.5% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases fell for the second consecutive month though the full year gain of 2.8% was the strongest since the series inception. Less food &amp; energy prices also fell m/m but the annual increase of 1.8% was the strongest since 2002.
Productivity and Economic Outlook, today&#39;s speech by Fed Governor Susan Schmidt Bies can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2006/20060118/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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Dec</th>
<th scope="col">Nov</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&nbsp;</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>3.4%</td>
<td>3.4%</td>
<td>2.7%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>1.8%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>-0.9%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.4%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-2.2%</td>
<td>-8.0%</td>
<td>17.0%</td>
<td>16.9%</td>
<td>10.9%</td>
<td>12.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.4%</td>
<td>2.5%</td>
<td>3.4%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&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"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>-0.3%</td>
<td>-0.5%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>1.7%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>1.1%</td>
</tr>
</tbody>
</table>
Chain Store Sales Fell Last Week 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 18, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118c.jpg" width="353">
Chain store sales fell 1.4% last week following the modest 0.1% rise which opened the new year according to the International Council of Shopping Centers (ICSC)-UBS survey.
Solid increases throughout December pulled the yearend level up. Therefore, despite recent weakness, sales in January are 1.5% ahead of December.
During the last ten years there has been a 51% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.
The leading indicator of chain store sales rose strongly for the second consecutive week. The 0.6% gain pulled January 1.2% ahead of December which rose 0.8% from November.
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.

<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">01/14/06</th>
<th scope="col">01/07/06</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>457.7</td>
<td>464.3</td>
<td>3.1%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Mortgage Applications Up With More Refinancing 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 18, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118b.jpg" width="353">
The total number of mortgage applications rose 2.2% last week, the second up week following four consecutive weeks down. This year, mortgage applications are 2.1% higher than during December.
Higher applications to refinance accounted for all of last week&#39;s rise. A 9.9% w/w gain followed a like increase which opened the new year and lifted the level of refis 11.0% this month above December.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118a.jpg" width="353">
The effective interest rate on a conventional 30-year mortgage fell for the eighth week in the last nine to 6.31% versus an average 6.48% in December. The effective rate on a 15-year mortgage also fell to 5.94%, the second week below 6% since October. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
Purchase applications fell 3.0% following a 9.3% surge the prior week. The decline pulled purchase applications in January 1.1% below the December average.
During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
Are Banks Vulnerable to a Housing Bust from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20060201/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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">01/13/06</th>
<th scope="col">01/06/06</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 class="odd">
<td class="firstcol">Total Market Index</td>
<td>613.3</td>
<td>600.1</td>
<td>-10.2%</td>
<td>708.6</td>
<td>735.1</td>
<td>1,067.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>443.9</td>
<td>457.4</td>
<td>-0.9%</td>
<td>470.9</td>
<td>454.5</td>
<td>395.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,645.2</td>
<td>1,497.5</td>
<td>-19.7%</td>
<td>2,092.3</td>
<td>2,366.8</td>
<td>4,981.8</td>
</tr>
</tbody>
</table>
UK Labor Market Weakens in Late 2005 
by <a href="/comment/Stone.html">Carol Stone</a> January 18, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118f.jpg" width="353">
Employment has begun to falter in the UK, according to the latest Labor Force Survey, published today by the Office of National Statistics (ONS). In the 3 months centered on October, the number of people employed fell 49,000 from September&#39;s 3-month average and stood only 0.8% above a year ago. As recently as August the year-on-year gain was 1.3%. The employment rate decreased 0.2 percentage points in the October reading to 74.5% from 74.7% in September and 74.8 in the October period of 2004. This rate, the number employed compared to the population of &quot;working age&quot; (16-59 for women and 16-64 for men), peaked at 75.0% last January. Commensurately, the unemployment rate has risen, reaching 5.0% most recently, up from a low of 4.7% recorded in August.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060118g.jpg" width="353">
Associated wage and unemployment insurance data also show softening. The average earnings index, watched by many in the UK as a harbinger of inflation pressures, had just a 3.4% yearly growth rate in the three months ended November, slowing from 4.6% as recently as April. The number of claimants for Jobseeker&#39;s Allowance benefits rose in the month of December to 909,100 from 901,900 in November and 825,000 in December 2004.
There are other scattered signs of softening in the UK. Consumer confidence turned negative in October, and industrial production declined irregularly through much of 2005. The CBI industrial trends survey shows marked declines in order books continuously since March. GDP growth slowed to below 2% year-on-year in Q2 and Q3. [Q4 data are due to be reported next Wednesday, January 25.] Exports, by contrast, have been rising as have retail sales. So there is some mixed quality to UK economic activity, but the basic industry appears sluggish and it&#39;s hardly surprising that the labor market is sharing in this.

<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/UK/@U7/@U7.HTM">UK Labor Force Survey (SA)</a></th>
<th scope="col">Dec 2005</th>
<th scope="col">Nov 2005</th>
<th scope="col">Oct 2005</th>
<th scope="col">Sept 2005</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Employment (Thous)</td>
<td>--</td>
<td>--</td>
<td>28,764</td>
<td>28,813</td>
<td>28,542</td>
<td>28,465</td>
<td>28,183</td>
<td>27,917</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Change (Thous/%)</td>
<td>--</td>
<td>--</td>
<td>-49</td>
<td>-12</td>
<td>0.8</td>
<td>1.0</td>
<td>1.0</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment Rate (%)</td>
<td>--</td>
<td>--</td>
<td>74.5</td>
<td>74.7</td>
<td>74.8</td>
<td>74.8</td>
<td>74.6</td>
<td>74.5</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate (%)</td>
<td>--</td>
<td>--</td>
<td>5.0</td>
<td>4.9</td>
<td>4.7</td>
<td>4.8</td>
<td>5.0</td>
<td>5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Earnings Index (Yr/Yr %) </td>
<td>--</td>
<td>3.4</td>
<td>3.6</td>
<td>4.1</td>
<td>4.3</td>
<td>4.3</td>
<td>3.4</td>
<td>3.5</td>
</tr>
<tr>
<td class="firstcol">Claimant Count (Thous)</td>
<td>909.1</td>
<td>901.9</td>
<td>891.5</td>
<td>878.0</td>
<td>825.0</td>
<td>853.6</td>
<td>933.3</td>
<td>946.7</td>
</tr>
</tbody>
</table>


</html>

Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060124a.jpg" width="353">
Canadian firms remain optimistic regarding the business outlook according to the latest Business Outlook Survey of the Bank of Canada that was released today. The Bank conducts interviews with the senior management of about 100 companies, selected in accordance with the composition of Canada&#39;s gross domestic product. Topics discussed include the companies&#39; views on such factors as the outlooks for the economy and inflation, plans for investments and pressures on production capacity and labor shortages. According to the Bank, &quot;The method of sample selection ensures a good cross-section of opinion. Nevertheless, the statistical reliability of the survey is limited, given the small sample size.&quot;
The excess of those who think future sales will be higher over those who think they will be lower rose to 15.84% in the fourth quarter of 2005 from 13.86% in the third quarter and was 7.92 percentage points above the excess in the fourth quarter of 2004. Along with a higher balance of opinion on the sales outlook, there has been and increase in the proportion of respondents who expect to incur difficulties in meeting demand. Those expecting some difficulty declined slightly to 34.70% in the fourth quarter from 35.60% in the third and was 3.30 percentage points below the fourth quarter of 2004. However, those expecting significant difficulty rose to 14.90% in the fourth quarter from 9.90% in the third quarter and from 7.00% in the fourth quarter of 2004. The increases in those expecting some, and those expecting significant, difficulty in meeting demand are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060124b.jpg" width="353">
In spite of the increase in those expecting significant difficulty in meeting demand, the balance of opinion regarding for investment in machinery and equipment declined slightly in the fourth quarter and was 2.78 percentage points below the fourth quarter of 2004. The balance of opinion regarding future employment also declined slightly in the fourth quarter from the third, but was almost 12 percentage points above the fourth quarter of 2004.
According to the survey, inflationary expectations have moderated. The number of firms expecting consumer price inflation to exceed 3% over the next two years declined to 18.80% in the fourth quarter from 26.70% in the third quarter but was 6.80 percentage points above the fourth quarter of 2004. The second chart shows the percent of firms expecting inflation to range between 1-3% and those expecting inflation to exceed 3%. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">The Business Outlook Survey of the Bank of Canada</th>
<th scope="col">Q4 05 %</th>
<th scope="col">Q3 05 % </th>
<th scope="col">Q4 04 %</th>
<th scope="col"> Q/Q % pt</th>
<th scope="col">Y/Y % pt</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">Percent Balance </td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Future Sales Growth</td>
<td>15.84</td>
<td>13.86</td>
<td>7.92</td>
<td>&nbsp;1.98</td>
<td>7.92</td>
<td>17.43</td>
<td>17.91</td>
<td>21.38</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Plans for Investment</td>
<td>19.00</td>
<td>19.80</td>
<td>21.78</td>
<td>-0.80</td>
<td>-2.78</td>
<td>19.20</td>
<td>16.95</td>
<td>2.99</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Future Employment</td>
<td>49.50</td>
<td>50.50</td>
<td>37.62</td>
<td>-1.00</td>
<td>11.88</td>
<td>42.75</td>
<td>33.42</td>
<td>27.96</td>
</tr>
<tr class="odd">
<td class="firstcol"> Percent of Respondents </td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Inflation Expectations</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;&lt;1%</td>
<td>0.00</td>
<td>0.00</td>
<td>0.00</td>
<td>0.00</td>
<td>0.00</td>
<td>0.25</td>
<td>0.00</td>
<td>0.50</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 1-2%</td>
<td>13.90</td>
<td>9.90</td>
<td>29.00</td>
<td>4.00</td>
<td>15.10</td>
<td>18.70</td>
<td>32.25</td>
<td>34.25</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; 2-3%</td>
<td>61.40</td>
<td>60.40</td>
<td>56.00</td>
<td>1.00</td>
<td>5.40</td>
<td>62.45</td>
<td>53.00</td>
<td>54.50&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&gt;3%</td>
<td>18.80</td>
<td>26.70</td>
<td>12.00</td>
<td>-7.90</td>
<td>6.80</td>
<td>14.13</td>
<td>10.75</td>
<td>9.50&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Ability to Meet Demand</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Some Difficulty</td>
<td>34.70&nbsp;</td>
<td>35.60&nbsp;</td>
<td>38.00&nbsp;</td>
<td>-0.90&nbsp;</td>
<td>-3.30&nbsp;</td>
<td>32.58&nbsp;</td>
<td>34.00&nbsp;</td>
<td>32.50&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Significant Difficulty</td>
<td>14.90</td>
<td>9.90&nbsp;</td>
<td>7.00&nbsp;</td>
<td>5.00&nbsp;</td>
<td>7.90&nbsp;</td>
<td>11.20&nbsp;</td>
<td>7.25&nbsp;</td>
<td>6.25&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

Canadian firms remain optimistic regarding the business outlook according to the latest Business Outlook Survey of the Bank of Canada that was released today. The Bank conducts interviews with the senior management of about 100 [...]

Canadian Business Expects Further Increases in Sales, but Sees More Difficulty in Meeting Demand

<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/060117d.jpg" width="353">
Overall industrial output rose last month by 0.6% following an upwardly revised 0.8% increase during November. For the second month, the gain exceeded Consensus expectations which had been for a 0.5% rise. For all of 2005, output rose 3.1%. The gain was down from a 4.1% increase during 2004 but the two years together were the strongest in five years.
Factory sector production increased a scant 0.2% (4.1% y/y) following an upwardly revised 0.5% November increase. Again, the annual increase for all of 2005 in factory production of 3.8% was down versus a 5.0% increase during 2004.
Output of business equipment again was notably strong. A 2.7% (26.1% y/y) increase in high tech output was led by another 1.1% (11.7% y/y) increase in computer output, a 3.5% (30.8% y/y) spike in semiconductors and a 1.8% (25.2% y/y) surge in output of communications gear.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060117c.jpg" width="353">
Excluding the high tech sector, factory output was unchanged (2.4% y/y) following an upwardly revised 0.3% November increase. For all 2005, output less the high tech sector rose 2.6% after a 3.8% rise during 2004.
Motor vehicle &amp; parts output fell for the third straight month. The 2.8% (-2.4% y/y) decline slowed the annual increase in output to 2.8%, the worst for motor vehicles since 2002. Output of appliances, furniture &amp; carpeting also fell for the third month but the 0.4% (+2.2% y/y) decline masked a 0.9% (-1.8% y/y) increase in furniture output.
Total capacity utilization rose to 80.7%, the highest level since late 2001. Capacity grew 1.6% y/y and for the year the 1.3% gain was the strongest since 2002. Factory sector utilization remained unchanged at 79.6% in December though the annual average during 2005 of 78.8% was the highest since 2000.
Excluding the high tech sector, the factory utilization rate slipped slightly in December to 80.1%. The annual average of 79.3% about matched the previous high during 2000. Capacity less the high tech sector grew a paltry 0.1% in December, about the monthly rate of the last year. While improved versus declines during 2003 &amp; 2004, the 0.5% increase for all of last year compared unfavorably to a 4.5% increase during 1998.

<table border="0" cellspacing="0" width="100%">

</table>
<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/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</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">Industrial Production</td>
<td>0.6%</td>
<td>0.8%</td>
<td>2.9%</td>
<td>3.1%</td>
<td>4.1%</td>
<td>0.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Goods</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>1.3%</td>
<td>2.0%</td>
<td>2.1%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business Equipment</td>
<td>0.5%</td>
<td>1.3%</td>
<td>10.2%</td>
<td>9.0%</td>
<td>9.3%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>80.7%</td>
<td>80.3%</td>
<td>79.7% (12/05)</td>
<td>80.0%</td>
<td>78.6%</td>
<td>75.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Overall industrial output rose last month by 0.6% following an upwardly revised 0.8% increase during November. For the second month, the gain exceeded Consensus expectations which had been for a 0.5% rise. For all of 2005, output rose [...]

Industrial Output Gain Led By High Tech

<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/060117a.jpg" width="353">
The January Empire State Index of General Business Conditions reversed all of the prior month&#39;s gain and fell 6.16 points to 20.12. Consensus expectations for the factory sector index had been for a lesser decline to 22. The figures reflect annual benchmark revision.
Since the series&#39; inception in 2001 there has been a 76% correlation between the index level and the three month change in factory sector production.
Declines in inventories, delivery times and unfilled orders prompted the fall in the overall index. Otherwise, the component series increased. The shipments index rose to the highest level in over a year while the employment index reversed most of its December drop. The index of new orders was about unchanged and work hours rose to the highest level since October.
Pricing pressure remained about unchanged versus December and the levels remained down sharply from Fall peaks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060117b.jpg" width="353">
Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.
The index of expectations for business conditions in six months improved 3.5 points to the highest level since August. Expectations for future capital spending slipped slightly as they did in December but remained at a relatively high level.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click <a href="http://www.newyorkfed.org/research/regional_economy/empiresurvey_overview.html">here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<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/@S5/@S511/@S511.HTM">Empire State Manufacturing Survey</a> </th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Jan &#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">General Business Conditions (diffusion index)</td>
<td>20.12</td>
<td>26.28</td>
<td>19.02</td>
<td>15.56</td>
<td>28.79</td>
<td>15.98</td>
</tr>
</tbody>
</table>
</body>
</html>

The January Empire State Index of General Business Conditions reversed all of the prior month's gain and fell 6.16 points to 20.12. Consensus expectations for the factory sector index had been for a lesser decline to 22. The figures [...]

Empire State Index Slipped

<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/060117a.jpg" width="353">
The January Empire State Index of General Business Conditions reversed all of the prior month&#39;s gain and fell 6.16 points to 20.12. Consensus expectations for the factory sector index had been for a lesser decline to 22. The figures reflect annual benchmark revision.
Since the series&#39; inception in 2001 there has been a 76% correlation between the index level and the three month change in factory sector production.
Declines in inventories, delivery times and unfilled orders prompted the fall in the overall index. Otherwise, the component series increased. The shipments index rose to the highest level in over a year while the employment index reversed most of its December drop. The index of new orders was about unchanged and work hours rose to the highest level since October.
Pricing pressure remained about unchanged versus December and the levels remained down sharply from Fall peaks.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060117b.jpg" width="353">
Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.
The index of expectations for business conditions in six months improved 3.5 points to the highest level since August. Expectations for future capital spending slipped slightly as they did in December but remained at a relatively high level.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click <a href="http://www.newyorkfed.org/research/regional_economy/empiresurvey_overview.html">here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<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/@S5/@S511/@S511.HTM">Empire State Manufacturing Survey</a> </th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Jan &#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">General Business Conditions (diffusion index)</td>
<td>20.12</td>
<td>26.28</td>
<td>19.02</td>
<td>15.56</td>
<td>28.79</td>
<td>15.98</td>
</tr>
</tbody>
</table>
Industrial Output Gain Led By High Tech 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 17, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060117d.jpg" width="353">
Overall industrial output rose last month by 0.6% following an upwardly revised 0.8% increase during November. For the second month, the gain exceeded Consensus expectations which had been for a 0.5% rise. For all of 2005, output rose 3.1%. The gain was down from a 4.1% increase during 2004 but the two years together were the strongest in five years.
Factory sector production increased a scant 0.2% (4.1% y/y) following an upwardly revised 0.5% November increase. Again, the annual increase for all of 2005 in factory production of 3.8% was down versus a 5.0% increase during 2004.
Output of business equipment again was notably strong. A 2.7% (26.1% y/y) increase in high tech output was led by another 1.1% (11.7% y/y) increase in computer output, a 3.5% (30.8% y/y) spike in semiconductors and a 1.8% (25.2% y/y) surge in output of communications gear.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060117c.jpg" width="353">
Excluding the high tech sector, factory output was unchanged (2.4% y/y) following an upwardly revised 0.3% November increase. For all 2005, output less the high tech sector rose 2.6% after a 3.8% rise during 2004.
Motor vehicle &amp; parts output fell for the third straight month. The 2.8% (-2.4% y/y) decline slowed the annual increase in output to 2.8%, the worst for motor vehicles since 2002. Output of appliances, furniture &amp; carpeting also fell for the third month but the 0.4% (+2.2% y/y) decline masked a 0.9% (-1.8% y/y) increase in furniture output.
Total capacity utilization rose to 80.7%, the highest level since late 2001. Capacity grew 1.6% y/y and for the year the 1.3% gain was the strongest since 2002. Factory sector utilization remained unchanged at 79.6% in December though the annual average during 2005 of 78.8% was the highest since 2000.
Excluding the high tech sector, the factory utilization rate slipped slightly in December to 80.1%. The annual average of 79.3% about matched the previous high during 2000. Capacity less the high tech sector grew a paltry 0.1% in December, about the monthly rate of the last year. While improved versus declines during 2003 &amp; 2004, the 0.5% increase for all of last year compared unfavorably to a 4.5% increase during 1998.

<table border="0" cellspacing="0" width="100%">

</table>
<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/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</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">Industrial Production</td>
<td>0.6%</td>
<td>0.8%</td>
<td>2.9%</td>
<td>3.1%</td>
<td>4.1%</td>
<td>0.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Goods</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>1.3%</td>
<td>2.0%</td>
<td>2.1%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business Equipment</td>
<td>0.5%</td>
<td>1.3%</td>
<td>10.2%</td>
<td>9.0%</td>
<td>9.3%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>80.7%</td>
<td>80.3%</td>
<td>79.7% (12/05)</td>
<td>80.0%</td>
<td>78.6%</td>
<td>75.7%</td>
</tr>
</tbody>
</table>
</body>
</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/060116b.jpg" width="353">
Data on Japan&#39;s balance of payments for November were released today by the Ministry of Finance. The ministry reports the data in hundred millions of yen and these figures are reported in the Haver Data base but in the table below and in the following text we have moved the decimal point one to the left and, as a result, report the figures in billions of yen instead of the hundred millions.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060116a.jpg" width="353">
On a seasonally adjusted basis the current account in November was 1,569.8 billion yen or at the exchange rate of November 30, about $15 billion. The current account declined by 103.8 billion yen from October, but was 98.1 billion yen above November 2005. The month to month decline was due an lessening of the deficit on services of142.5 billion yen and a 220.0 billion yen decline in income on overseas transactions. Since early this year net income from overseas transactions has become a bigger factor in the current account than the balance on goods as shown in the first chart.
Although the trade in goods surplus increased 224.1 billion yen from October to November it was 120.0 billion yen below November of 2004. The stimulus to exports from the almost 16% depreciation of the yen over the past year was offset by the negative impact of higher oil prices on imports. The year over year change in imports and exports are shown in the second chart. Throughout this year the year over year increase in imports has outweighed that of exports. 

<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/@J9/@J9.HTM">Japan Current Account&nbsp;</a> (Billion yen)</th>
<th scope="col">Nov 05&nbsp;</th>
<th scope="col">Oct 05&nbsp; </th>
<th scope="col">Nov 04&nbsp;</th>
<th scope="col">M/M dif&nbsp;</th>
<th scope="col">Y/Y dif</th>
<th scope="col">2004 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </th>
<th scope="col">2003&nbsp;</th>
<th scope="col">2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Current Account</td>
<td>1,569.8</td>
<td>1,673.6</td>
<td>1.471.7</td>
<td>-103.8</td>
<td>98.1</td>
<td>18,594.4</td>
<td>15,828.7</td>
<td>14,040.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Balance on Goods and Services</td>
<td>718.8</td>
<td>637.2</td>
<td>742.2</td>
<td>81.6</td>
<td>-23.4.</td>
<td>10,042.2</td>
<td>8,378.3</td>
<td>6,449.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Balance on Goods</td>
<td>976.1</td>
<td>752.0</td>
<td>1,096.1</td>
<td>224.1</td>
<td>-120.0</td>
<td>14,124.7</td>
<td>12,274.1</td>
<td>11,699.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Exports</td>
<td>5,669.5</td>
<td>5,552.4</td>
<td>5,072.4</td>
<td>117.1</td>
<td>597.4</td>
<td>58,095.0</td>
<td>51,952.6</td>
<td>49,449.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Imports</td>
<td>4,693.4</td>
<td>4,800.4</td>
<td>3,976.1</td>
<td>-107.0</td>
<td>717.3</td>
<td>43,960.5</td>
<td>39,678.4</td>
<td>37,750.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Balance on Services</td>
<td>-257.3</td>
<td>-114.8</td>
<td>-353.8</td>
<td>-142.5</td>
<td>98.5</td>
<td>-4,082.4</td>
<td>-3,895.9</td>
<td>-5,249.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Net Income</td>
<td>892.2</td>
<td>1,112.2</td>
<td>813.1</td>
<td>-220.0</td>
<td>7901</td>
<td>9,385.5</td>
<td>8,323.1</td>
<td>8,273.4&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Current Transfers</td>
<td>-41.2</td>
<td>-75.8</td>
<td>-83.6</td>
<td>34.6</td>
<td>42.2</td>
<td>-833.5</td>
<td>-872.6</td>
<td>-681.8&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

Data on Japan's balance of payments for November were released today by the Ministry of Finance. The ministry reports the data in hundred millions of yen and these figures are reported in the Haver Data base but in the table below and [...]

Japan's Balance of Payment: Net Income from Overseas Transactions Currently Is Greater than Trade in Goods Balance

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

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

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

Michael J. Moran

260410L.jpg

260410M.jpg

The Consumer Price Index rose 0.9% in March, easily the sharpest monthly rise since the inflation burst in 2022. Although pronounced in magnitude, the increase was not surprising, as essentially all analysts had built in pressure from the energy sector. Energy prices jumped 10.9%, led by a surge of 21.2% in gasoline prices. Other energy components wiggled: charges for electricity services rose 0.8%, offsetting declines in the prior two months; a drop 0.9% in the price of natural gas services followed sharp increases in the prior three months.

The press report from the Bureau of Labor Statistics showed food prices as unchanged, but calculating the shift to more than one decimal point showed a marginal decline (-0.005%) The dip was almost imperceptible, but it nevertheless was a welcome rarity. The decline occurred in the food-at-home component (i.e. grocery store prices, -0.2%); prices of food away from home (i.e. at restaurants and bars) rose 0.2%.

Core prices rose 0.2 percent, softer than the expected increase of 0.3%. Only two areas posted high-side readings. Apparel prices increased 1.0% after a jump of 1.3% in February, perhaps reflecting hope for an active spring selling season. Airfares jumped 2.7%, hardly surprising in light of recent energy developments. Sharper increases are likely in coming months because of higher fuel prices. Most other core items were contained, including declines of 1.0% in medical-care commodities and 0.4% in the prices of used motor vehicles. Prices of medical-care commodities have been quiet since the middle of 2024; the latest year-over-year change totaled only 0.3%. Prices of used cars and trucks have declined for four consecutive months, leaving a year-over-year decline of 3.2%.

Although core prices were well contained in March, the outlook is uncertain because of potential passthrough from higher energy prices. At the same time, recent trends in the inflation rates for core goods and core services offer a reason to be optimistic, as both are decelerating. As shown in the left chart below, core goods prices in the past six months have been subdued, which has pulled the year-over-year change from 1.5% last fall (August to October) to 1.2% in March. Core service prices, shown in the right chart below, have registered changes of 0.3% or 0.4% in the three months before the 0.2% reading in March. However, results for October and November were restrained, and changes in the past six months in total show deceleration. The year-over-year change of 3.0% in core service prices in March reflects an advance of 3.3% in the first six months of this span (annual rate) and 2.7% in the past six months. The pattern is choppy, but it traces a decelerating trend.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

260410N.jpg

260410O.jpg

- Gasoline prices drove the energy component higher; electricity prices also contributed.
- Food prices provided a surprise by posting a fractional decline.
- Core prices rose less than expected; both goods and services components were contained.

March CPI: Pressure in the Energy Sector (as Expected); Tame Elsewhere (Surprisingly)

Winnie Tapasanun

260410F.jpg

260410G.jpg

Total factory orders were virtually unchanged m/m in February following a flat reading in January and a 0.4% decline in December, data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected a 0.2% m/m February increase. The year-on-year growth rate eased to 3.7% in February, the lowest since October, from 4.2% in January (+3.0% in February 2025), remaining far below the April 2021 peak of 39.6%. Notably, orders for nondefense aircraft & parts plunged 28.6% m/m in February following decreases of 1.7% in January and 22.7% in December, while orders for defense aircraft & parts fell 2.1% after a 26.9% January slump and an 11.8% December jump. Factory orders excluding defense edged up 0.1% (3.6% y/y), the third m/m increase in four months, following a 0.4% January rebound. Factory orders excluding the transportation sector rose 1.2% (2.5% y/y), the strongest of four consecutive m/m gains, after a 0.5% January increase.

Durable goods orders fell 1.3% (+7.4% y/y) in February after a 0.4% decline in January (in line with a 1.4% m/m decrease in the advance report on April 7), marking the fourth m/m decline in five months. The February m/m fall reflected a 5.3% orders drop (+10.2% y/y) in transportation equipment following a 1.9% January decrease, alongside m/m declines of 0.5% (+2.4% y/y) in furniture & related products and 0.3% (+4.9% y/y) in electrical equipment, appliances & components. Other major durable goods orders categories rose m/m in February, led by a 2.4% gain (10.5% y/y) in primary metals, followed by increases of 1.7% (9.5% y/y) in machinery, 0.5% (5.4% y/y) in fabricated metal products, and 0.2% (7.7% y/y) in computers & electronic products.

Nondurable goods orders, which equal nondurable goods shipments, advanced 1.5% (0.1% y/y) in February, the biggest of three successive m/m gains, after a 0.5% increase in January. The February m/m rise was led by a 6.2% jump (-6.4% y/y) in petroleum & coal products, followed by gains of 5.9% (-5.8% y/y) leather & allied products, 1.2% (-2.8% y/y) in textile mills, 1.0% (1.6% y/y) in paper products, 0.9% (1.2% y/y) in plastics & rubber products, 0.6% (3.7% y/y) in beverage & tobacco products, 0.5% (3.2% y/y) in chemical products, 0.4% (3.2% y/y) in apparel, and 0.2% (0.5% y/y) in food products. To the downside, nondurable goods shipments for textile products (-1.4%; -1.5% y/y) and printing (-0.4%; -0.9% y/y) fell m/m in February following their January increases.

Total shipments rose 1.4% (3.5% y/y) in February after gains of 0.7% in January and December, registering the fourth m/m rise in five months. Excluding transportation, shipments advanced 1.4% (2.3% y/y), the fifth m/m gain in six months, after a 0.5% January increase. Shipments of durable goods industries also rose 1.4% (6.9% y/y), up for the fifth time in six months, after a 0.9% January gain. This reflected m/m increases across nearly all durable goods shipments categories, led by a 2.5% rise (10.1% y/y) in primary metals, followed by gains of 1.7% (5.5% y/y) in electrical equipment, appliances & components, 1.7% (4.0% y/y) in furniture & related products, 1.6% (9.7% y/y) in transportation equipment, 1.4% (7.6% y/y) in machinery, 1.3% (3.8% y/y) in nonmetallic mineral products, 1.0% (6.1% y/y) in computers & electronic products, 1.0% (2.5% y/y) in miscellaneous durable goods, and 0.9% (5.4% y/y) in fabricated metal products. In contrast, durable goods shipments for wood products were the only category with a monthly decline in February, easing 0.1% (-2.9% y/y) following a flat January reading.

Unfilled orders edged up 0.1% (11.1% y/y) in February, the smallest of seven consecutive m/m increases, following a 0.6% rise in January. Excluding transportation, unfilled orders grew 0.2% (1.9% y/y), up for the seventh straight month, after a 0.3% January increase. Backlogs of durable goods ticked up 0.1% (11.1% y/y) in February, led by gains of 0.5% (2.0% y/y) in machinery and 0.2% (4.9% y/y) in electrical equipment, appliances & components, partially offset by declines of 0.7% (+1.5% y/y) in furniture & related products and 0.1% (+2.3% y/y) in primary metals.

Inventories inched up 0.1% (0.8% y/y) in February, the fourth successive m/m increase, following matching 0.1% gains in January and December. Excluding transportation, inventories edged up 0.1% (1.0% y/y) after no change in January. Durable goods inventories increased 0.1% (1.8% y/y) in February after rising 0.2% for four straight months, while nondurable goods inventories were virtually unchanged (-0.8% y/y) after declining 0.3% in January and December.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

260410H.jpg

260410I.jpg

- Factory orders virtually unchanged (+3.7% y/y) in Feb. for second straight month; still 7.6% above the Jan. ’24 low.
- Durable goods orders (-1.3%), fourth m/m fall in five mths.; nondurable goods orders (+1.5%), largest of three successive m/m gains; shipments (+1.4%), fourth m/m rise in five mths.
- Transportation orders -5.3% m/m, led by a 28.6% plunge in nondefense aircraft orders.
- Unfilled orders +0.1%, smallest of seven straight m/m increases.
- Inventories +0.1%, holding within a narrow 0.1%-0.2% range for four consecutive mths.

U.S. Factory Orders Flat in February on Weak Nondefense Aircraft Orders

Andrew Cates

**Positive Growth Surprises, Negative Inflation Surprises—For Now**
The global macro backdrop heading into the latest Middle East shock was, by recent standards, relatively constructive. As the chart shows, growth data had been consistently surprising to the upside, while inflation surprises have been in negative territory—an unusually benign combination suggesting resilient activity alongside easing price pressures. What is striking, however, is that—at least through March and into early April—this pattern has not yet been meaningfully dislodged. For now, the data flow still reflects a world that was stabilising rather than deteriorating. That said, this is almost certainly a lagging signal. Supply-side shocks of this nature—particularly those centred on energy—tend to work with a delay but can be highly disruptive once they feed through. The risk, therefore, is that the current “goldilocks” surprise dynamic proves short-lived as higher energy costs, supply chain frictions and rising uncertainty begin to reshape the incoming data in the weeks ahead.

260409Z1.jpg

**Monetary Policy Expectations Shift as Easing Bets Are Repriced**
How policymakers respond to the evolving situation in the Middle East will be critical in shaping both market dynamics and the broader global outlook. This chart, based on the latest April Blue Chip Financial Forecasts survey, suggests that expectations are already beginning to shift. Forecasters are now less inclined to anticipate policy easing in the period ahead—particularly in the euro area, where expectations for rate cuts have been scaled back. Similarly, some of the easing previously priced for the Federal Reserve and the Bank of England has been pared back over the next 12 months. While this is not yet a full pivot toward tightening, it does point to a more cautious policy backdrop, reflecting the risk that renewed energy-driven inflation pressures could constrain central banks’ ability to support growth.

260409Z2.jpg

**Delay, Don’t Tighten: Central Banks’ Likely Playbook**
If the previous chart highlights a shift in policy expectations, this one gives a clearer sense of the reaction function underpinning it. When asked how central banks would respond if energy-driven inflation proves more persistent, most panellists point not to renewed tightening, but to a more cautious delay in easing. In other words, the hurdle for rate cuts has risen, even if the bar for  hikes remains relatively high. This distinction matters. It suggests that policymakers are likely to treat the shock as a supply-driven inflation impulse—one that complicates the outlook but does not automatically warrant aggressive tightening. At the same time, the responses underscore a second important theme: divergence. A sizeable share of forecasters expect policy paths to vary significantly across regions, reflecting differences in energy exposure, inflation dynamics and domestic growth conditions. Taken together, the message is one of constrained flexibility. Central banks may want to support growth, but persistent energy pressures could keep them on hold for longer than previously anticipated—reinforcing the more cautious policy outlook already evident in market pricing.

260409Z3.jpg

**Markets Signal Fiscal Concern, Not Inflation Panic**
If central banks are likely to proceed cautiously, financial markets are already beginning to draw their own conclusions. This chart shows that the recent adjustment in US Treasury markets has been driven primarily by a rise in real yields rather than a meaningful increase in inflation expectations. In other words, markets are not yet pricing a loss of monetary policy credibility or a sharp unanchoring of inflation expectations. Instead, the move points more toward concerns around the broader policy mix—particularly the fiscal backdrop and the potential for increased borrowing needs in an environment of heightened geopolitical risk. This distinction is important. A rise in inflation expectations would suggest fears of central banks falling behind the curve. What we are seeing instead is a repricing of real rates, consistent with tighter financial conditions and a higher risk premium. For now, at least, markets appear to view the shock less as a classic inflation spiral and more as a development that complicates the growth outlook and places greater strain on policy frameworks—especially on the fiscal side.

260409Z4.jpg

**Electricity Prices Reflect Energy Dependence**
The initial response in electricity markets since the Middle East disruption has followed a familiar pattern. Economies with greater domestic energy capacity—such as Scandinavia and, to a lesser extent, the US—have seen relatively contained electricity prices. By contrast, those more reliant on imported energy—most notably the UK and parts of Europe—continue to face significantly higher costs

260409Z5.jpg

**Generation Capacity Determines Energy Resilience**
These price dynamics are closely linked to underlying differences in electricity generation capacity. As the sixth chart shows, countries with higher per capita electricity production—again including Scandinavia and the US—are structurally better positioned to absorb external shocks. In contrast, economies with more limited domestic generation capacity, such as the UK and Germany, are inherently more exposed to fluctuations in global energy markets. This structural divide is likely to prove increasingly important in the period ahead, influencing not just near-term inflation outcomes but also the relative resilience of growth across economies as energy costs remain volatile.

260409Z6.jpg

Amid further tentative signs of de-escalation—most notably President Trump’s decision on April 7th to step back from further escalation—financial markets have stabilised somewhat, but the macroeconomic implications of the Middle East crisis remain highly uncertain. As our charts show, the global economy entered this shock from a position of relative strength, with positive growth surprises and easing inflation pressures still evident in the data (chart 1). However, that benign backdrop now looks vulnerable. Central banks are already reassessing the outlook, with expectations for policy easing being pared back (chart 2) and a growing consensus that any response to persistent energy-driven inflation will likely involve delaying cuts rather than tightening aggressively—albeit with significant regional divergence (chart 3). Financial markets, for their part, are not yet signalling a loss of inflation control, but the rise in real yields suggests increasing concern around the broader policy mix, particularly fiscal pressures (chart 4). Finally, the adjustment to the shock is unlikely to be uniform. Structural differences in domestic energy capacity are already driving wide divergences in electricity prices, leaving more import-dependent economies exposed to higher costs and sharper trade-offs between growth and inflation (charts 5 and 6). Taken together, the message is clear: even if geopolitical tensions ease, the economic aftershocks are likely to be uneven, persistent and increasingly shaped by structural constraints.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/4qBjHX7OmdXmxVN2oRe1nB?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: From Oil Shock to Policy Dilemma

260409A.jpg

260409B.jpg

This monthly report is always packed with information relating to the household sector. At this time, most observers will probably be most interested in price developments, and the results for February were a bit unsettling. The headline price index rose 0.4%, influenced by a jump of 0.8% in energy prices. This increase was largely anticipated and not especially troubling when viewed in isolation. Energy prices have shown little net change in the past two years, and the latest reading of the index was comfortably within the recent range of observations. However, given developments in the Middle East, energy prices undoubtedly will surge out of that recent range in the months ahead.

Core PCE prices also rose 0.4%, a touch firmer than the expected increase of 0.3%. An increase of 0.4% in core inflation is a quick pace even when viewed in Isolation, but this advance followed a similar increase in January, and the December reading almost rounded to 0.4%. These recent changes pulled the year-over-year increase in core prices to 3.0%, a full percentage point above the Federal Reserve’s target.

Nominal personal income dipped 0.1% in February, which translated to a decline of 0.4% after adjusting for inflation (almost rounding to -0.5%). The softness is striking, but a review of the detail suggests that special factors played a role. Much of the weakness reflected a decline of 1.7% in dividend income, which followed a jump of 1.9% in January. Dividend payments in the prior two years followed the same pattern, leaving one to suspect that seasonal adjustment has gone awry. Government transfer payments also declined, with the miscellaneous category accounting for most of the drop. Medicaid payments also fell, marking the fifth consecutive decline, most likely driven by the tightening of provisions included in the One Big Beautiful Bill Act.

Nominal consumer expenditures rose 0.5%, a seemingly strong result, but the change amounted to only 0.1% in real terms. The small increase followed a flat reading in January and increases of only 0.1% in November and December. Consumers spent actively in the second and third quarters of last year, but they have become cautious recently. The data in hand suggest real outlay growth of approximately 1.0% in the first quarter, slower than the average pace of 3.0% in the middle of last year and 1.9% in 2025-Q4.

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

260409C.jpg

260409D.jpg

- The energy component contributed to a high-side reading on the price index for personal consumption expenditures; the core component was firm as well.
- Consumer spending showed signs of slowing.

Personal Income, Consumption, and Prices: Higher Prices Dampen Real Gains

Sandy Batten

260409N1.jpg

260409C1.jpg

The third estimate of Q4 2025 GDP showed that real GDP growth slowed to 0.5% q/q saar versus 0.7% in the second estimate and 1.4% in the advance estimate. GDP had grown 4.4% in Q3. The more than one-month long shutdown of the federal government continued to have been a notable restraint on GDP growth in Q4, subtracting 1.0%-point from overall growth, the same as in the second estimate.

Revisions were very small across major expenditure categories. Growth of personal consumption expenditures was revised down slightly to 1.9% q/q saar from 2.0% previously. Nonresidential fixed investment increased 2.4%, up slightly from the 2.2% reported in the second estimate. The 0.5% q/q decline previously reported for residential investment was revised to a larger decline of 1.7%, subtracting 0.1%-point from overall growth versus 0.0%-point in the previous estimate. Inventories declined more than previously estimated, reducing their contribution to growth from 0.3%-point in the second estimate to 0.1%-point in today’s estimate.

260409O1.jpg

260409P1.jpg

There were slight downward revisions to the declines previously reported for both exports and imports, leaving net exports essentially unrevised. As already noted, a 16.6% q/q saar plunge in federal government spending (revised down slightly from -16.7%) accounted for most of the weakness in Q4. This included a 24.3% q/q collapse in nondefense spending, the second largest quarterly decline in nearly forty years. By contrast, state and local government spending increased 1.5%, revised up from 1.2% in the previous estimate.

Private domestic demand growth (final sales to private domestic purchasers, a favored gauge of demand by the Federal Reserve) was revised slower to 1.8% q/q saar in Q4 from 1.9% in the second estimate and 2.4% in the advance report. However, even the revised pace of growth is respectable and close to the economy’s potential growth rate.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

260409Q1.jpg

260409S1.jpg

- Q4 GDP growth revised to 0.5% q/q saar from 0.7% in the first revision and 1.4% in the advance report.
- The shutdown of the federal government still played a critical role in the slowdown, subtracting 1.0%-point from Q4 growth.
- Domestic demand slowed further with final sales to private domestic purchasers revised down to 1.8% from 1.9% in the first revision and 2.4% in the advance report.

Economy in Brief

Jump to:

CPI Fell Again, Unexpectedly; 2005 Strongest Since 2000

CPI Fell Again, Unexpectedly; 2005 Strongest Since 2000

Canadian Business Expects Further Increases in Sales, but Sees More Difficulty in Meeting Demand

Industrial Output Gain Led By High Tech

Empire State Index Slipped

Empire State Index Slipped

Japan's Balance of Payment: Net Income from Overseas Transactions Currently Is Greater than Trade in Goods Balance

Japan's Balance of Payment: Net Income from Overseas Transactions Currently Is Greater than Trade in Goods Balance