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/051207c.jpg" width="353">
The Australian economy expanded a mere 0.2% in Q3, according to data reported at midday today, Canberra time. This was the smallest quarterly increase in a year. Australian GDP data are expressed in chained A$, with fiscal 2004 as the reference year, Q3 2003 to Q2 2004. Press reports and market participants focused on the &quot;slow&quot; advance, and the A$ fell in foreign exchange markets.
However, Q2 growth was an outsized 1.3%, and as seen in the table below, included sizable gains in private fixed investment, 6.7%, and government consumption, 1.3%. Thus, the small Q3 result could mark a return to a more normal path, rather than a cyclical weakening. The investment item slowed to a 0.5% increase in Q3 and government spending decreased by 0.6%. Exports were also strong in both Q1 and Q2, so their shrinkage in Q3 could also be more a reaction to that strength than a turn toward a new trend. In the meantime, household consumption is growing fairly steadily, with 0.6% in both Q2 and Q3, making a 2.8% annualized rate for the first three quarters of this year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207d.jpg" width="353">
Even with the moderation in Q3, the capital formation figures highlight strength in business investment generally. Nonresidential buildings and other structures are up 24.5% from a year ago, showing 2005 as a rebound year after a slowdown last year to &quot;only&quot; 4.2% growth. Five-year expansion of those capital investments has run at an 8.7% annual rate. Machinery and equipment expenditures have had an erratic quarterly pattern, down in Q1, up 10.6% in Q2 and up a slim 1.5% in Q3, but they are running 15% above a year ago, close in line with 16% over the past four years.
Thus, despite the Q3 slowdown, the Australian economy looks vigorous, with growth in several diverse sectors. Obviously, though, as with all countries, prospects for the months ahead are clouded with the high cost of energy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ANZ/@A1/@A102/@A102.HTM">Australia GDP Chain 2003/04 A$</a></th>
<th scope="col">Q3 2005</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
<th scope="col">From Q3 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real GDP</td>
<td>0.2</td>
<td>1.3</td>
<td>0.7</td>
<td>2.6</td>
<td>3.5</td>
<td>3.1</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">Consumption: Households</td>
<td>0.6</td>
<td>0.6</td>
<td>0.8</td>
<td>2.7</td>
<td>5.7</td>
<td>3.8</td>
<td>3.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>-0.6</td>
<td>1.3</td>
<td>-0.1</td>
<td>1.6</td>
<td>3.7</td>
<td>3.7</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol">Private Fixed Capital Form.</td>
<td>0.5</td>
<td>6.7</td>
<td>-1.6</td>
<td>9.5</td>
<td>6.9</td>
<td>10.7</td>
<td>17.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Public Fixed Capital Form.</td>
<td>-5.2</td>
<td>-0.2</td>
<td>1.5</td>
<td>0.2</td>
<td>13.1</td>
<td>-0.8</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-2.3</td>
<td>2.0</td>
<td>1.0</td>
<td>2.6</td>
<td>4.0</td>
<td>-2.2</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td class="firstcol">-Imports</td>
<td>-0.5</td>
<td>2.0</td>
<td>1.6</td>
<td>8.3</td>
<td>15.1</td>
<td>10.5</td>
<td>10.7</td>
</tr>
<tr>
<td class="firstcol">Domestic Final Demand</td>
<td>0.2</td>
<td>2.0</td>
<td>0.2</td>
<td>3.8</td>
<td>5.9</td>
<td>5.0</td>
<td>6.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Gross Value Added</td>
<td>0.0</td>
<td>1.2</td>
<td>0.4</td>
<td>1.9</td>
<td>3.8</td>
<td>2.6</td>
<td>4.1</td>
</tr>
</tbody>
</table>
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The Australian economy expanded a mere 0.2% in Q3, according to data reported at midday today, Canberra time. This was the smallest quarterly increase in a year. Australian GDP data are expressed in chained A$, with fiscal 2004 as the [...]

Australian GDP Slows to 0.2% Growth in Q3, But Q2's 1.3% Was Strong

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207a.jpg" width="353">
According to the Mortgage Bankers Association, the 5.2% rise in the total number of mortgage applications last week recovered virtually all of the prior two weeks&#39; decline. Nevertheless, the rebound left the recent level 26% below the peak in early June.
The performance ofpurchase applications is consistent with a topping, but not at all a collapse, in the housing market. Purchase applications rose 4.0% last week and added to a several weekly gains during November. The latest lifted the level 4.7% ahead of the November average which had inched up 0.8% from October.
Purchase applications nevertheless remain 5% below the Spring peak. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
A 7.6% w/w rise in applications to refinance recovered the sharp decline of the prior week but applications had fallen hard for six successive weeks and the latest level was down 2.8% from the November average. Versus the June peak, the latest level of refis is down 46%.
The effective interest rate on a conventional 30-year mortgage rose further last week to 6.58% from 6.44% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also rose to 6.18% from 6.04%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
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>.
Trends in Home Ownership from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20051201/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">12/02/05</th>
<th scope="col">11/18/05</th>
<th scope="col">Y/Y</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">Total Market Index</td>
<td>656.7</td>
<td>624.1</td>
<td>-5.7%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>495.1</td>
<td>476.2</td>
<td>0.9%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,596.4</td>
<td>1,484.3</td>
<td>-15.6%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
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According to the Mortgage Bankers Association, the 5.2% rise in the total number of mortgage applications last week recovered virtually all of the prior two weeks' decline. Nevertheless, the rebound left the recent level 26% below the [...]

Mortgage Applications Recover Some

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207b.jpg" width="353">
Challenger, Grey &amp; Christmas reported that job cut announcements in November rose for the third consecutive month. The 22.1% rise to 99,279 followed a 13.2% rise the prior month and pulled the three month average of job cut announcements up to 84,139 (-19.7% y/y).
During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
The aerospace (+251% y/y) and auto (+42% y/y) industries reported notable m/m increases in layoffs as did the financial (22.0% y/y) and the pharmaceutical (1,046% y/y) industries. These increases were somewhat offset by declines in retail (-31.8% y/y) and telecommunications (-71.2% y/y).
Challenger also reported that announced hiring plans rose sharply (413.8% y/y) for the second consecutive month.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>99,279</td>
<td>81,301</td>
<td>-5.0%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
</body>
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Challenger, Grey & Christmas reported that job cut announcements in November rose for the third consecutive month. The 22.1% rise to 99,279 followed a 13.2% rise the prior month and pulled the three month average of job cut [...]

Challenger Layoffs Up Third Straight Month in November

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207b.jpg" width="353">
Challenger, Grey &amp; Christmas reported that job cut announcements in November rose for the third consecutive month. The 22.1% rise to 99,279 followed a 13.2% rise the prior month and pulled the three month average of job cut announcements up to 84,139 (-19.7% y/y).
During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
The aerospace (+251% y/y) and auto (+42% y/y) industries reported notable m/m increases in layoffs as did the financial (22.0% y/y) and the pharmaceutical (1,046% y/y) industries. These increases were somewhat offset by declines in retail (-31.8% y/y) and telecommunications (-71.2% y/y).
Challenger also reported that announced hiring plans rose sharply (413.8% y/y) for the second consecutive month.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>99,279</td>
<td>81,301</td>
<td>-5.0%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
Mortgage Applications Recover Some 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207a.jpg" width="353">
According to the Mortgage Bankers Association, the 5.2% rise in the total number of mortgage applications last week recovered virtually all of the prior two weeks&#39; decline. Nevertheless, the rebound left the recent level 26% below the peak in early June.
The performance ofpurchase applications is consistent with a topping, but not at all a collapse, in the housing market. Purchase applications rose 4.0% last week and added to a several weekly gains during November. The latest lifted the level 4.7% ahead of the November average which had inched up 0.8% from October.
Purchase applications nevertheless remain 5% below the Spring peak. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
A 7.6% w/w rise in applications to refinance recovered the sharp decline of the prior week but applications had fallen hard for six successive weeks and the latest level was down 2.8% from the November average. Versus the June peak, the latest level of refis is down 46%.
The effective interest rate on a conventional 30-year mortgage rose further last week to 6.58% from 6.44% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also rose to 6.18% from 6.04%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
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>.
Trends in Home Ownership from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20051201/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
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<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">12/02/05</th>
<th scope="col">11/18/05</th>
<th scope="col">Y/Y</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">Total Market Index</td>
<td>656.7</td>
<td>624.1</td>
<td>-5.7%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>495.1</td>
<td>476.2</td>
<td>0.9%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,596.4</td>
<td>1,484.3</td>
<td>-15.6%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Australian GDP Slows to 0.2% Growth in Q3, But Q2's 1.3% Was Strong 
by <a href="/comment/Stone.html">Carol Stone</a> December 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207c.jpg" width="353">
The Australian economy expanded a mere 0.2% in Q3, according to data reported at midday today, Canberra time. This was the smallest quarterly increase in a year. Australian GDP data are expressed in chained A$, with fiscal 2004 as the reference year, Q3 2003 to Q2 2004. Press reports and market participants focused on the &quot;slow&quot; advance, and the A$ fell in foreign exchange markets.
However, Q2 growth was an outsized 1.3%, and as seen in the table below, included sizable gains in private fixed investment, 6.7%, and government consumption, 1.3%. Thus, the small Q3 result could mark a return to a more normal path, rather than a cyclical weakening. The investment item slowed to a 0.5% increase in Q3 and government spending decreased by 0.6%. Exports were also strong in both Q1 and Q2, so their shrinkage in Q3 could also be more a reaction to that strength than a turn toward a new trend. In the meantime, household consumption is growing fairly steadily, with 0.6% in both Q2 and Q3, making a 2.8% annualized rate for the first three quarters of this year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051207d.jpg" width="353">
Even with the moderation in Q3, the capital formation figures highlight strength in business investment generally. Nonresidential buildings and other structures are up 24.5% from a year ago, showing 2005 as a rebound year after a slowdown last year to &quot;only&quot; 4.2% growth. Five-year expansion of those capital investments has run at an 8.7% annual rate. Machinery and equipment expenditures have had an erratic quarterly pattern, down in Q1, up 10.6% in Q2 and up a slim 1.5% in Q3, but they are running 15% above a year ago, close in line with 16% over the past four years.
Thus, despite the Q3 slowdown, the Australian economy looks vigorous, with growth in several diverse sectors. Obviously, though, as with all countries, prospects for the months ahead are clouded with the high cost of energy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/ANZ/@A1/@A102/@A102.HTM">Australia GDP Chain 2003/04 A$</a></th>
<th scope="col">Q3 2005</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
<th scope="col">From Q3 2004</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">Real GDP</td>
<td>0.2</td>
<td>1.3</td>
<td>0.7</td>
<td>2.6</td>
<td>3.5</td>
<td>3.1</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">Consumption: Households</td>
<td>0.6</td>
<td>0.6</td>
<td>0.8</td>
<td>2.7</td>
<td>5.7</td>
<td>3.8</td>
<td>3.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>-0.6</td>
<td>1.3</td>
<td>-0.1</td>
<td>1.6</td>
<td>3.7</td>
<td>3.7</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol">Private Fixed Capital Form.</td>
<td>0.5</td>
<td>6.7</td>
<td>-1.6</td>
<td>9.5</td>
<td>6.9</td>
<td>10.7</td>
<td>17.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Public Fixed Capital Form.</td>
<td>-5.2</td>
<td>-0.2</td>
<td>1.5</td>
<td>0.2</td>
<td>13.1</td>
<td>-0.8</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-2.3</td>
<td>2.0</td>
<td>1.0</td>
<td>2.6</td>
<td>4.0</td>
<td>-2.2</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td class="firstcol">-Imports</td>
<td>-0.5</td>
<td>2.0</td>
<td>1.6</td>
<td>8.3</td>
<td>15.1</td>
<td>10.5</td>
<td>10.7</td>
</tr>
<tr>
<td class="firstcol">Domestic Final Demand</td>
<td>0.2</td>
<td>2.0</td>
<td>0.2</td>
<td>3.8</td>
<td>5.9</td>
<td>5.0</td>
<td>6.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Gross Value Added</td>
<td>0.0</td>
<td>1.2</td>
<td>0.4</td>
<td>1.9</td>
<td>3.8</td>
<td>2.6</td>
<td>4.1</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206g.jpg" width="353">
Two more Nordic countries--Sweden and Norway--reported third quarter GDP data today. With Denmark, having reported last week, only Finland in the Nordic area remains to be heard from. So far growth in the area has been stronger than that of the Euro Zone. In both countries private consumption and investment were strong.
The official releases of the two countries highlight different measures of growth. Sweden&#39;s Statistical Bureau highlights the year-to-year change in the seasonally unadjusted data while Norway&#39;s Statistical Bureau highlights the quarter-to-quarter change in the seasonally adjusted data. According to the Swedish method, Sweden&#39;s GDP rose 3.43% in the third quarter. The comparable figure for Norway would be 3.11%. Norway reports growth separately for its Mainland activities and for its North Sea petroleum activities and ocean transport. Mainland GDP rose 3.13% in the third quarter while the petroleum and ocean transport rose 3.01%. According to the Norwegian method. Sweden&#39;s GDP rose 0.95% in the third quarter while that of Norway rose 0.80%. (Norway&#39;s Mainland GDP rose 0.83% and the petroleum and related activities rose 0.69%.) Thus, when allowance is made for the various definitions of growth the two countries show roughly similar rates of growth in the third quarter.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206h.jpg" width="353">
Over time, however, Norwegian growth has tended to be more volatile than that of Sweden as can be seen in the first chart that shows the quarter-to-quarter percent changes in the seasonally adjusted GDP for both countries. The volatility in the Norwegian data is due in large part to the volatility of the petroleum activities. The second chart shows the year-to-year changes in Norway&#39;s Mainland GDP and it petroleum related GDP activities.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"></th>
<th scope="col">Q3 05&nbsp; %</th>
<th scope="col">Q2 05 % </th>
<th scope="col">Q1 05 %</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">Sweden GDP</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Q/Q change in SA data</td>
<td>0.95</td>
<td>0.77</td>
<td>0.55</td>
<td>3.74</td>
<td>1.69</td>
<td>2.00</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Y/Y change in NSA data</td>
<td>3.43</td>
<td>3.19</td>
<td>0.86</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Norway GDP</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Q/Q change in SA data</td>
<td>0.80</td>
<td>1.32</td>
<td>0.20</td>
<td>2.81</td>
<td>1.13</td>
<td>1.11</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Y/Y change in NSA data</td>
<td>3.11</td>
<td>4.65</td>
<td>-1.36</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Norway Mainland GDP</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Q/Q change in SA data</td>
<td>0.83</td>
<td>0.85</td>
<td>0.48</td>
<td>3.43</td>
<td>1.41</td>
<td>1.41</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Y/Y change in NSA data</td>
<td>&nbsp;3.13</td>
<td>7.42</td>
<td>0.24&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Norway Petroleum Activities and Ocean Transport</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Q/Q change in SA data</td>
<td>0.69&nbsp;</td>
<td>3.36&nbsp;</td>
<td>-0.99&nbsp;</td>
<td>&nbsp;0.35</td>
<td>-0.00&nbsp;</td>
<td>0.10&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Y/Y change in NSA data</td>
<td>3.01</td>
<td>-5.98</td>
<td>-7.42</td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
</body>
</html>

Two more Nordic countries--Sweden and Norway--reported third quarter GDP data today. With Denmark, having reported last week, only Finland in the Nordic area remains to be heard from. So far growth in the area has been stronger than [...]

Sweden and Norway Report Good Third Quarter Growth

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206f.jpg" width="353">
The International Council of Shopping Centers (ICSC)-UBS survey indicated that chain store sales collapsed 3.1% last week following the 0.7% drop during Thanksgiving week. It was the sharpest w/w drop since 1996 and lowered the starting point for December sales by 3.3% versus the November average which rose 1.2% m/m.
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 from ICSC recovered 1.1% (-0.5% y/y) following the prior week&#39;s revised 0.3% dip.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The latest decline in store sales was accompanied by an unchanged level of retail gasoline prices which held at $2.15 (12.3% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><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">12/03/05</th>
<th scope="col">11/26/05</th>
<th scope="col">Y/Y</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>440.6</td>
<td>454.8</td>
<td>3.5%</td>
<td>4.6%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


</html>

The International Council of Shopping Centers (ICSC)-UBS survey indicated that chain store sales collapsed 3.1% last week following the 0.7% drop during Thanksgiving week. It was the sharpest w/w drop since 1996 and lowered the [...]

Chain Store Sales Down Sharply

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206d.jpg" width="353">
Factory inventories in October rose 0.6% following an upwardly revised 0.1% up tick in September. Less petroleum, the 0.4% (3.9% y/y) rise in factory inventories was the strongest since February.
The October inventory gain was led by a 11.4% rise in motor vehicles but additionally reflected a 0.4% (4.1% y/y) increase in electrical equipment and a 0.5% (-1.1% y/y) rise in computers &amp; electronic products. Nondurables inventories rose 0.9% (4.9% y/y) and less petroleum, the 0.5% (+2.7% y/y) rise in nondurable inventories was the first in four months.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206e.jpg" width="353">
Factory shipments recovered 1.0% and factory sector orders surged 2.2%. The advance report of a 3.4% jump in durables goods orders was revised to 3.7%.
Unfilled orders jumped 1.6% and pulled the year to year gain to a near record 12.1%. Less the transportation sector backlogs continued strong and surged 1.1% (9.8% y/y) while the ratio of total unfilled orders to shipments rose further to the highest level since 2002.<a href="http://research.stlouisfed.org/publications/review/05/07/Gali.pdf"> </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/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS)</th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</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">Inventories</td>
<td>0.6%</td>
<td>0.1%</td>
<td>4.7%</td>
<td>7.7%</td>
<td>-1.1%</td>
<td>-5.4%</td>
</tr>
<tr>
<td class="firstcol">New Orders</td>
<td>2.2%</td>
<td>-1.4%</td>
<td>9.0%</td>
<td>9.3%</td>
<td>3.5%</td>
<td>-2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>1.0%</td>
<td>-0.4%</td>
<td>6.5%</td>
<td>9.5%</td>
<td>1.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Unfilled Orders</td>
<td>1.6%</td>
<td>0.6%</td>
<td>12.1%</td>
<td>8.4%</td>
<td>8.0%</td>
<td>-8.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Factory inventories in October rose 0.6% following an upwardly revised 0.1% up tick in September. Less petroleum, the 0.4% (3.9% y/y) rise in factory inventories was the strongest since February. The October inventory gain was led by [...]

U.S. Factory Inventories Back on the Rise, Order Backlogs Surged

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206a.jpg" width="353">
Non-farm labor productivity growth for 3Q was revised higher to 4.7% versus the initial estimate of a 4.1% gain. Consensus expectations had been for a revision to 4.5%. The strength of these increases is impressive given that three hurricanes hit the Gulf Coast last quarter. Further evidence of strength is the comparison to the five year average of 3.4% growth. The recent trend rate of increase is the strongest since the mid 1960s.
Notable is that the trend in productivity exceeds average output growth of 2.9% during the last five years. For 3Q, output growth was revised up to 4.8% (4.4% y/y) from 4.2% reported initially. The estimate of hours worked last quarter was unrevised at 0.1% (1.2% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206b.jpg" width="353">
Compensation costs were little revised for 3Q at 3.7% (5.0 y/y) but the 2Q gain was revised sharply lower to 0.9%. As a result, unit labor costs fell 1.0% following a revised 1.2% decline in 2Q.
Factory sector productivity growth was revised lower for 3Q to 3.4% (4.5% y/y) from 4.5%. Compensation growth was little revised at 3.1% (6.2% y/y) and the 0.3% (+1.7% y/y) decline in unit labor costs followed a revised 2Q drop.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051206c.jpg" width="353">
Productivity in the nonfinancial corporate sector for 3Q, reported for the first time, grew 3.2% (4.7% y/y) versus 4.3% growth in 2Q which was revised down. In fact, the estimate of y/y productivity growth through 2Q was lowered substantially to 4.3% from 6.3% due to a lowered estimate of output, however, compensation growth was lowered as well. Unit labor costs rose 1.3% in 3Q (0.7% y/y) as output grew 4.0% (6.0% y/y). Nonfinancial corporate sector output is gleaned from the income side of the National Income &amp; Product Accounts (NIPA) as opposed to the non-farm output figures which are derived from the output side of the NIPA. Factory sector output is derived from the industrial production measures compiled by the Federal Reserve Board.
The implicit price deflator for nonfarm business was little revised at 3.1% (2.8% y/y). The increase lifted the ratio of prices to unit labor costs to its highest since 1997. During the last ten years there has been a 60% correlation between the ratio and the y/y growth in operating corporate profits.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EC/@EC02/@EC02.HTM">Non-farm Business Sector</a> (SAAR)</th>
<th scope="col">3Q &#39;05</th>
<th scope="col">3Q &#39;05</th>
<th scope="col">2Q &#39;05</th>
<th scope="col">Y/Y</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">Output per Hour</td>
<td>4.7%</td>
<td>4.1%</td>
<td>2.1%</td>
<td>3.1%</td>
<td>3.4%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Compensation</td>
<td>3.7%</td>
<td>3.6%</td>
<td>0.9%</td>
<td>5.0%</td>
<td>4.5%</td>
<td>4.0%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>-1.0%</td>
<td>-0.5%</td>
<td>-1.2%</td>
<td>1.8%</td>
<td>1.1%</td>
<td>0.2%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm labor productivity growth for 3Q was revised higher to 4.7% versus the initial estimate of a 4.1% gain. Consensus expectations had been for a revision to 4.5%. The strength of these increases is impressive given that three [...]

3Q U.S. Productivity Revised Up, 2Q Compensation Lower

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

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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

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- 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)

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.

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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.

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Charts of the Week: From Oil Shock to Policy Dilemma

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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**.

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- 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

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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.

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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**.

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- 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.

U.S. Q4 2025 Real GDP Growth Revised Slower

Robert Brusca

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Germany’s industrial production slipped in February, driven lower by dropping output of consumer goods. Sequential growth rates over 12 months, six months, and three months show a confusing array of patterns, except for intermediate goods, where annualized growth rates for output sequentially weaken and show declines on each horizon. All German sector growth rates for the quarter-to-date are showing declines, and the growth rankings by sector are below 50% across the broad, indicating below median performance across German sectors.  It’s a very unimpressive report.

Real manufacturing orders rose modestly in February against the backdrop of a very sharp drop in January. Real manufacturing sales have been erratic.

German output and industrial gauges, ranked on annual sales growth against historic norms, have been very weak. Only real orders post a standing above 50%, which represents the median.
 
France, Spain, Portugal, Sweden, and Norway provide some perspective on European growth. The northern European non-EMU member countries are much stronger than the EMU reporters, two of which have standings below their median levels (rankings below 50).

Economy in Brief

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Australian GDP Slows to 0.2% Growth in Q3, But Q2's 1.3% Was Strong

Mortgage Applications Recover Some

Challenger Layoffs Up Third Straight Month in November

Challenger Layoffs Up Third Straight Month in November

Sweden and Norway Report Good Third Quarter Growth

Chain Store Sales Down Sharply

U.S. Factory Inventories Back on the Rise, Order Backlogs Surged

3Q U.S. Productivity Revised Up, 2Q Compensation Lower