Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607b.jpg" width="353">
April sales of semiconductors in the Americas as published by the Semiconductor Industry Association fell a sharp 21.1% following a like increase the month prior. This sideways movement in American sales of semis has been in place for roughly a year.
American sales of semiconductors account for 18% of the worldwide total, about half the percentage in 2000. Sales growth in the Asia/Pacific region averaged 41.3% last year, twice the American average, while sales in Japan rose 17.5%. The Asia/Pacific region currently accounts for just under one half of worldwide sales of semiconductors, up from less than one quarter in 2000.
During the last ten years there has been a 66% correlation between the y/y change in American sales of semiconductors and the change in real U.S. investment in equipment &amp; software.

<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/INDUSTRY/@I02/@I0211/@I021101/@I021101.HTM">Semiconductor Sales </a></th>
<th scope="col">April</th>
<th scope="col">March</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">Worldwide</td>
<td>$16.679B</td>
<td>$20.556B</td>
<td>4.7%</td>
<td>28.0%</td>
<td>18.3%</td>
<td>1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Americas</td>
<td>$2.920B</td>
<td>$3.701B</td>
<td>3.8%</td>
<td>20.8%</td>
<td>3.4%</td>
<td>-12.6%</td>
</tr>
</tbody>
</table>
</body>
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April sales of semiconductors in the Americas as published by the Semiconductor Industry Association fell a sharp 21.1% following a like increase the month prior. This sideways movement in American sales of semis has been in place for [...]

Semiconductor Sales Eased

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607a.jpg" width="353">
Chain store sales rose a modest 0.4% during the opening week of June following three consecutive periods of decline according to the International Council of Shopping Centers (ICSC)-UBS survey. The slim increase left sales 0.7% below the May average which rose 0.3% versus April.
During the last ten years there has been a 56% 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 slipped 0.3% w/w (+0.8% y/y), the first decline in four weeks.
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.
Last night&#39;s remarks by Fed Chairman Alan Greenspan are available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050606/default.htm"> here</a>.
Battle at Bond Bluff: Forecasters vs. Financial Markets from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20050601/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<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">06/04/05</th>
<th scope="col">05/28/05</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>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>452.9</td>
<td>451.2</td>
<td>3.3%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
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Chain store sales rose a modest 0.4% during the opening week of June following three consecutive periods of decline according to the International Council of Shopping Centers (ICSC)-UBS survey. The slim increase left sales 0.7% below [...]

Chain Store Sales Recovered Some Last Week

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607a.jpg" width="353">
Chain store sales rose a modest 0.4% during the opening week of June following three consecutive periods of decline according to the International Council of Shopping Centers (ICSC)-UBS survey. The slim increase left sales 0.7% below the May average which rose 0.3% versus April.
During the last ten years there has been a 56% 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 slipped 0.3% w/w (+0.8% y/y), the first decline in four weeks.
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.
Last night&#39;s remarks by Fed Chairman Alan Greenspan are available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050606/default.htm"> here</a>.
Battle at Bond Bluff: Forecasters vs. Financial Markets from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20050601/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/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">06/04/05</th>
<th scope="col">05/28/05</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>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>452.9</td>
<td>451.2</td>
<td>3.3%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Semiconductor Sales Eased 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607b.jpg" width="353">
April sales of semiconductors in the Americas as published by the Semiconductor Industry Association fell a sharp 21.1% following a like increase the month prior. This sideways movement in American sales of semis has been in place for roughly a year.
American sales of semiconductors account for 18% of the worldwide total, about half the percentage in 2000. Sales growth in the Asia/Pacific region averaged 41.3% last year, twice the American average, while sales in Japan rose 17.5%. The Asia/Pacific region currently accounts for just under one half of worldwide sales of semiconductors, up from less than one quarter in 2000.
During the last ten years there has been a 66% correlation between the y/y change in American sales of semiconductors and the change in real U.S. investment in equipment &amp; software.

<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/INDUSTRY/@I02/@I0211/@I021101/@I021101.HTM">Semiconductor Sales </a></th>
<th scope="col">April</th>
<th scope="col">March</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">Worldwide</td>
<td>$16.679B</td>
<td>$20.556B</td>
<td>4.7%</td>
<td>28.0%</td>
<td>18.3%</td>
<td>1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Americas</td>
<td>$2.920B</td>
<td>$3.701B</td>
<td>3.8%</td>
<td>20.8%</td>
<td>3.4%</td>
<td>-12.6%</td>
</tr>
</tbody>
</table>
Industrial Production:  Germany, Norway, Brazil and Hungary 
by <a href="/comment/Curley.html">Louise Curley</a> June 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607c.jpg" width="353">
Industrial production data for April were released today for Germany, Norway, Brazil and Hungary--a large and a small developed economy and a large and a small emerging economy.
The first chart compares the trend in manufacturing production for Germany and Norway. Indexes for manufacturing rather than the total are used as the total indexes for these countries are particularly erratic, including such volatile industries as construction in Germany and oil and gas extraction and mining and quarrying in Norway. For instance, the increase in the total index for Germany was 1.1% from March to April but after excluding the 18.6% rise in construction, manufacturing was up only 0.5%. In Norway the total was up 4.7%, but excluding the rise of 6.3% in oil and gas extraction and of 17.9% in mining and quarrying, up, manufacturing was up only 2.2% Production has increased in recent months in both countries, but there has been no strong trend since 2000. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607d.jpg" width="353">
In contrast industrial production in the two emerging market countries has been in a strong uptrend since 2000 as can be seen in the second chart. While index numbers tell us nothing of magnitudes, they do reveal changes in the levels of production. To make it easier to compare the growth in production in the four countries we have adjusted the figures for Norway and Brazil, putting both on a bases of 2000 =100. The official Norway data are based on 1995=100 and those for Brazil, on 2002=100. These calculations are shown in the table below.
Currently production in the emerging market economies is well above 2000 levels--some 15% in Brazil and 30% in Hungary while manufacturing production in Norway is slightly below the level of 2000 and in Germany, only slightly above. Production in Brazil is beginning to falter, but production in Hungary is still strong.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 05</th>
<th scope="col">Mar 05</th>
<th scope="col">M/M%</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp;2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany Mfg 2000=100</td>
<td>105.1</td>
<td>104.6</td>
<td>0.48</td>
<td>2.64</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Norway Mfg 2000=100 Computed</td>
<td>98.4</td>
<td>96.2</td>
<td>2.22</td>
<td>5.63</td>
<td>95.3</td>
<td>93.9</td>
<td>98.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Norway Mfg 1995 =100 Official&nbsp;</td>
<td>101.4</td>
<td>99.2</td>
<td>2.22</td>
<td>5.63</td>
<td>98.2</td>
<td>96.8</td>
<td>101.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Hungary 2000=100</td>
<td>130.50</td>
<td>126.58</td>
<td>3.10</td>
<td>7.26</td>
<td>123.10</td>
<td>114.37</td>
<td>107.82</td>
</tr>
<tr>
<td class="firstcol">Brazil 2000=100&nbsp; Computed</td>
<td>115.69</td>
<td>115.79</td>
<td>-0.04</td>
<td>4.68</td>
<td>112.78</td>
<td>104.37</td>
<td>104.37</td>
</tr>
<tr class="odd">
<td class="firstcol">Brazil 2002=100 Official</td>
<td>110.84</td>
<td>110.88</td>
<td>-0.04</td>
<td>4.68</td>
<td>108.05</td>
<td>100.0</td>
<td>100.0</td>
</tr>
</tbody>
</table>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050606c.jpg" width="353">
Despite small increases in the demand for and in placements of permanent staff in recent months, the job market in the United Kingdom has been easing for about a year as revealed in The Survey of Jobs conducted by NTC Research on behalf of the Recruitment and Employment Confederation and Deloitte &amp; Touche LLP. These data are found in the Haver database entitled UKSRVYS.
There are four general aspects of the labor market covered by The Survey of Jobs: recruitment, demand, availability and wages and salaries. And for each of these, diffusion indexes are calculated for both permanent and temporary staff.
Typical of late cyclical trends, as the demand for labor weakens, the supply increases. In May, 2005, the index for the demand for temporary staff was almost 12% below May of 2004. At the same time the index for the availability of temporary staff was more than 20% above May of 2004. While the demand for permanent staff is only about 3% below last year&#39;s comparable figure, the increase in the availability of permanent staff is almost as high as that of temporary staff. The two charts show these inverse relationships for temporary and permanent staff.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050606d.jpg" width="353">
Other signs of weakness in the labor market are the declines in the diffusion indexes for wages and salaries for both permanent and temporary staff. Although these indexes are above the 50 mark, indicating that more people believe they are rising than those who believe they are falling, the indexes are below levels reached a year ago.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Diffusion Indexes</th>
<th scope="col">May 05</th>
<th scope="col">Apr 05</th>
<th scope="col">May 04</th>
<th scope="col">M/M%</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp;2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Demand for Jobs</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; Permanent staff</td>
<td>59.5</td>
<td>59.2</td>
<td>61.2</td>
<td>0.51</td>
<td>-2.78</td>
<td>61.5</td>
<td>52.6</td>
<td>51.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Temporary staff</td>
<td>56.0</td>
<td>56.6</td>
<td>63.4</td>
<td>-1.06</td>
<td>-11.67</td>
<td>61.5</td>
<td>55.3</td>
<td>56.3</td>
</tr>
<tr>
<td class="firstcol">Availability for Jobs</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Permanent staff</td>
<td>46.3</td>
<td>44.5</td>
<td>38.7</td>
<td>4.04</td>
<td>19.64</td>
<td>40.8</td>
<td>55.6</td>
<td>59.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Temporary staff</td>
<td>50.0</td>
<td>48.4</td>
<td>41.5</td>
<td>3.95</td>
<td>20.48</td>
<td>43.8</td>
<td>54.3</td>
<td>58.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Wages and Salaries</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; Permanent staff</td>
<td>58.0</td>
<td>60.3</td>
<td>59.7</td>
<td>-3.81</td>
<td>-2.85</td>
<td>5.88</td>
<td>54.3</td>
<td>51.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Temporary staff</td>
<td>55.3</td>
<td>55.7</td>
<td>59.2</td>
<td>-0.72</td>
<td>-6.59</td>
<td>57.9</td>
<td>52.7</td>
<td>51.7</td>
</tr>
<tr>
<td class="firstcol">Recruitment Activity</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Placement of Permanent Staff</td>
<td>56.3</td>
<td>55.9</td>
<td>59.1</td>
<td>0.72</td>
<td>-4.74</td>
<td>59.0</td>
<td>53.4</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Billings from temporary and contract staff</td>
<td>53.2</td>
<td>53.3</td>
<td>60.7</td>
<td>-0.19</td>
<td>-12.36</td>
<td>59.1</td>
<td>53.3</td>
<td>53.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Temporary staff margins</td>
<td>49.2</td>
<td>49.7</td>
<td>48.2</td>
<td>-1.01</td>
<td>2.07</td>
<td>48.7</td>
<td>45.9</td>
<td>45.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Despite small increases in the demand for and in placements of permanent staff in recent months, the job market in the United Kingdom has been easing for about a year as revealed in The Survey of Jobs conducted by NTC Research on [...]

UK Survey of Jobs Reveals Softening in the Labor Market

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050606b.jpg" width="353">
The weekly leading index of the US economy published by the Economic Cycle Research Institute (ECRI) fell last week for the fifth week in the last six. The 0.6% decline lowered the index 2.9% versus the peak in early March.
During the last ten years there has been a 54% correlation between the change in the weekly leading index and the change in US real GDP growth during the following quarter. The correlation has risen to 67% during the last five years. During the last ten years there has been a a 70% correlation between the y/y change in the ECRI leaders and the change in the Conference Board&#39;s Index of Leading Economic Indicators.
Six month in the leaders fell to near zero. While down sharply from the double digit growth rates logged during 2003, recession is not indicated. Negative growth in excess of -4% typically preceded past U.S. recessions.
A slowdown in economic growth may or may not be indicated by the more than 10 percentage point slowdown in the leaders&#39; growth. During both the late 1980s and the late 1990s, the leaders slowed by an even greater degree and little slowing in real GDP occurred. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050606a.jpg" width="353">
Weakness in the leaders has been broad based. The components of the Conference Board leaders weigh heavily on the financial and the factory sectors (which are the more volatile of the US data series) and both sets are indicating slower growth.
Visit the <a href="http://www.businesscycle.com/">Economic Cycle Research Institute</a> for analysis of US and international business cycles.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Economic Cycle Research Institute&nbsp;</th>
<th scope="col">05/27/05</th>
<th scope="col">12/31/04</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">Weekly Leading Index</td>
<td>132.0</td>
<td>132.4</td>
<td>-0.6%</td>
<td>132.5</td>
<td>124.8</td>
<td>119.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; 6 Month Growth Rate</td>
<td>0.7%</td>
<td>1.4%</td>
<td>&nbsp;</td>
<td>4.3%</td>
<td>6.5%</td>
<td>1.1%</td>
</tr>
</tbody>
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The weekly leading index of the US economy published by the Economic Cycle Research Institute (ECRI) fell last week for the fifth week in the last six. The 0.6% decline lowered the index 2.9% versus the peak in early March. During the [...]

ECRI Leading Economic Index Trending Lower

Carol Stone, CBE

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Consumer prices in Chile slowed last month after a strong rise in April. The total CPI was up 0.4% (seasonally adjusted by Haver) following 0.7%. This helped the 12-month inflation rate ease to 2.7% from 2.9%. Energy prices were evidently the main mover in both the April surge and the May moderation; transportation prices had risen a mere 0.2% in March, but leaped 2.2% in April and were still strong but less so in May with a 1.3% rise.
Chilean inflation generally remains well under control. Excluding food and energy, the CPI was up 2.4% over May 2004. This is a higher rate than what prevailed over the previous three years by about 0.7 percentage point. But the firming has come mainly from reduced rates of deflation in clothing prices and home furnishings, not from a measurable reacceleration of some sector; indeed, housing costs, health care and education are basically trendless near the overall inflation rate.
Inflation in Chile also remains notable relative to its neighbors. Argentina still struggles with more than 8% and Brazil with about 7%. Among South American countries, only Ecuador and Peru have slower inflation than Chile. For Ecuador, the slower pace is new just in the last three or four years. Peru&#39;s inflation has been a bit lower than Chile&#39;s since early 2001, but Peru was experiencing much more dramatic rates until well into the mid-1990s.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050603e.jpg" width="353"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050603d.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">May 2005</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Year/ Year</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Total CPI</td>
<td>0.4</td>
<td>0.7</td>
<td>0.3</td>
<td>2.7</td>
<td>2.4</td>
<td>1.1</td>
<td>2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">ex Food &amp; Energy</td>
<td>0.5</td>
<td>0.3</td>
<td>0.1</td>
<td>2.4</td>
<td>1.8</td>
<td>1.6</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">Food</td>
<td>0.2</td>
<td>0.2</td>
<td>0.2</td>
<td>1.8</td>
<td>0.2</td>
<td>-0.8</td>
<td>3.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Transportation</td>
<td>1.3</td>
<td>2.2</td>
<td>0.2</td>
<td>6.7</td>
<td>9.1</td>
<td>0.3</td>
<td>3.5</td>
</tr>
</tbody>
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Consumer prices in Chile slowed last month after a strong rise in April. The total CPI was up 0.4% (seasonally adjusted by Haver) following 0.7%. This helped the 12-month inflation rate ease to 2.7% from 2.9%. Energy prices were [...]

Chilean Inflation Eases in May After Energy-Driven Surge in April

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050603c.jpg" width="353">
The May Business Activity Index for the non-manufacturing sector fell to 58.5 from 61.7 in April, reported the Institute for Supply Management. The average level so far this year of 60.5 is below the 2004 average of 62.4. Consensus expectations had been for a reading of 60.0 for May.
Since the series&#39; inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
Both the new orders index and the employment indexes rose slightly m/m but remained well off the earlier highs. Since the series&#39; inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
Pricing power dropped again m/m to the lowest level since August 2003.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">May&nbsp; &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>58.5</td>
<td>61.7</td>
<td>63.3</td>
<td>62.4</td>
<td>58.2</td>
<td>55.1</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>57.9</td>
<td>61.9</td>
<td>72.0</td>
<td>69.0</td>
<td>56.8</td>
<td>54.0</td>
</tr>
</tbody>
</table>


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The May Business Activity Index for the non-manufacturing sector fell to 58.5 from 61.7 in April, reported the Institute for Supply Management. The average level so far this year of 60.5 is below the 2004 average of 62.4. Consensus [...]

ISM Non-Manufacturing Index Fell Again

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050603a.jpg" width="353">
Non-farm payrolls increased just 78,000 in May, the weakest rise since 2003. The prior month&#39;s strong gain was revised slightly higher but March was revised lower. Consensus expectations had been for a 180,000 May increase.
Widespread declines in private service producing industries where payrolls rose 59,000 (1.9% y/y) last month accounted for the weakness. Information services jobs fell 8,000 (-0.2% y/y), real estate &amp; leasing jobs were off 1,700 (+2.4% y/y), temporary services jobs fell 4,300 (+5.3% y/y) and jobs in leisure industries fell 6,000 (+2.0% y/y).
Factory sector payrolls fell 7,000 for the fourth monthly decline this year. A 10,000 worker decline in nondurable goods industries (-1.5% y/y) centered in the apparel and the paper industries.
Construction jobs rose 20,000 (4.0% y/y) but that was less than half the prior month&#39;s increase. Total government employment rose a modest 5,000 (0.8% y/y). Federal government jobs increased 1,000 (-0.4% y/y) and local gov&#39;t employment rose 5,000 (0.8% y/y). <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050603b.jpg" width="353">
The household survey indicated that the unemployment rate fell unexpectedly to 5.1%, the lowest level since 2001. Employment again was strong posting a 376,000 (1.9% y/y) rise and the labor force rose 360,000 (1.4% y/y). The labor force participation rate moved higher for the second month to 66.1% as the number of dropouts from the force fell for the second month. Growth in dropouts fell to 0.8% y/y, down from the high of 3.7% late in 2003.
The index of aggregate hours worked (employment times hours worked) rose a slight 0.1% (2.3% y/y) and the gain in April was scaled back to 0.6% due to a downward revision to the length of the workweek. The level of hours worked so far in 2Q is up 3.4% (AR) from 1Q05.
The increase in average hourly earnings slowed to 0.2% though earnings in manufacturing rose a strong 0.4% (2.7% y/y).
What&#39;s Driving Wage Inequality? The Effects of Technical Change on the Labor Market from the Federal Reserve Bank of Richmond can be found <a href="http://www.rich.frb.org/publications/economic_research/annual_report/2004/index.cfm"> 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/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">May</th>
<th scope="col">April</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">Payroll Employment</td>
<td>78,000</td>
<td>274,000</td>
<td>1.5%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-7,000</td>
<td>-9,000</td>
<td>-0.3%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.6%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.1%</td>
<td>5.2%</td>
<td>5.6%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
</body>
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Non-farm payrolls increased just 78,000 in May, the weakest rise since 2003. The prior month's strong gain was revised slightly higher but March was revised lower. Consensus expectations had been for a 180,000 May increase. Widespread [...]

U.S. Job Gain Well Short of Expectations

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

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

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Tian Yong Woon

In this week’s Letter, we examine the first-round price impacts of the surge in oil prices stemming from the ongoing Middle East conflict in Asia. Despite recent rhetoric and reports suggesting a potentially swift resolution, the conflict continues to unfold, with a ceasefire hanging in the balance, and with some measures of shipping volumes through the Strait of Hormuz still reduced to a trickle. At the same time, crude oil prices have been whipsawing amid shifting market perceptions about the persistence of the current supply shock (chart 1). The initial effects of higher oil prices are already showing up in hard data, particularly in energy- and fuel-related inflation across Indonesia, South Korea, and Vietnam (chart 2). In response, several governments have rolled out sizeable subsidy programmes to cushion rising energy costs, though these measures come with significant fiscal strain.

We also assess recent consumer inflation expectations in South Korea and Taiwan, which show early signs of edging higher (chart 3), although there is as yet no clear evidence of a meaningful unanchoring. To add further nuance, our latest Blue Chip survey suggests that most panellists expect only a limited and temporary pass-through from higher energy prices to core inflation, though a non-trivial minority anticipate a more persistent effect (chart 4). On the policy front, respondents broadly expect central banks to delay easing while avoiding outright tightening, with outcomes likely to diverge across regions (chart 5). In the near term, upcoming policy decisions in India, New Zealand, and South Korea—alongside other key data releases—will provide a useful test of these expectations (chart 6).

**The Middle East conflict**
The Middle East conflict continues to rage, with IMF-tracked shipping volumes through the Strait of Hormuz still reduced to a trickle. Meanwhile, crude oil prices remain volatile, gyrating alongside shifting perceptions over how soon normal oil flows might resume. In reality, there is still little sign of a substantive resolution, and no agreement to fully reopen the strait appears imminent, suggesting that oil flows are likely to remain constrained at low levels in the near term. That said, some investors are closely monitoring developments following reports of discussions around a potential 45-day ceasefire, which could pave the way toward a more lasting resolution. Until then, and absent any meaningful supply relief, crude oil prices—and by extension, energy-related inflation—are likely to face continued upward pressure, particularly for oil-dependent, importing economies.

260406T1.jpg

**Initial price impacts**
The initial inflation concerns among policymakers and investors stemming from the surge in oil prices are now beginning to show up in the data, as illustrated in chart 2. The latest March readings—capturing the period after the onset of the Middle East conflict—already point to a sharp acceleration in energy-related prices on a year-ago basis. Indonesia’s energy CPI basket has risen by around 9%, while diesel prices in South Korea have jumped 17%. Vietnam’s retail gasoline prices have seen an even more pronounced increase, at roughly 25.6%. Given the scale of these price surges, and their direct impact on everyday essentials—particularly fuel for daily commutes and broader economic activity—governments across Asia have begun rolling out sizeable subsidy programmes. These measures, often implemented at significant fiscal cost, aim to cushion the burden on households and firms. For instance, South Korea’s finance ministry proposed a supplementary budget of around $17.3 billion in late March to support low-income households, youth, and businesses amid higher oil prices, with approval expected by April 10. Meanwhile, Indonesia has allocated approximately $22.4 billion toward energy subsidies and support for selected energy and utilities firms to help keep prices affordable.

260406T2.jpg

**Consumer inflation expectations**
What policymakers are likely to focus on—beyond the immediate price impacts—is how the recent surge in oil prices feeds into inflation expectations. If left unanchored, these expectations could pose a far greater challenge than the supply-driven price shock itself, including reduced monetary policy effectiveness in reining in inflation and the risk of a self-fulfilling inflation cycle—though it is worth noting that such dynamics are not yet close to materialising. So far, there are some early, albeit inconclusive, signs that near-term consumer inflation expectations are beginning to drift higher in certain economies. As shown in chart 3, one-year-ahead inflation expectations edged up to 2.7% in March, while in Taiwan, consumer sentiment regarding domestic price trends over the next six months has turned notably more pessimistic relative to overall confidence.

260406T3.jpg

**The latest Blue Chip survey**
Turning to investor perspectives on how higher energy prices may feed into inflation, our special questions in the latest Blue Chip Financial Forecasts (BCFF) survey offer some useful nuance. As shown in chart 4, around two-thirds of panellists expect only a limited and temporary pass-through from higher oil prices to core inflation. That said, a non-trivial minority (31%) anticipate a more moderate and persistent pass-through. This is notable given the focus on core inflation, and underscores how energy prices can generate second-round effects even in typically non-energy components, reflecting the pervasive role of energy in everyday economic activity—from manufacturing to the upkeep of a wide range of goods and services.

260406T4.jpg

Delving deeper, we also asked panellists about their views on the prospective path of central bank policy should energy-driven inflation prove persistent. As shown in chart 5, responses broadly coalesce around two themes: central banks are likely to delay easing rather than tighten, and policy responses will vary meaningfully across regions. The former is already playing out to some extent in recent central bank decisions across Asia, with several explicitly citing the ongoing Middle East conflict as a reason to remain vigilant on inflation and refrain from easing policy prematurely. As for the latter, there are already signs of divergence in how different central banks are approaching the situation.

260406T5.jpg

**The week ahead**
Looking to the week ahead, there will be ample opportunities to assess whether investor expectations for central bank policy moves play out across Asia, with several rate decisions due—most notably in India, New Zealand, and South Korea. Also on the docket are China’s March CPI print and a range of Japan-related releases. Policymakers are likely to remain focused on balancing inflation control with supporting growth and maintaining currency stability. For now, and absent offsetting domestic factors, expectations for further near-term easing have been tempered by rising inflation risks. In China, recent CPI readings point to a modest pickup, while producer price deflation has begun to ease after a prolonged period of weak or negative inflation.

260406T6.jpg

Asia

Economic Letter from Asia: First-Round Effects

Michael J. Moran

260403A.jpg

260403B.jpg

The report on payroll employment for March was impressive when viewed in isolation. Job growth was strong at 178,000, and the advance was broadly based. The construction and manufacturing sectors both posted solid gains, and the service-producing sector registered its firmest performance in more than a year. However, the gain might be viewed as a continuation of an unusual bout of random volatility. The March advance followed a notable drop in February (-133,000, revised down from -92,000), which followed an upside surprise in January (160,000, revised up from 126,000).

To be sure, statistical noise has been a factor in the past three months, but the results also represent an encouraging shift in job growth from that in the second half of last year, when employment rose only marginally in the third quarter and fell in the fourth. The net change in the past three months seems to signal that job growth is not drying up. The net advance so far this year is far from brisk, but it is clearly in the plus column and noticeably better than results in late 2025.

The unemployment rate also might be viewed as favorable, as it dipped 0.1 percentage point to 4.3%, although it was a “soft” decline. That is, employment as measured by the household survey declined 64,000, but the size of the labor force fell by a larger amount (off 396,000). Still, the jobless rate has climbed only modestly higher since the labor market started to ease in 2023, and it has inched lower in the past few months.

Unemployment has been contained despite modest hiring because layoffs also have been light. Initial claims for unemployment benefits have moved sideways in the past few years, indicating no change in the pace of layoffs. This pattern is confirmed by terminations data in the report on job openings and labor turnover (JOLTs) from the Bureau of Labor Statistics.

A supply-side shift in the labor market also has helped to contain the unemployment rate. Growth in the size of the labor force has slowed, and with fewer individuals seeking employment, those searching are more easily absorbed. Measures of the size of the labor force can be difficult to assess because there are breaks in the series every year. The Bureau of Labor Statistics adjusts the population controls used in its estimating procedure every January without revising past data to align with the new estimates. Thus, every January involves a discontinuity in the series, which will distort year-over-year changes.

However, Haver Analytics maintains a smoothed series originally developed by BLS to eliminate the breaks in the labor force data. As shown in the chart below, the smoothed series on the size of the labor force had been growing at a pace centered on 1.2% through 2022, but it has slowed irregularly since then (an observation for October is not available because of limited data collection during the government shutdown). The overall labor force is still growing, but the slower pace means fewer individuals looking for work, which most likely results in fewer being counted as unemployed.

The BLS collects data every month on both native-born and foreign-born individuals in the labor force. The breaks in these series are an issue, and Haver does not maintain smoothed series. However, the use of moving averages achieves enough smoothing to provide a sense of underlying changes. The native-born labor force has moved erratically in the past couple of years, but it has continued to advance. The foreign-born labor force, in contrast, seems to have peaked in mid-2025 and has generally declined since then.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

260403C.jpg

260403D.jpg

- The jump of 178,000 in payroll employment in March easily exceeded the expected gain of 51,000.
- Following a net gain in January and February, the employment setting seems to have brightened slightly.
- A dip in the unemployment rate continued the recent pattern of marginal changes.

Payroll Employment: Another Surprise in March, The Third Consecutive

Robert Brusca

260403E.jpg

French manufacturing industrial production was flat in February after a January rebound; output rose by 0.2% following a 0.8% decline in December.

The components of industrial production in February showed 2.6% increase in consumer durables, a 0.4% increase in consumer nondurables, flat output from capital goods, and a 0.7% month to month decline in intermediate output.

Sequentially, French output had been growing at a slow, steady pace of 0.8% at an annual rate over both 12 months and six months, but then slipped to a 6.1% contraction at an annual rate over three months. Consumer durable goods output on this span shows consistent increases, but there are no trends to clear acceleration or deceleration. Consumer nondurables trace an accelerating path of moderate means from -1.8% over 12 months, to -0.4% over six months, and then rising at a 5.5% annual rate over three months. Capital goods output is moving in the opposite direction, growing by 3.4% over 12 months, slowing to a 0.7% annual pace over six months, and then contracting at a 9.5% annual rate over three months. Intermediate goods output is falling at 0.8% pace over 12 months, but then it switches to an expansion rate of 0.8% over six months and 0.6% and over three months. There's nothing remarkable about these patterns, except there's some acceleration, some deceleration, and a lot of mulling about at low growth rates.

As a separate item, French auto production is slipping and decelerating, falling by 7.1% at an annual rate over 12 months, falling at a 7.9% pace over six months, and then plunging at a 19.3% annual rate over three months. On these same horizons, motor vehicle registrations fall by 14.7% over 12 months; the weakness pares back to an 11.2% annual rate decline over six months, and then it steps up to a 22.1% decline at an annual rate over three months. French demand for autos is not in good shape.

In the quarter to date—now two months into the first quarter—manufacturing industrial production is falling at a 0.8% annual rate. That pace is boosted by 9.4% annual rate gain in consumer durables output but restrained by just a 0.2% annual rate increase in consumer nondurable goods. Capital goods output is falling at a 1.9% annual rate, while intermediate goods output is falling at a 1% annual rate. Also in the quarter to date, automobile production is plunging at a 24.3% annual rate, while on the demand side, motor vehicle registrations are falling at a 15% annual rate.

French manufacturing data are somewhat confusing. The chart shows that the industrial production trend has been showing consistent increases over 12 months, but it has recently been pulling back relatively sharply. On the other hand, the manufacturing PMI for France has been consistently negative going back to mid-2022 and only in early 2026 has the manufacturing PMI been posting some values above the 50% mark, indicating that output was starting to actually expand. In March, the PMI reading for manufacturing has slipped back by the thinnest margin below the 50% mark.

260403.jpg

Of course, events in the Middle East make everything more speculative, with the war effectively closing the Strait of Hormuz and no certainty about how or when that is going to be sorted out. In the meantime, the potential threat of ongoing oil price pressures has put both the ECB and the Bank of England in a position to be more wary with policy, and they warned markets about the potential for rate hikes as soon as their next meetings are engaged. That also raises questions about the outlook for growth. But we continue to track and chronicle trends in the data. It's also quite clear that we could have events that will play out that could completely undermine these trends before they get a chance to run to conclusion. It's an important time to be wary and watch all developments—a lot is in play.

France

French IP Waffles

Kathleen Stephansen, CBE

260402A5.jpg

260402B5.jpg

Initial claims for unemployment insurance declined by 9,000 to 202,000 in the week ending March 28, from 211,000 in the week ending March 21, revised from 210,000. The four-week average declined 3,000 to 207,750 in the week ending March 28, from 210,750 the March 21 week, revised from 210,500. The Forecast Survey looked for 212,000 claims to have been filed.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 25,000 to 1.841 million in the week ending March 21, from 1.816 million in the week ending March 14. The four-week moving average declined to 1.839 million in the latest week from 1.846 million in the March 14 week. This is the lowest level for this average since September 28, 2024 when it was 1.834 million. The insured unemployment rate remained at 1.2% in the week of March 21. It has remained at that level since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending March 14, the highest unemployment rates were in Rhode Island (2.83%), New Jersey (2.73%), Massachusetts (2.66%), Washington (2.39%), Minnesota (2.31%), California (2.17%), and New York (2.01%). The lowest rates were in Florida (0.31%), Louisiana (0.32%), Arkansas (0.36%), Alabama (0.38%), and North Carolina (0.40%). Rates in other notable states include Illinois (1.99%), Connecticut (1.82%), Pennsylvania (1.72%), and Texas (1.07%). These state data are not seasonally adjusted.

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

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- New claims declined by 9,000 to 202,000.
- Continuing claims rose by 25,000 to 1.841 million.
- The insured unemployment rate remained at 1.2%.

U.S. Initial Unemployment Claims Edged Down in the Week of March 28

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The S&P manufacturing PMIs for March showed improvements in 44.4% of the 18 reporters. The median reading for the month was at 50.9, indicating that expanding output was the median reading through the period. The median change showed a small step back of 0.1 diffusion points month-to-month.

Sequentially, looking at average yearly activity compared to a year ago, six months compared to 12 months, and three months compared to six months, we see progress in train. For three months compared to six months, the proportion of reporters showing improvement is 72.2%. For these reporters, over six months compared to 12 months, there is a 61.1% improvement proportion, while for 12 months compared to 12 months ago, there is only a 27.8% improvement.

The median reading over three months on average is 50.7, while the median reading over six months is 50.0 and the median reading over 12 months is 49.4. These readings show a very slow but steady improvement in manufacturing over this horizon.

In addition, we calculate the queue percentile standings for each reporter—that is, the level of the current diffusion index compared to all of the observations back to January 2022, expressing the final number as the percentile standing for the current month in that queue. On that basis, the median percentile standing for this group of reporters is 76.5%. It tells us that the median standing is in the top 25 percentile of all the readings since January 2022 to date. That's a reasonably good result. For the euro area, the queue percentile standing is at the 89.8 percentile, while for Germany it's at its 91.8 percentile. For the Monetary Union and for Germany, the current numbers are some of the best we've seen during this period. However, that doesn't mean that they're necessarily stellar readings.

**PMI diffusion vs. PMI rank standings**
German diffusion in manufacturing is 52.2 in March; for the EMU it is 51.6. Germany posts the fourth-highest PMI rank standing and the fifth highest raw standing in March. The highest standing among all reporters is 52.6 from South Korea. This is a period in which no country was posting very strong manufacturing results. In fact, the United States, with a manufacturing PMI rank standing of 79.6, has a diffusion reading in March just a tick below Germany’s whose queue standing at 91.8 seems miles ahead of the U.S.—but it isn’t. Remember that the queue standings are about relative positioning.

Looking at the details, we see that below-median rank readings were logged by Mexico, Russia, India, Brazil, Indonesia, and Turkey. The Asian markets and developing economies seem to have a harder time working up to the standards achieved by other countries.

We also have averages by certain groups of countries. For example, the U.S., the U.K., the Monetary Union, Canada, and Japan—an expanded G10 groping—had an average reading of 51.3 in March, and for that group of countries, the improvements have been steady from 12 months to six months to three months. For the BRIC countries in March, the average standing was 50.4, and for that group there has been a very slight ongoing erosion. For the Asian group, on average, the March reading is 51.2, and there has been a progression to stronger readings from 49.9 over 12 months to 50.5 over six months and to 50.8 over three months.

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On balance, manufacturing was quite uneven in March; however, there's a progression of improvement that is still in place. But with rising oil prices, war in Iran, and lots of knock-on effects to supply trains, it's likely that these readings are going to fall on harder times in the months ahead—unless the Iran war can be wrapped up in very, very, short order. According to the Baltic Dry index, there hasn't been much reduction in global shipping of dry goods. That index excludes oil and other wet goods shipments that clearly have been impeded. However, giving it more time, we may see that the dry index begins to show some difficulties.

Economy in Brief

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