Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050107b.jpg" width="353">
Non-farm payrolls in December rose 157,000 following an upwardly revised gain of 137,000 in November. Consensus expectations had been for a 175,000 December increase. Payrolls have risen in each month since September of 2003 and the average monthly gain during that period was 155,000.
Hiring was strongest last month in selected private service producing industries, up 115,000 (2.0% y/y). Jobs in the financial sector rose 14,000 m/m (1.8% y/y) and professional &amp; business services rose 41,000 (3.4% y/y). Jobs in education &amp; health rose 47,000 (2.4% y/y) and wholesale trade jobs rose 17,000 (1.7% y/y). Gains elsewhere were scattered as indicated by the one month diffusion index for private payrolls of 57.6. While improved from the 2003 figure of 42.9%, this breadth of job gain figure will range between 65 and 70 when the labor market is strongest.
Factory sector payrolls rose modestly for the first gain in four months and the one month diffusion index of job gain at 51.2 crept above the break even line of 50 for the first time since July.
Government employment rose 29,000 (0.8% y/y). Federal government jobs fell 7,000 (-0.5% y/y) but that was offset by increased state (+1.0% y/y) and local (+1.0% y/y) hiring.
The index of aggregate hours worked (employment times hours worked) rose 0.4% (+2.9% y/y) in December and the index rose at a 2.1% annual rate in the fourth quarter, down from 3.1% in 3Q.
Average hourly earnings rose the same 0.1% (2.7% y/y) as in November. In the service sector, small 2.3% y/y gains in the financial and in the professional &amp; business service industries were offset by a strong 3.8% gain in information services. Manufacturing earnings rose 2.7% last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050107a.jpg" width="353">
Revised figures from the separate household survey indicate that the unemployment rate held steady at 5.4%. Employment fell 137,000 (+1.3% y/y) but the labor force also fell by 110,000 (1.0% y/y). The labor force participation rate dipped slightly to 66.0% and that was the average for 2004 versus 66.2% in 2003 and 66.6% in 2002.
Today&#39;s comments from Federal Reserve Board Governor Ben S. Bernanke on &quot;The Transition from Academic to Policy Maker&quot; can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050107/default.htm"> here</a>.
&quot;Do Actions Speak Louder Than Words? The Response of Asset Prices to Monetary Policy Actions and Statements&quot; is a Working Paper from the Federal Reserve Board and it is available <a href="http://www.federalreserve.gov/pubs/feds/2004/200466/200466pap.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</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>157,000</td>
<td>137,000</td>
<td>1.7%</td>
<td>1.0%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>3,000</td>
<td>-9,000</td>
<td>0.5%</td>
<td>-1.0%</td>
<td>-4.8%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.7</td>
<td>33.6</td>
<td>33.8</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.7%</td>
<td>2.7%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.4%</td>
<td>5.4%</td>
<td>5.7%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm payrolls in December rose 157,000 following an upwardly revised gain of 137,000 in November. Consensus expectations had been for a 175,000 December increase. Payrolls have risen in each month since September of 2003 and the [...]

Scattered Industry Gains Lift U.S. Employment Again

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050106b.jpg" width="353">
Confidence surveys in the Euro-Zone showed some slight erosion in December, according to data issued today by the European Commission. The most widely followed measure, industrial confidence, slipped from -3 to -4 (balance of favorable less unfavorable survey responses). Consumer confidence held steady at -13, and the overall Economic Sentiment Index fell 0.6%.
Press reports tended to emphasize the declines in these data, which, though modest, came in on the short side of expectations. The industrial confidence gauge, for instance, was forecast at -3 by market economists. At the same time, a quick glance at both the accompanying chart and table shows that the latest confidence data are far from weak by recent historical comparisons. The &quot;decline&quot; in Economic Sentiment still left it above the 2004 average and more than 3% above the year-ago level. Industrial confidence, at -4 in December, was similarly firmer than the year&#39;s average of -5 and the December 2003 reading of -8. Thus, it would seem important not to give excessive weight to this latest one-month movement in judging prospects for the European economy early in the new year.
Another issue discussed in press reports as impacting economic sentiment and confidence is the exchange rate. Since trade has very significant role in European economic activity, some argue that these survey results reflect the recent strength in the euro, which would be expected to slow those economies. We agree that&#39;s a logical position, but the actual performance of exchange rate and sentiment data don&#39;t bear this out. There is virtually no correlation between the euro and either the economic sentiment index or industrial confidence. As evident in the graph, for some periods, it does appear that swings in the currency drive sentiment, while at other times, the causation must run the other way. The correlation ratio is negative overall in the last 15 years, but over the last three years, currency and sentiment have been positively related. This is another example that seemingly straightforward rules of thumb about economic relationships don&#39;t always pan out.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Dec 2004</th>
<th scope="col">Nov 2004</th>
<th scope="col">Oct 2004</th>
<th scope="col">Dec 2003</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">Economic Sentiment (Long-Term Average = 100)*</td>
<td>100.3</td>
<td>100.9</td>
<td>101.4</td>
<td>97.2</td>
<td>100.1</td>
<td>93.5</td>
<td>94.4</td>
</tr>
<tr>
<td class="firstcol">Industrial Confidence (Balance)*</td>
<td>-4</td>
<td>-3</td>
<td>-3</td>
<td>-8</td>
<td>-5</td>
<td>-10</td>
<td>-11</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence (Balance)*</td>
<td>-13</td>
<td>-13</td>
<td>-14</td>
<td>-16</td>
<td>-14</td>
<td>-18</td>
<td>-11</td>
</tr>
<tr>
<td class="firstcol">Exchange Rate ($/Euro)</td>
<td>1.3408</td>
<td>1.2991</td>
<td>1.2490</td>
<td>1.2286</td>
<td>1.2433</td>
<td>1.1309</td>
<td>0.9449</td>
</tr>
</tbody>
</table>
</body>
</html>

Confidence surveys in the Euro-Zone showed some slight erosion in December, according to data issued today by the European Commission. The most widely followed measure, industrial confidence, slipped from -3 to -4 (balance of [...]

European Industrial Confidence Edges Lower in December

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050106a.jpg" width="353">
Initial claims for unemployment insurance rose 43,000 to 364,000 last week following a deepened 10,000 decline the week prior. Consensus expectations had been for 333,000 claims.
The increase probably was influenced by the difficulties of seasonal adjustment during the Holiday season.
The four week moving average of initial claims rose slightly to 333,000 (-7.3% y/y).
During the last ten years there has been a (negative) 82% correlation between the level of initial claims and the y/y change in payroll employment.
Continuing claims for unemployment insurance rose sharply for the second consecutive week, up 61,000 following an upwardly revised 53,000 increase the week prior.
The insured rate of unemployment remained at 2.2%, where it&#39;s been since early October.
Today&#39;s speech by Federal Reserve Board Governor Donald L. Kohn titled &quot;Crisis Management: The Known, The Unknown and the Unknowable&quot; is available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050106/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">01/01/05</th>
<th scope="col">12/25/04</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">Initial Claims</td>
<td>364</td>
<td>321</td>
<td>0.0%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,840</td>
<td>-14.0%</td>
<td></td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose 43,000 to 364,000 last week following a deepened 10,000 decline the week prior. Consensus expectations had been for 333,000 claims. The increase probably was influenced by the [...]

Initial Unemployment Insurance Claims Rose Sharply

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041231a.jpg" width="353">
Initial claims for unemployment insurance rose 43,000 to 364,000 last week following a deepened 10,000 decline the week prior. Consensus expectations had been for 333,000 claims.
The increase probably was influenced by the difficulties of seasonal adjustment during the Holiday season.
The four week moving average of initial claims rose slightly to 333,000 (-7.3% y/y).
During the last ten years there has been a (negative) 82% correlation between the level of initial claims and the y/y change in payroll employment.
Continuing claims for unemployment insurance rose sharply for the second consecutive week, up 61,000 following an upwardly revised 53,000 increase the week prior.
The insured rate of unemployment remained at 2.2%, where it&#39;s been since early October.
Today&#39;s speech by Federal Reserve Board Governor Donald L. Kohn titled &quot;Crisis Management: The Known, The Unknown and the Unknowable&quot; is available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050106/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">01/01/05</th>
<th scope="col">12/25/04</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">Initial Claims</td>
<td>364</td>
<td>321</td>
<td>0.0%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,840</td>
<td>-14.0%</td>
<td></td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050105e.jpg" width="353">
Services activity in the Euro-Zone slowed progressively throughout 2004, according the latest PMI surveys published by NTC Research in London. The December index, at 52.65, rose a minimal 0.07 point from November&#39;s 15-month low. Notably, though, the components covering new business and expectations gained more distinctly in the month, hinting that better activity rates may develop during this New Year. Employment had a modest increase and managed to remain slightly in positive territory (above 50%).
The performance was mixed by country, but all the countries maintained at least some degree of net growth, that is, an index level above 50%. Germany and Italy backtracked a bit, but France and Spain experienced nice advances.
The companion manufacturing survey, which was published Monday, had a modest 1.00-point increase in Europe. The November level, as with the services sector, was the lowest in more than a year. The December increase may suggest that the contractionary impact of the strong euro and high energy prices is beginning to ease.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">PMI Services Index</th>
<th scope="col">Nov 2004</th>
<th scope="col">Dec 2004</th>
<th scope="col">Change</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Euro-Zone</td>
<td>52.58</td>
<td>52.65</td>
<td>+0.07</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Employment</td>
<td>50.52</td>
<td>50.62</td>
<td>+0.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; New Business</td>
<td>50.70</td>
<td>51.32</td>
<td>+0.62</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Expectations</td>
<td>61.39</td>
<td>63.16</td>
<td>+1.77</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>51.32</td>
<td>50.96</td>
<td>-0.36</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>54.01</td>
<td>54.86</td>
<td>+0.85</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>53.10</td>
<td>52.69</td>
<td>-0.41</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>52.26</td>
<td>53.03</td>
<td>+0.77</td>
</tr>
<tr>
<td class="firstcol">Memo: PMI Euro-Zone Manufacturing</td>
<td>50.43</td>
<td>51.43</td>
<td>+1.00</td>
</tr>
</tbody>
</table>
</body>
</html>

Services activity in the Euro-Zone slowed progressively throughout 2004, according the latest PMI surveys published by NTC Research in London. The December index, at 52.65, rose a minimal 0.07 point from November's 15-month low. [...]

European Industry Shows Modest Pickup in December After Months of Slowdown

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050105c.jpg" width="353">
Mortgage applications virtually dried up during the latest week according to the Mortgage Bankers Association (MBA) Survey. A 10.6% decline during the last week of 2004 capped off several weeks of decline, dropped total applications to the lowest level since June and pulled the average level of activity during the year down nearly one third versus 2003.
Applications to purchase weakened notably and fell 13.7% to the lowest level since February. Nevertheless, the average level of purchase applications rose 15.0% last year versus 2003. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Refi&#39;s fell a lesser 5.7% w/w but that followed a 7.9% decline the prior week and put an end to a year which saw applications to refinance halve versus 2003.
The effective interest rate on a conventional 30-year mortgage fell slightly to 5.94% versus an average 6.05% during 2004. The effective rate on a 15-year mortgage was 5.43% last week versus the 2004 average of 5.47%.
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>.
The minutes of the latest Federal Open Market Committee meeting can be found <a href="http://www.federalreserve.gov/fomc/minutes/20041214.htm"> here</a>.
&quot;What Determines the Credit Spread?&quot; from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2004/el2004-36.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">01/01/05</th>
<th scope="col">12/25/04</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 class="odd">
<td class="firstcol">Total Market Index</td>
<td>605.7</td>
<td>677.4</td>
<td>1.0%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>417.3</td>
<td>483.8</td>
<td>4.0%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,701.3</td>
<td>1,803.9</td>
<td>-3.1%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Mortgage applications virtually dried up during the latest week according to the Mortgage Bankers Association (MBA) Survey. A 10.6% decline during the last week of 2004 capped off several weeks of decline, dropped total applications [...]

Total Mortgage Applications Down Sharply

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050105d.jpg" width="353">
According to Challenger, Gray &amp; Christmas, job cut announcements reported in December rose 4.3% from November and ended the year up 17.2% from a year earlier. Despite these gains, total job cut announcements in 2004 fell 15.9% versus 2003, down for the third consecutive year and were nearly half the peak level in 2001.
During the last ten years there has been an 86% (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.
Increases in job cut announcements were widespread last month, although they halved in the E-Commerce &amp; Dot com industry and fell also in electronics and services.

<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">Dec</th>
<th scope="col">Nov</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>109,045</td>
<td>104,530</td>
<td>17.2%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
</body>
</html>

According to Challenger, Gray & Christmas, job cut announcements reported in December rose 4.3% from November and ended the year up 17.2% from a year earlier. Despite these gains, total job cut announcements in 2004 fell 15.9% versus [...]

Challenger Layoff Count Rose Further

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

**Global shipping costs**
The Baltic Dirty Tanker Index has surged to multi-year highs, reflecting a sharp tightening in global oil shipping markets. The primary driver is the escalation in Middle East tensions, particularly the effective disruption to flows through the Strait of Hormuz—a critical artery for roughly a fifth of global oil trade. Heightened security risks, including missile and drone attacks on vessels and port infrastructure, have forced rerouting, increased insurance premia and reduced effective tanker supply. At the same time, longer voyage distances—especially for Gulf exports diverted around the Cape—are tying up capacity and amplifying rate pressures. The result is a classic squeeze: constrained supply of available ships meeting elevated demand for transport, pushing freight costs sharply higher.

260401Z1.jpg

**Supply Chain Bottlenecks**
Flash PMI data point to a renewed build-up of supply chain pressures across the major economies. Supplier delivery times—where readings below 50 indicate slower deliveries—have deteriorated in both the US and UK, with the latter showing a particularly sharp decline. The euro area, while more stable, is also drifting in the same direction. This broad-based softening suggests that the disruptions visible in energy and shipping markets are now feeding into the real economy. Longer delivery times are typically an early indicator of tightening supply conditions, rising input costs and, ultimately, renewed pipeline inflation pressures. While not yet at the extremes seen during the pandemic, the direction of travel is clear: supply chains are becoming less efficient just as geopolitical risks intensify.

260401Z2.jpg

**Policy Uncertainty Versus Market Volatility**
A striking divergence is emerging between policy uncertainty and financial market volatility. The US Economic Policy Uncertainty Index has risen sharply, reflecting the intensifying geopolitical backdrop, trade disruptions and an increasingly complex policy environment. By contrast, the VIX—while off its lows—remains relatively contained by historical standards. This gap suggests that financial markets may be underpricing the scale and persistence of current risks. Either uncertainty begins to recede, or market volatility has further to rise. For now, the message is clear: policymakers are operating in a far more uncertain world than markets appear to be discounting.

260401Z3.jpg

**Oil Prices and Monetary Policy** 
The sharp rise in oil prices is once again feeding directly into short-term interest rate expectations, with a strong positive correlation evident between WTI and US 2-year Treasury yields. As energy prices surge, markets are reassessing the near-term inflation outlook and the likely policy response, pushing yields higher. This reflects a familiar dynamic: energy shocks tighten financial conditions not just directly, but via expectations of more restrictive monetary policy. That said, there are important caveats. Medium-term market-based inflation expectations remain relatively well contained, suggesting credibility in central banks’ ability to anchor inflation over time. Moreover, recent communication from Fed Chair Powell indicates that the Federal Reserve is in no immediate hurry to raise rates, pointing instead to a more cautious, data-dependent approach in the face of heightened uncertainty.

260401Z4.jpg

**Loose Labour Markets**
Wage growth across the US, UK and euro area continues to moderate, pointing to a gradual loosening in labour market conditions. The sharp post-pandemic surge in wage pressures—particularly pronounced in the US—has clearly faded, with all three regions now on a downward trajectory. This matters in the current context: while the oil shock is pushing headline inflation higher and complicating the near-term outlook, easing wage dynamics reduce the risk of persistent second-round effects. In turn, this lessens the urgency for central banks to respond aggressively with tighter policy. The result is a more nuanced policy backdrop—one where energy-driven inflation pressures are rising, but underlying domestic cost pressures are moving in the opposite direction.

260401Z5.jpg

**Headline Inflation in Advanced Economies**
Despite the recent energy shock, broader inflation dynamics across advanced economies remain relatively well behaved. The euro area HICP flash estimate rose from 1.9% in February to 2.5% in March, driven largely by higher energy prices. However, core inflation edged down to 2.3% from 2.4%, suggesting that pass-through into underlying price pressures remains limited for now. More generally, inflation across many advanced economies continues to hover close to central bank targets—a marked contrast to the peaks seen in 2022. While higher oil prices will almost certainly continue to lift headline inflation in the near term, and the risk is clearly tilted toward further upside, the broader picture for now remains one of relatively contained underlying pressures. This suggests the current shock is more likely to complicate the disinflation process—potentially slowing or interrupting it—rather than decisively reversing it, though the balance of risks has become less favourable.

260401Z6.jpg

Amid tentative signs of de-escalation from the US administration over the past 48 hours—including suggestions that the conflict with Iran could conclude relatively quickly—financial markets have begun to retrace some of last week’s sharp repricing of Middle East risk. Oil prices have come off their highs, while equities and bonds have rallied as risk premia ease. That said, the earlier phase of the week saw a decisive adjustment: oil surged, front-end yields moved higher, and uncertainty rose as investors grappled with the implications of disrupted energy flows. Even now, the overall adjustment has been uneven—volatility has picked up, but not to levels typically associated with sustained geopolitical stress—raising questions about how fully markets are internalising both the risks and the rapidly shifting outlook. Our charts this week capture these cross-currents. Tanker rates have spiked as shipping routes are disrupted and capacity tightens (chart 1), while PMI delivery times point to early signs of supply chain strain feeding into the real economy (chart 2). At the same time, the divergence between elevated policy uncertainty and relatively contained market volatility suggests there could have been a degree of complacency (chart 3). The rise in oil prices is already feeding into higher short-term yields, though this is being tempered by cooling labour markets, anchored inflation expectations and more cautious central bank signalling (charts 4 and 5). Meanwhile, euro area flash CPI has picked up, but core inflation remains relatively benign, suggesting underlying price pressures are still contained for now (chart 6).

Charts of the Week: Strait Stress

Sandy Batten

260401V4.jpg

260401W4.jpg

Total retail sales rebounded in February, rising a larger-than-expected 0.6% m/m (+3.7% y/y) following an upwardly revised 0.1% monthly decline in January (previously -0.2% m/m), according to data from the U.S. Census Bureau. The Action Economics Forecast Survey expected a 0.4% monthly increase. Excluding autos, other sales were up 0.5% m/m (+3.6% y/y), the first monthly increase in three months. The Action Economics Forecast Survey looked for a 0.3% m/m increase.

The control group of sales (those categories that the BEA uses to construct PCE in the national accounts) increased 0.5% m/m in February following a 0.2% increase in January. The January/February average for this variable is 2.1% annualized above the Q4 average. In Q4, the control group rose 2.8% saar from Q3. So, today’s figures point to a slight slowdown in PCE growth in the first quarter. Note, however, that the data released today predates the escalation of the conflict between the US/Israel and Iran which has led to a marked rise in gasoline/energy prices. The increase in energy prices to date, if maintained, could stress household finances and thereby significantly slow consumer spending ahead.

Sales of motor vehicles and parts jumped 1.2% m/m in February, their first monthly gain in three months and their largest monthly increase since last July. Furniture sales declined 1.0% m/m in February while sales of electronics and appliances rose 0.5% m/m. Sales of building materials increased 0.4% m/m, their fourth consecutive monthly gain. Sales at health and personal care stores jumped 2.3% m/m, their first monthly gain in five months. Sales at gasoline stations rose 0.9% m/m in February, their third monthly gain in the past four months, ahead of the sharp price increases that occurred in March. Clothing store sales jumped 2.0% m/m, their first monthly increase in three months. Department store sales gained 3.0% m/m, their first monthly increase in four months. Food sales slumped 1.0% m/m in February, their first monthly decline in three months. Sales of nonstore retailers increased 0.7% m/m in February on top of a 1.4% m/m jump in January. Eating out sales rose 0.4% m/m, their first monthly gain in three months.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

260401X4.jpg

260401Y4.jpg

- Total sales increased 0.6% m/m after a 0.1% m/m decline in January
- Excluding autos, sales increase 0.5% m/m in February after having been unchanged in January.
- Sales of the retail control group that is used to construct PCE rose 0.5% m/m in February.

U.S. Retail Sales Rebounded in February

Winnie Tapasanun

260401J35.jpg

260401K35.jpg

U.S. nonfarm private sector payrolls rose a larger-than-expected 62,000 (0.3% y/y) in March after increases of 66,000 in February (+63,000 initially) and 11,000 in January (unrevised), according to the ADP National Employment Report. The three-month average change was +46,000 in March, up from +38,000 in February and +41,000 in January. The Action Economics Forecast Survey expected a 40,000 increase in March.

Small business hiring (less than 50 employees) climbed a solid 85,000 (0.7% y/y) in March—the ninth straight m/m increase and the largest since August—after a 61,000 gain in February (+60,000 initially), with employment in very small firms (1-19 employees) surging 112,000, the strongest m/m rise since February 2024, and employment in small firms (20-49 employees) down 27,000. Employment at medium-sized firms (50-499 employees) fell 20,000 (-0.4% y/y) in March following a 6,000 decline in February (-7,000 initially) and two consecutive m/m increases. Large business hiring (500+ employees) slipped 4,000 (+1.0% y/y) after an 11,000 February rebound (+10,000 initially).

Service-producing jobs rose 32,000 (0.5% y/y) in March, the 10th straight m/m gain, on top of a 50,000 advance in February (+47,000 initially). March’s rise was led by education & health services (+58,000), followed by information (+16,000), leisure & hospitality (+7,000), financial activities (+4,000), other services (+4,000), and professional & business services (+1,000). To the downside, m/m employment fell in trade, transportation & utilities (-58,000).

Goods-producing employment advanced 30,000 (-0.4% y/y) in March, the biggest m/m increase since October 2022, after a 16,000 rise in February (unrevised). March’s gain was led by construction (+30,000) and natural resources & mining (+11,000), while manufacturing (-11,000) continued to decline.

By region, nonfarm private payroll employment rose m/m in March in the South (+101,000; +0.5% y/y) and West (+16,000; +0.4% y/y). In contrast, employment fell m/m in the Northeast (-29,000; +0.4% y/y) and Midwest (-26,000; -0.1% y/y).

Wage growth for job changers accelerated to a three-month-high 6.6% y/y in March from 6.3% y/y in February, remaining well below a high of 16.1% in April 2022. Wage growth for job stayers held steady at 4.5% y/y for the third consecutive month in March, holding in a narrow 4.4%-4.5% range since April 2025. Pay growth also remained steady in major industries, including financial activities (5.2% y/y), manufacturing (4.9% y/y), construction (4.7% y/y), leisure & hospitality (4.6% y/y), education & health services (4.3% y/y), and professional & business services (4.3% y/y).

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

260401L35.jpg

260401M35.jpg

- Private payrolls +62K in March, ninth straight m/m gain.
- Hiring increase driven by small businesses (+85K), strongest since August.
- Service-sector jobs up (+32K), led by education & health svs. (+58K) and information (+16K), partly offset by trade, transp. & utilities (-58K).
- Goods-producing jobs up (+30K), driven by construction (+30K).
- Wage growth accelerates y/y for job changers (6.6%, a three-month high) but steady for job stayers (4.5%).

U.S. ADP Private Employment Growth in March Above Forecasts

Kathleen Stephansen, CBE

260401A2.jpg

260401B2.jpg

Mortgage applications dropped 10.4% w/w (+14.2% y/y) in the week ending March 27, after declining 10.5% w/w (+25.5% y/y) in the week ending March 20, and by 10.9% w/w in the week ending March 13, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 2.6% w/w (+0.8% y/y) in the latest week, after dropping 5.4% w/w (+5.0% y/y) in the week ending March 20.  Applications for loan refinancing plunged 17.3% w/w (+33.2% y/y) in the March 27 week, following a drop of 14.6% w/w (+52.2% y/y) in the week ending March 20, and a decline of 18.5% w/w in the week ending March 13.

The effective interest rate on a 30-year fixed-rate loan rose 14bps to 6.76% in the week ending March 27 from 6.62% in the week ending March 20. The rate on the 30-year fixed-rate loan has risen 52bps since the February 27 week. The rate on 15-year fixed-rate mortgages rose 5bps to 6.08% in the latest week from 6.03% in the prior week. The 30-year Jumbo rate rose 10bps to 6.71% in the March 27 week from 6.61% in the week ending March 20. The rate on a 5-year ARM dropped 12bps to 5.88% in the latest week from 6.00% in the week ending March 20.

The share of applications for refinancing an existing loan dropped to 45.3% of total applications in the week of March 27 from 49.6% in the March 20 week. The adjustable-rate mortgage (ARM) share of activity eased to 8.0% in the week ending March 27 from 8.1% in the week ending March 20.

The average size of a mortgage loan declined 1.3% w/w (-1.9% y/y) to $389,200 in the week ending March 27, after declining 2.4% w/w (-0.9% y/y) to $394,500 in the week ending March 20. The average size of a purchase loan edged down 0.8% w/w (+0.4% y/y) to $449,400 in the latest week, after declining 0.5% w/w (+2.3% y/y) to $453,200 in the March 20 week. The average size of a loan to refinance a mortgage declined 5.5% w/w (+0.3% y/y) to $316,600 in the March 27 week following a drop of 6.3% w/w (+1.0% y/y) to $334,900 in the March 20 week. Since the week of February 27, the average size of a loan to refinance a mortgage has declined 21.8%.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Both applications for loans to purchase and for loan refinancing dropped in the latest week.
- Interest rate on 30-year fixed-rate loans rose 14bps to 6.76% 
- Average loan size declined.

U.S. Mortgage Applications Dropped in the March 27 Week

Robert Brusca

260401E.jpg

The unemployment rate in the European monetary union picked up to 6.2% in February from 6.1% in January, when it had declined from 6.2% in December. The 6.1% reading is the all-time low, so at 6.2% the unemployment rate remains extremely low in the monetary union.

The number of unemployed in February rose by about 1% in both the EU and the monetary union; however, over broader spans of three months, six months, and 12 months, the number of unemployed is still falling.

February is a low month for the number of reporters on the table showing a decline in the unemployment rate. Among the 12 member reporters listed in the table, only Spain had a lower unemployment rate in February than in January, and Spain continues to show declines in unemployment as it also saw its unemployment rate drop in January and December, as well as on balance over three months, six months, and 12 months. Spain is the only country in the monetary union showing this kind of ongoing progress in reducing unemployment.

For the most part, unemployment rates seem to be stuck at relatively low levels among these 12 monetary union reporters. Four show net declines over 12 months, while six show declines over six months and four show declines over three months. Only three—Austria, Finland, and Luxembourg—report unemployment rates that rank above their respective medians, above a ranking of 50% on data back to 2000.

Although the EMU unemployment rate ticked up in February, it remains exceptionally low. Unemployment in Italy also ticked higher and has the exceptionally low ranking of 0.2%, having just moved up from its all-time low. Country-reported unemployment rates are in the bottom 10 percentile of their range over this period in Spain and Greece. You will remember these as the countries with the structurally highest unemployment rates typically in double digits prior to the formation of the European Union; now the Greek unemployment rate is 8.5% and the Spanish unemployment rate is 9.8%, and they are gradually folding into the community norms.

Despite the uptick in the unemployment rate, it's another excellent unemployment report for the monetary union, with unemployment rates below the medians up and down the line with few exceptions and with both countries brandishing unemployment rates that are substantially below their historic medians. Inflation rate in the monetary union remains broadly controlled, and the progress on the unemployment rate has been spectacular. Despite the other problems that the monetary union has encountered, these are true successes of the formation of the monetary union.

Economy in Brief

Jump to:

Scattered Industry Gains Lift U.S. Employment Again

Scattered Industry Gains Lift U.S. Employment Again

European Industrial Confidence Edges Lower in December

Initial Unemployment Insurance Claims Rose Sharply

Initial Unemployment Insurance Claims Rose Sharply

European Industry Shows Modest Pickup in December After Months of Slowdown

Total Mortgage Applications Down Sharply

Challenger Layoff Count Rose Further