Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041209a.jpg" width="353">
Import prices increased 0.2% last month versus the Consensus expectation for no change, the gain held back by a 2.6% decline in petroleum prices. Yesterday&#39;s price for Brent crude oil of $37.52/bbl. versus the November average of $43.17 heralds another decline this month.
Non-petroleum import prices, however, rose a strong 0.7% in November. Strength reflected a 2.8% (16.0% y/y) increase in prices for industrial materials excluding petroleum, driven by a 27.5% (42.5% y/y) increase in natural gas prices.
But prices for other goods firmed as well. Capital goods prices rose 0.2% (-1.5% y/y) following several months of decline. The decline in computer prices eased to -0.1% (-6.9% y/y) and capital goods prices excluding computers rose 0.3% (+1.3% y/y). That y/y rate of increase has been roughly stable since early 2003. Non-auto consumer goods prices increased 0.1% (+0.4% y/y), the largest monthly increase since February. Motor vehicle &amp; parts prices rose 0.2% (2.1% y/y).
During the last fifteen years there has been a (negative) 47% correlation between the nominal broad foreign exchange value of the U.S. dollar and the y/y change in nonpetroleum import prices.
Export prices rose 0.3% as a 0.4% rise in nonagricultural prices (5.5% y/y) offset a 0.1% decline in agricultural prices (-5.2% y/y).
&quot;Easing Out of the Bank of Japan&#39;s Monetary Easing Policy&quot; from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2004/el2004-33.pdf"> here</a>.
&quot;Considering the Capital Account&quot; from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/iet/20041101/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/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.2%</td>
<td>1.6%</td>
<td>9.5%</td>
<td>2.9%</td>
<td>-2.5%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-2.6%</td>
<td>11.6%</td>
<td>60.4%</td>
<td>21.0%</td>
<td>3.0%</td>
<td>-17.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>3.4%</td>
<td>1.1%</td>
<td>-2.4%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.3%</td>
<td>0.7%</td>
<td>4.3%</td>
<td>1.6%</td>
<td>-1.0%</td>
<td>-0.8%</td>
</tr>
</tbody>
</table>
</body>
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Import prices increased 0.2% last month versus the Consensus expectation for no change, the gain held back by a 2.6% decline in petroleum prices. Yesterday's price for Brent crude oil of $37.52/bbl. versus the November average of [...]

Import Prices Firmer Than Expected in November

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041209d.jpg" width="353">
The net worth of the US household sector rose 10.2% last quarter versus 3Q03. The year to year rate of increase is slower than the 14.4% gain in 1Q04.
The rise was driven by a 10.0% y/y rise in total asset values. Tangible asset values rose 13.1% y/y as the value of real estate holdings surged 15.4%. Financial asset values rose a lesser 8.2%, held back by higher interest rates which lowered the value of treasury issues by 19.1%. Money market share values also fell 11.6%. Higher prices in the stock market helped lift the value of mutual fund shares by 18.1% and the value of corporate equities held directly by 7.5%.
Foreign sector holdings of total US assets rose 20.7% y/y raising the foreign sector&#39;s ownership share of total US financial assets to an upwardly revised 12.7% versus 7.0% ten years ago.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041209c.jpg" width="353">
Growth in total credit market debt outstanding was steady at 7.8%. The federal government and US households continued growing debt at or about a double digit rate and nonfinancial corporations&#39; debt grew just 3.3%.
Total credit market debt owed by the household sector rose 9.8% y/y as home mortgage debt rose 11.5%. Consumer credit rose 4.3%.

<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/FFUNDS/@F2/@F201/@F201.HTM">Flow of Funds</a> (Y/Y Chg.)</th>
<th scope="col">% of Total</th>
<th scope="col">3Q04</th>
<th scope="col">2Q04</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Credit Market Debt Outstanding</td>
<td></td>
<td>7.8%</td>
<td>7.9%</td>
<td>8.6%</td>
<td>7.4%</td>
<td>7.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Federal Government</td>
<td>12%</td>
<td>9.7%</td>
<td>10.6%</td>
<td>10.9%</td>
<td>7.6%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Households</td>
<td>28%</td>
<td>9.8%</td>
<td>9.7%</td>
<td>10.3%</td>
<td>9.6%</td>
<td>8.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Nonfinancial Corporate Business</td>
<td>14%</td>
<td>3.3%</td>
<td>2.6%</td>
<td>3.5%</td>
<td>0.6%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Financial Sectors</td>
<td>32%</td>
<td>7.8%</td>
<td>8.7%</td>
<td>9.8%</td>
<td>9.0%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Total Credit Market Assets</td>
<td></td>
<td>7.8%</td>
<td>7.9%</td>
<td>8.6%</td>
<td>7.4%</td>
<td>7.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Household Sector</td>
<td>6%</td>
<td>8.2%</td>
<td>10.8%</td>
<td>14.1%</td>
<td>-7.0%</td>
<td>-4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Rest of World</td>
<td>13%</td>
<td>20.7%</td>
<td>18.5%</td>
<td>15.9%</td>
<td>16.4%</td>
<td>12.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; US Financial Sectors</td>
<td>77%</td>
<td>6.9%</td>
<td>6.8%</td>
<td>7.9%</td>
<td>7.6%</td>
<td>8.1%</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Net Worth: Households &amp; Nonprofit Organizations (Trillions)</td>
<td></td>
<td>$46.7</td>
<td>$46.1</td>
<td>$44.7</td>
<td>$39.7</td>
<td>$41.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Tangible Assets</td>
<td></td>
<td>$21.7</td>
<td>$20.8</td>
<td>$19.9</td>
<td>$18.2</td>
<td>$16.8</td>
</tr>
</tbody>
</table>
Import Prices Firmer Than Expected in November 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 9, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041209a.jpg" width="353">
Import prices increased 0.2% last month versus the Consensus expectation for no change, the gain held back by a 2.6% decline in petroleum prices. Yesterday&#39;s price for Brent crude oil of $37.52/bbl. versus the November average of $43.17 heralds another decline this month.
Non-petroleum import prices, however, rose a strong 0.7% in November. Strength reflected a 2.8% (16.0% y/y) increase in prices for industrial materials excluding petroleum, driven by a 27.5% (42.5% y/y) increase in natural gas prices.
But prices for other goods firmed as well. Capital goods prices rose 0.2% (-1.5% y/y) following several months of decline. The decline in computer prices eased to -0.1% (-6.9% y/y) and capital goods prices excluding computers rose 0.3% (+1.3% y/y). That y/y rate of increase has been roughly stable since early 2003. Non-auto consumer goods prices increased 0.1% (+0.4% y/y), the largest monthly increase since February. Motor vehicle &amp; parts prices rose 0.2% (2.1% y/y).
During the last fifteen years there has been a (negative) 47% correlation between the nominal broad foreign exchange value of the U.S. dollar and the y/y change in nonpetroleum import prices.
Export prices rose 0.3% as a 0.4% rise in nonagricultural prices (5.5% y/y) offset a 0.1% decline in agricultural prices (-5.2% y/y).
&quot;Easing Out of the Bank of Japan&#39;s Monetary Easing Policy&quot; from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2004/el2004-33.pdf"> here</a>.
&quot;Considering the Capital Account&quot; from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/iet/20041101/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/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.2%</td>
<td>1.6%</td>
<td>9.5%</td>
<td>2.9%</td>
<td>-2.5%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-2.6%</td>
<td>11.6%</td>
<td>60.4%</td>
<td>21.0%</td>
<td>3.0%</td>
<td>-17.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>3.4%</td>
<td>1.1%</td>
<td>-2.4%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.3%</td>
<td>0.7%</td>
<td>4.3%</td>
<td>1.6%</td>
<td>-1.0%</td>
<td>-0.8%</td>
</tr>
</tbody>
</table>
Initial Claims for Unemployment Insurance Rose Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 9, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041209b.jpg" width="353">
Initial unemployment insurance claims unexpectedly rose another 8,000 to 357,000 on top of the 25,000 increase during Thanksgiving week. A decline to 335,000 had been the Consensus expectation. Not seasonally adjusted, claims surged 147,300 last week.
The four week moving average of initial claims rose to 341,250 (-7.8% 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 surged 91,000 following a deepened 38,000 decline the prior week.
The insured rate of unemployment ticked back up to 2.2% from a revised 2.1% the prior week.

<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">12/04/04</th>
<th scope="col">11/27/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>357</td>
<td>349</td>
<td>-5.1%</td>
<td>402</td>
<td>404</td>
<td>406</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,796</td>
<td>-16.2%</td>
<td>3,531</td>
<td>3,570</td>
<td>3,018</td>
</tr>
</tbody>
</table>
</body>
</html>

The net worth of the US household sector rose 10.2% last quarter versus 3Q03. The year to year rate of increase is slower than the 14.4% gain in 1Q04. The rise was driven by a 10.0% y/y rise in total asset values. Tangible asset [...]

Households' Net Worth Improved Further

Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208c.jpg" width="353">
Revised data for Japan&#39;s Q3 GDP were reported today by the Cabinet Office. This is the usual &quot;second preliminary&quot; report, but it also included the previously announced shift to chain-linking and the rebasing from 1995 to 2000. Now, technically as in other countries that use chain-weighting, there is no &quot;base year&quot;. 2000 is known as the &quot;reference year&quot; and only means that is the period when price indexes are set equal to 100, and therefore nominal and &quot;real&quot; chain-weighted items are equal.
Real GDP rose 0.06% in Q3, minimally less than the original Q3 compilation showing an 0.08% increase. An interim calculation using chain-weighting, which was published on November 18, showed a decrease of 0.03%. Today&#39;s press reports highlight the comparison with the original data, and so conclude that growth is slower. However, in the new data released today, more current input data actually lifted the quarter&#39;s overall performance by a tiny amount from the Interim figure. Longer-run comparisons show that the technical shift in weighting procedures yielded slower growth, but this was to be expected. It isn&#39;t that the economy is actually weaker than thought before, but that there is now a more accurate numerical representation.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208d.jpg" width="353">
For Q3, more distinguishable shifts occurred in individual GDP components. As seen in the table below, consumer spending is now seen as weaker than before; effects of chain-weighting eroded some of the growth and the routine quarterly revision cut further into it. In contrast, plant and equipment investment was stronger. As we noted in our commentary on the shift to chain-linking in mid-November, the chaining procedure did subtract some investment growth in recent periods. However, new input data brought significant gains to the latest two quarters while diminishing the prior two periods. Thus, although growth over the last year has been the same as in the Interim data, the shift in the quarterly distribution leaves more forward momentum. With other varied economic indicators looking less healthy, this uptrend in Japanese business investment gives some encouragement that business conditions there are not uniformly deteriorating.
As in November, these data were again updated in &quot;real time&quot; by our Asian shift staff. Clients in the Far East and in Europe then had access to the information early in their own workdays. Updates for many series in China, Korea and Hong Kong, among others, are coming now in what for New Yorkers is the evening or middle of the night.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">% Changes</th>
<th scope="col">3 Qtr 2004</th>
<th scope="col">2 Qtr 2004</th>
<th scope="col">Year Ago</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP: Chain Weighted, 2000 Yen</td>
<td>0.1</td>
<td>-0.1</td>
<td>2.6</td>
<td>1.3</td>
<td>-0.3</td>
<td>0.2</td>
</tr>
<tr>
<td class="firstcol">Chain Weighted, 1995 Yen</td>
<td>-0.0</td>
<td>0.0</td>
<td>2.7</td>
<td>1.3</td>
<td>-0.4</td>
<td>0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Weighted, 1995 Prices</td>
<td>0.1</td>
<td>0.3</td>
<td>3.8</td>
<td>2.5</td>
<td>-0.2</td>
<td>0.6</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>
</tr>
<tr class="odd">
<td class="firstcol">Household Consumption: Chain Weighted, 2000 Yen</td>
<td>0.2</td>
<td>0.3</td>
<td>2.1</td>
<td>0.2</td>
<td>0.5</td>
<td>1.0</td>
</tr>
<tr>
<td class="firstcol"> Chain Weighted, 1995 Yen</td>
<td>0.6</td>
<td>0.6</td>
<td>3.0</td>
<td>0.2</td>
<td>0.7</td>
<td>1.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Weighted, 1995 Prices</td>
<td>0.9</td>
<td>0.8</td>
<td>4.0</td>
<td>0.8</td>
<td>1.0</td>
<td>2.2</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>
</tr>
<tr class="odd">
<td class="firstcol">Private Investment, Plant &amp; Equipment: Chain Weighted, 2000 Yen</td>
<td>1.1</td>
<td>4.3</td>
<td>7.4</td>
<td>6.2</td>
<td>-6.7</td>
<td>0.8</td>
</tr>
<tr>
<td class="firstcol"> Chain Weighted, 1995 Yen</td>
<td>-0.8</td>
<td>0.2</td>
<td>7.4</td>
<td>6.8</td>
<td>-6.3</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Weighted, 1995 Prices</td>
<td>-0.2</td>
<td>0.6</td>
<td>9.2</td>
<td>9.6</td>
<td>-6.9</td>
<td>1.7</td>
</tr>
</tbody>
</table>
</body>
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Revised data for Japan's Q3 GDP were reported today by the Cabinet Office. This is the usual "second preliminary" report, but it also included the previously announced shift to chain-linking and the rebasing from 1995 to 2000. Now, [...]

Revisions Bring Modestly Lower Japanese GDP Growth; Data Now Chain-Linked, Rebased to 2000

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208a.jpg" width="353">
According to the Mortgage Bankers Association (MBA) Survey, mortgage applications rose 3.4% last week following declines during November that, by the end of the month, had pulled the total market index down 11.6%.
Purchase applications rose 6.6% following several weeks of decline that lowered the month-end level 7.3% versus October. 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.
Applications to refinance added 1.1% to November declines that totaled 17.0%.
The effective interest rate on a conventional 30-year mortgage fell to 5.94% and averaged 5.97% last month versus 5.92% in October. The effective rate on a 15-year mortgage also fell to 5.40% versus 5.42% averaged in November.
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>.
&quot;Perfecting Housing Finance&quot; from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20041101/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
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<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/03/04</th>
<th scope="col">11/26/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>696.2</td>
<td>673.3</td>
<td>15.7%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>490.9</td>
<td>460.3</td>
<td>22.8%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,890.6</td>
<td>1,912.3</td>
<td>6.5%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
</tr>
</tbody>
</table>
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According to the Mortgage Bankers Association (MBA) Survey, mortgage applications rose 3.4% last week following declines during November that, by the end of the month, had pulled the total market index down 11.6%. Purchase [...]

Mortgage Applications Bounce Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208b.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated that through October, the job openings rate rose to 2.5% in October versus a monthly low of 2.0% in August 2003. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.
The number of job openings in October rose to 3.330 million, up 18.0% y/y.
The latest hires rate rose to 3.3% versus a low of 3.0% during the spring of 2003. The hires rate is the number of hires during the month divided by employment.
The survey dates only to December 2000 but has since followed the movement in nonfarm payrolls.
Job separations rose to 4.159 million (+7.8% y/y) and the separation rate was unchanged at 3.2%, up from 3.0% last October. Total separations include quits, layoffs, discharges, and other separations including retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment.
From the U.S. Department of Labor, a description of the Jolts survey and the latest release is available <a href="http://www.bls.gov/news.release/jolts.nr0.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Oct &#39;03</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.5%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>2.1%</td>
<td>2.2%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Hires Rate: Total</td>
<td>3.3%</td>
<td>3.2%</td>
<td>3.2%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
</body>
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The Job Openings & Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated that through October, the job openings rate rose to 2.5% in October versus a monthly low of 2.0% in August 2003. The job openings rate is [...]

JOLTS: Job Openings & Hires Up in the US

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208b.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics indicated that through October, the job openings rate rose to 2.5% in October versus a monthly low of 2.0% in August 2003. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings.
The number of job openings in October rose to 3.330 million, up 18.0% y/y.
The latest hires rate rose to 3.3% versus a low of 3.0% during the spring of 2003. The hires rate is the number of hires during the month divided by employment.
The survey dates only to December 2000 but has since followed the movement in nonfarm payrolls.
Job separations rose to 4.159 million (+7.8% y/y) and the separation rate was unchanged at 3.2%, up from 3.0% last October. Total separations include quits, layoffs, discharges, and other separations including retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment.
From the U.S. Department of Labor, a description of the Jolts survey and the latest release is available <a href="http://www.bls.gov/news.release/jolts.nr0.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Oct &#39;03</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.5%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>2.1%</td>
<td>2.2%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Hires Rate: Total</td>
<td>3.3%</td>
<td>3.2%</td>
<td>3.2%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
Mortgage Applications Bounce Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041208a.jpg" width="353">
According to the Mortgage Bankers Association (MBA) Survey, mortgage applications rose 3.4% last week following declines during November that, by the end of the month, had pulled the total market index down 11.6%.
Purchase applications rose 6.6% following several weeks of decline that lowered the month-end level 7.3% versus October. 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.
Applications to refinance added 1.1% to November declines that totaled 17.0%.
The effective interest rate on a conventional 30-year mortgage fell to 5.94% and averaged 5.97% last month versus 5.92% in October. The effective rate on a 15-year mortgage also fell to 5.40% versus 5.42% averaged in November.
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>.
&quot;Perfecting Housing Finance&quot; from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20041101/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/03/04</th>
<th scope="col">11/26/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>696.2</td>
<td>673.3</td>
<td>15.7%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>490.9</td>
<td>460.3</td>
<td>22.8%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,890.6</td>
<td>1,912.3</td>
<td>6.5%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
</tr>
</tbody>
</table>
</body>
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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/041207d.jpg" width="353">
Institutional investors and analysts in Germany have become slightly less pessimistic. The December ZEW indicator showed that the balance of optimists over pessimists was 14.4%, 0.5 percentage points above November, The increase is hardly significant. The best interpretation may be to say that confidence has stopped declining.
The balance of optimists over pessimists remains well below the long run average of 34.5%. Moreover, the balance is 59 points below its December 2003 value. The recent peak in the balance was 48.4% in July. The indicator has been trending down since then with ever increasing differences from a year ago, as can be seen in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041207e.jpg" width="353">
The decline in confidence has been attributed, in large part, to the increases in oil prices and in the euro. The weekly value of the euro in terms of the dollar and the weekly price (dollars per gallon) of Brent Crude oil for the past two years are shown in the second chart. Both have risen relentlessly since the beginning of this year through October. The euro has since continued to climb, but the price of oil dipped 14% from the last week in October to the last week in November and may have contributed to the slight increase of optimists over pessimists in the December ZEW survey of institutional investors and analysts.

<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 04</th>
<th scope="col">Nov 04</th>
<th scope="col">Oct&nbsp;04</th>
<th scope="col">Sep 04</th>
<th scope="col">Aug 04</th>
<th scope="col">Jul 04&nbsp;&nbsp;</th>
<th scope="col">Jun 04&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">ZEW (Percent balance)</td>
<td>14.4</td>
<td>13.9</td>
<td>31.3</td>
<td>38.4</td>
<td>45.3</td>
<td>48.4</td>
<td>47.4</td>
</tr>
<tr>
<td class="firstcol">% Points change from Year Ago</td>
<td>-59</td>
<td>-53</td>
<td>-29</td>
<td>-22.5</td>
<td>-7.2</td>
<td>6.5</td>
<td>26.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Price as of last week in</td>
<td>&nbsp;</td>
<td>Nov 04</td>
<td>Oct&nbsp;04</td>
<td>Sep 04</td>
<td>Aug 04</td>
<td>Jul 04&nbsp;&nbsp;</td>
<td>Jun 04&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Brent Crude Oil ($</td>
<td>&nbsp;</td>
<td>44.04</td>
<td>51.43</td>
<td>47.09</td>
<td>39.75</td>
<td>40.09</td>
<td>34.62</td>
</tr>
<tr>
<td class="firstcol">Dollar/euro</td>
<td>&nbsp;</td>
<td>1.3147&nbsp;&nbsp;</td>
<td>1.2754</td>
<td>1.2250</td>
<td>1.2099</td>
<td>1.2068</td>
<td>1.21221</td>
</tr>
</tbody>
</table>
</body>
</html>

Institutional investors and analysts in Germany have become slightly less pessimistic. The December ZEW indicator showed that the balance of optimists over pessimists was 14.4%, 0.5 percentage points above November, The increase is [...]

German Investor Confidence Stops Falling After Four Months of Decline

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041207f.jpg" width="353">
Job cut announcements reported in November rose 2.6% from October and 5.1% from a year ago according to Challenger, Gray &amp; Christmas. The monthly tally of 104,530 pulled the three month moving average of job cut announcements to 104,744 (-9.7% y/y), the highest this year.
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.
Job cut announcements in the automotive industry more than doubled and rose 10 fold in E-Commerce &amp; Dot com to the highest level since January 2003. Government layoffs also surged and layoffs rose in insurance, electronics, services, telecommunication, transportation and energy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>104,530</td>
<td>101,840</td>
<td>5.1%</td>
<td>1,236,426</td>
<td>1,431,052</td>
<td>1,956,876</td>
</tr>
</tbody>
</table>
</body>
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Job cut announcements reported in November rose 2.6% from October and 5.1% from a year ago according to Challenger, Gray & Christmas. The monthly tally of 104,530 pulled the three month moving average of job cut announcements to [...]

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

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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

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

Sandy Batten

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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**.

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- 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

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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.

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- 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

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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.

Economy in Brief

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