Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908a.jpg" width="353">
The Congressional Budget Office Updated its US budget outlook. The current deficit estimates of $422 for FY04 and $348B for FY05 are below the $477B and $363B estimated six months ago due to improved economic &amp; technical assumptions.
The ten year deficit outlook, however, deteriorated due to raised spending estimates (mostly military &amp; Medicare) which more than offset raised estimates of revenues.
&quot;The Budget and Economic Outlook: An Update&quot; from the Congressional Budget Office is available <a href="http://www.cbo.gov/ftpdocs/57xx/doc5773/08-24-BudgetUpdate.pdf">here</a>.
For the first ten months of FY04 the deficit of $395.8 was 22.2% larger than last year. Budget deficits raised the growth in outstanding liabilities of the Federal government through 1Q04 to 12.7% versus 8.0% growth in nonfederal liabilities.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908f.jpg" width="353">
Growth in net receipts for the first ten months of FY04 improved to 4.0% versus a 3.9% decline during the first ten months of FY03. Individual tax receipts were down 0.3% versus a 6.9% decline in the first ten months of FY03. Corporate tax receipts for the fiscal year-to-date were up 45.0% ($145.3B) versus last fiscal YTD.
Growth in Federal net expenditures was about stable at 7.2% versus the first ten months of last fiscal year. Defense expenditures grew 14.8% versus 15.9% last year. Growth in Medicare outlays was 8.6% versus 8.3%. Interest expense grew 3.7% versus a 10.0% decline during last year&#39;s first ten months.

<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/USECON/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">July &#39;03</th>
<th scope="col">FY2003</th>
<th scope="col">FY2002</th>
<th scope="col">FY2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$-69.2B</td>
<td>$19.1B</td>
<td>$-54.2B</td>
<td>$-374.2B</td>
<td>$-157.8B</td>
<td>$127.3B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revenues</td>
<td>$134.4B</td>
<td>$214.4B</td>
<td>8.8%</td>
<td>-3.8%</td>
<td>-6.9%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>$203.6B</td>
<td>$195.2B</td>
<td>14.5%</td>
<td>7.2%</td>
<td>7.9%</td>
<td>4.2%</td>
</tr>
</tbody>
</table>
</body>
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The Congressional Budget Office Updated its US budget outlook. The current deficit estimates of $422 for FY04 and $348B for FY05 are below the $477B and $363B estimated six months ago due to improved economic & technical assumptions. [...]

U.S. Budget Deficit Estimates Updated

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908e.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics for July continued to indicate improved hiring, but at a slower rate than in June. The hires rate fell to 3.2% from an upwardly revised 3.4% in June. These figures are versus the monthly low of 3.0% last Spring and 3.1% during all of last year.
The hires rate in manufacturing slipped to 2.4% from 2.6% in June but remained above the 2.2% averaged last year.
The survey dates only to December 2000 but has since followed closely the movement in nonfarm payrolls.
The job openings rate rose to 2.4%, the highest level since October 2002.
Chairman Greenspan&#39;s testimony on the economic outlook is available <a href="http://www.federalreserve.gov/BoardDocs/Testimony/2004/200409082/default.htm">here</a>.

<table border="0" cellspacing="0" width="100%">
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<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">July</th>
<th scope="col">June</th>
<th scope="col">July &#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>2.4%</td>
<td>2.3%</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>3.2%</td>
<td>3.4%</td>
<td>3.1%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
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The Job Openings & Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics for July continued to indicate improved hiring, but at a slower rate than in June. The hires rate fell to 3.2% from an upwardly revised 3.4% in June. [...]

JOLTS July Update: US Hiring Improved But Slower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908e.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics for July continued to indicate improved hiring, but at a slower rate than in June. The hires rate fell to 3.2% from an upwardly revised 3.4% in June. These figures are versus the monthly low of 3.0% last Spring and 3.1% during all of last year.
The hires rate in manufacturing slipped to 2.4% from 2.6% in June but remained above the 2.2% averaged last year.
The survey dates only to December 2000 but has since followed closely the movement in nonfarm payrolls.
The job openings rate rose to 2.4%, the highest level since October 2002.
Chairman Greenspan&#39;s testimony on the economic outlook is available <a href="http://www.federalreserve.gov/BoardDocs/Testimony/2004/200409082/default.htm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">July &#39;03</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.4%</td>
<td>2.3%</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>3.2%</td>
<td>3.4%</td>
<td>3.1%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
U.S. Budget Deficit Estimates Updated 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908a.jpg" width="353">
The Congressional Budget Office Updated its US budget outlook. The current deficit estimates of $422 for FY04 and $348B for FY05 are below the $477B and $363B estimated six months ago due to improved economic &amp; technical assumptions.
The ten year deficit outlook, however, deteriorated due to raised spending estimates (mostly military &amp; Medicare) which more than offset raised estimates of revenues.
&quot;The Budget and Economic Outlook: An Update&quot; from the Congressional Budget Office is available <a href="http://www.cbo.gov/ftpdocs/57xx/doc5773/08-24-BudgetUpdate.pdf">here</a>.
For the first ten months of FY04 the deficit of $395.8 was 22.2% larger than last year. Budget deficits raised the growth in outstanding liabilities of the Federal government through 1Q04 to 12.7% versus 8.0% growth in nonfederal liabilities.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908f.jpg" width="353">
Growth in net receipts for the first ten months of FY04 improved to 4.0% versus a 3.9% decline during the first ten months of FY03. Individual tax receipts were down 0.3% versus a 6.9% decline in the first ten months of FY03. Corporate tax receipts for the fiscal year-to-date were up 45.0% ($145.3B) versus last fiscal YTD.
Growth in Federal net expenditures was about stable at 7.2% versus the first ten months of last fiscal year. Defense expenditures grew 14.8% versus 15.9% last year. Growth in Medicare outlays was 8.6% versus 8.3%. Interest expense grew 3.7% versus a 10.0% decline during last year&#39;s first ten months.

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<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">July &#39;03</th>
<th scope="col">FY2003</th>
<th scope="col">FY2002</th>
<th scope="col">FY2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$-69.2B</td>
<td>$19.1B</td>
<td>$-54.2B</td>
<td>$-374.2B</td>
<td>$-157.8B</td>
<td>$127.3B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revenues</td>
<td>$134.4B</td>
<td>$214.4B</td>
<td>8.8%</td>
<td>-3.8%</td>
<td>-6.9%</td>
<td>-1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>$203.6B</td>
<td>$195.2B</td>
<td>14.5%</td>
<td>7.2%</td>
<td>7.9%</td>
<td>4.2%</td>
</tr>
</tbody>
</table>
Challenger Layoffs Up Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908b.jpg" width="353">
Challenger, Gray &amp; Christmas reported that announced job cuts rose another 6.6% in August on top of an 8.1% rise the prior month. The increase to 74,150 was to the highest level since February.
The three month moving average of job cut announcements rose modestly to 69,355 (-7.4% y/y).
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.
A new series from Challenger indicated that announced hiring plans in August surged to a multiple of intentions for July. The series dates back only to May.

<table border="0" cellspacing="0" width="100%">
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<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Aug</th>
<th scope="col">July</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>74,150</td>
<td>69,572</td>
<td>-7.2%</td>
<td>1,236,426</td>
<td>1,431,052</td>
<td>1,956,876</td>
</tr>
</tbody>
</table>
U.S. Chain Store Sales Little Changed 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908c.jpg" width="353">
Chain store sales slipped ticked slightly higher last week but the level of sales was little changed from four weeks ago according to the International Council of Shopping Centers (ICSC)-UBS.
Sales began September 0.2% below the August average which was unchanged from July.
During the last ten years there has been a 60% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart. 

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<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">09/04/04</th>
<th scope="col">08/28/04</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">Total Weekly Retail Chain Store Sales</td>
<td>438.6</td>
<td>438.4</td>
<td>2.1%</td>
<td>2.9%</td>
<td>3.6%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Low Mortgage Rates Stimulate Borrowing 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908d.jpg" width="353">
The effective interest rate on a conventional 30-year mortgage ticked up last week to 6.06% from 6.02% the prior week, but those rates were little changed from the 6.04% averaged in August. In May, 30-year financing averaged 6.53%. The effective rate on a 15-year mortgage was 5.49%.
The index of mortgage applications compiled by the Mortgage Bankers Association jumped 7.7% from the prior week as purchase applications surged 7.4% and began the month 6.1% above August which fell 2.8% from July.
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 mortgages surged 8.0%following two weeks of decline. Refi&#39;s began September 7.5%% ahead of August.
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>.

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</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">09/03/04</th>
<th scope="col">08/27/04</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 class="odd">
<td class="firstcol">Total Market Index</td>
<td>692.0</td>
<td>642.7</td>
<td>-10.3%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>476.0</td>
<td>443.1</td>
<td>16.4%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,948.9</td>
<td>1,804.1</td>
<td>-32.4%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
</tr>
</tbody>
</table>
Mixed Fortunes for European Industry 
by <a href="/comment/Stone.html">Carol Stone</a> September 8, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040908g.jpg" width="353">
Yesterday, we described an improving trend in German industrial production through July, an encouraging sign for Europe as a whole. At the same time, not all countries are fully on board yet. Data reported yesterday for the UK show two months of hesitation and a report this morning from the Netherlands indicates that Dutch industry is still struggling to get on a sustained uptrend. 
UK output fell 0.3% in July following a similar decline in June. Trends are mixed among UK sectors, as production of capital goods and of consumer durable goods increased, while that of intermediate products and energy has had a listless performance and consumer nondurables continue to slide. Obviously, the improving pattern in investment and consumer durables, the most cyclical products, is quite favorable in the midst of an otherwise clouded picture. Indeed, capital goods output is the highest since the summer of 2001. 
In the Netherlands, manufacturing output has been uneven. It appeared to reach a bottom at the middle of last year and tilted up slightly in subsequent months. However, the declines in May and again in July erase most of those gains and leave factories just above their year-ago operating pace. Details will be published tomorrow. In the meantime, through June, food and textile production in the Netherlands were sources of weakness, as they have been in the UK. This suggests that consumer demand in those countries could still be sluggish and/or that import competition is pressuring domestic industry. 

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<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol">Industrial Production, % Changes</th>
<th scope="col">July 2004 </th>
<th scope="col">June 2004 </th>
<th scope="col">May 2004 </th>
<th scope="col">Year/ Year </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">UK </td>
<td>-0.3</td>
<td>-0.3</td>
<td>0.4</td>
<td>-2.5</td>
<td>-0.1</td>
<td>-2.5</td>
<td>-1.6</td>
</tr>
<tr>
<td class="firstcol">Netherlands* </td>
<td>-0.6</td>
<td>0.1</td>
<td>-0.7</td>
<td>0.2</td>
<td>-2.8</td>
<td>-0.8</td>
<td>-0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany </td>
<td>1.6</td>
<td>-1.5</td>
<td>1.0</td>
<td>-1.1</td>
<td>0.1</td>
<td>-1.3</td>
<td>-0.8</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/040907d.jpg" width="353">
Industrial production in Germany rose more in July than had been expected. The consensus had expected a rise in German industrial production after the 1.48% decline in June, but the extent of the rise was expected to be less than 1%. In fact the index rose 1.60% and is now at the highest level since February, 2001. The manufacturing and mining index rose 1.77%. The output of capital goods rose 1.99%, that of consumer durable, 6.76% and that of consumer nondurable, 1.13%. The first chart shows the output of capital goods and consumer goods. Capital goods output has been strong since mid 2003, while that of consumer goods has, at best, stabilized It is not apparent from the industrial production data to what extent the rise in production was due to domestic or foreign demand.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040907c.jpg" width="353"> 
Some indication of the source of demand can be seen in the New Orders data, which include foreign and domestic new orders. Domestic new orders rose 1.05% in July from June and were 3.99% above July 2003. Foreign new orders rose 5.18% in July and were 11.35% above July 2003. The second chart showing foreign and domestic new orders suggests that foreign demand is still the major factor in the rise in German industrial production, but domestic demand is beginning to show a slight improvement.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">2000=100</th>
<th scope="col">Jul 04</th>
<th scope="col">Jun 04</th>
<th scope="col">Jul 03</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2003&nbsp;</th>
<th scope="col">&nbsp; 2002&nbsp;</th>
<th scope="col">&nbsp; 2001&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>101.4</td>
<td>99.8</td>
<td>99.2</td>
<td>1.60</td>
<td>2.22</td>
<td>98.4&nbsp;</td>
<td>98.3</td>
<td>99.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing and Mining</td>
<td>103.7</td>
<td>101.9</td>
<td>100.4</td>
<td>1.77</td>
<td>3.29</td>
<td>99.5&nbsp;</td>
<td>99.3</td>
<td>100.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Capital Goods</td>
<td>107.5</td>
<td>105.4</td>
<td>103.0</td>
<td>1.99</td>
<td>4.37</td>
<td>102.0&nbsp;</td>
<td>101.1</td>
<td>102.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Consumer Durable Goods</td>
<td>&nbsp; 94.8</td>
<td>88.8</td>
<td>92.4</td>
<td>6.76</td>
<td>2.60</td>
<td>87.1&nbsp;</td>
<td>92.0</td>
<td>100.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Consumer Non Durable Goods</td>
<td>98.7</td>
<td>97.6</td>
<td>98.3</td>
<td>1.13</td>
<td>0.41</td>
<td>&nbsp;97.4</td>
<td>98.2</td>
<td>98.8</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders (2000 Prices)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>104.1</td>
<td>101.1</td>
<td>96.9</td>
<td>2.97</td>
<td>7.43</td>
<td>97.8&nbsp;</td>
<td>97.2</td>
<td>97.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Domestic</td>
<td>96.4</td>
<td>95.4</td>
<td>92.7</td>
<td>1.05</td>
<td>3.99</td>
<td>93.4&nbsp;</td>
<td>93.5</td>
<td>96.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Foreign</td>
<td>113.8</td>
<td>108.2</td>
<td>102.2</td>
<td>5.18</td>
<td>11.35</td>
<td>103.3</td>
<td>101.9</td>
<td>98.4</td>
</tr>
</tbody>
</table>
</body>
</html>

Industrial production in Germany rose more in July than had been expected. The consensus had expected a rise in German industrial production after the 1.48% decline in June, but the extent of the rise was expected to be less than 1%. [...]

German Industrial Production and New Orders Rise in July

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040907b.jpg" width="353">
Mass layoffs in the US as reported to the Bureau of Labor Statistics jumped 52% in July from an elevated June level which rose 40% from May. The increases reversed all of improvement which had occurred through May.
These mass layoffs generated 253,929 initial claims for unemployment insurance, up 12.1% y/y.
Since the series inception in 1995 there has been a (negative) 46% correlation between the number of initial claims generated by mass layoffs and the one month change in non-farm payrolls.
The Mass Layoff Statistics (MLS) program collects reports on mass layoff actions that result in workers being separated from their jobs. Monthly mass layoff numbers are from establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a 5-week period. Extended mass layoff numbers (issued quarterly) are from a subset of such establishments--where private sector non-farm employers indicate that 50 or more workers were separated from their jobs for at least 31 days.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF10/@EF1001/@EF1001.HTM">Mass Layoffs</a></th>
<th scope="col">July</th>
<th scope="col">June</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">Number of Events: All Industries</td>
<td>2,094</td>
<td>1,379</td>
<td>0.3%</td>
<td>18,963</td>
<td>20,277</td>
<td>21,467</td>
</tr>
</tbody>
</table>
</body>
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Mass layoffs in the US as reported to the Bureau of Labor Statistics jumped 52% in July from an elevated June level which rose 40% from May. The increases reversed all of improvement which had occurred through May. These mass layoffs [...]

Mass Layoffs Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040907a.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics suggests US job creation has picked up, albeit moderately. The hires rate rose to 3.3% in June versus a monthly low of 3.0% last Spring and 3.1% during all of last year. The latest hires rate is down from the March high of 3.5% but it equals the rate averaged so far this year.
This year&#39;s improvement in the hires rate has been paced by job growth in the manufacturing and construction industries.
The survey dates only to December 2000 but has since followed closely the movement in nonfarm payrolls.
The job openings rate also is up this year versus last but it has been stuck at 2.3% since December.

<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">June</th>
<th scope="col">May</th>
<th scope="col">June &#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>2.3%</td>
<td>2.3%</td>
<td>2.3%</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>3.1%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Job Openings & Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics suggests US job creation has picked up, albeit moderately. The hires rate rose to 3.3% in June versus a monthly low of 3.0% last Spring and 3.1% [...]

JOLTS Indicates Improved Hiring 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/040907a.jpg" width="353">
The Job Openings &amp; Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics suggests US job creation has picked up, albeit moderately. The hires rate rose to 3.3% in June versus a monthly low of 3.0% last Spring and 3.1% during all of last year. The latest hires rate is down from the March high of 3.5% but it equals the rate averaged so far this year.
This year&#39;s improvement in the hires rate has been paced by job growth in the manufacturing and construction industries.
The survey dates only to December 2000 but has since followed closely the movement in nonfarm payrolls.
The job openings rate also is up this year versus last but it has been stuck at 2.3% since December.

<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">June</th>
<th scope="col">May</th>
<th scope="col">June &#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>2.3%</td>
<td>2.3%</td>
<td>2.3%</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>3.1%</td>
<td>3.1%</td>
<td>3.2%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
Mass Layoffs Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 7, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040907b.jpg" width="353">
Mass layoffs in the US as reported to the Bureau of Labor Statistics jumped 52% in July from an elevated June level which rose 40% from May. The increases reversed all of improvement which had occurred through May.
These mass layoffs generated 253,929 initial claims for unemployment insurance, up 12.1% y/y.
Since the series inception in 1995 there has been a (negative) 46% correlation between the number of initial claims generated by mass layoffs and the one month change in non-farm payrolls.
The Mass Layoff Statistics (MLS) program collects reports on mass layoff actions that result in workers being separated from their jobs. Monthly mass layoff numbers are from establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a 5-week period. Extended mass layoff numbers (issued quarterly) are from a subset of such establishments--where private sector non-farm employers indicate that 50 or more workers were separated from their jobs for at least 31 days.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF10/@EF1001/@EF1001.HTM">Mass Layoffs</a></th>
<th scope="col">July</th>
<th scope="col">June</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">Number of Events: All Industries</td>
<td>2,094</td>
<td>1,379</td>
<td>0.3%</td>
<td>18,963</td>
<td>20,277</td>
<td>21,467</td>
</tr>
</tbody>
</table>
</body>
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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/040903c.jpg" width="353">
The Euro-Zone Purchasing Managers Index for the service industries edged down in August to 54.47 from 55.31 in July. A narrow range from 54.40 to 55.76 has prevailed for six months now, tracing a steady moderate growth path for service sector activity. These international PMI surveys are conducted by NTC-Research for Reuters, Inc.
Most individual countries have also seen minimal swings in these service industry gauges. That in Germany, a few points lower than most, has crept higher the last few months. In Italy, the opposite is true: its index was over 58 in June, but has slowed to 56.5 in August. Components for the Euro-Zone Total show that employment is picking up while new orders are showing a bit less growth. Expectations have been virtually unchanged over the summer months. Input prices, as seen in the first graph, continue to move ahead.
NTC-Research compiles purchasing manager indexes for the Euro-Zone and other countries for the manufacturing, construction and service sectors of each economy. The firm recently introduced a set of &quot;GDP Indicators&quot; which combines these three sectoral indexes into a weighted average of the three diffusion indexes. NTC analysts then use regression models to scale the index to GDP growth rates.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040903d.jpg" width="353"> 
For the Euro-Zone, the index eased too in August, although it stands several percentage points above year-ago levels. For assessing year-to-year growth prospects, the NTC PMI-based indicator&#39;s translation to year-to-year growth aligns fairly well with GDP performance and has a high correlation ratio of 93%. The indicator level runs a 79% correlation with quarterly changes in Euro-Zone GDP. The recent moves in the indicator suggest a further gain in Euro-Zone GDP of 0.5 to 0.6% this quarter and year-on-year expansion of about 2-1/4%, that is, at least maintaining its recent growth rates.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Purchasing Managers Index Percent (&gt;50 = expansion;&nbsp; &lt;50 = contraction)</th>
<th scope="col">Aug 2004</th>
<th scope="col">July 2004</th>
<th scope="col">June 2004</th>
<th scope="col">Aug 2003</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">Services:</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">Euro Zone Total</td>
<td>54.47</td>
<td>55.31</td>
<td>55.31</td>
<td>51.99</td>
<td>51.36</td>
<td>51.58</td>
<td>51.63</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Germany</td>
<td>53.54</td>
<td>53.87</td>
<td>52.30</td>
<td>51.78</td>
<td>48.49</td>
<td>48.62</td>
<td>48.87</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>56.91</td>
<td>56.22</td>
<td>56.77</td>
<td>57.00</td>
<td>54.84</td>
<td>54.37</td>
<td>51.41</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">GDP Indicator: </td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Zone Total</td>
<td>54.5</td>
<td>55.5</td>
<td>55.0</td>
<td>50.8</td>
<td>50.6</td>
<td>51.3</td>
<td>50.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Year/Year % Change</td>
<td>2.2</td>
<td>2.2</td>
<td>2.3</td>
<td>0.4</td>
<td>0.8</td>
<td>1.0</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Actual GDP Growth, Year/Year</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>0.5</td>
<td>0.9</td>
<td>1.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Euro-Zone Purchasing Managers Index for the service industries edged down in August to 54.47 from 55.31 in July. A narrow range from 54.40 to 55.76 has prevailed for six months now, tracing a steady moderate growth path for [...]

Euro-Zone Services Activity Maintains Steady Growth

PMIs showing widespread revival of global economy

Crude oil price has returned to pre-conflict level but traffic through Hormuz still subpar

Surging orders for computers and electronics propelling durable goods orders

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

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Andrew Cates

**Growth Surprises Continue to Underpin Equity Resilience**
Global equity markets have proved remarkably resilient in recent weeks, shrugging off intermittent bouts of geopolitical and policy uncertainty to grind higher. Chart 1 below helps explain why: it tracks the relationship between global growth-versus-inflation surprises and world equity markets, and on that measure the recent run of global growth data has continued to surprise on the upside relative to inflation outturns — a combination that has historically been supportive for risk assets. Whether that resilience persists will depend on whether the growth-surprise advantage evident in the chart below can be sustained in the face of the inflationary pressures explored below.

260709Z1.jpg

**PMIs Confirm a Broadly Solid Global Expansion**
This week's final composite PMI readings for June reinforced the broader impression of resilient global growth. As chart 2 below shows, most major economies posted readings comfortably in expansionary territory, with India continuing to lead the pack and the US not far behind. Even the laggards in the sample are hovering close to the expansion threshold rather than falling decisively below it, suggesting stabilisation rather than outright contraction (and with the UK a notable exception).

260709Z2.jpg

**Inflation Surprises Are Creeping Back, and Bond Yields Are Taking Notice**
The US growth picture painted by Haver's surprise indices broadly echoes the message from the global PMI data. Chart 3 below shows the combined growth-and-inflation surprise index drifting higher this week, and closer inspection suggests growth is doing most of that work, with activity data continuing to outperform expectations. That is, on the face of it, good news. But it has not stopped bond markets from taking notice: short-dated Treasury yields have remained elevated in recent weeks, as stronger growth keeps alive the possibility that the Federal Reserve holds rates higher for longer or even lifts them in coming weeks.

260709Z3.jpg

**Supply Chains Are Tightening** 
Latest data show that global supply chain pressures tightened by less in June than they had the month before, likely reflecting the easing of Middle East tensions through much of the period. Chart 4 below shows that pressures troughed in the middle of last year and have been building gradually since, though June's slower pace of tightening suggests that easing had started to feed through. Still, today's flare-up threatens to undo that improvement, particularly if it affects shipping routes or energy flows through the region once again.

260709Z4.jpg

**Extreme Weather: An Old Supply-Side Risk Returns**
Geopolitics is not the only source of supply-side risk currently in play. Large parts of Europe have been gripped this week by another intense and prolonged heatwave, with temperatures in several major cities running well above seasonal norms. Extreme heat of this kind carries real economic costs: it depresses labour productivity, particularly in outdoor and manufacturing-adjacent sectors, strains electricity grids as air-conditioning demand spikes, and can disrupt agricultural output and river-based transport when water levels fall. Episodes like this have become more frequent in recent years, and while any single heatwave rarely shifts the macro picture on its own, the cumulative effect of more frequent and more severe weather events could start showing up in productivity and inflation data across the advanced economies. It is a reminder that the supply side of the global economy faces structural as well as cyclical challenges, and that climate-related disruption deserves a permanent place alongside geopolitics and demographics in any assessment of medium-term inflation risk.

260709Z5.jpg

**AI Investment: The Other Side of the Supply Equation**
Set against these supply-side headwinds is a genuinely positive structural development: the extraordinary scale of private investment now flowing into artificial intelligence. Chart 6 below shows just how sharply that investment has grown in recent years, reaching a fresh high last year. If even a fraction of that investment translates into genuine productivity gains, it could provide a meaningful long-run offset to the energy, climate and geopolitical constraints highlighted elsewhere in this week's charts. The scale of the bet now being placed on AI is large enough that it is beginning to show up in aggregate investment and capital expenditure data across the advanced economies, and it is likely to remain one of the defining structural themes shaping the global growth outlook over the remainder of this decade.

260709Z6.jpg

Global markets head into this week’s closing stages digesting a mixed set of signals. Last week's US non-farm payrolls report undershot expectations, adding to questions about the durability of the US labour market even as broader activity data have continued to hold up well. Compounding that picture, news broke today of renewed instability in the Middle East, reintroducing a geopolitical risk premium into markets just as investors had begun to look past it. Global equity markets have nonetheless remained resilient, continuing to track the broadly encouraging tone of incoming activity data (chart 1). That resilience was reinforced by a solid set of global PMIs across most major economies over the past few days (chart 2). Haver's surprise indices tell a similar story of positive growth momentum in the US, but with an important caveat: incoming inflation data have also been surprising to the upside, driven largely by higher oil prices (chart 3). These inflation risks could persist moreover, as global supply chain pressures have picked up in recent months and today's flare-up in the Middle East threatens to add further strain (chart 4). The world economy remains vulnerable to other supply-side shocks too, such as the extreme heat gripping much of Europe this week (chart 5). Still, on the other side of the ledger the enormous scale of investment now flowing into artificial intelligence could be a genuine source of supply-side potential (chart 6).

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/0dl4LKZaL1oTC5UPIaqrA9?utm_source=generator&si=7aa69345dbfd4ac4" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Growth Holds Firm

Robert Brusca

260710E.jpg

Manufacturing output in the countries of the European Monetary Union continues to underperform. The median change for the 11 countries reporting on the table is a 0.5% decline in May following a 0.3% increase in April. However, only 41.7% of the reporters are accelerating in May, compared to 25% in April, although in March over half of the reporters had showed some acceleration, with output at 61.5%.

In May, of these eleven early reporters, seven showed month-to-month declines in output. This compares to four showing declines in April and four showing declines in March.

**Sequential trends**
Over 12 months, output is declining in four of these eleven countries: Germany, Luxembourg, Ireland, and Portugal. Over six months, output declines in five of the eleven countries. Over three months, output declines in four of the eleven countries. Over these broader sequential periods, output is increasing in most cases; only one country, Ireland, shows consistent declines in output over three months, six months, and 12 months. However, among EMU countries, only Italy shows output expanding on all three timelines, although Sweden, an EU member country, also shows output increasing in all three periods.

Amid the output weakness in May, the quarter-to-date calculation for industrial production growth is also broadly weak. In May, seven of the eleven quarter-to-date changes in industrial production are negative. Positive results, increases in the quarter-to-date, are registered by Germany, Luxembourg, Greece, and Portugal.

The ranking of the year-over-year growth rates shows seven countries with output growth rate rankings below 50%, marking them as below their respective medians. The comparisons for output growth are taken back to 2006, a period of about 20 years.

Four EMU countries rank above their twenty-year medians: France, Italy, Luxembourg, and Greece.

The snapshot of industry in the monetary union is consistent, showing little momentum, little strength, and relatively low rankings for current growth rates; only a minority of reporters show an acceleration in growth in May compared to April. With the situation in the Strait of Hormuz deteriorating again, the outlook for industrial production has to remain guarded.

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Europe

Industrial Sector Remains Under Pressure in EMU

Winnie Tapasanun

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Existing home sales unexpectedly fell 2.4% m/m (+2.8% y/y) to 4.09 million units (SAAR) in June, the first monthly decline since March, following an upwardly revised 3.7% increase to 4.19 million in May (previously +3.2%; 4.17 mil.), according to the National Association of Realtors (NAR). The Action Economics Forecast Survey had expected June sales of 4.20 million units. Sales remained 36.4% below a high of 6.43 million in January 2022 and 38.0% below a peak of 6.60 million in January 2021. The June decline coincided with a rise in the average 30-year fixed mortgage rate to 6.49% in June, the highest since August 2025, after increasing to 6.44% in May, according to Freddie Mac. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales fell 2.4% (+3.3% y/y) to 3.73 million units in June, the first m/m fall in three months, following a 4.1% gain to 3.82 million in May, remaining 34.6% below a high of 5.70 million in January 2022. Sales of condos and co-ops decreased 2.7% (-2.7% y/y) to 360,000 in June, the lowest level since May 2025, after being unchanged m/m for the third successive month at 370,000, remaining 50.7% below a high of 730,000 in January 2022.

Regionally, June existing home sales declined m/m in all regions except the Northeast. Sales in the South dropped 3.6% (+3.8% y/y) to 1.89 million in June, a three-month low, after a 3.2% rise in May, and sales in the Midwest slid 3.0% (+2.1% y/y) to 980,000 following a 7.4% May advance; both posted the first m/m decrease in three months. Sales in the West fell 1.3% (+2.8% y/y) to 740,000, the lowest level since January, after being flat m/m at 750,000 in May. In contrast, sales in the Northeast increased 2.1% (0.0% y/y) to 480,000 after a 4.4% May gain. Notably, the South remained the dominant region, accounting for 46.2% of total U.S. existing home sales.

The median price of all existing homes (NSA) rose 2.2% (1.8% y/y) to $440,600 in June, the fifth consecutive m/m rise, on top of an upwardly revised 3.3% increase to $431,200 in May ($429,300 previously). Prices were 22.1% above a low of $360,800 in January 2023. The median price of an existing single-family home climbed 2.3% (1.8% y/y) to $446,400 in June, the fifth straight m/m increase, after a 3.4% advance to $436,400 in May. The median price of condos and co-ops, up for the sixth time in seven months, grew 0.6% (1.6% y/y) to $380,000 following a 1.0% May gain to $377,800. Regionally, overall prices rose m/m and y/y in June in the Northeast (+5.6%; +3.9% y/y), Midwest (+2.1%; +2.7% y/y), South (+1.0%; +0.9% y/y), and West (+0.8%; +0.9% y/y). All these price series were at their record highs.

Inventories of homes for sale fell m/m in June for the first time since December. The number of existing homes for sale (NSA) declined 0.6% (+1.3% y/y) to 1.56 million units following an upwardly revised 4.7% May rise to 1.57 million (the highest level since November 2019). The supply of homes on the market at the current selling rate (NSA) increased to 4.6 months in June from 4.5 months in May and April, matching the highest level since August 2025. A record low in supply of 1.6 months was in January 2022.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- June sales -2.4% m/m to 4.09 mil., first drop in three mths.; +2.8% y/y, third straight y/y rise.
- Sales m/m down in the South (-3.6%), Midwest (-3.0%), and West (-1.3%); up in the Northeast (+2.1%).
- Sales y/y up in all regions except the Northeast w/ a flat reading.
- Median sales price +2.2% (+1.8% y/y) to $440,600, a record high.
- Unsold inventory -0.6% (+1.3% y/y) to 1.56 mil. units, first m/m decline since Dec.; 4.6 months' supply, highest since Aug. ’25.

U.S. Existing Home Sales Unexpectedly Fall in June from a Five-Month High

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance declined 2,000 to 215,000 in the week ending July 4, from 217,000 in the week ending June 27, revised from 215,000. The four-week average was 218,750 in the July 4 week, down from 222,500 in the week ending June 27. The Action Economics/Haver Analytics Survey looked for 218,000 claims to have been filed. 

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 8,000 to 1.814 million in the week ending June 27, from 1.806 million in the week ending June 20, revised from 1.814 million. The four-week moving average rose to 1.808 million in the June 27 week from 1.801 million in the June 20 week. The insured unemployment rate was unchanged at 1.2% in the week of June 27. Except for a one-week dip to 1.1% in the week of April 25, the insured unemployment rate has been at 1.2% since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending June 20, the highest unemployment rates were in Washington (2.03%), New Jersey (2.11%), Minnesota (2.15%), and Puerto Rico (2.45%). The lowest rates were in South Dakota (0.28%), Florida (0.35%), Alabama and North Carolina (both 0.41%), Louisiana (0.42%), and Arkansas (0.49%). Rates in other notable states include California (1.88%), Pennsylvania (1.63%), Illinois (1.58%), New York (1.52%), and Texas (1.12%). 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 2,000 to 215,000 in the week ending July 4.
- Continuing claims rose by 8,000 to 1.814 million in the week ending June 27.
- The insured unemployment rate was unchanged at 1.2% in the week of June 27.

U.S. Initial Unemployment Claims Declined in the Week of July 4

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The German trade surplus surged in May to €19.1 billion from €14.7 billion in April. Exports rose by 0.9% in May while imports fell by 2.5%, creating a jump in the surplus month-to-month. In April, exports increased by 0.8% while imports rose by 1.1%.

Details on exports and imports lag by one month. In April, exports for motor vehicles and consumer goods declined, while exports of capital goods and other exports rose. On the import side, there were increases in imports ranging from 2.8% to 4.3% month-to-month across capital goods, motor vehicles, and consumer goods, but for the catch-all category ‘other’ imports fell by 2.7% month-to-month.

Flows adjusted for inflation showed an increase in exports of 0.4% in May while real imports fell by 3.3%. In April, real exports were flat while real imports fell by 0.2%.

The sequential behavior of real exports and real imports show independent activity. Imports log a clear weakening, rising 0.1% over 12 months, falling at a 5% annual rate over six months, and then falling at a 10.3% annual rate over three months. On the export side, real exports rose by 2.6% over 12 months, accelerated to a 7.2% annual rate over six months, but over three months have pulled back and fallen at a 1.6% annual rate. However, export growth still exceeds import growth over each of these horizons: 12 months, six months, and three months.

Trade trends paint a darkening picture of the German economy, with imports weak in real terms and trending even weaker, while activity on the export side of the equation pops over 12 months and six months but takes a hit over three months.

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The situation in the Strait of Hormuz continues to muddy the waters for the future. Passage through the strait has been sharply stopped, stabilized, revived, and now is back to being destabilized. That makes the strait a major uncertainty zone; it's hard to tell how these effects are going to play out over the coming months for German trade results and everyone else's. The deterioration of conditions in the Strait of Hormuz is now unknowable because Iran has decided to start shooting at ships, further destabilizing the outlook.

Economy in Brief

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U.S. Budget Deficit Estimates Updated

JOLTS July Update: US Hiring Improved But Slower

JOLTS July Update: US Hiring Improved But Slower

German Industrial Production and New Orders Rise in July

Mass Layoffs Up

JOLTS Indicates Improved Hiring in the US

JOLTS Indicates Improved Hiring in the US

Euro-Zone Services Activity Maintains Steady Growth