Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021125b.jpg" width="353">
Sales of existing single family homes rose much more than expected in October. Sales rose 6.1% from September which was revised up slightly.
Sales through October were up 11.0% versus last December. During the first ten months of 2002 sales were up 5.3% versus 2001.
Home sales rose in each of the country&#39;s regions.
The median price of an existing home rose 1.1% to $159,600 (9.8% y/y). The median price in September was revised down.
The figures reflect closings of past home sales. 
The average rate on a conventional 30-year mortgage rose slightly last month versus September to 6.11%. Rates averaged 6.97% during all of last year. The decline this year in mortgage rates has combined with strong growth in disposable income to offset higher home prices and thus raise home affordability.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;5,770</td>
<td>&nbsp;5,440</td>
<td>9.5%</td>
<td>5,291</td>
<td>5,159</td>
<td>5,193</td>
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OECD Leaders Fell Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 25, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021125c.jpg" width="353">
The OECD Index of Leading Indicators fell in each of the three months ending in September, heralding an end to the steady gains in industrial production of this year.
In the European Union, industrial production rose through the summer capped by a strong 1.5% August gain in Germany, but German leading indicators have fallen moderately in each of the last four months. EU leaders also have fallen in each of the last four months.
In the UK, production already has started to move lower, down in three of the four months ended September (-0.7% YTD). Leaders have fallen in the last two months.
Production in France has moved sideways since some respectable monthly gains early this year. Leading indicators in France have fallen in each of the last four months.
Trends in Japan have been firm relative to Europe. Production in Japan fell moderately in September but has gained 5.1% YTD. Leading indicators have been moving steadily higher since last Fall with a modest decline only this past September
The OECD Economic Outlook (Preliminary Edition) for November 2002 can be found by clicking <a href="http://www.oecd.org/EN/document/0,,EN-document-0-nodirectorate-no-2-21578-0,00.html">here</a>.

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Sales of existing single family homes rose much more than expected in October. Sales rose 6.1% from September which was revised up slightly. Sales through October were up 11.0% versus last December. During the first ten months of 2002 [...]

Existing Home Sales Up Again

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021122a.jpg" width="353">
The Chicago Fed National Activity Index (CFNAI) fell last month to its lowest level since last November.
The reading pulled the three-month moving average of the CFNAI down to -0.55, a level consistent with roughly 2% growth in real GDP.. A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth.
During the last ten years there has been a 72% correlation between the level of the CFNAI and quarterly growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production &amp; income, the labor market, personal consumption &amp; housing, mfg. &amp; trade sales, and inventories &amp; orders.
For a complete discussion of the Chicago Fed&#39;s National Activity Index click <a href="http://www.chicagofed.org/economicresearchanddata/national/index.cfm">here</a>.
A discussion of the CFNAI and its role as a business cycle indicator can be found <a href="http://www.chicagofed.org/publications/economicperspectives/2002/3qepart2.pdf">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Oct &#39;01</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">CFNAI</td>
<td>-0.81</td>
<td>-0.39</td>
<td>-1.12</td>
<td>-1.10</td>
<td>-0.18</td>
<td>0.27</td>
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Mortgage Refinancing Booms 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 22, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021122b.jpg" width="353">
The index of mortgage applications to refinance, compiled by the Mortgage Bankers Association, surged last week back to near record territory.
Mortgage applications for home purchase also rose, but just slightly. Applications for purchase have been moving irregularly lower since peaking this past Spring.. The indexes equated to $680 bil. of mortgage originations in 4Q01 of which $476 bil. then was for refinancing (70%) and $204 bil. was for purchase.. The recent contract rate on a conventional 30 year mortgage was 5.94% versus 6.93% averaged last year. The effective rate, including points, was 6.23%.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">11/15/02</th>
<th scope="col">10/18/02</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total Market Index</td>
<td>1,200.2</td>
<td>1,128.3</td>
<td>625.6</td>
<td>322.7</td>
<td>352.0</td>
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<td class="firstcol">&nbsp; Purchase</td>
<td>345.0</td>
<td>361.5</td>
<td>304.9</td>
<td>302.7</td>
<td>275.8</td>
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<td class="firstcol">&nbsp; Refinancing</td>
<td>6,174.1</td>
<td>5,588.7</td>
<td>2,491.0</td>
<td>438.8</td>
<td>795.2</td>
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The Chicago Fed National Activity Index (CFNAI) fell last month to its lowest level since last November. The reading pulled the three-month moving average of the CFNAI down to -0.55, a level consistent with roughly 2% growth in real [...]

Chicago Fed National Activity Index Hit a Soft Spot in October

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021121a.jpg" width="353">
Initial claims for unemployment insurance were lower than expected in the latest week at the lowest level in four months. Claims in the prior week were revised up slightly.
The latest figure is for the survey period for November nonfarm payrolls. Initial claims were down 38,000 (9.2%) from the October survey period.
There has been a 65% correlation during the last ten years between the level of initial claims and the m/m change in nonfarm payrolls.
The four-week moving average of initial claims dropped to 395,750, down 10.3% y/y.
Continuing claims for unemployment insurance fell 1.7% w/w from the prior week&#39;s elevated level which was little revised.
The insured rate of unemployment fell slightly to 2.8%, back to the average of the last four months.

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<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">11/16/02</th>
<th scope="col">11/09/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Initial Claims</td>
<td>376.0</td>
<td>401.0</td>
<td>-11.5%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
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<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,582</td>
<td>-2.0%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
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Leading Indicators Unchanged 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021121b.jpg" width="353">
The Composite Index of Leading Economic Indicators, reported by the Conference Board, was unchanged last month, as expected. Prior months&#39; declines were revised deeper.
The breadth-of-gain amongst the leaders&#39; component series improved sharply to 60% from a downwardly revised level of 35% in September. The six-month diffusion index remained at a low 50%.
Lower claims for jobless insurance and a higher money supply had the largest positive influences on the leading index in October offset by lower consumer expectations and vendor deliveries and a shorter workweek.
The ratio of coincident-to-lagging indicators was unchanged. The ratio is an indicator of excess relative to actual economic performance.
The coincident indicators and the lagging indicators were unchanged.
The Leading index is based on eight previously reported economic data series and two that are estimated.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Leading</td>
<td>0.0%</td>
<td>-0.4%</td>
<td>2.0%</td>
<td>-0.7%</td>
<td>1.1%</td>
<td>3.3%</td>
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<td class="firstcol">Coincident</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.7%</td>
<td>-0.5%</td>
<td>3.4%</td>
<td>3.2%</td>
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<td class="firstcol">Lagging</td>
<td>0.0%</td>
<td>-0.5%</td>
<td>-3.8%</td>
<td>-1.3%</td>
<td>2.8%</td>
<td>1.7%</td>
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Philadelphia Fed Index Improved 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021121c.jpg" width="353">
The Philadelphia Fed&#146;s index of general business conditions for November improved more than expected. The Business Activity Index rose to 6.1, the highest level since July. A reading of -5.0 had been expected.
The improvement mirrored the rise reported last week in the Empire State General Conditions Index for November.
Amongst the sub indexes, new orders improved sharply and shipments turned positive versus their negative readings last month. Employment was virtually flat.
The business conditions index reflects a separate survey question, not the components. 
The prices paid index fell moderately, but remained quite positive as it has since March.
During the last ten years there has been a 46% correlation between the level of the General Activity Index and the quarterly change in real GDP. Over the last twenty years that correlation has been 67%.
For a discussion of the Philadelphia Fed&#39;s Business Outlook Survey click <a href="http://www.phil.frb.org/files/bos/brso98mt.pdf">here</a>. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S504/@S504.HTM">Philadelphia Fed Business Outlook</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">General Activity Index</td>
<td>6.1</td>
<td>-13.1</td>
<td>-18.5</td>
<td>-17.3</td>
<td>8.2</td>
<td>13.3</td>
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<tr>
<td class="firstcol">Prices Paid Index</td>
<td>13.0</td>
<td>14.3</td>
<td>-17.6</td>
<td>-1.0</td>
<td>27.1</td>
<td>10.0</td>
</tr>
</tbody>
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U.S. Budget Deficit Deepened in October 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 21, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021121d.jpg" width="353">
The US budget deteriorated last month versus Consensus expectations for a $45 bil. deficit.
Receipts fell sharply m/m in payback for the 54.7% surge in September. Individual tax payments fell m/m and were down 13.0% from last year. 
Federal expenditures surged m/m following a decline in September and were up 8.6% y/y. Defense spending was up 15.2% y/y. Spending on transportation and education also continued strong.

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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">Oct</th>
<th scope="col">Sept</th>
<th scope="col">y/y</th>
<th scope="col">FY2002</th>
<th scope="col">FY2001</th>
<th scope="col">FY2000</th>
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<td class="firstcol">Budget Balance</td>
<td>$-54.0B</td>
<td>$42.5B</td>
<td>$-7.7B</td>
<td>$-158.5B</td>
<td>$127.1B</td>
<td>$125.5B</td>
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<tr>
<td class="firstcol">&nbsp; Revenues</td>
<td>$124.9B</td>
<td>$192.8B</td>
<td>-20.5%</td>
<td>-6.9%</td>
<td>-1.7%</td>
<td>10.8%</td>
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<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>$178.9B</td>
<td>$150.3B</td>
<td>8.6%</td>
<td>7.9%</td>
<td>4.2%</td>
<td>5.1%</td>
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Initial claims for unemployment insurance were lower than expected in the latest week at the lowest level in four months. Claims in the prior week were revised up slightly. The latest figure is for the survey period for November [...]

Initial Claims for Unemployment Insurance Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021120a.jpg" width="353">
Housing starts fell more than expected last month and reversed September&#39;s spike. Starts fell 11.4% m/m. The run-up in September was lessened slightly.
Single family starts were relatively firm, falling 7.0% from the previous month. September&#39;s starts rose 16.3% (downwardly revised). 
Multi-family starts fell a sharp 29.3% following a 6.3% decline in September that was revised deeper.
Building permits rose 1.7% m/m to near the highest level of the year.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total</td>
<td>1,603</td>
<td>1,810</td>
<td>4.7%</td>
<td>1,603</td>
<td>1,573</td>
<td>1,647</td>
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<td class="firstcol">&nbsp; Single Family</td>
<td>1,350</td>
<td>1,452</td>
<td>9.0%</td>
<td>1,273</td>
<td>1,232</td>
<td>1,306</td>
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<td class="firstcol">&nbsp; Multi Family</td>
<td>253</td>
<td>358</td>
<td>-13.7%</td>
<td>330</td>
<td>341</td>
<td>341</td>
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Housing starts fell more than expected last month and reversed September's spike. Starts fell 11.4% m/m. The run-up in September was lessened slightly. Single family starts were relatively firm, falling 7.0% from the previous month. [...]

Housing Starts Fell Sharply

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021119c.jpg" width="353">
Chain store sales fell sharply last week, according to the BTM-UBSW survey. Sales fell 1.2% and erased virtually all the gains in the prior two weeks.
So far in November, sales were down 0.3% from the average sales level a month earlier. October sales fell 1.5% from September.
The October decline in chain store sales was not mirrored by declines in the BLS figures on general merchandise store sales (+1.1%) or apparel store sales (+4.0%).
During the last ten years there has been a 38% correlation between the year-to-year percent change in monthly chain store sales and the change in nonauto retail sales.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">11/16/02</th>
<th scope="col">11/09/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>397.1</td>
<td>402.0</td>
<td>2.0%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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U.S. Trade Deficit Remained Quite Deep in September 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 19, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021119b.jpg" width="353">
The U.S. foreign trade deficit remained deeper than expected in September following the record deficit of the month earlier. The previously reported August deficit was lessened slightly due to a lessened decline in exports. Consensus expectations had been for a September deficit of $37.2B
Exports fell for the second consecutive month. The y/y comparison improved due to a sharp 7.3% m/m decline in exports last September. Capital goods exports rose a moderate 0.8% (9.6% AR, YTD) but nonauto consumer goods exports fell for the second consecutive month (-0.5% AR, YTD).
Imports rose moderately, held back by the third consecutive monthly decline in capital goods imports. Imports of nonauto consumer goods fell 1.4% following the 5.2% August spurt.
The refiner&#39;s acquisition cost of imported crude oil rose to $26.64 in September versus $15.95 in December. Crude oil prices rose further in October but have fallen sharply in November.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE03/@EE03.HTM">Foreign Trade</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
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<td class="firstcol">Trade Deficit</td>
<td>$38.0B</td>
<td>$38.3B</td>
<td>$19.5B(9/01)</td>
<td>$358.3B</td>
<td>$378.7B</td>
<td>$262.2B</td>
</tr>
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<td class="firstcol">&nbsp; Exports - Goods &amp; Services</td>
<td>-0.4%</td>
<td>-0.5%</td>
<td>6.7%</td>
<td>-6.2%</td>
<td>11.2%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports - Goods &amp; Services</td>
<td>-0.5%</td>
<td>2.4%</td>
<td>24.5%</td>
<td>-6.0%</td>
<td>18.3%</td>
<td>10.9%</td>
</tr>
</tbody>
</table>
CPI Rose As Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 19, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021119a.jpg" width="353">
The Consumer Price Index (CPI-U) rose 0.3% last month, slightly above the YTD average of 0.2%. The gain was as expected. Excluding food and energy, prices also rose as expected, about equal to the YTD average.
Lower tobacco prices (-3.1%) helped restrain inflation last month, though the core CPI less tobacco rose the same 0.2% as the overall core due to rounding.
Amongst other goods, some prices firmed. Household furnishings and operation prices rose 0.3%, the first gain in five months. New vehicle prices rose 0.4% following a 0.5% September gain.On the downside were used car prices (-1.6%). Apparel prices were flat.
Services prices were mixed. Shelter prices rose just 0.2% following the 0.1% gain in the prior month. Public transportation prices fell 1.6% for the fourth decline in five months. Education prices were flat following a 0.2% decline the month prior. Recreation prices were up 0.3%, however, and medical care services prices surged 0.7%, nearly double the elevated September gain.
Energy prices were again strong last month led by a 3.4% (33.1% AR, YTD) rise in gasoline prices. Fuel oil prices also were strong, up 1.7%. Piped gas &amp; electricity prices were up 0.4% for the third month.

<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/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.3%</td>
<td>0.2%</td>
<td>2.1%</td>
<td>2.8%</td>
<td>3.4%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.2%</td>
<td>2.7%</td>
<td>2.4%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>-1.1%</td>
<td>0.3%</td>
<td>0.5%</td>
<td>0.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.7%</td>
<td>3.7%</td>
<td>3.3%</td>
<td>2.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>1.9%</td>
<td>0.7%</td>
<td>3.0%</td>
<td>3.7%</td>
<td>16.9%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food &amp; Beverages</td>
<td>0.1%</td>
<td>0.2%</td>
<td>0.9%</td>
<td>3.1%</td>
<td>2.3%</td>
<td>2.1%</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>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a></td>
<td>0.2%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>2.1%</td>
<td>2.0%</td>
<td>NA</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>1.9%</td>
<td>&nbsp;1.4%</td>
<td>NA</td>
</tr>
</tbody>
</table>
NAHB Housing Index Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 19, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021119d.jpg" width="353">
The National Association of Home Builders index of new home sales rose sharply last month and during the recent several months following a period of relative stability early this year. The latest rise was to the highest level in two years.
Surveys of market conditions both currently and prospectively in the next six month improved. The current sales index improved sharply. 
During the last fifteen years there has been a 70% correlation between the annual percent change in the NAHB Index and the change in new home sales.
For a description of the housing market index from the National Association of Home Builders, visit the <a href="http://www.nahb.org/generic.aspx?sectionID=134&amp;genericContentID=532">NAHB website</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>65</td>
<td>63</td>
<td>49</td>
<td>56</td>
<td>62</td>
<td>73</td>
</tr>
</tbody>
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Chain store sales fell sharply last week, according to the BTM-UBSW survey. Sales fell 1.2% and erased virtually all the gains in the prior two weeks. So far in November, sales were down 0.3% from the average sales level a month [...]

Weekly Chain Store Sales Falter

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021118b.jpg" width="353">
The Manpower Employment Outlook Survey index of net hiring rose for 1Q03 from the improved level of the prior six months.
The not seasonally adjusted survey results indicated that 20% of firms plan to add employees in 1Q03 compared to 24% in 4Q. 12% planned to cut payrolls in 1Q compared to 9% in 4Q.
Hiring typically weakens seasonally in 1Q and layoffs also typically rise
Over the last 25 years there has been an 77% correlation between the Manpower survey net hiring figure and the y/y change in nonfarm payrolls. That correlation fell to 51% during the most recent ten years.
Manpower surveys nearly 16,000 public &amp; private firms in 477 US markets.

<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/@S302/@S302.HTM">Manpower Employment Outlook Survey</a></th>
<th scope="col">1Q03</th>
<th scope="col">4Q02</th>
<th scope="col">1Q02</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">All Industries: Net Higher (SA, %)</td>
<td>16</td>
<td>14</td>
<td>8</td>
<td>11</td>
<td>17</td>
<td>24</td>
</tr>
</tbody>
</table>
ECRI Future Inflation Gauge Level After Prior Surge 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 18, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021118a.jpg" width="353">
The Future Inflation Gauge (FIG) published by the Economic Cycle Research Institute (ECRI) remained stable in October after sharp m/m gains in six of the prior seven months. Gains in those months were also revised higher.
The indicator&#39;s six-month growth rate of 24.1% was the strongest growth rate in the record of the index which dates back to 1994.
The monthly FIG has a mean lead of 11 months and a median lead of 9 months at inflation cycle turns .
The eight components of the FIG are commodity prices, employment measures, capacity measures, import prices, the yield spread, real estate and debt.
For more on ECRI visit <a href="http://www.businesscycle.com">businesscycle.com</a>.

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</table>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF12/@EF12.HTM">ECRI</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Future Inflation Gauge</td>
<td>114.6</td>
<td>114.6</td>
<td>17.8%</td>
<td>-14.2%</td>
<td>6.5%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Manpower Employment Outlook Survey index of net hiring rose for 1Q03 from the improved level of the prior six months. The not seasonally adjusted survey results indicated that 20% of firms plan to add employees in 1Q03 compared to [...]

Manpower Survey Hiring Index Improved for 1Q03

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021115a.jpg" width="353">
Finished producer prices surged by the most for any month since September 1990, powered by higher energy prices. Consensus expectations were for a 0.2% gain.
Excluding food and energy prices also rose much more than expectations for a 0.1% gain, driven by higher prices for passenger cars. Core producer prices were up 0.2% (AR) year to date.
Energy prices surged 4.2% (15.3% AR, YTD). Gasoline prices jumped 10.9% (86.5% AR) and fuel oil prices were strong for the fourth consecutive month (72.6% AR, YTD). Residential gas prices also rose a strong 3.5% but the YTD gain was a relatively low 4.0% (AR). These energy product price series are NSA.
Core finished consumer goods prices rose 0.6% (0.6% AR, YTD). Consumer durables prices jumped 0.8% on the rise in car prices. Gains in other consumer durables prices were relatively modest or negative. Core nondurable goods prices rose a firm 0.4% (1.4% AR, YTD) due to higher apparel prices. Capital goods prices rose 0.4% (-0.3% AR, YTD), the most for any month since October 1999.
Food prices rose a firm 0.7% (-1.5% AR, YTD) following three consecutive months of decline.
Intermediate goods prices were strong due to higher petroleum prices. Core intermediate prices rose just 0.1% for the second consecutive month (1.8% AR, YTD). 
Crude goods prices jumped (21.5% AR, YTD) reflecting higher energy prices. Other commodities prices reflected in the core crude price measure also surged reflecting higher scrap metals prices.

<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/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>1.1%</td>
<td>0.1%</td>
<td>0.6%</td>
<td>2.0%</td>
<td>3.7%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.5%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>1.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.7%</td>
<td>0.5%</td>
<td>1.7%</td>
<td>0.4%</td>
<td>4.9%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.0%</td>
<td>-0.1%</td>
<td>2.6%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>3.4%</td>
<td>0.6%</td>
<td>14.5%</td>
<td>0.3%</td>
<td>22.8%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.9%</td>
<td>-0.6%</td>
<td>10.9%</td>
<td>-9.9%</td>
<td>7.3%</td>
<td>-4.7%</td>
</tr>
</tbody>
</table>
Business Inventory Accumulation Started Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 15, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021115c.jpg" width="353">
Total business inventories rose more than double Consensus expectations for September. August figures were revised back to positive due to raised figures for nonauto retail inventories.
Retail inventories (7.0% YTD, AR) surged, led by a 2.0% jump in motor vehicle inventories. Nonauto retail inventories (2.5% YTD, AR) rose strongly.
Inventories of furniture &amp; home furnishings rose 1.8% and have been steadily accumulating (12.0% YTD, AR) since September. Inventories at apparel stores (4.1% YTD, AR) also jumped 0.9%. At general merchandise stores (-1.1% YTD, AR), inventories rose a modest 0.2%.
Overall business sales declined 0.5% (4.4% YTD, AR), the first monthly decline since May.
The inventory-to-sales ratio rose slightly to 1.36 from a record low level. 

<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/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.5%</td>
<td>0.1%</td>
<td>-2.4%</td>
<td>-6.3%</td>
<td>5.6%</td>
<td>5.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>1.1%</td>
<td>-0.0%</td>
<td>1.5%</td>
<td>-5.0%</td>
<td>6.1%</td>
<td>7.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.6%</td>
<td>0.1%</td>
<td>1.0%</td>
<td>-2.0%</td>
<td>4.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.5%</td>
<td>0.1%</td>
<td>-3.4%</td>
<td>-5.5%</td>
<td>6.6%</td>
<td>6.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.0%</td>
<td>0.1%</td>
<td>-5.2%</td>
<td>-8.0%</td>
<td>4.5%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
Industrial Production Down Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 15, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021115b.jpg" width="353">
Industrial production slumped in October versus Consensus expectations for a moderate 0.3% decline. September&#39;s decline was deepened slightly. October was the third consecutive monthly decline in output. Production was up 2.3% (AR) year to date.
Output in the manufacturing sector fell 0.7% (2.0% AR, YTD) and September&#39;s previously reported 0.2% decline was doubled. It was the third consecutive monthly decline in factory output.
Sharply lower motor vehicle and parts output (5.2% AR, YTD) led the factory sector decline, off sharply for the second consecutive month. Output of furniture &amp; fixtures fell 2.3% following an upwardly revised 1.0% September gain. Apparel output fell sharply for the second month in three 
Output of business equipment fell 2.0% (-3.8% AR, YTD) following a steep September decline. Output of information processing equipment rose 0.1% after a sharp 0.5% September decline that was revised from a slight gain. 
Capacity utilization fell sharply to the lowest level since March. Capacity again rose 0.1%(1.0% AR, YTD) as it has since early last year.

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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/USECON/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Industrial Production</td>
<td>-0.8%</td>
<td>-0.2%</td>
<td>1.2%</td>
<td>-3.7%</td>
<td>4.5%</td>
<td>3.7%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>75.2%</td>
<td>75.8%</td>
<td>75.0%(10/01)</td>
<td>76.8%</td>
<td>81.8%</td>
<td>81.4%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Up in Early November 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 15, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021115d.jpg" width="353">
The preliminary reading of Consumer Sentiment for November rose a surprising 5.5% from October according to the University of Michigan. The figure was versus the Consensus expectation of a rise in the index level to 82.0.
Indexes of current conditions and expectations both rose, the latter sharply.
The University of Michigan survey is not seasonally adjusted.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Prelim. Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Sentiment</td>
<td>85.0</td>
<td>80.6</td>
<td>1.3%</td>
<td>89.2</td>
<td>107.6</td>
<td>105.8</td>
</tr>
</tbody>
</table>
Empire State Manufacturing Survey Improved in November 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 15, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021115e.jpg" width="353">
The Empire State Manufacturing Survey reported that the index of general business conditions improved in November.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question, not components.
Diffusion indexes for employment, new orders, and shipments improved. Indexes of prices paid and received both fell.
For the latest Empire State Manufacturing Survey report, click <a href="http://www.newyorkfed.org/rmaghome/regional/mfg_survey/11_2002.pdf">here</a>.

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<colgroup><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S511/@S511.HTM">Empire State Manufacturing Survey</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General business conditions (diffusion index)</td>
<td>9.64</td>
<td>-14.61</td>
<td>-16.39</td>
<td>-14.97</td>
</tr>
</tbody>
</table>
</body>
</html>

Finished producer prices surged by the most for any month since September 1990, powered by higher energy prices. Consensus expectations were for a 0.2% gain. Excluding food and energy prices also rose much more than expectations for a [...]

Producer Prices Rocket Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021114a.jpg" width="353">
Retail sales were slightly stronger last month than Consensus expectations for a 0.2% decline. The sharp drop in September retail sales was little revised. Total retail sales were up at a 2.6% annual rate YTD through October.
Sales last October were lifted by the huge 22.5% gain in sales of motor vehicles. The record auto sales rate last year of 21.10 mil. units was the result of new zero percent financing incentives. Unit vehicle sales last month ran at a 15.34 mil. unit rate.
Sales excluding motor vehicles and parts dealers rose more than twice expectations for a 0.3% gain. September sales were revised down slightly. Year to date nonauto retail sales were up at a 4.6% annual rate through October.
Strong apparel store sales, up 4.0%, provided the lift to nonauto sales. That gain was a rebound from sales declines in six of the prior seven months. Apparel store sales were up at a 2.1% rate YTD through October.
Strong sales at general merchandise stores, up 1.1%, also were a bounce back from prior weakness. Nevertheless, year to date sales were up at a healthy 4.6% rate through October.
Furniture and home furnishing store sales were flat after a slight September decline (0.2% YTD, AR).
Motor vehicle dealers&#39; sales declined 1.9% following a 5.0% drop in September. Year to date sales were down at a 3.4% rate.
Sales at gasoline service stations rose 1.5% reflecting sharp 5-7% gains in wholesale gasoline prices. Less gasoline, nonauto retail sales rose 0.6%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.0%</td>
<td>-1.3%</td>
<td>-0.7%</td>
<td>3.8%</td>
<td>6.7%</td>
<td>8.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>4.5%</td>
<td>3.4%</td>
<td>7.3%</td>
<td>7.4%</td>
</tr>
</tbody>
</table>
<table border="0" cellspacing="0" width="100%">

</table>
Import Prices Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 14, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021114c.jpg" width="353">
Prices for imported commodities rose slightly last month, right on Consensus expectations for a moderate 0.1% gain. September figures were unrevised.
Petroleum import prices posted the smallest monthly gain this year, except for a 3.5% decline in June. Nevertheless, they are up at a 82.1% rate since December. So far in November the price of Arab Light crude oil has run below $23.00/bbl versus $25.39 in October.
Nonpetroleum import prices fell for the first month since May (0.2% YTD, AR).
Prices of imported foods and beverages fell last month as did capital good prices. Nonauto consumer goods prices rose a slight 0.1% (-0.7% YTD, AR) and auto prices were up 0.3% (0.7% YTD, AR).
Export prices were unchanged (1.4% YTD, AR). Food and capital goods prices fell. Only prices of industrial supplies prices rose meaningfully.

<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">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.1%</td>
<td>0.7%</td>
<td>2.1%</td>
<td>-3.5%</td>
<td>6.5%</td>
<td>0.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>0.1%</td>
<td>6.0%</td>
<td>34.5%</td>
<td>-17.2%</td>
<td>66.5%</td>
<td>34.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>-0.4%</td>
<td>-1.5%</td>
<td>1.0%</td>
<td>-1.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.0%</td>
<td>0.2%</td>
<td>0.4%</td>
<td>-0.8%</td>
<td>1.6%</td>
<td>-1.3%</td>
</tr>
</tbody>
</table>
Initial Claims for Jobless Insurance Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 14, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/021114b.jpg" width="353">
Initial claims for unemployment insurance fell more than expected in the latest week. Claims in the prior week were revised up slightly.
The four-week moving average of initial claims dropped to 396,750, down 12.6% y/y.
Continuing claims for unemployment insurance rose a sharp 2.5% w/w, but the prior week&#39;s unchanged level was revised down.
The insured rate of unemployment rose slightly to 2.9% following three weeks unchanged at 2.8%.

<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">11/09/02</th>
<th scope="col">11/02/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>388.0</td>
<td>396.0</td>
<td>-9.6%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,646</td>
<td>-1.3%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
</tr>
</tbody>
</table>
</body>
</html>

Retail sales were slightly stronger last month than Consensus expectations for a 0.2% decline. The sharp drop in September retail sales was little revised. Total retail sales were up at a 2.6% annual rate YTD through October. Sales [...]

Retail Sales Unchanged M/M, but Healthy

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

Cost of transporting crude oil has soared to series high

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

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

Is recent drop in sentiment signaling softer growth ahead?

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

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

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

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Winnie Tapasanun

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Existing home sales fell 3.6% m/m (-1.0% y/y) to 3.98 million units (SAAR) in March, the lowest level since June 2025, following a 2.7% rebound to 4.13 million in February (previously +1.7%; 4.09 mil.), according to the National Association of Realtors (NAR). The Action Economics Forecast Survey had expected March sales of 4.08 million units. Sales remained 38.1% below a high of 6.43 million in January 2022 and 39.7% below a peak of 6.60 million in January 2021. The March fall coincided with an increase in the average 30-year fixed mortgage rate to a three-month-high 6.18% in March after declining to 6.05% in February, 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 3.5% (-0.3% y/y) to 3.63 million units in March, the second m/m fall in three months and the weakest reading since June 2025, after a 3.3% increase to 3.76 million in February. Sales of condos and co-ops slid 5.4% (-7.9% y/y) to 350,000, the fourth m/m slide in five months and the lowest level since May 2020, on top of a 2.6% February decline to 370,000.

By region, March existing home sales fell m/m across all major regions. Sales in the Northeast dropped 8.5% (-12.2% y/y) to 430,000 in March after a 6.0% February decrease, marking the third consecutive m/m fall and a record low. Sales in the Midwest fell 4.2% (-3.2% y/y) to 920,000, the lowest reading since September 2024, reversing a 3.2% February increase. Sales in the South slid 3.1% (+2.2% y/y) to 1.86 million after a 3.2% February rise. Sales in the West fell 1.3% (+1.3% y/y) to 770,000 following a 6.8% February rebound. The Midwest, South, and West each posted the second m/m decline in three months. Notably, the South remained the dominant region, accounting for 46.7% of total U.S. existing home sales.

The median price of all existing homes (NSA) rose 2.7% (1.4% y/y) to $408,800 in March, the highest since November, following a 0.8% increase to $398,000 in February (unrevised) and three successive m/m declines. Prices were 5.5% below a high of $432,700 in June 2025 but 13.3% above a low of $360,800 in January 2023. The median price of an existing single-family home grew 2.5% (1.3% y/y) to $412,400 in March, the highest since November, after a 1.0% rebound to $402,300 in February. The median price of condos and co-ops, up for the third time in four months, climbed 4.8% (2.3% y/y) to $371,500, the highest since June 2025, following a 2.9% February drop to $ 354,400. Regionally, overall prices rose m/m in March in the Midwest (+3.8%; +4.9% y/y), Northeast (+3.5%; +5.7% y/y), West (+2.7%; -1.3% y/y), and South (+1.7%; +0.8% y/y).

Inventories of homes for sale increased for the third consecutive in March. The number of existing homes for sale (NSA) rose 3.0% (2.3% y/y) to 1.36 million units, the highest level since November, following a 4.8% February rise to 1.32 million. The supply of homes on the market at the current selling rate (NSA) rose to 4.1 months, the highest in four months, after holding at 3.8 months in February and January. The recent high of 4.6 months was in August 2025, while 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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- March sales -3.6% m/m to lower-than-expected 3.98 mil.; -1.0% y/y, fifth straight y/y decrease.
- Broad-based regional m/m declines: Northeast (-8.5%), Midwest (-4.2%), South (-3.1%), West (-1.3%); y/y sales up in the South and West but down in the Northeast and Midwest.
- Median sales price +2.7% (+1.4% y/y) to $408,800, highest since November.
- Unsold inventory +3.0% (+2.3% y/y) to four-month-high 1.36 mil. units; 4.1 months' supply.

U.S. Existing Home Sales Drop in March to a Nine-Month Low

Tian Yong Woon

In this week’s Letter, we continue to track developments in the Middle East and their implications for Asia. While the recent US–Iran ceasefire initially provided some relief to markets, subsequent complications have kept uncertainty elevated, with no conclusive resumption of trade flows yet through the Strait of Hormuz (chart 1)—flows that are critical to restoring the global energy system to more normal conditions.

Overall, our Blue Chip Economic Indicators panellists have broadly downgraded growth expectations for Asia this year, with the exceptions of China and Taiwan, while inflation forecasts have been revised higher across the board (chart 2). That said, the growth and inflation impact from the conflict are largely viewed as transitory, with most panellists expecting them to last between six and twelve months (chart 3). Nonetheless, central banks in the region appear increasingly reluctant to ease policy further. This is evident in the latest round of decisions, where India, South Korea, and New Zealand all held policy rates steady (chart 4), citing heightened uncertainty stemming from the ongoing conflict.

While inflationary pressures are beginning to build more broadly across the region, China had already been experiencing a pickup in recent months (chart 5). This has been supported by easing producer price deflation and improving industrial profits, alongside policy efforts to curb excessive price competition among producers. Attention now turns to China’s upcoming Q1 GDP release and the full slate of monthly data due later this week (chart 6).

**Middle east conflict developments**
Crude oil prices fell sharply earlier last week following news of a temporary US–Iran ceasefire. That said, the geopolitical backdrop remains highly fragile, as reflected in continued rhetoric from both sides, alongside the US announcement of a naval blockade over the strait after talks failed to yield an agreement. Compounding this, Iran has indicated that it cannot fully reopen the strait, citing uncertainty over the location of sea mines it had previously laid—further complicating any swift normalization of oil flows. Even prior to these latest developments, IMF-tracked shipping volumes had only begun to show tentative signs of recovery and remain well below pre-escalation levels. As such, while the ceasefire provides a welcome reprieve, meaningful economic relief will hinge on a sustained restoration of oil flows—crucially without additional frictions or costs that could impair global trade. Until then, crude prices are likely to remain elevated, albeit possibly off recent highs, weighing on growth while sustaining inflationary pressures. In Asia, where many economies are heavily reliant on oil imports, the region is likely to bear a disproportionate share of these effects.

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**The latest Blue Chip Economic Indicators survey**
In light of recent developments, our latest Blue Chip Economic Indicators (BCEI) survey provides a timely update. It is a monthly poll of forecasters covering key economic indicators across a wide range of economies. As shown in chart 2, panellists have generally trimmed their 2026 growth forecasts across most Asian economies. Taiwan is a notable exception, with growth expectations revised higher, likely continuing to be supported by the ongoing AI-driven expansion. Meanwhile, forecasts for China’s 2026 growth were left unchanged. On the inflation front, expectations for 2026 have been revised higher across all Asian economies, consistent with the pass-through from the recent surge in oil prices. The largest upward revision was seen in Australia (+0.7 ppts), while increases were more modest in economies such as Japan and China (+0.3 ppts each).

260413T2.jpg

Digging deeper into this month’s BCEI survey, the special questions provide additional insight into panellists’ views. In particular, one question asked about the time horizon over which current energy supply chain disruptions are expected to materially affect global inflation and growth. Panellists largely view the impact as short term (chart 3), with most clustering around a six- to twelve-month window. Smaller shares see effects lasting either less than six months or extending between one and three years, while only a very small minority expect disruptions to persist beyond three years. Overall, while the recent oil price surge represents a clear shock to the global economy, it is widely seen as transitory—temporarily lifting inflation and weighing modestly on growth, but unlikely to drive a fundamental shift in the broader macroeconomic outlook.

260413T3.jpg

**The week’s central bank decisions**
Turning to last week’s key monetary policy decisions in the region, the central banks of India (RBI), South Korea (BoK), and New Zealand (RBNZ) all kept policy rates unchanged, with several common threads across their communications. Notably, each highlighted the considerable uncertainty stemming from the Middle East conflict, which has already begun to feed into global inflation via higher oil prices. This aligns with broader investor sentiment: the bar for further policy easing has risen given renewed inflationary pressures, while the threshold for a shift toward tightening remains high, as most economies are still far from overheating. On central bank–specific nuances, the RBI emphasized the delicate trade-off between anchoring inflation expectations and minimizing growth sacrifices. The BoK noted that its policy rate is around the neutral level, while flagging potential additional pressure on the won from elevated oil prices. Meanwhile, the RBNZ signalled that near-term inflation is likely to rise even as the economic recovery softens, citing significant supply chain disruptions linked to the Middle East conflict.

260413T4.jpg

**China and the week ahead**
Lastly, we turn to China and the week ahead. As shown in chart 5, even prior to the Middle East conflict, China had already begun to see a pickup in inflation—an early indication that it may be moving out of its prolonged period of chronically low, or even negative, price pressures. This recent firming in CPI inflation has been accompanied by more sustained growth in industrial profits and a steady improvement in producer price pressures, with PPI inflation recently turning positive after a multi-year stretch of deflation. Together, these trends point to gradually strengthening price dynamics. The shift in inflation also reflects underlying policy efforts to curb excessive price competition among producers, which had weighed on prices for an extended period. Looking ahead, the recent oil price shock could provide an additional boost to inflation, as higher energy costs begin to feed through into future readings.

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Looking ahead to the coming week, Asia faces a packed data calendar, with the spotlight firmly on China as its Q1 GDP release and the usual slate of monthly indicators are due (chart 6). A key focus will be how March data shapes overall Q1 growth, particularly given that activity in the first two months of the year largely surprised to the upside. Investors will also be watching for any early signs of spillovers from the Middle East conflict in the March prints. Retail sales will be closely monitored as a gauge of the effectiveness of policy support for consumption, while developments in house prices will remain in focus as the property downturn continues to unfold gradually.

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Asia

Economic Letter from Asia: A Shifting Consensus

Michael J. Moran

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The Consumer Price Index rose 0.9% in March, easily the sharpest monthly rise since the inflation burst in 2022. Although pronounced in magnitude, the increase was not surprising, as essentially all analysts had built in pressure from the energy sector. Energy prices jumped 10.9%, led by a surge of 21.2% in gasoline prices. Other energy components wiggled: charges for electricity services rose 0.8%, offsetting declines in the prior two months; a drop 0.9% in the price of natural gas services followed sharp increases in the prior three months.

The press report from the Bureau of Labor Statistics showed food prices as unchanged, but calculating the shift to more than one decimal point showed a marginal decline (-0.005%) The dip was almost imperceptible, but it nevertheless was a welcome rarity. The decline occurred in the food-at-home component (i.e. grocery store prices, -0.2%); prices of food away from home (i.e. at restaurants and bars) rose 0.2%.

Core prices rose 0.2 percent, softer than the expected increase of 0.3%. Only two areas posted high-side readings. Apparel prices increased 1.0% after a jump of 1.3% in February, perhaps reflecting hope for an active spring selling season. Airfares jumped 2.7%, hardly surprising in light of recent energy developments. Sharper increases are likely in coming months because of higher fuel prices. Most other core items were contained, including declines of 1.0% in medical-care commodities and 0.4% in the prices of used motor vehicles. Prices of medical-care commodities have been quiet since the middle of 2024; the latest year-over-year change totaled only 0.3%. Prices of used cars and trucks have declined for four consecutive months, leaving a year-over-year decline of 3.2%.

Although core prices were well contained in March, the outlook is uncertain because of potential passthrough from higher energy prices. At the same time, recent trends in the inflation rates for core goods and core services offer a reason to be optimistic, as both are decelerating. As shown in the left chart below, core goods prices in the past six months have been subdued, which has pulled the year-over-year change from 1.5% last fall (August to October) to 1.2% in March. Core service prices, shown in the right chart below, have registered changes of 0.3% or 0.4% in the three months before the 0.2% reading in March. However, results for October and November were restrained, and changes in the past six months in total show deceleration. The year-over-year change of 3.0% in core service prices in March reflects an advance of 3.3% in the first six months of this span (annual rate) and 2.7% in the past six months. The pattern is choppy, but it traces a decelerating trend.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Gasoline prices drove the energy component higher; electricity prices also contributed.
- Food prices provided a surprise by posting a fractional decline.
- Core prices rose less than expected; both goods and services components were contained.

March CPI: Pressure in the Energy Sector (as Expected); Tame Elsewhere (Surprisingly)

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Total factory orders were virtually unchanged m/m in February following a flat reading in January and a 0.4% decline in December, data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected a 0.2% m/m February increase. The year-on-year growth rate eased to 3.7% in February, the lowest since October, from 4.2% in January (+3.0% in February 2025), remaining far below the April 2021 peak of 39.6%. Notably, orders for nondefense aircraft & parts plunged 28.6% m/m in February following decreases of 1.7% in January and 22.7% in December, while orders for defense aircraft & parts fell 2.1% after a 26.9% January slump and an 11.8% December jump. Factory orders excluding defense edged up 0.1% (3.6% y/y), the third m/m increase in four months, following a 0.4% January rebound. Factory orders excluding the transportation sector rose 1.2% (2.5% y/y), the strongest of four consecutive m/m gains, after a 0.5% January increase.

Durable goods orders fell 1.3% (+7.4% y/y) in February after a 0.4% decline in January (in line with a 1.4% m/m decrease in the advance report on April 7), marking the fourth m/m decline in five months. The February m/m fall reflected a 5.3% orders drop (+10.2% y/y) in transportation equipment following a 1.9% January decrease, alongside m/m declines of 0.5% (+2.4% y/y) in furniture & related products and 0.3% (+4.9% y/y) in electrical equipment, appliances & components. Other major durable goods orders categories rose m/m in February, led by a 2.4% gain (10.5% y/y) in primary metals, followed by increases of 1.7% (9.5% y/y) in machinery, 0.5% (5.4% y/y) in fabricated metal products, and 0.2% (7.7% y/y) in computers & electronic products.

Nondurable goods orders, which equal nondurable goods shipments, advanced 1.5% (0.1% y/y) in February, the biggest of three successive m/m gains, after a 0.5% increase in January. The February m/m rise was led by a 6.2% jump (-6.4% y/y) in petroleum & coal products, followed by gains of 5.9% (-5.8% y/y) leather & allied products, 1.2% (-2.8% y/y) in textile mills, 1.0% (1.6% y/y) in paper products, 0.9% (1.2% y/y) in plastics & rubber products, 0.6% (3.7% y/y) in beverage & tobacco products, 0.5% (3.2% y/y) in chemical products, 0.4% (3.2% y/y) in apparel, and 0.2% (0.5% y/y) in food products. To the downside, nondurable goods shipments for textile products (-1.4%; -1.5% y/y) and printing (-0.4%; -0.9% y/y) fell m/m in February following their January increases.

Total shipments rose 1.4% (3.5% y/y) in February after gains of 0.7% in January and December, registering the fourth m/m rise in five months. Excluding transportation, shipments advanced 1.4% (2.3% y/y), the fifth m/m gain in six months, after a 0.5% January increase. Shipments of durable goods industries also rose 1.4% (6.9% y/y), up for the fifth time in six months, after a 0.9% January gain. This reflected m/m increases across nearly all durable goods shipments categories, led by a 2.5% rise (10.1% y/y) in primary metals, followed by gains of 1.7% (5.5% y/y) in electrical equipment, appliances & components, 1.7% (4.0% y/y) in furniture & related products, 1.6% (9.7% y/y) in transportation equipment, 1.4% (7.6% y/y) in machinery, 1.3% (3.8% y/y) in nonmetallic mineral products, 1.0% (6.1% y/y) in computers & electronic products, 1.0% (2.5% y/y) in miscellaneous durable goods, and 0.9% (5.4% y/y) in fabricated metal products. In contrast, durable goods shipments for wood products were the only category with a monthly decline in February, easing 0.1% (-2.9% y/y) following a flat January reading.

Unfilled orders edged up 0.1% (11.1% y/y) in February, the smallest of seven consecutive m/m increases, following a 0.6% rise in January. Excluding transportation, unfilled orders grew 0.2% (1.9% y/y), up for the seventh straight month, after a 0.3% January increase. Backlogs of durable goods ticked up 0.1% (11.1% y/y) in February, led by gains of 0.5% (2.0% y/y) in machinery and 0.2% (4.9% y/y) in electrical equipment, appliances & components, partially offset by declines of 0.7% (+1.5% y/y) in furniture & related products and 0.1% (+2.3% y/y) in primary metals.

Inventories inched up 0.1% (0.8% y/y) in February, the fourth successive m/m increase, following matching 0.1% gains in January and December. Excluding transportation, inventories edged up 0.1% (1.0% y/y) after no change in January. Durable goods inventories increased 0.1% (1.8% y/y) in February after rising 0.2% for four straight months, while nondurable goods inventories were virtually unchanged (-0.8% y/y) after declining 0.3% in January and December.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Factory orders virtually unchanged (+3.7% y/y) in Feb. for second straight month; still 7.6% above the Jan. ’24 low.
- Durable goods orders (-1.3%), fourth m/m fall in five mths.; nondurable goods orders (+1.5%), largest of three successive m/m gains; shipments (+1.4%), fourth m/m rise in five mths.
- Transportation orders -5.3% m/m, led by a 28.6% plunge in nondefense aircraft orders.
- Unfilled orders +0.1%, smallest of seven straight m/m increases.
- Inventories +0.1%, holding within a narrow 0.1%-0.2% range for four consecutive mths.

U.S. Factory Orders Flat in February on Weak Nondefense Aircraft Orders

Andrew Cates

**Positive Growth Surprises, Negative Inflation Surprises—For Now**
The global macro backdrop heading into the latest Middle East shock was, by recent standards, relatively constructive. As the chart shows, growth data had been consistently surprising to the upside, while inflation surprises have been in negative territory—an unusually benign combination suggesting resilient activity alongside easing price pressures. What is striking, however, is that—at least through March and into early April—this pattern has not yet been meaningfully dislodged. For now, the data flow still reflects a world that was stabilising rather than deteriorating. That said, this is almost certainly a lagging signal. Supply-side shocks of this nature—particularly those centred on energy—tend to work with a delay but can be highly disruptive once they feed through. The risk, therefore, is that the current “goldilocks” surprise dynamic proves short-lived as higher energy costs, supply chain frictions and rising uncertainty begin to reshape the incoming data in the weeks ahead.

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**Monetary Policy Expectations Shift as Easing Bets Are Repriced**
How policymakers respond to the evolving situation in the Middle East will be critical in shaping both market dynamics and the broader global outlook. This chart, based on the latest April Blue Chip Financial Forecasts survey, suggests that expectations are already beginning to shift. Forecasters are now less inclined to anticipate policy easing in the period ahead—particularly in the euro area, where expectations for rate cuts have been scaled back. Similarly, some of the easing previously priced for the Federal Reserve and the Bank of England has been pared back over the next 12 months. While this is not yet a full pivot toward tightening, it does point to a more cautious policy backdrop, reflecting the risk that renewed energy-driven inflation pressures could constrain central banks’ ability to support growth.

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**Delay, Don’t Tighten: Central Banks’ Likely Playbook**
If the previous chart highlights a shift in policy expectations, this one gives a clearer sense of the reaction function underpinning it. When asked how central banks would respond if energy-driven inflation proves more persistent, most panellists point not to renewed tightening, but to a more cautious delay in easing. In other words, the hurdle for rate cuts has risen, even if the bar for  hikes remains relatively high. This distinction matters. It suggests that policymakers are likely to treat the shock as a supply-driven inflation impulse—one that complicates the outlook but does not automatically warrant aggressive tightening. At the same time, the responses underscore a second important theme: divergence. A sizeable share of forecasters expect policy paths to vary significantly across regions, reflecting differences in energy exposure, inflation dynamics and domestic growth conditions. Taken together, the message is one of constrained flexibility. Central banks may want to support growth, but persistent energy pressures could keep them on hold for longer than previously anticipated—reinforcing the more cautious policy outlook already evident in market pricing.

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**Markets Signal Fiscal Concern, Not Inflation Panic**
If central banks are likely to proceed cautiously, financial markets are already beginning to draw their own conclusions. This chart shows that the recent adjustment in US Treasury markets has been driven primarily by a rise in real yields rather than a meaningful increase in inflation expectations. In other words, markets are not yet pricing a loss of monetary policy credibility or a sharp unanchoring of inflation expectations. Instead, the move points more toward concerns around the broader policy mix—particularly the fiscal backdrop and the potential for increased borrowing needs in an environment of heightened geopolitical risk. This distinction is important. A rise in inflation expectations would suggest fears of central banks falling behind the curve. What we are seeing instead is a repricing of real rates, consistent with tighter financial conditions and a higher risk premium. For now, at least, markets appear to view the shock less as a classic inflation spiral and more as a development that complicates the growth outlook and places greater strain on policy frameworks—especially on the fiscal side.

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**Electricity Prices Reflect Energy Dependence**
The initial response in electricity markets since the Middle East disruption has followed a familiar pattern. Economies with greater domestic energy capacity—such as Scandinavia and, to a lesser extent, the US—have seen relatively contained electricity prices. By contrast, those more reliant on imported energy—most notably the UK and parts of Europe—continue to face significantly higher costs

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**Generation Capacity Determines Energy Resilience**
These price dynamics are closely linked to underlying differences in electricity generation capacity. As the sixth chart shows, countries with higher per capita electricity production—again including Scandinavia and the US—are structurally better positioned to absorb external shocks. In contrast, economies with more limited domestic generation capacity, such as the UK and Germany, are inherently more exposed to fluctuations in global energy markets. This structural divide is likely to prove increasingly important in the period ahead, influencing not just near-term inflation outcomes but also the relative resilience of growth across economies as energy costs remain volatile.

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Amid further tentative signs of de-escalation—most notably President Trump’s decision on April 7th to step back from further escalation—financial markets have stabilised somewhat, but the macroeconomic implications of the Middle East crisis remain highly uncertain. As our charts show, the global economy entered this shock from a position of relative strength, with positive growth surprises and easing inflation pressures still evident in the data (chart 1). However, that benign backdrop now looks vulnerable. Central banks are already reassessing the outlook, with expectations for policy easing being pared back (chart 2) and a growing consensus that any response to persistent energy-driven inflation will likely involve delaying cuts rather than tightening aggressively—albeit with significant regional divergence (chart 3). Financial markets, for their part, are not yet signalling a loss of inflation control, but the rise in real yields suggests increasing concern around the broader policy mix, particularly fiscal pressures (chart 4). Finally, the adjustment to the shock is unlikely to be uniform. Structural differences in domestic energy capacity are already driving wide divergences in electricity prices, leaving more import-dependent economies exposed to higher costs and sharper trade-offs between growth and inflation (charts 5 and 6). Taken together, the message is clear: even if geopolitical tensions ease, the economic aftershocks are likely to be uneven, persistent and increasingly shaped by structural constraints.

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