Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030716c.jpg" width="353">
The Consumer Price Index (CPI-U) rose an expected 0.3% last month following no change in May.
The CPI less food and energy was unchanged versus Consensus expectations for a 0.2% rise. A slowdown in services price inflation and continued deflation of goods prices resulted in the third unchanged &quot;core&quot; CPI this year.
Core services prices rose only 0.1% and that was below the 0.2% monthly average of this year. Shelter prices fell slightly (1.8% YTD AR) following the 0.6% gain in May. Medical care services prices were strong for the second consecutive month, up 0.4% (3.1% YTD AR).Education and communication prices fell for the fourth consecutive month. Public transportation prices rose 0.7% (5.2% YTD AR) following a 2.0% May gain.
Goods prices continued to deflate. New and used vehicle prices fell 0.3% for the fifth monthly decline this year. Prices for household furnishings and operation fell 0.2% for the fourth consecutive monthly drop. Apparel prices managed the first monthly increase since August of last year.
Energy prices increased moderately. A 1.3% rise in gasoline prices, the first gain in three months, was offset by the third consecutive decline in fuel oil prices and a moderate 0.7% rise in piped gas &amp; electricity prices.
The chained CPI which adjusts for shifts in consumer buying behavior increased for the first month in three. It is similar to the PCE price deflator. The core price measure fell 0.2% after having been unchanged for two months (1.1% YTD AR).
Analysis by the Federal Reserve Bank of Atlanta titled &quot;Inflation Persistence: How Much Can We Explain?&quot; can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=F0032574-E423-472F-AE6FF9E491589A5D&amp;method=display_body#rubio">here</a>.

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<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">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2%</td>
<td>0.0%</td>
<td>2.1%</td>
<td>1.6%</td>
<td>2.8%</td>
<td>3.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.3%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>2.7%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.1%</td>
<td>-0.4%</td>
<td>-1.9%</td>
<td>-1.1%</td>
<td>0.3%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.1%</td>
<td>0.5%</td>
<td>2.9%</td>
<td>3.8%</td>
<td>3.7%</td>
<td>3.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>0.8%</td>
<td>-3.1%</td>
<td>9.4%</td>
<td>-5.8%</td>
<td>3.7%</td>
<td>16.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food &amp; Beverages</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>1.8%</td>
<td>3.1%</td>
<td>2.3%</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>0.1%</td>
<td>-0.2%</td>
<td>1.7%</td>
<td>1.3%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>1.0%</td>
<td>1.8%</td>
<td>&nbsp;2.0%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Industrial Production Up Slightly, Factory Output Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030716d.jpg" width="353">
Industrial production rose 0.1% in June for the second month. Consensus expectations were for a 0.2% gain.
Output in the manufacturing sector surged 0.5% (-1.0% y/y) for the second consecutive monthly gain.
Output in selected high-technology industries added 1.0% (9.2% y/y) to strong gains in the prior five months. Excluding high-tech factory output in June rose 0.4% (-1.6% y/y). Motor vehicle output rose for the first month in five and output of electrical equipment rose for the second consecutive month. Output of furniture jumped 1.0% for the second consecutive monthly gain.
Total capacity utilization was unchanged at 74.3%, the lowest level since July 1983. Factory sector utilization rose slightly to 72.6%. Growth in capacity remained slow at 1.0% y/y versus 1.5% growth last year and 3.2% growth in 2001.
The influence of trend output growth on the US economy&#39;s &quot;speed limit&quot; is discussed by the Federal Reserve Bank of San Francisco <a href="http://www.frbsf.org/publications/economics/letter/2003/el2003-14.pdf">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Industrial Production</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-1.0%</td>
<td>-0.8%</td>
<td>-3.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>74.3%</td>
<td>74.3%</td>
<td>75.9%(6/02)</td>
<td>75.6%</td>
<td>77.3%</td>
<td>82.7%</td>
</tr>
</tbody>
</table>
Mortgage Applications Up a Bit 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030716a.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association nudged up 0.9% last week following the 17.7% decline the week earlier.
Applications for home purchase jumped 8.0% and recouped all of the 5.5% decline the previous week. So far in July, mortgage applications for home purchase are setting a new record.
During the last ten years there has been a 51% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance fell another 1.6% following the 21.3% w/w decline the previous week.
Interest rates on a conventional 30-Year mortgage fell slightly w/w with the effective rate at 5.62% versus 6.13% averaged in December. The effective rate on a 15-year mortgage also fell to 5.04%.
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 at <a href="http://www.mbaa.org/">www.mbaa.org.</a>

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<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">7/11/03</th>
<th scope="col">7/4/03</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>1,358.2</td>
<td>1,346.3</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>447.2</td>
<td>414.1</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>6,657.2</td>
<td>6,768.3</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>
Business Inventories Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030716b.jpg" width="353">
Total business inventories fell unexpectedly in May. The 0.2% decline was versus Consensus expectations for a 0.1% rise.
Retail inventories fell sharply. The 0.3% decline reflected lower inventories of motor vehicles and parts as well as a huge 1.5% decline in general merchandise store inventories.
Overall business sales fell slightly m/m (2.0% y/y) following a 1.7% April drop.
The inventory-to-sales ratio was stable m/m at 1.40 and versus 1.38 last year. 

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<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">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>3.5%</td>
<td>2.1%</td>
<td>-5.4%</td>
<td>5.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>7.3%</td>
<td>7.6%</td>
<td>-2.9%</td>
<td>6.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>-0.3%</td>
<td>-0.1%</td>
<td>2.9%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>2.3%</td>
<td>0.4%</td>
<td>-4.9%</td>
<td>6.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>0.7%</td>
<td>-1.9%</td>
<td>-8.0%</td>
<td>4.5%</td>
</tr>
</tbody>
</table>
Housing Market Index Higher 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030716e.jpg" width="353">
The National Association of Home Builders (NAHB) reported that their Composite Housing Market Index rose another two points in July to 64. The index was up 4.9% from July of last year.
During the last fifteen years there has been a 68% correlation between the y/y change in the NAHB index and the change in new home sales.
The index of current market conditions for home sales rose (6.2% y/y) as the percentage of builders indicating &quot;good&quot; conditions rose to 50% from 47%.
The index which measures expected home sales in six months rose to 73 (5.8% y/y) versus an average of 69 during all of last year.
Traffic of prospective buyers again rose sharply to near the high for this year.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
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">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>64</td>
<td>62</td>
<td>61</td>
<td>61</td>
<td>56</td>
<td>62</td>
</tr>
</tbody>
</table>
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The Consumer Price Index (CPI-U) rose an expected 0.3% last month following no change in May. The CPI less food and energy was unchanged versus Consensus expectations for a 0.2% rise. A slowdown in services price inflation and [...]

CPI Tame

Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030715d.jpg" width="353">
TheZEW index that measures investor confidence almost doubled in July. It rose from 21.3 in June to 41.9, the highest level since September, 2002 and well above the long term average of 33. A reduction in the Euro Zone&#39;s central interest rate to 2% last month, plans by the government to bring forward by one year tax cuts scheduled for January 2005 and proposed measures to ease labor laws and cut jobless benefits have improved the business climate. Moreover, the abortive strikein East Germany last month byIG Metall&#39;s, Germany&#39;s largest trade union, is seen as harbinger of a better climate for labor reform and reduced wage demands generally.. While the rise in confidence is impressive, the ZEW index is based on a relatively small sample of investors. The broader IFO index based on businessmen&#39;s appraisal of economic conditions is due to be released in a few weeks.. The outlook for economic growth in Germany in 2003 remains tenuous. GDP declined in the first quarter of 2003 and the rise in the value of the Euro is having its toll on exports. The European Commission is estimating that the German economy will grow 0.2-0.3% at best this year.

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<th scope="col" class="firstcol"></th>
<th scope="col">July 2003</th>
<th scope="col">&nbsp;June 2003</th>
<th scope="col">July 2002</th>
<th scope="col">M/M</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">ZEW INDEX</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Percent Balance</td>
<td>41.9</td>
<td>21.3</td>
<td>69.1</td>
<td>96.7</td>
<td>-39.4</td>
<td>45.3</td>
<td>2.8</td>
<td>59.1</td>
</tr>
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<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Real GDP</td>
<td>IQ 03</td>
<td>4Q02</td>
<td>1Q 02</td>
<td>Q/Q</td>
<td>Y/Y</td>
<td>2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr class="odd">
<td class="firstcol">Bil. 95 Euros</td>
<td>483.0</td>
<td>506.8</td>
<td>480.5</td>
<td>-4.7</td>
<td>0.5</td>
<td>1984.3.</td>
<td>1980.8.</td>
<td>1969.5</td>
</tr>
<tr>
<td class="firstcol">Percent Change</td>
<td>-3.55</td>
<td>-1.11</td>
<td>-3.53</td>
<td></td>
<td></td>
<td>0.18</td>
<td>0.57</td>
<td>2.86</td>
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</tbody>
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TheZEW index that measures investor confidence almost doubled in July. It rose from 21.3 in June to 41.9, the highest level since September, 2002 and well above the long term average of 33. A reduction in the Euro Zone's central [...]

German Investors' Confidence Takes a Big Jump But Economic Outlook Still Tenuous

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030715a.jpg" width="353">
Retail sales rose an expected 0.5% in June following just a slight increase in May. The May figures were little revised.
Sales excluding motor vehicles and parts dealers rose a strong 0.7%, more than twice Consensus expectations for a 0.3% gain. The slight increase in May was little revised.
Sales gains were widespread last month. Apparel and accessory stores added 1.3% (2.9% y/y) to the 1.6% May sales spurt that was revised up. Furniture, home furnishing and electronics store sales increased 0.2% (3.4% y/y) following a 1.4% May gain which was weaker than the 2.0% rise reported last month. Sales at general merchandise stores rose 0.3% (2.4% y/y) following an unrevised 0.7% May gain.
Sales of building materials and garden supplies surged 2.6% (6.1% y/y). Excluding these categories, nonauto retail sales rose 0.5% (3.5% y/y).
Motor vehicle dealers&#39; sales fell 0.1% for the second consecutive monthly decline. Unit sales of light vehicles rose 1.9% last month to 16.43 mil. (AR). Sales at gasoline service stations rose 1.3% following two months of sharp decline.

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<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
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</thead>
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<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.5%</td>
<td>0.0%</td>
<td>4.2%</td>
<td>3.2%</td>
<td>2.9%</td>
<td>6.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.7%</td>
<td>0.1%</td>
<td>3.8%</td>
<td>3.7%</td>
<td>2.9%</td>
<td>7.4%</td>
</tr>
</tbody>
</table>
Empire State Factory Survey Showed Third Month of Gain 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 15, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030715b.jpg" width="353">
The Empire State Manufacturing Survey indicated the third month of improvement for area manufacturers. The index of general business conditions fell somewhat to 22.56 in July but remained near the series&#39; highs.
Consensus expectations were for a reading of 25.0. The data were reported by the Federal Reserve Bank of New York.
New orders sustained nearly all of the June surge while shipments improved to a series high. Offsetting this strength was sharp deterioration in the unfilled orders and employment indexes which both fell back into negative territory.
The index of prices paid improved to 6.45 versus the negative reading of June.
The survey includes measures of business expectations six months ahead. This diffusion index fell to 52.5 but for the last three months is much improved from the lows of the February-to-April period. Expectations for capital expenditures rose.
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 the components.
For the latest Empire State Manufacturing Survey report, click <a href="http://www.newyorkfed.org/rmaghome/regional/mfg_survey/index.html">here</a>.

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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">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General business conditions (diffusion index)</td>
<td>22.56</td>
<td>27.60</td>
<td>0.21</td>
<td>7.10</td>
<td>-13.02</td>
</tr>
</tbody>
</table>
Chain Store Sales Jump Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 15, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030715c.jpg" width="353">
Chain store sales added 0.9% last week to the 0.7% jump the week prior, according to the BTM-UBSW survey.
Sales started July 1.1% ahead of June which were barely changed from May.
During the last five years there has been a 60% correlation between the year-to-year percent change in chain store sales and the change in nonauto retail sales less gasoline.
The BTM leading indicator of chain store sales fell 0.5% in early July. It was the fourth decline in the last five weeks for this indicator.
The BTM-UBSW retail chain-store sales index is constructed from the sales results reported by seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">7/12/03</th>
<th scope="col">7/5/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>423.9</td>
<td>420.1</td>
<td>2.3%</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

Retail sales rose an expected 0.5% in June following just a slight increase in May. The May figures were little revised. Sales excluding motor vehicles and parts dealers rose a strong 0.7%, more than twice Consensus expectations for a [...]

Retail Sales Rose As Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030714b.jpg" width="353">
Stock markets in Latin America are up sharply from late 2002. The Morgan Stanley Capital International index of Latin America EMF (Emerging Markets Free) stock prices in U.S. dollars has risen almost 15% in the last month and is up 23% from July 2002.
Currency appreciation in Argentina and Brazil have accounted for a part of the rise in dollar terms, but political changes have also been important. Brazil&#39;s new president who took office on January 1, has so far surprised investors by adhering to a tough government deficit reduction plan. In Argentina belief that the new president, who was inaugurated in May, will restructure the government debt together with a surge in exports has increased confidence.. Stock markets in Japan, Asian emerging markets and in the United States have increased in recent months, but remain below levels reached a year ago while the stock market in dollar terms in Europe shows little gain in spite of the rise in the Euro.

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</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Stock Prices</th>
<th scope="col">June 2003</th>
<th scope="col">&nbsp;May 2003</th>
<th scope="col">June 2002</th>
<th scope="col">M/M</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Morgan Stanley (12/87=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Asia</td>
<td>154.432</td>
<td>143.572</td>
<td>161.157</td>
<td>7.56</td>
<td>-4.14</td>
<td>140.350</td>
<td>149.704</td>
<td>143.615</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Latin America&nbsp;</td>
<td>800.192</td>
<td>782.791</td>
<td>731.890</td>
<td>14.85</td>
<td>23.00</td>
<td>658.941</td>
<td>876.163</td>
<td>915.634</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Europe&nbsp;</td>
<td>942.252</td>
<td>935.729</td>
<td>1021.604</td>
<td>0.70</td>
<td>-7.77</td>
<td>867.447</td>
<td>1085.759</td>
<td>1378.396</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Japan</td>
<td>1630.444</td>
<td>1518.857</td>
<td>1927.331</td>
<td>7.35</td>
<td>-15.40</td>
<td>1593.175</td>
<td>1789.256</td>
<td>2551.957</td>
</tr>
<tr>
<td class="firstcol">S&amp;P 500 (1941-43=100)</td>
<td>988.00</td>
<td>935.96</td>
<td>1014.05</td>
<td>5.56</td>
<td>-2.57</td>
<td>995.64</td>
<td>1192.08</td>
<td>1426.76</td>
</tr>
</tbody>
</table>
</body>
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Stock markets in Latin America are up sharply from late 2002. The Morgan Stanley Capital International index of Latin America EMF (Emerging Markets Free) stock prices in U.S. dollars has risen almost 15% in the last month and is up [...]

Stock Markets in Latin America Outpace Other Major Areas

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030714a.jpg" width="353">
The OECD Index of Leading Indicators (Big 7) rose in May for the second consecutive month. The 0.7% gain followed a 0.1% rise in April but the two increases represented the only real upward movement in the index so far this year.
Not only has the index just one material rise this year, gains amongst the member country leading indexes have been limited. The leading index for the US rose a smart 1.2% in May following a 0.7% increase in April, and those gains more than made up for sharp declines in February and March.
Also showing some strength were the leaders in Italy. They managed the fourth increase of the year in May and were up 1.2% YTD.
On the weak side, the leading index in Germany rose just 0.3% in May and year to date was up 0.1%. In France, the leaders rose 0.6% in May but remained down 1.6% YTD. Similarly, in the U.K. the May leaders did rise 0.6% but were down 0.7% YTD.
Leaders for Japan were down in May for the third straight month (-1.0% YTD) and in Canada the May leading indicators jumped 2.0% but the gain just made up for three consecutive months of decline.
For more from the Organisation for Economic Cooperation and Development (OECD), visit its <a href="http://www.oecd.org/home/">website</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/OECDMEI/OECDMEI.HTM">OECD Main Economic Indicators</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">OECD Major Seven - Leading Index (Trend Restored)</td>
<td>119.1</td>
<td>118.2</td>
<td>-0.3%</td>
<td>4.2%</td>
<td>-2.1%</td>
<td>3.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; European Union</td>
<td>117.2</td>
<td>116.5</td>
<td>0.2%</td>
<td>3.1%</td>
<td>-1.7%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Japan</td>
<td>100.6</td>
<td>100.7</td>
<td>-1.0%</td>
<td>0.7%</td>
<td>-2.9%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; United States</td>
<td>131.0</td>
<td>129.4</td>
<td>-0.0%</td>
<td>5.8%</td>
<td>-2.5%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

The OECD Index of Leading Indicators (Big 7) rose in May for the second consecutive month. The 0.7% gain followed a 0.1% rise in April but the two increases represented the only real upward movement in the index so far this year. Not [...]

OECD Leaders Up A Little

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030711b.jpg" width="353">
Finished producer prices rose 0.5% in June, a bit more than Consensus expectations for a 0.3% gain. The rise was the first in three months.
Finished energy prices jumped 3.4% for the first gain in three months. That accounted for virtually all of the PPI&#39;s rise last month. Gasoline prices rose 5.5% (16.5% y/y) while fuel oil prices jumped 3.5% (23.7% y/y). Residential gas prices rose 3.0% and are up 35.5% y/y. These energy product price series are NSA.
Excluding food and energy, prices fell 0.1% for the third monthly decline this year. The core PPI is up 0.3% YTD.
Core finished consumer goods prices fell 0.1% (-0.5% y/y) for the third consecutive monthly drop. Passenger car prices fell 1.5% (-1.3% y/y). Prices for household appliances fell for the fourth month this year (-1.9% y/y) and home electronic equipment prices also fell (-2.2% y/y). Core consumer nondurable prices rose for the fourth month this year (-0.3% y/y). Capital goods prices dropped for the fourth month this year (0.0% y/y).
Intermediate goods prices rose by 0.5%, the first increase in three months. Energy prices led the gain, up 2.0%, but food prices rose a strong 1.9% (0.8% y/y). Less food &amp; energy intermediate goods prices were unchanged. 
Crude goods prices jumped 4.5% reflecting a 10.7% gain in energy prices. Core crude prices rose 0.6%, the first gain in four months. These prices are up 0.4% YTD.

<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/@E802/@E80201/@E80201.HTM">Producer Price Index</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>0.5%</td>
<td>-0.3%</td>
<td>2.9%</td>
<td>-1.3%</td>
<td>2.0%</td>
<td>3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>1.4%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.5%</td>
<td>-0.8%</td>
<td>4.5%</td>
<td>-1.5%</td>
<td>0.4%</td>
<td>4.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>2.1%</td>
<td>-0.5%</td>
<td>-0.1%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>4.5%</td>
<td>1.7%</td>
<td>29.5%</td>
<td>-10.6%</td>
<td>0.3%</td>
<td>22.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.6%</td>
<td>-1.9%</td>
<td>4.9%</td>
<td>3.8%</td>
<td>-10.0%</td>
<td>7.4%</td>
</tr>
</tbody>
</table>
U.S. Trade Deficit Stable 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 11, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030711a.jpg" width="353">
The U.S. foreign trade deficit in May remained near the record level at $41.8B. That was about stable with an April deficit that was revised slightly shallower. Consensus expectations were for a deficit of $41.5B.
For the first five months of this year, the trade deficit averaged a $492.2B annual rate.
Imports rose 0.7% in May as a decline in the value of petroleum product imports was offset by higher imports of capital goods (+3.0% y/y) and autos (+3.8% y/y).
The quantity of crude petroleum imports rose 1.9% (8.1% y/y) but the average price fell 7.3% to $24.11, about even with last May.
Exports rose 0.9% and are up slightly YTD. Exports of capital goods rose 1.3%, up 3.8% YTD.
A report from the Federal Reserve Bank of St. Louis titled &quot;World Trade: Past, Present, and Future&quot; can be found <a href="http://research.stlouisfed.org/publications/iet/20030501/cover.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
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<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE03/@EE03.HTM">Foreign Trade</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Trade Deficit</td>
<td>$41.8B</td>
<td>$41.6B</td>
<td>$35.1B(5/02)</td>
<td>$418.0B</td>
<td>$357.8B</td>
<td>$375.4B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports - Goods &amp; Services</td>
<td>0.9%</td>
<td>-1.8%</td>
<td>1.2%</td>
<td>-3.3%</td>
<td>-5.8%</td>
<td>11.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports - Goods &amp; Services</td>
<td>0.7%</td>
<td>-2.2%</td>
<td>6.7%</td>
<td>2.0%</td>
<td>-5.5%</td>
<td>18.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Finished producer prices rose 0.5% in June, a bit more than Consensus expectations for a 0.3% gain. The rise was the first in three months. Finished energy prices jumped 3.4% for the first gain in three months. That accounted for [...]

Higher Energy Prices Raised The June PPI, Core Prices Fell

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030710a.jpg" width="353">
Initial claims for unemployment insurance rose unexpectedly by 5,000 last week, to 439,000, and added to a 26,000 increase the prior week that was revised up. Consensus expectations had been for claims of 420,000
The four-week moving average of initial claims rose to 426,750 (+8.2% y/y).
Continuing claims for unemployment insurance surged by 87,000 (2.3%) w/w. The prior week&#39;s level was revised down slightly.
During the last ten years there has been a 79% (inverse) correlation between the level of initial claims for unemployment insurance and the y/y change in nonfarm payrolls.
The insured rate of unemployment rose to 3.0% from a downwardly revised 2.9% the week prior.

<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">7/2/03</th>
<th scope="col">6/28/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>439.0</td>
<td>434.0</td>
<td>9.7%</td>
<td>404.3</td>
<td>406.0</td>
<td>299.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,818</td>
<td>5.4%</td>
<td>3,575</td>
<td>3,022</td>
<td>2,114</td>
</tr>
</tbody>
</table>
Import Prices Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 10, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030710b.jpg" width="353">
Prices for imported commodities rose more than expected last month. The 0.8% rise was double Consensus expectations. The 0.8% decline in prices in May was much deeper than the initial estimate of a 0.3% decline.
Petroleum import prices rose 4.7% last month and recovered most of a 5.4% May decline that was deepened sharply. So far in July the price of Brent Crude Oil has been around $28.00 versus $27.49/bbl averaged in June.
Nonpetroleum import prices rose 0.5%, the first increase in three months. The gain reflected increases in each of the categories. Nonauto consumer goods prices rose 0.2% (0.0% y/y) for the first gain this year. Prices for industrial supplies and materials jumped 2.6% (8.8% y/y).
Export prices fell 0.2% for the second decline in the last three months. Export prices for food and capital goods fell.

<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">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.8%</td>
<td>-0.8%</td>
<td>2.0%</td>
<td>-2.5%</td>
<td>-3.5%</td>
<td>6.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>4.7%</td>
<td>-5.4%</td>
<td>12.0%</td>
<td>3.0%</td>
<td>-17.2%</td>
<td>66.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>0.5%</td>
<td>-0.3%</td>
<td>1.1%</td>
<td>-2.4%</td>
<td>-1.5%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>-0.2%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>-1.0%</td>
<td>-0.8%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose unexpectedly by 5,000 last week, to 439,000, and added to a 26,000 increase the prior week that was revised up. Consensus expectations had been for claims of 420,000 The four-week moving [...]

Initial Jobless Insurance Claims Again Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030709b.jpg" width="353">
Consumer credit outstanding (which excludes mortgages) rose $7.3B (5.0% AR) in May. Consensus expectations had been for a $5.5B rise. The surge in April was revised down due to a lowered gain in nonrevolving credit. 
During the first five months of this year, consumer credit usage rose at a 4.7% annual rate.
Nonrevolving credit (which includes auto loans) rose at a 4.9% annual rate following the 7.8% jump in April. Year to date, nonrevolving credit usage is up at a 4.9% rate. 
Revolving credit rose at a 5.3% annual rate and recovered from the weak 2.0% gain in April.

<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/@E103/@E10308/@E10308.HTM">Consumer Credit Outstanding</a></th>
<th scope="col">May m/m</th>
<th scope="col">April m/m</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$7.3B</td>
<td>$7.9B</td>
<td>3.3%</td>
<td>3.6%</td>
<td>6.9%</td>
<td>10.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$3.1B</td>
<td>$1.2B</td>
<td>2.2%</td>
<td>1.5%</td>
<td>5.1%</td>
<td>11.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$4.2B</td>
<td>$6.6B</td>
<td>4.1%</td>
<td>5.0%</td>
<td>8.2%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
Mortgage Applications Plunge 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 9, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030709a.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association plunged 17.7% last week as interest rates rose. It was the largest drop in one week since late October of last year, also a time when interest rates blipped up.
Applications to refinance fell 21.3% w/w to the lowest level since early May.
Applications for home purchase fell a moderate 5.5% w/w. That followed the 6.6% gain the week prior which was to a record level.
During the last ten years there has been a 51% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Interest rates on a conventional 30-Year mortgage moved higher for the third week with the effective rate at 5.67% versus 6.13% averaged in December. The effective rate on a 15-year mortgage also rose to 5.07%, the first week over 5% since mid-May.
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 at <a href="http://www.mbaa.org/">www.mbaa.org.</a>

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><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">7/04/03</th>
<th scope="col">6/27/03</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>1,346.3</td>
<td>1,635.5</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>414.1</td>
<td>438.4</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>6,768.3</td>
<td>8,599.1</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer credit outstanding (which excludes mortgages) rose $7.3B (5.0% AR) in May. Consensus expectations had been for a $5.5B rise. The surge in April was revised down due to a lowered gain in nonrevolving credit. During the first [...]

Consumer Credit Use Up Again

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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Business in the service sector recovered last month. The Services PMI rose to 52.4 during October after falling to 50.0 in September, following a rise to 52.0 in August, according to the Institute for Supply Management. The index hit a recent high of 55.8 in October of last year and remains below the all-time high of 67.5 in November 2021. The Action Economics Forecast Survey expected a reading of 50.9 in October.

The ISM Composite Index, developed by Haver Analytics, combines the services index and the ISM manufacturing index released on Monday. This index rose to 52.0 in October, the highest level since February, after declining to 49.9 in September.

Most components of the services index increased last month. The business activity index rose to 54.3 last month after falling to 49.9 in September. It remained below its high of 70.9 in both October & November of 2021. Twenty-three percent (NSA) of respondents reported improved activity while 15.3% reported decline. The new orders index surged to a twelve month high of 56.2 after falling to 50.4 in September. Twenty-eight percent (NSA) of respondents reported improved orders while a 16.3% reported decline. Also working higher, the employment series rose to 48.2, its highest level in five months, after rising to 47.2 in September. A higher 14.3% (NSA) of respondents reported increased employment while 17.9% reported declines. Working lower, the supplier delivery series fell to 50.8 in October after rising to 52.6 in September. A lessened 3.5% of respondents (NSA) reported faster delivery speeds while a much lower 5.1% reported slower speeds.

On the inflation front, the prices index rose to a three-year high of 70.0 in October after rising to 69.4 in September. The index has increased from its March 2024 low of 53.5. An increased 43.2% (NSA) of respondents reported higher prices while 5.4% reported lower prices.

Additionally, the new export orders index rose to 47.8 (NSA) in October following a decline to 46.5 in September. A higher 14.1% of survey respondents reported higher exports while a steady 18.6% reported decline. The imports index fell to 43.7 last month after falling to 49.2 in September. A lessened 6.9% of respondents reported higher imports while an increased 19.6% reported decline. The inventory change index rose to 49.5 after falling to 47.8 and the order backlog index declined sharply to 40.8 and reversed its September rise. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector, while below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries.

The ISM figures are available in Haver's **USECON** database, with additional detail in the **SURVEYS** database. The expectations figure from Action Economics is in the **AS1REPNA** database.

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- Total services index is highest since February.
- Business activity, new orders and employment increase.
- Prices index continues upward trend from 2024 low.

U.S. ISM Services PMI Rebounda in October; Price Index Advances

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The ADP National Employment Report indicated that nonfarm private sector payrolls during October increased 42,000 (0.7% y/y) after declining 29,000 in September, revised from -32,000, and dipping an unrevised 3,000 in August. The three-month average change of 3,000 compares to 24,000 in Q3’25, 22,000 in Q2 and 139,000 in Q1. The Action Economics Forecast Survey expected a 25,000 increase in October.

Small business hiring (less than 50 employees) fell 10,000 (+0.1% y/y) after declining 34,000 in September, revised from -40,000. Employment at medium-sized firms (50-499 employees) weakened 22,000 (+0.7% y/y) after declining 30,000 in September, revised from a 20,000 fall. Large business hiring (500+ employees) offset these declines and rose 74,000 (2.2% y/y) after increasing 31,000 in September, revised from 33,000. It was the largest gain in twelve months.

Service-producing jobs increased 32,000 (0.7% y/y) in October after falling 21,000 in September, revised from -28,000. Changes amongst industry sectors were mixed. Trade, transportation & utilities employment rose 47,000 (0.3% y/y) after falling 6,000. Financial activities employment improved 11,000 (1.9% y/y) following a 9,000 decline in September. Education & health services rose 25,000 (0.2% y/y) after increasing 32,000 in September. Working lower, leisure & hospitality employment declined 5,000 (+2.4% y/y) after falling 16,000 in September. Professional & business jobs fell 15,000 (+0.1% y/y) following a 6,000 decline. Information sector employment weakened 17,000 (-0.0% y/y) after rising 1,000 in September.

Goods-producing employment moved up by 9,000 (1.0% y/y) in October, following a 7,000 decrease, revised from a 3,000 decline. Construction jobs rose 5,000 (1.8% y/y) after falling 4,000. Manufacturing jobs fell 3,000 (+0.2% y/y) following a 2,000 increase. Natural resources and mining jobs increased 7,000 (2.7% y/y) after declining 5,000 in September.

By region, in the Midwest employment rose 9,000 (0.8% y/y) last month after falling 55,000 in September. In the West, the number of jobs improved 39,000 (0.6% y/y) following a 16,000 increase. In the South, employment rose 5,000 (0.7% y/y) following a 17,000 September increase. Working lower, the number of jobs fell 12,000 (+0.9% y/y) in the Northeast in October after falling 5,000 in September.

Wage growth for job-changers in October held steady at 6.7% y/y, well below a high of 16.1% in April 2022. Wage growth for job-stayers advanced 4.5% y/y, unchanged from September and the slowest increase since June 2021. Across major industries, wage growth for job-stayers was reduced.

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

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- Gain in private payrolls is first in three months.
- Service-sector & construction hirings move up, but factory jobs decline.
- Wage growth steadies.

U.S. ADP Employment Recovers in October

Winnie Tapasanun

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Mortgage applications fell 1.9% w/w (+73.6% y/y) in the week ending October 31 following a 7.1% gain in the week ending October 24, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The latest reading was the fifth w/w fall in six weeks to the index level of 332.3. Applications for loans to purchase a house declined 0.6% (+24.8% y/y) in the October 31 week, down for the fifth week in six, after a 4.5% increase in the previous week. Applications for loan refinancing dropped 2.8% (+151.4% y/y) in the October 31 week, down for the first week in three, following a 9.3% advance in the October 24 week.

The effective interest rate on a 30-year fixed-rate loan edged up to 6.48% in the week ending October 31 after declining to 6.47% in the week ending October 24; it was up from a low of 6.29% in the week of September 20, 2024 but down from a peak of 8.12% in the week of October 20, 2023. The rate on 15-year fixed-rate mortgages slipped to 5.81% in the October 31 week, the lowest since the September 12 week, after decreasing to 5.82% in the previous week; it was up from a low of 5.60% in the week of September 20, 2024 but down from a high of 7.44% in the week of October 27, 2023. The rate on 30-year jumbo loans rose 4bps to a three-week-high 6.52% in the October 31 week after declining to 6.48% in the prior week; however, it was slightly down from a low of 6.57% in the week of September 13, 2024 and below a high of 7.99% in the week of October 27, 2023. The rate on a 5-year ARM rose 4bps to 5.88% in the October 31 week, the highest since September 26 week, after rising to 5.84% in the previous week; it was above a low of 5.84% in the week of September 13, 2024 but below a high of 7.31% in the week of October 27, 2023.

The share of applications for refinancing an existing loan edged down to 57.0% of total applications in the week ending October 31 after rising to a five-week-high 57.1% in the week ending October 24; those numbers remained below a peak of 60.2% in the week of September 19. The adjustable-rate mortgage (ARM) share of activity fell to 8.7% in the October 31 week, the lowest reading since the September 26 week, after falling to 8.9% in the prior week; it was below its recent peak of 12.9% in the September 12 week and a high of 9.6% in the April 11 week but up from a low of 4.7% in the January 3 week.

The average size of a mortgage loan, up for the third week in four, increased 0.6% w/w (7.3% y/y) to $414,900 in the October 31 week, the highest level since the September 19 week, reversing a 0.6% drop to $412,300 in the October 24 week. The average size of a purchase loan fell 0.4% (-2.3% y/y) to $435,100 in the October 31 week on top of a 0.5% decline to $436,800 in the prior week, marking the fourth weekly fall in five weeks and the lowest level since the October 10 week. The average size of a loan to refinance a mortgage rose 1.5% (34.0% y/y) to $399,700 in the October 31 week after a 0.4% decline to $393,900 in the previous week, registering the third weekly rise in four weeks and the highest level since the September 19 week.

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

- Purchase applications -0.6% w/w; refinancing loan applications -2.8% w/w.
- Effective interest rate on 30-year fixed loans ticks up to 6.48% despite ongoing downward trend.
- Average loan size rebounds to the highest level since the September 19 week.

U.S. Mortgage Applications Drop 1.9% in the October 31 Week After Previous Gain

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Retail gasoline prices for all grades slipped to $3.15 per gallon (-1.3% y/y), on average, in the week ended November 3 after rising to $3.16 in the previous week. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. Haver Analytics seasonally adjusts the retail prices of regular grade gasoline. That price held at $3.05 last week versus $3.05 in the previous week.

The price of West Texas Intermediate crude oil rose to $60.70 per barrel (-11.2% y/y) in the week ended October 31 after improving to $59.43 per barrel in the prior week. It was the highest price in three weeks but prices remained below a recent high of $74.17 during the third week of June. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $61.05 per barrel. The price of European Brent crude increased to $65.02 per barrel (-10.5% y/y) in the week of October 31 after rising to $63.22 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. Yesterday, the price was $65.79 per barrel.

Natural gas prices rose to an average $3.43/mmbtu (88.5% y/y) in the week ended October 31 after rising to $3.25/mmbtu in the prior week. The rise left prices at the highest level since the second week of April and well above the low of $1.40/mmbtu in the week of March 15, 2024. Yesterday, the price was $3.37 per mmbtu.

Gasoline demand declined 4.2% y/y in the four weeks ending October 24, following a 3.6% y/y decline in the prior four weeks. Demand for all petroleum products weakened 0.9% y/y in the four weeks ending October 24, after slipping 0.1% y/y in the previous four-week period. Crude oil input to refineries declined 1.7% y/y in the four weeks ending October 24, after a 0.3% y/y gain in the prior four weeks.

Gasoline inventories ease 0.1% y/y in the week ending October 24 following a 1.5% y/y gain in the prior week. Residual fuel oil inventories fell 10.0% y/y in the October 24 week after falling 13.0% y/y in the prior week. Working higher, crude oil inventories rose 1.7% y/y in the week of October 24 after rising 2.6% y/y in the previous week.

Measured in days’ supply, gasoline inventories fell to 24.3 days in the week of October 24. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil held steady at 26.7 days in the week of October 24. The supply remained below a recent high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** and **USENERGY** databases.

- Gasoline prices are minimally changed.
- Crude oil costs rise further.
- Natural gas prices strengthen.

U.S. Energy Prices Are Mixed in Latest Week

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U.S. light vehicle sales dove 6.9% (-4.5% y/y) in October to 15.48 million units (SAAR) after holding steady at 16.62 million units in September. Sales fell broadly. 

Light truck sales slid 6.9% (-1.4% y/y) in October to 12.90 million units, after rising 0.9% in September. Purchases of domestically-made light trucks fell 7.9% (+1.4% y/y) to 10.10 million units, the lowest level since February, after rising 3.4% in September. Sales of imported light trucks fell 2.8% (-10.3% y/y) to 2.80 million units, following a 7.4% September decline.

Trucks’ 83.3% share of the light vehicle market last month was steady with September and compared to 82.6% in August, and to 80.7% in October of last year. The share has averaged 82.4% so far this year versus 56.5% ten years earlier.

Passenger car sales declined 6.9% (-17.6% y/y) last month to 2.58 million, after falling 4.8% in September. Purchases of domestically-produced cars fell 7.2% (-16.5% y/y) last month to 1.93 million units, after weakening 7.1% in September. Imported auto sales declined 4.5% (-22.0% y/y) to 0.64 million units after holding steady in September.

Imports' 22.2% share of the U.S. light vehicle market rose from 21.4% in September. These compared to a high of 26.3% in November of 2023. Imports' share of the passenger car market edged up to 24.8% last month from 24.2% in September. It reached a high of 38.1% in September 2021. Imports' share of the light truck market increased to 21.7% last month from 20.8% in September.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Light truck sales and auto purchases decline m/m.
- Total sales decline sharply y/y.
- Imports' market share declines.

Economy in Brief: 2003

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