Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020410a.jpg" width="353">
Crude oil prices have fallen slightly during the past week, but tensions in the Mideast have raised the spot market price of West Texas Intermediate crude more than 40% since the lows set early this year.
Refined product prices have followed with wholesale gasoline prices up a like amount during the period, but as of February the CPI for energy had yet to increase.
Wholesale heating oil prices have risen a lesser 30% due to the mild winter and the winding down of the heating season.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/daily/@D3/@D306/@D30604/@D30604.HTM">Daily Crude Oil Prices</a></th>
<th scope="col">4/09/02</th>
<th scope="col">3/05/02</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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</thead>
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<td class="firstcol">West Texas Intermediate Crude Oil</td>
<td>$25.83</td>
<td>$23.18</td>
<td>-9.3%</td>
<td>$25.97</td>
<td>$30.34</td>
<td>$19.34</td>
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</tbody>
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Crude oil prices have fallen slightly during the past week, but tensions in the Mideast have raised the spot market price of West Texas Intermediate crude more than 40% since the lows set early this year. Refined product prices have [...]

Crude Oil Prices Surge

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020409a.jpg" width="353">
Chain store sales rose a slight 0.3% last week but it was only the second weekly rise in the last six. April sales began 0.7% below the March average.
The latest week contained the last day of March. The final tally placed sales last month down 0.4% from the February average.
The BTM leading indicator of chain store sales also weakened through March, falling in three of five weeks, notably in the last week.
During the last ten years there has been a 20% correlation between the monthly percent change in chain store sales and the change in consumer confidence.

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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">4/06/02</th>
<th scope="col">3/30/02</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>403.7</td>
<td>402.5</td>
<td>6.2%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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Chain store sales rose a slight 0.3% last week but it was only the second weekly rise in the last six. April sales began 0.7% below the March average. The latest week contained the last day of March. The final tally placed sales last [...]

Weekly Chain Store Sales Up Slightly

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020408a.jpg" width="353">
Corporate profits in 4Q01 surged by 93.4% (AR) from 3Q, following four successive quarters of sharp decline. 
A sharp spike in the capital consumption adjustment (CCA) was the cause of the profit surge. The spike was a result of recent tax legislation which allowed for retroactive depreciation allowances and the carry back of net operating losses.
Provisions for the immediate write-off of 30% of investments made after 9/11 also swelled the CCA.

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<th scope="col" class="firstcol"></th>
<th scope="col">4Q01</th>
<th scope="col">3Q01</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">Corporate Profits w/ IVA &amp; CCA</td>
<td>$822.0B</td>
<td>$697.0B</td>
<td>-3.0%</td>
<td>-12.5%</td>
<td>6.2%</td>
<td>6.1%</td>
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<td class="firstcol">&nbsp; IVA</td>
<td>$16.6B</td>
<td>$3.1B</td>
<td>$-7.3B</td>
<td>$2.3B</td>
<td>$-12.4B</td>
<td>$-2.9B</td>
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<td class="firstcol">&nbsp; CCA</td>
<td>$186.1B</td>
<td>$13.4B</td>
<td>$38.4B</td>
<td>$66.5B</td>
<td>$43.4B</td>
<td>$51.7B</td>
</tr>
<tr>
<td class="firstcol">Profits Before Tax</td>
<td>$619.4B</td>
<td>$680.6B</td>
<td>-24.1%</td>
<td>-17.4%</td>
<td>8.9%</td>
<td>7.7%</td>
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<td class="firstcol">Profits After Tax</td>
<td>$425.2B</td>
<td>$475.6B</td>
<td>-24.5%</td>
<td>15.9%</td>
<td>9.7%</td>
<td>8.5%</td>
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Corporate profits in 4Q01 surged by 93.4% (AR) from 3Q, following four successive quarters of sharp decline. A sharp spike in the capital consumption adjustment (CCA) was the cause of the profit surge. The spike was a result of recent [...]

Corporate Profits Surged in 4Q

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020405a.jpg" width="353">
Nonfarm payrolls rose about as expected last month. However, the previously reported gain in February payrolls was revised to a slight decline due to a downwardly revised gain in service sector payrolls.Yesterday&#39;s indication that initial claims for unemployment insurance rose due to filings for extended benefits was an advance indication that the pace of rehiring remained slow.
Further indication of weakness was the decline in the one-month diffusion index of job gain to 45.6%, the second decline in a row. The three month figure rose to 43.1%.The unemployment rate rose due to a 425,000 (-1.4% y/y) decline in household employment.
The median duration of unemployment was stable at 8.1 weeks, down sharply from the peak but up versus last year.
Factory sector jobs continued to fall though by the smallest amount since December 2000. Job loss continued in the industrial machinery, electronic equipment and transportation sectors. The one month diffusion index for the factory sector improved to 42.3% and the February figure was revised up.
Construction sector jobs fell 37,000 (-2.2% y/y) following a 30,000 gain in February. 
Employment in the service sector rose 135,000 (0.1% m/m) led by strong gains in basic services and government. Employment in all other service sectors fell. 
The index of aggregate hours worked (employment times hours worked) rose 0.1%. The 1Q average is 0.4% (AR) below 4Q.Aggregate hours rose in the factory sector for the first time since January 2001. 
Average hourly earnings rose an expected 0.3%, but February was revised up.
The employment figures for nonfarm payrolls are based on reports provided to the US Labor Department by businesses, while the figures from which the unemployment rate is derived are based on a survey of US households.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</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">Payroll Employment</td>
<td>58,000</td>
<td>-2,000</td>
<td>-1.0%</td>
<td>0.4%</td>
<td>2.2%</td>
<td>2.4%</td>
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<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-38,000</td>
<td>-54,000</td>
<td>-7.1%</td>
<td>-4.2%</td>
<td>-0.5%</td>
<td>-1.3%</td>
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<td class="firstcol">Average Weekly Hour1s</td>
<td>34.2</td>
<td>34.2</td>
<td>34.3</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.5%</td>
<td>4.2%</td>
<td>3.8%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.7%</td>
<td>5.5%</td>
<td>4.3%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
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</table>
Consumer Credit Growth Stable in February 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 5, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020405b.jpg" width="353">
Consumer borrowing rose about as expected in February, however the surge in January was revised sharply lower. 
The downward revision was due to lowered figures for nonrevolving credit (autos and other personal loans).
Revolving credit again rose by just a modest amount. Commercial banks and credit unions registered large unadjusted declines.

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<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">Feb m/m</th>
<th scope="col">Jan m/m</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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</thead>
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<td class="firstcol">Total</td>
<td>$7.1B</td>
<td>$7.0B</td>
<td>5.1%</td>
<td>6.1%</td>
<td>10.2%</td>
<td>7.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$0.6B</td>
<td>$1.5B</td>
<td>1.9%</td>
<td>3.9%</td>
<td>11.5%</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$6.3B</td>
<td>$5.7B</td>
<td>7.6%</td>
<td>7.7%</td>
<td>9.2%</td>
<td>8.4%</td>
</tr>
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Nonfarm payrolls rose about as expected last month. However, the previously reported gain in February payrolls was revised to a slight decline due to a downwardly revised gain in service sector payrolls.Yesterday's indication that [...]

Jobs in March Up, February Gain Revised Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020404a.jpg" width="353">
Initial claims for unemployment insurance rose unexpectedly from the prior week&#39;s level that was revised up slightly. 
Some the increase was due to filings for extended unemployment insurance benefits. 
The four-week moving average of claims rose sharply to 403,750, the highest level since January. 
Continuing claims for unemployment insurance rose sharply in the latest week. The prior week&#39;s level was revised down. 
The insured rate of unemployment rose to 2.8%, the highest level since December.

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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">03/30/02</th>
<th scope="col">03/23/02</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>460.0</td>
<td>396.0</td>
<td>19.8%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,608</td>
<td>44.7%</td>
<td>3,031</td>
<td>2,127</td>
<td>2,187</td>
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Initial claims for unemployment insurance rose unexpectedly from the prior week's level that was revised up slightly. Some the increase was due to filings for extended unemployment insurance benefits. The four-week moving average of [...]

Initial Claims for Jobless Insurance Highest Since December

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020403a.jpg" width="353">
Light vehicle sales fell 1.4% last month versus February. The slight decline was expected.
Sales of domestically built cars and trucks fell 2.4% m/m and remained below last year&#39;s level. Imported vehicle sales rose 2.5% m/m and remained up versus 2001.
During the last three months, imports captured 20.4% of the US light vehicle market versus 17.8% last year, 16.3% in 2000 and 14.6% in 1999.
Sales of cars (-3.4% y/y) rose last month but sales of light trucks (-4.5% y/y) fell. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil.Units)</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</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>16.44</td>
<td>16.68</td>
<td>-4.0%</td>
<td>17.21</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>13.08</td>
<td>13.39</td>
<td>-8.2%</td>
<td>14.15</td>
<td>14.58</td>
<td>14.47</td>
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<td class="firstcol">&nbsp; Imported</td>
<td>3.37</td>
<td>3.28</td>
<td>17.3%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
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</tbody>
</table>
ISM Nonmanufacturing Index Down Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020403b.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector fell as expected last month. 
New orders fell but employment rose. The not seasonally adjusted price index rose for the third month in a row. 
Business activity for the nonmanufacturing sector is a question separate from the components mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components. 
During the last four years, there has been a 44% correlation between the level of the NAPM nonmanufacturing index and quarterly growth in real GDP in the service sector.
ISM surveys more than 370 purchasing managers in more than 62 industries, including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</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">Business Activity Index</td>
<td>57.3</td>
<td>58.7</td>
<td>50.3</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
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</tbody>
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</body>
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Light vehicle sales fell 1.4% last month versus February. The slight decline was expected. Sales of domestically built cars and trucks fell 2.4% m/m and remained below last year's level. Imported vehicle sales rose 2.5% m/m and [...]

Vehicle Sales Down Slightly Versus February

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020402a.jpg" width="353">
The ISM Composite Index of manufacturing sector activity rose unexpectedly last month. Consensus expectations were for a slight decline to 54.5.The rise was in line with the moderate gain in the Chicago Purchasing agents&#39; index. 
New orders were quite strong rising to the highest level since 1987. The employment, supplier delivery and inventory components also rose but production fell. 
Inflation pressure rose sharply, the index moving above 50 for the first time since February 2001.
Over the last twenty years there has been a 75% correlation between the ISM Composite Index and 3-month growth in factory production.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</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">Composite Index</td>
<td>55.6</td>
<td>54.7</td>
<td>43.2</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>51.9</td>
<td>41.5</td>
<td>49.9</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Strong Again in February 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020402b.jpg" width="353">
The value of construction put in place rose slightly more than expected in February driven by sharply higher residential construction.
The January increase was revised lower due to lowered figures for nonresidential building, initially reported up, but residential building was revised higher. 
Residential building rose for the third month in a row, up 6.4% since June. 
In the nonresidential sector, sharp declines were registered across the board
Spending by governments fell for the first time since September, but public industrial and education construction were strong.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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>1.1%</td>
<td>0.8%</td>
<td>1.2%</td>
<td>5.5%</td>
<td>7.0%</td>
<td>8.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>3.5%</td>
<td>0.9%</td>
<td>4.5%</td>
<td>5.4%</td>
<td>7.4%</td>
<td>11.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-3.0%</td>
<td>-1.7%</td>
<td>-17.4%</td>
<td>-0.3%</td>
<td>8.0%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>-0.5%</td>
<td>5.5%</td>
<td>16.7%</td>
<td>11.0%</td>
<td>4.5%</td>
<td>10.1%</td>
</tr>
</tbody>
</table>
Weekly Chain Store Sales Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 2, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020402d.jpg" width="353">
Chain store sales fell sharply last week, by the same 0.6% as during the prior week.
March sales were down 0.4% from the February average. February sales rose 2.5% from January.
During the last ten years there has been a 20% correlation between the monthly percent change in chain store sales and the change in consumer confidence.

<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">3/30/02</th>
<th scope="col">3/23/02</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">Total Weekly Retail Chain Store Sales</td>
<td>402.5</td>
<td>405.1</td>
<td>6.0%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
Factory Inventory Liquidation Continued 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 2, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020402c.jpg" width="353">
Manufacturing inventories fell more than expected in February. January&#39;s decline, which originally showed moderation versus prior months, was revised deeper.
Inventory decumulation continued strong across industries. A slight rise in heavy duty trucks as well as aircraft caused the increase in the transportation industry. 
Shipments fell 2.8% reversing all of the gains of the prior two months. 
Durable goods orders were revised up slightly versus the advance report, to a 1.8% gain.

<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/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Inventories</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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">Mfg Inventories</td>
<td>-0.4%</td>
<td>-0.8%</td>
<td>-8.8%</td>
<td>-7.5%</td>
<td>4.6%</td>
<td>2.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

The ISM Composite Index of manufacturing sector activity rose unexpectedly last month. Consensus expectations were for a slight decline to 54.5.The rise was in line with the moderate gain in the Chicago Purchasing agents' index. New [...]

ISM Index Slightly Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020401b.jpg" width="353">
Personal income in February rose by the strongest amount for any one month since December 2000. The gain followed a strong rise January. Strength in both months was powered by huge gains in farm proprietors&#39; income. 
Wage and salary disbursements rose 0.4% (2.0% y/y) in February following a slight decline the month earlier. 
Personal spending was strong, powered by a rise in unit vehicle sales. Spending on nondurable goods and services rose moderately. 
Disposable income was strong, rising 0.7% 4.6% y/y) following a 1.8% gain January. 
The PCE price deflator was quite tame for the twelfth month in thirteen.

<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/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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">Personal Income</td>
<td>0.6%</td>
<td>0.5%</td>
<td>2.8%</td>
<td>4.9%</td>
<td>7.0%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.6%</td>
<td>0.5%</td>
<td>4.0%</td>
<td>5.0%</td>
<td>7.7%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>2.0%</td>
<td>1.9%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>1.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">PCE Price Deflator</td>
<td>0.1%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Strong 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 29, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020401a.jpg" width="353">
The March reading of Consumer Sentiment by the University of Michigan was slightly stronger than the mid-month reading and up 5.5% from the February level. 
The improved sentiment accompanied a 16.0% surge in consumer confidence reported earlier by the Conference Board, confirming that the consumer does indeed feel better about his well being.
The University of Michigan survey is not seasonally adjusted.
During the past five years there has been a 39% correlation between the level of consumer sentiment and the 3-month % change in real PCE.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">Univ. of Michigan</a></th>
<th scope="col">March</th>
<th scope="col">Feb</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>95.7</td>
<td>90.7</td>
<td>4.6%</td>
<td>89.2</td>
<td>107.6</td>
<td>105.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Personal income in February rose by the strongest amount for any one month since December 2000. The gain followed a strong rise January. Strength in both months was powered by huge gains in farm proprietors' income. Wage and salary [...]

Personal Income and Spending Strong

Retail gasoline price still well above pre-conflict level and now rising again

PMIs showing widespread revival of global economy

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

Surging orders for computers and electronics propelling durable goods orders

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

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

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

US is big leader in global surge in private AI investment

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

Sharply rising share of AI-related jobs

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

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

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

Cost of transporting crude oil has soared to series high

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

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

Is recent drop in sentiment signaling softer growth ahead?

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

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

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

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Sandy Batten

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The Producer Price Index for final demand fell 0.3% m/m (+5.5% y/y) in June following a downwardly revised 0.6% (6.0%y/y) gain in May (previously 1.1% m/m, 6.5% y/y) according to the Bureau of Labor Statistics (BLS). This was the first monthly decline in the headline index since August 2025 and the largest decline since April 2025. The Action Economics Forecast Survey expected an unchanged reading in June. Producer prices excluding food, energy and trade services edged up 0.1% m/m (+5.1% y/y) in June after having jumped 0.8% m/m (5.1% y/y) in May. The PPI excluding food and energy (the previous core index) rose 0.2% m/m (4.7% y/y) in June versus a 0.1% m/m (4.6% y/y) increase in May. A 0.1% m/m increase was expected.

The June decline in the index for final demand was attributable to a 1.4% m/m decline (+7.9% y/y) in prices for final demand goods following a 2.3% monthly rise in May. The index for final demand services increased 0.2% m/m (4.6% y/y) in June after a 0.1% monthly decline in May.

The 1.4% m/m decline in final demand goods prices was the largest since July 2022. Leading the decline in June, prices for final demand energy dropped 6.4% m/m. A 12.0% m/m decline in gasoline prices accounted for two-thirds of the decline in final demand goods prices in June. The index for final demand foods moved down 0.6% m/m, the first monthly decline in three months. Conversely, prices for final demand goods less food and energy increased 0.2% m/m (+5.1% y/y). The indexes for diesel fuel, jet fuel, fresh vegetables (except potatoes), crude petroleum, and thermoplastic resins and materials fell. In contrast, prices for plastic products advanced 1.6% m/m. The indexes for residential electric power and for potatoes also increased.

The index for final demand services rose 0.2% m/m (4.6% y/y) in June after falling 0.1% m/m in May. Over 60% of the advance in June can be attributed to margins for final demand trade services, which moved up 0.4% m/m after a 2.3% m/m decline in May. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing increased 0.1% m/m. Conversely, the index for final demand transportation and warehousing services declined 0.1% m/m. The indexes for securities brokerage, dealing, and investment advice; furniture retailing; apparel, jewelry, footwear, and accessories retailing; loan services (partial); and inpatient care rose. In contrast, margins for machinery and vehicle wholesaling declined 8.4%. The indexes for food and alcohol wholesaling and for deposit services (partial) also fell.

Final demand construction costs edged up 0.1% m/m (3.5% y/y) in June, the same monthly increase as in May. Construction prices for private capital investment also edged up 0.1% (3.4% y/y) in June, the same monthly gain as in May.

Prices for intermediate demand processed goods fell 1.2% m/m (+11.1% y/y) in June, the first monthly decline since October 2025 and the largest monthly decline since December 2022. Processed energy goods prices slumped 7.3% m/m, the first monthly decline since January. Processed foods prices edged up 0.1% m/m following a 0.6% m/m jump in May. Prices of processed goods excluding foods and energy rose 0.6% m/m, down markedly from 1.7% monthly gains in both April and May.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

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- Led by a 6.4% m/m decline in energy prices, the PPI for final demand fell 0.3% m/m in June.
- Goods prices fell 1.4% m/m, the first monthly decline since January, while services prices rose 0.2% m/m.
- Excluding food, energy and trade margins, the new core measure edged up 0.1% m/m while the old core (excluding just food and energy) rose 0.2% m/m in June.

U.S. Producer Prices Fell in June

Winnie Tapasanun

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The Empire State Manufacturing Index of General Business Conditions rose to a higher-than-expected 15.6 in July following a 13.9-point drop to 5.7 in June, according to the Empire State Manufacturing Survey released by the Federal Reserve Bank of New York. A reading of 8.6 for July had been expected in the Action Economics Forecast Survey. The positive July figure indicated that the business activity in New York State expanded for the fourth consecutive month and at a faster pace; it was a sharp improvement from 3.1 in July 2025 and a low of -29.7 in January 2024, though still below its most recent high of 19.6 in May and a high of 16.8 in November 2024. The percentage of respondents reporting an increase in general business conditions was 39.0% in July, up from 28.9% in June; the percentage reporting a decrease was 23.4%, up from June’s 23.2%. The latest survey was conducted between July 2 and July 10.

The headline index reflects the answer to a single question concerning the state of economic activity and is not calculated from the components. Haver Analytics calculates a composite index from the five major components, which is comparable to the ISM manufacturing index. This calculated index increased to 57.5 in July following a 4.6-point decline to 53.4 in June, representing the seventh straight expansion; it was modestly up from 54.1 in July 2025 and well above a low of 43.0 in January 2024. The index is the average of five diffusion indexes: new orders, shipments, employment, supplier deliveries and inventories, with equal weights (20% each).

In the latest survey, the new orders index jumped to 22.2 in July after a 19.2-point drop to 3.5 in June, marking the seventh consecutive expansion and a sharp improvement from a low of -30.7 in January 2024. The shipments index advanced to 24.4 in July, the highest level since April 2022, following a 10.3-point decrease to 8.6 in June; it was well above a low of -21.7 in April 2024. The unfilled orders index held at 5.0 in July and June after 4.9 in May, indicating unfilled orders expanded for the sixth straight month; the index reached its recent high of 10.8 in March and a low of -24.2 in January 2024. The inventories index increased to 4.0 in July following a 9.7-point decline to 0.0 in June, signaling inventories rose slightly this month after being unchanged. Meanwhile, the delivery times index rose to 13.0 in July from 11.9 in June, with 20.0% of respondents reporting longer delivery times and 7.0% reporting shorter times, indicating that delivery times continued to lengthen.

On the labor front, the number of employees index rose to 11.4 in July after a 1.3-point rebound to 9.6 in June, indicating that employment expanded for the sixth successive month and reached its highest level since December 2022. The index remained well above a low of -9.3 in December 2023 but below a peak of 24.9 in February 2022. In July, a higher 20.9% of respondents reported an increase in employment while 9.6% reported a decline. The average workweek index fell to 2.8 in July from 5.1 in June, remaining positive for the sixth straight month, albeit at a four-month low.

Inflation pressures eased in July but remained elevated. The prices paid index fell to 52.3 in July, the lowest level since April, after a 1.6-point decline to 61.0 in June. Although well below a peak of 84.9 in April 2022, the index remained above a low of 25.9 in December 2024 and a low of 20.8 in December 2023. In July, 55.4% of respondents reported higher prices paid while only 3.1% reported lower prices paid. The prices received index slid to 27.6 in July, a three-month low, from 31.4 in June. The index was above a low of 7.5 in December 2024 and a low of 7.7 in July 2023 but far below a high of 51.9 in March 2022. In July, 31.3% of respondents reported higher prices received while 3.6% reported lower prices received.

Firms remained fairly optimistic about the future business outlook in the latest survey. The index for future business conditions eased to 27.9 in July, the lowest level since April, after a 3.4-point decrease to 30.1 in June, with 49.9% of respondents expecting business conditions to improve over the next six months. Future new orders edged up to 33.2 in July, the highest level since February, from 32.5 in June, while future shipments slipped to 30.6 from 32.2. Growth in future employment slowed to 14.4, the lowest reading since December, from June’s 20.9. Capital spending plans remained positive for the ninth consecutive month in July, with the future capital expenditures index rising to 15.0 from June’s 10.9. Expected prices paid fell to 53.0 in July, the lowest level since March, from 59.4 in June, and expected prices received fell to 41.9, the lowest level since April, from 51.6.

The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease with zero separating expansion from contraction.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

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- General Business Conditions Index up 9.9 pts. to 15.6 in July; fourth straight expansion.
- Shipments (24.4), highest since Apr. ’22; new orders (22.2); unfilled orders (5.0); inventories (4.0).
- Employment (11.4), a solid reading and highest since Dec. ’22.
- Prices paid (52.3) and prices received (27.6) both at three-month lows.
- Firms fairly optimistic: Future Business Conditions Index down to a still-positive 27.9; future prices paid at a four-month-low 53.0.

U.S. Empire State Manufacturing Index Rebounds Strongly in July

Robert Brusca

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Industrial production in the European Monetary Union (EMU) shows only a very minor and idiosyncratic sector acceleration in the nondurable goods sector. Other sectors show trends that are not focused and drift into random variability. Nondurable goods output shows growth of -10.9% over 12 months, improving to a pace of -9.9% over six months annualized and improving further to -8.7% annualized over three months. The irony is that nondurable output is contracting over all these periods, but the contractions are becoming slightly less virulent. It is nothing to base any optimism on despite the technically ‘improving’ trend.

Total output and manufacturing output in the EMU each show strong gains annualized over three months after declines on balance over six months and 12 months. 

While the secular trends are not clear in showing persistent accelerations or decelerations for the most part, it's true that output across the consumer industries continues to show contraction on all timelines. When we move to intermediate goods and capital goods, we're looking at output showing increases over 12 months, six months, and three months. Even if there are not clear progressions, the persistence of output gains is notable. This again underscores the extent to which expansion is being carried ahead by business and not by the consumer, even in Europe.

On a quarter-to-date (QTD) basis (two months into the second quarter), output is generally showing increases, with the exception of consumer durable goods showing an output decline at a 2.4% annual rate. Top-line growth is still very unimpressive, with total industrial production at a 0.6% annual growth rate and manufacturing alone at a 0.4% annual growth rate; neither of these is strong, solid, or impressive.

Turning to the percentile standing data that evaluate the strength of year-over-year growth on a historic timeline, we see that manufacturing and total output growth log percentile standings just below the 30th percentile. Consumer goods, as an aggregate category, have a 1.3% standing, which is extremely weak. That standing consists of a 29% standing for consumer durables and a 1.3 percentile standing for consumer nondurables output.

Once again, it is intermediate and capital goods that are the backbone of support for output. Intermediate goods’ annual growth rate has a 63-percentile standing, and the year-over-year growth rate for capital goods has a 52.9 percentile standing. Both being above the 50% mark puts them above their median for the period of analysis; that period extends back to August 2006, roughly a 20-year period.

I previously reported on the country detail. The country detail shows accelerating manufacturing output in Ireland, Portugal, and Sweden (Sweden that is not a monetary union member). Austria, a monetary union member, shows persistent deceleration, while the rest of the countries in the group show somewhat chaotic patterns.

While the percentile standing for year-over-year growth in manufacturing is at the 27th percentile mark for the whole of the monetary union, that amalgamation includes size weighting for that evaluation. If we take the unweighted averages for the percentile standings for 11 of the oldest monetary union members, their average individual ranking is much higher at a 48.3 percentile mark. Clearly, there are great differences by country across the monetary union, and this gives the ECB an additional headache in trying to make one monetary policy for such a varied group of economies.

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Europe

IP in EMU Remains Weak

Michael J. Moran

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Most analysts were looking for a dip in the CPI because of a likely retreat in gasoline prices, but the published decline of 0.4% in the headline index was noticeably softer than the consensus estimate of -0.1%. Gasoline prices did not disappoint, with a drop of 9.7% offsetting approximately one-quarter of the cumulative surge in the prior three months. Prices of fuel oil fell almost as much as gasoline prices, and electricity charges contributed to the softness with a decline of 1.0%. The price of natural gas services was the only major energy item to increase in June (0.5%). All told, the energy component of the CPI fell 5.7% after climbing 19.6% in the prior three months.

The drop in energy prices was notable, but the core component provided a bigger surprise by posting a decline, the first since a series of three consecutive decreases during the pandemic. Before the pandemic-related retreat, the core component fell only twice from 1990 to 2019. The drop in June was minuscule (-0.02%), but the fact that it carried a minus sign was striking.

Both the goods and services components of the core index contributed to the restraint. Prices of goods other than food and energy fell 0.1%. The Bureau of Labor Statistics publishes six key subcategories of core goods, and five of them fell in June. Apparel prices stood out with a decline of 0.6%. Prices of core services were nearly unchanged at 0.03%, restrained by declines in medical services and motor vehicle insurance. Airfares, which showed upward pressure from rising fuel prices in the prior three months, posted a nondescript increase of 0.2%. The modest increase in the prices of core services led to a dip in the 12-month average increase after stepping up in April and May. The trend in core goods prices continued its gradual deceleration (chart, below right).

Food prices in June rose 0.2%, a reading comfortably within the range of the past few years.

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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- The energy component retraced a portion of its surge in the prior three months.
- Prices excluding food and energy provided a surprise by posting a rare decline.

June CPI: Cooling Energy Prices and a Restrained Core Component

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The NFIB Small Business Optimism Index rose to 97.4 in June, the highest level since February, after a 0.6-point decline to 95.3 in May, according to the Small Business Economic Trends survey conducted by the National Federation of Independent Business. The index was slightly below its 52-year average of 98.0 for the fourth consecutive month and down from a peak of 105.1 in December 2024, albeit above a low of 88.5 in March 2024. Seven of the 10 index components rose, while three fell. Meanwhile, the NFIB Small Business Uncertainty Index edged down to 89 in June following a three-point increase to 91 in May, remaining well above its historical average of 68. The index was below its record high of 110 in October 2024 but above its recent low of 84 in December 2025 and a low of 65 in November 2023.

The outlook for business conditions in the next six months remained positive for the 20th straight month in the latest survey. The net balance of respondents expecting the economy to improve advanced to 13% in June, a four-month high, following a one-point decline to 3% in May; these readings were far below a high of 52% in December 2024 but significantly above a record low of -61% in June 2022. Expected real sales climbed to a net 9% in June, a five-month high, from 1% in May; the latest figure was below a high of 22% in December 2024 but above a low of -18% in August 2024. A net -4% of respondents reported higher nominal sales in the past three months, up from -5% in May and marking the highest reading in four months; the latest result remained above a low of -20% in October 2024 but below the recent positive reading of 1% in February and a peak of 9% in June 2021.

Plans to expand the business inched up to 8% in June from 7% in May and April; the latest figure was down from a high of 20% in December 2024 but up from a low of 2% in March 2023. Plans to make capital outlays rebounded to 20% in June from 16% in May; these numbers were still below a high of 28% in November 2024 and a peak of 31% in October 2021. Expected credit conditions slipped to -5% in June, a three-month low, from -3% in May; this result was slightly below a high of -2% in December 2024 but above a low of -11% in November 2023. Meanwhile, a net 0% of respondents viewed current inventory stocks as “too low” in June, up from -4% in May and matching the highest reading since August 2025 (also 0%); the positive reading of 1% was recorded in May 2025.

On the labor front, 51% of respondents reported that qualified workers to fill job openings were hard to find in June, up from 46% in May and registering the highest level since September 2024. These numbers were above a low of 43% in August 2025 but below a high of 56% in August 2024 and a peak of 62% in September 2021. A net 11% planned to increase employment in June, up from 9% in May; it matched a low of 11% in March 2024 but remained below its recent high of 19% in November 2025 and a peak of 32% in August 2021. Notably, 32% reported positions not able to be filled in June, up from 29% in May (the lowest level since May 2020); these figures remained below a high of 51% in May 2022.

Overall earnings trends had remained in negative territory since December 2019. The measure fell to -20% in June, the lowest level in three months, following a four-point increase to -15% in May. These readings were below the most recent high of -14% in February and a high of -5% in June 2021 but above a low of -37% in August 2024,

On the pricing front, actual and expected selling prices remained at an inflationary level, indicating continued inflationary pressures. The net percent of firms raising their average selling prices rose to 38% in June, the highest reading since February 2023, after a six-point increase to 36% in May. The latest reading was up from a low of 20% in August 2024 but well below a peak of 66% in March 2022. The percentage planning to raise prices eased to a still-elevated 32% in June following a seven-point rise to 34% in May (the highest level since November 2023); these readings remained above a low of 21% in April 2023.

Wage inflation remained relatively high in the June survey. A net 28% of respondents raised compensation during the last three months, down from 31% in May and marking the lowest since November 2025. It was also below a high of 46% in February 2023 and a peak of 50% in January 2022. A net 17% of firms planned to raise worker compensation in the next three months, slightly down from 18% in May and matching the lowest reading since July 2025; this remained below highs of 28% in November 2024, 30% in November 2023, and 32% in October 2022.

Inflation was cited as the single most important problem facing small businesses, as reported by 21% of NFIB members in June, up from 18% in May and representing the highest since October 2024; these readings were well below a peak of 37% in July 2022. Taxes ranked second as the next most important problem (alongside labor quality), as reported by 19% of respondents in June, unchanged from May. Labor quality also remained a key challenge for small businesses, as reported by 19% of respondents in June—the highest since December—compared with 13% in May (the lowest level since December 2016). Other concerns (in June vs. May) included labor costs (8% vs. 14%), government requirements (8% vs. 10%), insurance cost/availability (8% vs. 8%), poor sales (7% vs. 7%), and competition from large businesses (5% vs. 6%).

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

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- Uncertainty Idx down 2 pts. to 89, remaining well above the historical avg. of 68.
- Expectations for economy up 10 pts. to 13%, a four-month high.
- Expected real sales up 8 pts. to 9%, a five-month high.
- Plans to expand business up 1 pt. to 8%, highest in three mths.
- Firms raising avg. selling prices up 2 pts. to 38%, highest since Feb. ’23.
- Top three business concerns: inflation (21%), taxes (19%), and labor quality (19%).