Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020306a.jpg" width="353">
Manufacturing inventories fell as expected for the twelfth month in a row in January. However, it was the mildest monthly drop since last May. 
Inventory decumulation continued strong across industries, although some moderation in that rate occurred notably in the electrical equipment, computer and machinery industries. Semiconductor inventories continued to plunge. 
Inventories of automobiles rose for the third consecutive month though inventories of furniture fell sharply for the fourteenth straight month. 
Shipments rose 2.0%, the third monthly increase in four, led by higher shipments of machinery and computers. 
Durable goods orders were revised to a 2.0% gain, down versus the advance report.

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<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">Jan &#39;02</th>
<th scope="col">Dec &#39;01</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>
<tbody>
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<td class="firstcol">Mfg Inventories</td>
<td>-0.6%</td>
<td>-0.9%</td>
<td>-8.4%</td>
<td>-7.5%</td>
<td>4.6%</td>
<td>2.3%</td>
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Manufacturing inventories fell as expected for the twelfth month in a row in January. However, it was the mildest monthly drop since last May. Inventory decumulation continued strong across industries, although some moderation in that [...]

Factory Inventory Liquidation Slowed

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020305a.jpg" width="353">
Prices for industrial commodities have risen roughly 7% since the lows last November according to the FIBER index of industrial materials price index (formerly the Journal of Commerce index). 
The FIBER index is heavily weighted toward crude oil and benzene prices which are up 13% during the period.
Prices in other categories also have risen since the fall including metals (+6%), textiles (+3%) and miscellaneous commodities (+11%).
During the last twenty years there has been a 46% correlation between the three-month percent change in the FIBER index and the three-month change in factory sector industrial production.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/DAILY/@D3/@D301/@D30103/@D30103.HTM">FIBER Industrial Materials Price Index (1990=100)</a></th>
<th scope="col">03/01/02</th>
<th scope="col">02/01/02</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">All Items</td>
<td>83.21</td>
<td>80.18</td>
<td>-4.0%</td>
<td>85.28</td>
<td>94.18</td>
<td>92.50</td>
</tr>
</tbody>
</table>
Weekly Chain Store Sales Down Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 5, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020305b.jpg" width="353">
Chain store sales fell 0.8% last week. It was the second consecutive week that sales declined following two consecutive weeks during which sales rose 4%.
With the full month results now in sales for February are 2.5% above 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.

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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">3/02/02</th>
<th scope="col">02/23/02</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">Total Weekly Retail Chain Store Sales</td>
<td>409.8</td>
<td>413.1</td>
<td>4.7%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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</tbody>
</table>
ISM Nonmanufacturing Index Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 5, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020305c.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector rose more than expected last month. A moderate increase had been expected. 
New orders surged but employment fell. The employment component is about at its October level. The not seasonally adjusted price index rose slightly and it is well off its lows of last fall. 
Business activity for the nonmanufacturing sector is a question separate from the components mentioned above. This is in contrast to the NAPM manufacturing sector composite index that reflects component activity. 
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">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>
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<td class="firstcol">Business Activity Index</td>
<td>58.7</td>
<td>49.6</td>
<td>52.4</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
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Prices for industrial commodities have risen roughly 7% since the lows last November according to the FIBER index of industrial materials price index (formerly the Journal of Commerce index). The FIBER index is heavily weighted toward [...]

Higher Commodity Prices Add Further to Recovery Signal

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020304.jpg" width="353">
Light vehicle sales were firm last month, rising 5.4% from January as aggressive sales promotion continued.
The annualized sales rate was the highest since last December, but was nevertheless below the full-year pace of 2001.
Sales of domestically built cars and trucks rose 7.2% m/m but remained below last year&#39;s level. Imported vehicle sales fell slightly m/m but were up sharply from 2001.
During the last three months, imports captured roughly 20% of the US light vehicle market versus 18% last year, 16% in 2000 and 15% in 1999.
Sales of both cars and trucks rose last month, though car sales fell to only 47% of the total market versus 64% ten years ago. 

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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">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>
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<td class="firstcol">Total</td>
<td>16.68</td>
<td>15.83</td>
<td>-4.8%</td>
<td>17.21</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>13.39</td>
<td>12.49</td>
<td>-8.5%</td>
<td>14.15</td>
<td>14.58</td>
<td>14.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imported</td>
<td>3.28</td>
<td>3.33</td>
<td>13.8%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
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Light vehicle sales were firm last month, rising 5.4% from January as aggressive sales promotion continued. The annualized sales rate was the highest since last December, but was nevertheless below the full-year pace of 2001. Sales of [...]

Vehicle Sales Up Versus January

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301b.jpg" width="353">
Personal income rose a surprising 0.4% last month, due to a 2.2% surge in transfer payments. 
Wage &amp; salary disbursements fell slightly following a 0.5% gain in December. Nevertheless, it was the fifth month in six of little or negative growth in wages. 
Personal spending was strong, as expected, for the first month in three. Though spending on durable goods fell sharply for the third straight month, reflecting lower sales of light vehicle, sales of nondurables and services were strong. 
Disposable income rose a strong 1.6%, the first material gain in five months and reflected a sharp drop in taxes. 
The PCE price deflator rose slightly (0.6% y/y) for only the second month in seven. Core prices rose 0.1% (1.2% y/y) following a slight December decline.

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<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">Jan &#39;02</th>
<th scope="col">Dec &#39;01</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">Personal Income</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>4.9%</td>
<td>7.0%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.4%</td>
<td>0.0%</td>
<td>3.4%</td>
<td>5.0%</td>
<td>7.7%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>1.8%</td>
<td>0.6%</td>
<td>0.9%</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>-0.2%</td>
<td>0.6%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
Chicago Purchasing Agents' Index Up Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301a.jpg" width="353">
The Chicago Purchasing Manager&#146;s Index of Business activity rose more than expected in February versus January, and was at its highest level since June 2000. 
Indexes of new orders, production, inventories and employment all rose. 
The prices paid index rose sharply and the index of vendor delivery speed rose, indicating an abatement of recent deflationary pressure. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</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>
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<td class="firstcol">Business Barometer</td>
<td>53.1</td>
<td>45.1</td>
<td>43.0</td>
<td>41.4</td>
<td>51.8</td>
<td>56.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid</td>
<td>51.2</td>
<td>40.7</td>
<td>63.5</td>
<td>50.5</td>
<td>65.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
ISM Index Quite Strong 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301c.jpg" width="353">
The ISM Composite Index of manufacturing sector activity rose much more than expected last month. Consensus expectations were for a gain to 50.5.The strength was in line with yesterday&#39;s Chicago Purchasing agents&#39; report. 
Each of the index&#39;s components except inventories contributed to the rise in the composite, but the rise in orders was sharpest rising to the highest level since November 1994. 
Inflation pressure fell slightly, contrary to the indication of firmer pricing in the Chicago report.

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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">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>
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<td class="firstcol">Composite Index</td>
<td>54.7</td>
<td>49.9</td>
<td>42.0</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>41.5</td>
<td>43.9</td>
<td>55.6</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Strong in January 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301d.jpg" width="353">
The value of construction put in place rose much more than expected in January, driven by sharply higher nonresidential and public construction. 
The surprise in nonresidential building was a pop after nine months of extreme weakness during which nonresidential building fell 16.9%. Decline during that period was led by a 33.6% drop in industrial building and a 25.2% decline in office construction. 
In the residential sector, single-family residential building rose a slight 0.4% following four months of zero or negative change. 
Spending by governments again was strong, led by education, highways &amp; streets and hospitals.

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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">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
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<td class="firstcol">Total</td>
<td>1.5%</td>
<td>0.5%</td>
<td>2.0%</td>
<td>5.6%</td>
<td>7.0%</td>
<td>8.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>0.1%</td>
<td>0.5%</td>
<td>4.2%</td>
<td>5.6%</td>
<td>7.4%</td>
<td>11.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>2.2%</td>
<td>-2.9%</td>
<td>-14.3%</td>
<td>-0.4%</td>
<td>8.0%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>3.7%</td>
<td>2.9%</td>
<td>17.5%</td>
<td>11.1%</td>
<td>4.5%</td>
<td>10.1%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Sagged 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301e.jpg" width="353">
The Univ. of Michigan&#39;s Index of Consumer Sentiment was a bit weaker than expected for the full month of February, falling 2.5% m/m. 
The decline in sentiment reflected a lower reading of consumer expectations but a higher reading of the current situation.
The decline in sentiment paralleled the 3.8% m/m decline in the Conference Board&#39;s February measure of Consumer Confidence. 
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.

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<th scope="col" class="firstcol">Univ. of Michigan</th>
<th scope="col">Feb &#39;02</th>
<th scope="col">Jan &#39;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>
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<td class="firstcol">Consumer Sentiment</td>
<td>90.7</td>
<td>93.0</td>
<td>0.1%</td>
<td>89.2</td>
<td>107.6</td>
<td>105.8</td>
</tr>
</tbody>
</table>
Help Wanted Advertising Stable 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020301f.jpg" width="353">
The Conference Board&#39;s National Index of Help-Wanted Advertising was stable in January at a low level. 
During the past ten years there has been a 74% correlation between the level of help-wanted advertising and the three-month % change in nonfarm payrolls. 
By region, job opportunities appeared strongest in the Mountain and East South Central regions of the country.
The figures are seasonally adjusted.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">Jan &#39;02</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Jan &#39;01</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nat&#39;l Help Wanted Index</td>
<td>47</td>
<td>47</td>
<td>77</td>
</tr>
</tbody>
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Personal income rose a surprising 0.4% last month, due to a 2.2% surge in transfer payments. Wage & salary disbursements fell slightly following a 0.5% gain in December. Nevertheless, it was the fifth month in six of little or [...]

Personal Income & Spending Strong

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228.jpg" width="353">
GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. 
Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential (-5.0%) and business fixed investment (-13.1%).
The rate of inventory decumulation was little changed, about doubling versus 3Q. 
The net export deficit was lessened significantly due to a decline in imports that was revised deeper.

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<th scope="col" class="firstcol">Chained &#39;96 $, % AR</th>
<th scope="col">4Q &#39;01 (Revised)</th>
<th scope="col">4Q &#39;01 (Advance)</th>
<th scope="col">3Q &#39;01</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">GDP</td>
<td>1.4%</td>
<td>0.2%</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-2.2%</td>
<td>-2.3%</td>
<td>-0.8%</td>
<td>-1.6%</td>
<td>-1.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>3.6%</td>
<td>2.5%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.9%</td>
<td>3.2%</td>
<td>-0.3%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228b.jpg" width="353">
Initial claims for unemployment insurance rose to the level which was expected in the latest week, however the prior week&#39;s level was revised substantially lower. The monthly average of claims was the lowest since February of last year.
The chart plots the level of weekly claims against the (inverted) monthly change in nonfarm payrolls. Only a modest decline in February payrolls is suggested for next Friday&#39;s, 3/8, release.
The four-week moving average of claims fell to 373,250.
Continuing claims for unemployment insurance rose slightly in the latest week. The prior week&#39;s level was revised down.
The insured rate of unemployment was unchanged at 2.7% for the third week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Unemployment Insurance (000s)</th>
<th scope="col">02/23/02</th>
<th scope="col">02/16/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>378.0</td>
<td>361.0</td>
<td>1.1%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,492</td>
<td>42.5%</td>
<td>3,3031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
</body>
</html>

GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential [...]

Revised 4Q GDP Up More Than Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228.jpg" width="353">
GDP last quarter was revised to show more real growth than expectations for only a modest upward revision. 
Upward revisions to real PCE (6.0% AR) drove domestic final demand growth higher despite continued weakness in both residential (-5.0%) and business fixed investment (-13.1%).
The rate of inventory decumulation was little changed, about doubling versus 3Q. 
The net export deficit was lessened significantly due to a decline in imports that was revised deeper.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Chained &#39;96 $, % AR</th>
<th scope="col">4Q &#39;01 (Revised)</th>
<th scope="col">4Q &#39;01 (Advance)</th>
<th scope="col">3Q &#39;01</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">GDP</td>
<td>1.4%</td>
<td>0.2%</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-2.2%</td>
<td>-2.3%</td>
<td>-0.8%</td>
<td>-1.6%</td>
<td>-1.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>3.6%</td>
<td>2.5%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.9%</td>
<td>3.2%</td>
<td>-0.3%</td>
<td>1.9%</td>
<td>2.3%</td>
<td>4.9%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Deflator</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Up Slightly 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 28, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020228b.jpg" width="353">
Initial claims for unemployment insurance rose to the level which was expected in the latest week, however the prior week&#39;s level was revised substantially lower. The monthly average of claims was the lowest since February of last year.
The chart plots the level of weekly claims against the (inverted) monthly change in nonfarm payrolls. Only a modest decline in February payrolls is suggested for next Friday&#39;s, 3/8, release.
The four-week moving average of claims fell to 373,250.
Continuing claims for unemployment insurance rose slightly in the latest week. The prior week&#39;s level was revised down.
The insured rate of unemployment was unchanged at 2.7% for the third week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">02/23/02</th>
<th scope="col">02/16/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>378.0</td>
<td>361.0</td>
<td>1.1%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,492</td>
<td>42.5%</td>
<td>3,3031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
</body>
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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020227a.jpg" width="353">
Durable goods orders rose more-than- expected last month, but December&#39;s previously reported gain was revised lower. 
Excluding transportation, durable orders rose 1.3%, the fourth consecutive monthly gain. December&#39;s 0.4% gain was revised slightly down.
Higher aircraft orders, up 21.6%, added to a 4.3% gain in the motor vehicle sector, the forth gain in a row.
Orders for nondefense capital goods rose slightly but December&#39;s previously reported gain now shows decline. Excluding aircraft, capital goods orders fell 0.1% following two month of strong gain.
Orders for computers and electronics products rose for the fourth month in a row. Orders for semiconductors, computers and communication equipment all rose. Orders for electrical equipment fell sharply for the second month but machinery orders rose. 
Shipments rose sharply. Excluding transportation shipments rose 2.5%, the first meaningful rise since October.
Inventories of durable goods fell for the twelfth consecutive month. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">NAICS Classification</th>
<th scope="col">Jan</th>
<th scope="col">Dec</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">Durable Goods Orders</td>
<td>2.6%</td>
<td>0.9%</td>
<td>-2.2%</td>
<td>-12.9%</td>
<td>6.6%</td>
<td>6.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nondefense Capital Goods</td>
<td>0.5%</td>
<td>-1.2%</td>
<td>-17.4%</td>
<td>-17.2%</td>
<td>14.4%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
New Home Sales Fall Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 27, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020227b.jpg" width="353">
Sales of new single family homes fell much more than expected last month after surging in November and December, which was revised up. Consensus estimates were for sales at a 925,000 annual rate.
January sales were the lowest since June 2000, but may have biased lower by strong seasonal adjustment factors.
Sales were mixed across the country&#39;s region, falling most sharply in the South but rising in the Northeast. 
The median price of a new home rose sharply to $183,400, 7.1% y/y. December&#39;s figures were revised up.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Homes Sales (000s, AR)</th>
<th scope="col">Jan &#39;02</th>
<th scope="col">&nbsp;Dec &#39;01</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">New Single-Family</td>
<td>823</td>
<td>966</td>
<td>-12.3%</td>
<td>907</td>
<td>881</td>
<td>879</td>
</tr>
</tbody>
</table>
</body>
</html>

Durable goods orders rose more-than- expected last month, but December's previously reported gain was revised lower. Excluding transportation, durable orders rose 1.3%, the fourth consecutive monthly gain. December's 0.4% gain was [...]

Durable Goods Orders Rise

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020226a.jpg" width="353">
Chain store sales fell 0.4% during the last full week of February. The decline followed two consecutive weeks during which sales had surged.
Sales for most of the month of February are now 2.5% above January. 
During the last nine years there has been a 28% correlation between the monthly percent change in chain store sales and the change in general merchandise store sales as published by the Commerce Department.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">BTM-UBSW (SA, 1977=100)</th>
<th scope="col">2/23/02</th>
<th scope="col">02/16/02</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>413.1</td>
<td>414.7</td>
<td>5.1%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
Consumer Confidence Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 26, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020226b.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence fell unexpectedly in February. January&#39;s level was revised up slightly. 
The fall in the Conference Board measure was in-line with the mid-month University of Michigan reading that consumer sentiment declined this month. 
The rise in confidence reflected lower readings for both consumer expectations and confidence regarding the present situation. 
The Conference Board&#39;s survey is conducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Conference Board</th>
<th scope="col">Feb &#39;02</th>
<th scope="col">Jan &#39;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">Consumer Confidence</td>
<td>94.1</td>
<td>97.8</td>
<td>-13.8%</td>
<td>106.6</td>
<td>139.0</td>
<td>135.3</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales fell 0.4% during the last full week of February. The decline followed two consecutive weeks during which sales had surged. Sales for most of the month of February are now 2.5% above January. During the last nine [...]

Weekly Chain Store Sales Fall Just Slightly

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%).

Economy in Brief

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Factory Inventory Liquidation Slowed

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Vehicle Sales Up Versus January

Personal Income & Spending Strong

Revised 4Q GDP Up More Than Expected

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