Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020212.jpg" width="353">
Chain store sales rose 2.1% in the first full week of February. The surge followed a slight 0.7% decline the prior week and raised sales so far in February 1.0% above January. 
Through early February, the Tokyo Bank Leading Indicator of chain store sales also had improved, albeit less than actual sales. 
During the last ten years, the correlation between the leading indicator of chain store sales and actual sales has been low.

<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">2/09/02</th>
<th scope="col">02/02/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>406.6</td>
<td>398.2</td>
<td>4.1%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
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</tbody>
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Chain store sales rose 2.1% in the first full week of February. The surge followed a slight 0.7% decline the prior week and raised sales so far in February 1.0% above January. Through early February, the Tokyo Bank Leading Indicator [...]

Weekly Chain Store Sales Build Momentum

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020211.jpg" width="353">
Prices for industrial commodities have risen nearly 5% 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 (nearly 50%) toward crude oil and benzene prices which are up 6% during the period.
Prices in most other categories also have risen since the fall, including metals, textiles and miscellaneous commodities.
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.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol">FIBER Industrial Materials Price Index (1990=100)</th>
<th scope="col">02/08/02</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>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">All Items</td>
<td>80.90</td>
<td>80.18</td>
<td>-9.4%</td>
<td>85.28</td>
<td>94.18</td>
<td>92.50</td>
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</table>
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Prices for industrial commodities have risen nearly 5% 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 (nearly [...]

Higher Commodity Prices Signal Recovery in Manufacturing

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020207b.jpg" width="353">
The Institute for Supply Management (formerly the NAPM) business activity index of the nonmanufacturing sector fell more than expected last month. A slight decline had been expected and new seasonal factors lowered the December level significantly. 
New orders and imports fell, while employment was about unchanged for the second month. 
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. 
The survey of nonmanufacturing activity dates only to July 1997. Therefore its seasonal adjustment should be viewed tentatively.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
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<th scope="col" class="firstcol">ISM Nonmanufacturing Survey</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>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>49.6</td>
<td>50.1</td>
<td>52.1</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 7, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020207a.jpg" width="353">
Initial claims for unemployment insurance fell slightly more than expected in the latest week. The prior week&#39;s level was little revised.
The decline in weekly claims since the October peak has lowered the four-week moving average to 380,500, down 24.8% since that peak.
Continuing claims for unemployment insurance fell in the latest week, but the prior week&#39;s level was revised up significantly.
The insured rate of unemployment was unchanged at 2.7%. The prior week&#39;s level was revised up.

<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">02/02/02</th>
<th scope="col">01/26/02</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>376.0</td>
<td>391.0</td>
<td>4.2%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,427</td>
<td>45.6%</td>
<td>3,031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
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The Institute for Supply Management (formerly the NAPM) business activity index of the nonmanufacturing sector fell more than expected last month. A slight decline had been expected and new seasonal factors lowered the December level [...]

ISM Nonmanufacturing Index Fell

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020201a.jpg" width="353">
The recent decline in nonfarm payrolls moderated as expected last month continuing a trend since payrolls fell 448,000 last October. December&#39;s decline was deepened slightly but the November drop was lessened. 
From the household survey, the unemployment rate fell despite a sharp drop in employment as the labor force fell by a record 924,000. 
The one-month diffusion index of payroll employment rose to 50.1, the first reading over 50 (more firms expanding payrolls than contracting) since last March. The three-month figure rose slightly to 38.1. 
Manufacturing payrolls again fell but by the least amount since September. The employment diffusion index for the factory sector improved to 40.8. 
Employment in the service sector rose due to strength in retail hiring. 
The index of aggregate hours worked (employment times hours worked) fell 0.4% and January was 0.5% below the 4Q average. 
Average hourly earnings were unchanged and the sharp December increase was revised lower. 
The establishment survey figures for nonfarm payrolls are based on reports provided to the US Labor Dept. by businesses. The household survey figures (incl. the unemployment rate) are based on a mail survey of US households.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Employment</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>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>-89,000</td>
<td>-130,000</td>
<td>-0.9%</td>
<td>0.4%</td>
<td>2.2%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-89,000</td>
<td>-122,000</td>
<td>-7.2%</td>
<td>-4.2%</td>
<td>-0.5%</td>
<td>-1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>34.1</td>
<td>34.4</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.0%</td>
<td>0.3%</td>
<td>4.0%</td>
<td>4.2%</td>
<td>3.8%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.6%</td>
<td>5.8%</td>
<td>4.2%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
</tr>
</tbody>
</table>
ISM Index Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020201c.jpg" width="353">
The Institute of Supply Management Manufacturing Index - formerly the NAPM Composite Manufacturing Index - rose as expected last month. New seasonal factors altered the historical data slightly. 
Each of the index component series rose except new orders which was about unchanged following a surge in December. 
Deflationary pressure fell as the price index rose to the highest level since last spring.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">ISM Manufacturing Survey</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>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>49.9</td>
<td>48.1</td>
<td>41.7</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>43.9</td>
<td>33.2</td>
<td>64.6</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Rose in December 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020201b.jpg" width="353">
The value of construction put-in-place rose precisely as expected in December. The November total was revised down due to a lowered estimate of nonresidential building but the decline in residential building was lessened. 
Residential building activity rose due to a jump in construction of multi-unit structures. The value of single-unit construction fell for the third month in four. 
Nonresidential building activity fell for the eighth month of the year. 
Spending by governments fell slightly after strong gains the prior two months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Construction Put-in-place</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Nov &#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">Total</td>
<td>0.2%</td>
<td>0.3%</td>
<td>3.0%</td>
<td>5.6%</td>
<td>7.0%</td>
<td>8.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>6.0%</td>
<td>5.6%</td>
<td>7.4%</td>
<td>11.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-11.7%</td>
<td>-0.2%</td>
<td>8.0%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>-0.2%</td>
<td>4.2%</td>
<td>16.0%</td>
<td>11.0%</td>
<td>4.5%</td>
<td>10.1%</td>
</tr>
</tbody>
</table>
Consumer Sentiment Rose Less than Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020201d.jpg" width="353">
The University of Michigan&#146;s Index of Consumer Sentiment rose less than expected in January due to weakness late in the month. 
Nevertheless, the 4.7% m/m rise reflected a sharply higher reading of expectations. The reading of current economic conditions fell and nearly erased the December gain. 
The figures are not seasonally adjusted. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol">University of Michigan</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>
<tbody>
<tr>
<td class="firstcol">Consumer Sentiment</td>
<td>93.0</td>
<td>88.8</td>
<td>-1.8%</td>
<td>89.2</td>
<td>107.6</td>
<td>105.8</td>
</tr>
</tbody>
</table>
</body>
</html>

The recent decline in nonfarm payrolls moderated as expected last month continuing a trend since payrolls fell 448,000 last October. December's decline was deepened slightly but the November drop was lessened. From the household [...]

Job Loss Smallest Since August

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020131a.jpg" width="353">
The employment cost index rose as expected last quarter. The quarterly report was virtually identical in substance to the 3Q report: higher unemployment rates have constrained growth in wages and benefits although increases in benefit costs remain elevated.
Compensation gains in service sector occupations have steadily accelerated since 1999 while gains in blue collar compensation have slowed over the last year. 
Growth in ECI compensation and average hourly earnings have converged.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol">ECI- Private Industry Workers</th>
<th scope="col">4Q`01</th>
<th scope="col">3Q `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">Compensation</td>
<td>1.0%</td>
<td>0.9%</td>
<td>4.2%</td>
<td>4.1%</td>
<td>4.4%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wages &amp; Salaries</td>
<td>0.9%</td>
<td>0.7%</td>
<td>3.8%</td>
<td>3.7%</td>
<td>3.9%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Benefit Costs</td>
<td>1.3%</td>
<td>1.4%</td>
<td>5.1%</td>
<td>5.1%</td>
<td>5.7%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
Personal Income Rose, Spending Down Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 31, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020131b.jpg" width="353">
Personal income rose for the first time since August and by slightly more than expected. 
A 0.6% gain in wage &amp; salary disbursements led the rise in income, though it too was the first material gain since the summer.
Personal spending fell for the third month in four again reflecting lower sales of light vehicles. Nondurable PCE also fell for the third month in four and services spending rose moderately 
Disposable income rose a modest 0.3%. The annual gain of 3.1% has more than halved since last year. Gains in real DPI also have halved to 2.0% 
The PCE price deflator fell for the third month in four. The price deflator less food and energy was unchanged (1.6% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Disposition of Personal Income</th>
<th scope="col">Dec &#39;01</th>
<th scope="col">Nov &#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">Personal Income</td>
<td>0.4%</td>
<td>-0.0%</td>
<td>2.7%</td>
<td>4.9%</td>
<td>7.0%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>-0.2%</td>
<td>-0.3%</td>
<td>3.6%</td>
<td>4.9%</td>
<td>7.7%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>1.0%</td>
<td>0.5%</td>
<td>1.2%</td>
<td>1.6%</td>
<td>1.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">PCE Price Deflator</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>1.1%</td>
<td>1.9%</td>
<td>2.7%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Rose 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 31, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020131c.jpg" width="353">
Initial claims for unemployment insurance rose a bit more than expected in the latest week. The prior week&#39;s level was revised down.
Despite the rise in weekly claims, the four-week moving average fell to 386,000, its lowest level since mid-August.
Continuing claims for unemployment insurance rose slightly in the latest week, but the prior week&#39;s level was revised to show a 4.7% drop versus the 1.5% decline reported initially.
The insured rate of unemployment was unchanged at 2.6%. The prior week&#39;s level was revised down.

<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">01/26/02</th>
<th scope="col">01/19/02</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>390.0</td>
<td>360.0</td>
<td>11.4%</td>
<td>408.0</td>
<td>302.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,382</td>
<td>44.1%</td>
<td>3,031</td>
<td>2,127</td>
<td>2,187</td>
</tr>
</tbody>
</table>
Chicago PM Index Rose Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 31, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020131d.jpg" width="353">
The Chicago Purchasing Manager&#146;s Index of Business activity jumped as expected. The historical seasonally adjusted data was recently revised. 
Indexes of new orders and production rose sharply, but employment fell to a record low. 
The prices paid index fell and the index of vendor delivery speed rose only slightly, both indicating little inflationary pressure. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Chicago Purchasing Managers Index, SA</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>
<tbody>
<tr>
<td class="firstcol">Business Barometer</td>
<td>45.1</td>
<td>41.5</td>
<td>41.7</td>
<td>41.4</td>
<td>51.8</td>
<td>56.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid</td>
<td>40.7</td>
<td>47.0</td>
<td>62.6</td>
<td>50.6</td>
<td>65.6</td>
<td>57.5</td>
</tr>
</tbody>
</table>
</body>
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The employment cost index rose as expected last quarter. The quarterly report was virtually identical in substance to the 3Q report: higher unemployment rates have constrained growth in wages and benefits although increases in benefit [...]

Employment Cost Index Gains Capped by Higher Unemployment

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<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020130.jpg">
GDP unexpectedly rose last quarter due to a decline in the price deflator, the first decrease in nearly 50 years. 
Price decline and/or weakness was widespread. Only prices in the residential investment (3.0%) and personal consumption (0.8%) categories rose. Elsewhere prices fell. Nonresidential fixed investment: -1.8%. Exports: -3.2%. Government: -0.7%.
Strength in inflation-adjusted PCE (5.3%) led the surge in real final domestic demand. Real government spending also surged led by higher defense spending. Elsewhere, demand fell with both residential and business fixed investment down sharply. 
The rate of inventory decumulation by far set a record, nearly doubling versus 3Q. As a percentage of GDP the rate of decumulation was a third higher than the prior peak set in 4Q82. 
The net export deficit unexpectedly deteriorated due to a sharp drop in exports.

<table border="0" cellspacing="0" width="100%">
<colgroup><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 (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>0.2%</td>
<td>-1.3%</td>
<td>0.1%</td>
<td>1.1%</td>
<td>4.1%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</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>2.5%</td>
<td>-0.5%</td>
<td>1.7%</td>
<td>2.2%</td>
<td>4.3%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</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>3.2%</td>
<td>-0.3%</td>
<td>1.7%</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>2.3%</td>
<td>1.8%</td>
<td>2.2%</td>
<td>2.3%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
Fed Leaves Interest Rates Unchanged 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 30, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020130b.jpg" width="353">
The Federal Reserve left the Federal Funds Target Rate unchanged at 1.75%, as expected. 
The press release, which accompanied the Fed&#146;s action, contained the following statement. &quot;Signs that weakness in demand is abating and economic activity is beginning to firm have become more prevalent.&quot;
The complete text of the Fed&#39;s latest press release can be viewed <a href="http://www.federalreserve.gov/boarddocs/press/general/2002/20020130/default.htm">here</a>.

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GDP unexpectedly rose last quarter due to a decline in the price deflator, the first decrease in nearly 50 years. Price decline and/or weakness was widespread. Only prices in the residential investment (3.0%) and personal consumption [...]

Unexpected Rise in Real GDP

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020129a.jpg" width="353">
Durable goods orders rose a bit more than expected last month, but it was off a November level that was revised sharply lower due to lowered figures in the transportation sector. 
Excluding transportation, durable orders rose 1.4% after rising 0.7% (revised slightly lower) in November. 
The sharp improvement in the ISM orders component bodes well for further improvement in durable goods orders. The five-year correlation between this index and the month-to-month change in durable orders ex. transportation is a significant 19%, but it rises to 28% when orders are lagged one month. 
Orders for nondefense capital goods rose for the third consecutive month led by the third monthly gain in the computers and electronics category (mostly semiconductors). 
Shipments rose slightly, but excluding transportation have yet to show meaningful improvement, down in all but two months of 2001.

<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">Dec</th>
<th scope="col">Nov</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>2.0%</td>
<td>-6.0%</td>
<td>-14.0%</td>
<td>-12.8%</td>
<td>6.6%</td>
<td>6.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nondefense Capital Goods</td>
<td>1.3%</td>
<td>4.0%</td>
<td>-26.7%</td>
<td>-17.0%</td>
<td>14.4%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
Weekly Chain Store Sales Up Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 29, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020129b.jpg" width="353">
Chain store sales rose 0.2% in the last full week of January. Sales have risen in five of the last six weeks. 
For the first four weeks of January sales were up 2.2% versus December. 
During the last five years there has been a 26% correlation between the month-to-month percent change in chain store sales and the change in retail sales at general merchandise stores.

<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">1/26/02</th>
<th scope="col">1/19/02</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>401.0</td>
<td>400.0</td>
<td>3.4%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
Consumer Confidence Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 29, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020129c.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence rose slightly more than expected in January. December&#39;s level was revised up. 
The rise in the Conference Board measure was in-line with the mid-month University of Michigan reading that consumer sentiment had improved. 
The rise in confidence reflected a sharply higher reading for consumer expectations. Confidence regarding the present situation was unchanged. A rise in expectations also powered the Michigan index. 
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">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>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>97.3</td>
<td>94.6</td>
<td>-15.9%</td>
<td>106.6</td>
<td>139.0</td>
<td>135.3</td>
</tr>
</tbody>
</table>
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Durable goods orders rose a bit more than expected last month, but it was off a November level that was revised sharply lower due to lowered figures in the transportation sector. Excluding transportation, durable orders rose 1.4% [...]

Durable Goods Orders Firm

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020128.jpg" width="353">
Sales of new single family homes were slightly stronger than expected last month. Consensus estimates were for sales at a 920,000 annual rate.
November&#39;s sales were revised down from 934,000 reported last month. For the year, new home sales set a record, far surpassing the previous record set in 1977.
Sales fell in each of country&#39;s regions except the West. 
The median price of a new home rose sharply to $170,200, 5.1% y/y. November&#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">Dec &#39;01</th>
<th scope="col">&nbsp;Nov &#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>946</td>
<td>895</td>
<td>-5.5%</td>
<td>901</td>
<td>881</td>
<td>879</td>
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Sales of new single family homes were slightly stronger than expected last month. Consensus estimates were for sales at a 920,000 annual rate. November's sales were revised down from 934,000 reported last month. For the year, new home [...]

New Home Sales Set a Record in 2001

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%).