Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130b.jpg" width="353">
Personal income rose an expected 0.4% last month following an upwardly revised like increase in November. For the full year personal income rose 5.4% which together with the 5.9% increase in 2004 was the strongest two year rise since 2001. The twelve month comparison of 2.1% suffered due to Microsoft&#39;s payment last year of a $32B stock dividend.
Wage &amp; salary disbursements rose the same 0.3% (3.7% y/y) as during November and the full year gain of 6.0% was the strongest since 2000. Factory sector wages reversed the prior month&#39;s decline and rose 0.1% (2.4% y/y) while service sector wages rose a moderate 0.3% (3.7% y/y) following an upwardly revised 0.4% November increase.
Disposable personal income rose 0.4% (0.9% y/y) for the second month. Adjusted for the negligible change in prices during December, take home pay jumped 0.4%, half the November increase which was boosted by a decline in prices and the year to year comparison was negative due to the dividend payout.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130c.jpg" width="353">
Personal taxes rose 0.4% (11.8% y/y) in December and for the full year rose 15.0% following a 4.9% gain during 2004.
Personal consumption expenditures rose a firm 0.9% versus expectations for a 0.7% gain. Spending on motor vehicles &amp; parts jumped 11.4% (-5.6% y/y) and spending on furniture &amp; household equipment added 0.3% (6.4% y/y) to a 1.6% November spike. Spending on clothing &amp; shoes dipped slightly (+5.8% y/y) following two months of huge increase while services spending rose 0.5% (6.3% y/y) after a 0.8% November jump.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130a.jpg" width="353">
The PCE chain price index fell for the second consecutive month due to the third consecutive decline in gasoline &amp; oil prices (+16.1% y/y). Less food &amp; energy, prices rose 0.1% following an upwardly revised 0.2% November increase. Durables prices continued the most recent decline which began in May as furniture &amp; household appliance prices fell (-4.0% y/y). Clothing &amp; shoes prices also fell by 0.3% (-1.1% y/y) and services prices rose a modest 0.1% (3.3% y/y).
The personal savings rate was negative for the eighth month in the last nine. In comparison, the personal savings rate from the Federal Reserve&#39;s Flow of Funds accounts, through 3Q05, was similarly depressed but still a positive 0.9%. The Flow of Funds measure amortizes durable goods purchases over an expected lifetime instead of treating them as an expense.
The Income Implications of Rising U.S. International Liabilities from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/newsevents/news/research/2006/rp060111.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.4%</td>
<td>2.1%</td>
<td>5.4%</td>
<td>5.9%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.9%</td>
<td>0.5%</td>
<td>6.2%</td>
<td>6.5%</td>
<td>6.5%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>4.4% (Dec &#39;04)</td>
<td>-0.5%</td>
<td>1.7%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>-0.0%</td>
<td>-0.4%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.6%</td>
<td>1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.1%</td>
<td>0.2%</td>
<td>1.9%</td>
<td>2.0%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
</tbody>
</table>
Industrial Production in Japan Rises for Fifth Successive Month 
by <a href="/comment/Curley.html">Louise Curley</a> January 30, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130d.jpg" width="353">
Industrial production in Japan rose for the fifth successive month in December giving further credence to Carol Stone&#39;s comment of last week: &quot;So perhaps there is in fact room for encouragement about the state of the Japanese economy.&quot; The headline index of manufacturing and mining at 105.0 (2000=100) rose 1.4% in December and exceeded the previous peaks reached in 1997 and early 2001 as shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130e.jpg" width="353">
One of the fastest growing areas of Japanese manufacturing has been the Electronic Parts and Devices, followed closely by Transport Equipment (ex ships and rolling stock). These industries have shown strong growth trends throughout Japan&#39;s period of overall sluggish growth as shown in the second chart. In December, the Electronic Parts and Devices index was 32.8% above the 2000 average and 21.5% above December 2004. The Transport Equipment (ex ships and rolling stock) index was 26% above the 2000 average and 15.5% above December,2004<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130f.jpg" width="353">
The rise of the Electronic and Transport Industries illustrates the changing structure of the Japanese economy. While these industries have grown, there has been a steady decline in the once traditional Japanese industries such as Textiles and Ceramics, Clay &amp; Stone Products as shown in the third chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Japan: Industrial Production (2000=100)</th>
<th scope="col">Dec 05</th>
<th scope="col">Nov 05&nbsp; </th>
<th scope="col">Dec 04&nbsp;</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y&nbsp; %&nbsp;</th>
<th scope="col">2005&nbsp;&nbsp;&nbsp; </th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Manufacturing and Mining</td>
<td>105.0</td>
<td>103.6</td>
<td>100.0</td>
<td>1.35</td>
<td>5.00</td>
<td>101.8</td>
<td>100.0</td>
<td>95.1</td>
</tr>
<tr>
<td class="firstcol">Electronic parts and devices</td>
<td>132.8</td>
<td>128.9</td>
<td>109.3</td>
<td>3.03</td>
<td>21.50</td>
<td>117.6</td>
<td>116.8</td>
<td>103.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Transport equip (ex ships and rolling stock)</td>
<td>126.0</td>
<td>121.5</td>
<td>109.1</td>
<td>3.70</td>
<td>15.49</td>
<td>119.0</td>
<td>113.2</td>
<td>108.6</td>
</tr>
<tr>
<td class="firstcol">Ceramics, clay and stone products</td>
<td>78.5</td>
<td>81.0</td>
<td>82.5</td>
<td>-3.09</td>
<td>-4.85</td>
<td>82.2</td>
<td>83.6</td>
<td>86.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Textiles</td>
<td>64.1</td>
<td>64.5</td>
<td>68.8</td>
<td>-0.62</td>
<td>-6.83</td>
<td>66.2</td>
<td>70.6</td>
<td>74.9</td>
</tr>
</tbody>
</table>


</html>

Personal income rose an expected 0.4% last month following an upwardly revised like increase in November. For the full year personal income rose 5.4% which together with the 5.9% increase in 2004 was the strongest two year rise since [...]

U.S. Personal Income & Spending Firm

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130b.jpg" width="353">
Personal income rose an expected 0.4% last month following an upwardly revised like increase in November. For the full year personal income rose 5.4% which together with the 5.9% increase in 2004 was the strongest two year rise since 2001. The twelve month comparison of 2.1% suffered due to Microsoft&#39;s payment last year of a $32B stock dividend.
Wage &amp; salary disbursements rose the same 0.3% (3.7% y/y) as during November and the full year gain of 6.0% was the strongest since 2000. Factory sector wages reversed the prior month&#39;s decline and rose 0.1% (2.4% y/y) while service sector wages rose a moderate 0.3% (3.7% y/y) following an upwardly revised 0.4% November increase.
Disposable personal income rose 0.4% (0.9% y/y) for the second month. Adjusted for the negligible change in prices during December, take home pay jumped 0.4%, half the November increase which was boosted by a decline in prices and the year to year comparison was negative due to the dividend payout.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130c.jpg" width="353">
Personal taxes rose 0.4% (11.8% y/y) in December and for the full year rose 15.0% following a 4.9% gain during 2004.
Personal consumption expenditures rose a firm 0.9% versus expectations for a 0.7% gain. Spending on motor vehicles &amp; parts jumped 11.4% (-5.6% y/y) and spending on furniture &amp; household equipment added 0.3% (6.4% y/y) to a 1.6% November spike. Spending on clothing &amp; shoes dipped slightly (+5.8% y/y) following two months of huge increase while services spending rose 0.5% (6.3% y/y) after a 0.8% November jump.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060130a.jpg" width="353">
The PCE chain price index fell for the second consecutive month due to the third consecutive decline in gasoline &amp; oil prices (+16.1% y/y). Less food &amp; energy, prices rose 0.1% following an upwardly revised 0.2% November increase. Durables prices continued the most recent decline which began in May as furniture &amp; household appliance prices fell (-4.0% y/y). Clothing &amp; shoes prices also fell by 0.3% (-1.1% y/y) and services prices rose a modest 0.1% (3.3% y/y).
The personal savings rate was negative for the eighth month in the last nine. In comparison, the personal savings rate from the Federal Reserve&#39;s Flow of Funds accounts, through 3Q05, was similarly depressed but still a positive 0.9%. The Flow of Funds measure amortizes durable goods purchases over an expected lifetime instead of treating them as an expense.
The Income Implications of Rising U.S. International Liabilities from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/newsevents/news/research/2006/rp060111.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.4%</td>
<td>2.1%</td>
<td>5.4%</td>
<td>5.9%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.9%</td>
<td>0.5%</td>
<td>6.2%</td>
<td>6.5%</td>
<td>6.5%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>4.4% (Dec &#39;04)</td>
<td>-0.5%</td>
<td>1.7%</td>
<td>2.1%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>-0.0%</td>
<td>-0.4%</td>
<td>2.8%</td>
<td>2.8%</td>
<td>2.6%</td>
<td>1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.1%</td>
<td>0.2%</td>
<td>1.9%</td>
<td>2.0%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
</tbody>
</table>


</html>

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127c.jpg" width="353">
Japan business and government leaders today were excited to report a second straight month of positive consumer price performance. The most widely followed CPI series is the total excluding fresh food, and it rose 0.1% year-on-year in December, following an equal move in November. The index was flat in October. So, by this gauge, the nation has not experienced deflation since early autumn. This development is already sparking talk of monetary policy changes as it perhaps signals that the long era of deflation has finally concluded. There was further encouragement from the local Tokyo area index, which moved into positive territory for January.
The upward price movements in the national index came in several sectors: housing costs, clothing, transportation and fuel. There was also less deflation in communications charges and in furniture and appliance prices. A separate &quot;core&quot; rate which, similar those in other countries, excludes energy as well as food, rose to +0.1% in December, its first positive reading. There is only slightly more than a year&#39;s history for this measure in Japan, however, so this move is less meaningful.
While the &quot;increases&quot; in the aggregate CPI series are minimal, they are the first since mid-1998, that is, more than seven years ago. The trend at that time was headed clearly downward, in the wake of the Asian currency crisis and in the face of general weakness of the Japanese economy. Now, finally, prices are firming, and this on the back of better demand. Retail sales in December, also reported today, rose 0.8% month-to-month in December, making 2005 the first year of positive growth in these sales since 1996. So perhaps there is in fact room for encouragement about the state of the Japanese economy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J5/@J504/@J504.HTM">Japan CPI: Yr/Yr % Changes, NSA</a></th>
<th scope="col">Jan 2006</th>
<th scope="col">Dec 2005</th>
<th scope="col">Nov 2005</th>
<th scope="col">Oct 2005</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">CPI Headline*</td>
<td>--</td>
<td>+0.1</td>
<td>+0.1</td>
<td>0.0</td>
<td>-0.2</td>
<td>0.0</td>
<td>-0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Total CPI</td>
<td>--</td>
<td>-0.1</td>
<td>-0.8</td>
<td>-0.7</td>
<td>+0.2</td>
<td>-0.4</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">Commodities ex Fresh Food</td>
<td>--</td>
<td>+0.2</td>
<td>0.0</td>
<td>+0.1</td>
<td>-0.1</td>
<td>-0.3</td>
<td>-1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Fresh Food</td>
<td>--</td>
<td>-7.5</td>
<td>-16.8</td>
<td>-14.2</td>
<td>+9.3</td>
<td>-6.6</td>
<td>+9.6</td>
</tr>
<tr>
<td class="firstcol">Services ex Imputed Rent</td>
<td>--</td>
<td>0.0</td>
<td>0.0</td>
<td>-0.4</td>
<td>-0.5</td>
<td>+0.3</td>
<td>+0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Total CPI, Ku-area of Tokyo</td>
<td>+0.1</td>
<td>-0.2</td>
<td>-0.3</td>
<td>-0.3</td>
<td>-0.4</td>
<td>-0.1</td>
<td>-0.7</td>
</tr>
</tbody>
</table>
</body>
</html>

Japan business and government leaders today were excited to report a second straight month of positive consumer price performance. The most widely followed CPI series is the total excluding fresh food, and it rose 0.1% year-on-year in [...]

Japan CPI Rises in December, a Second Consecutive Year/Year Increase

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127b.jpg" width="353">
December new single-family home sales increased 2.9% to 1.269M after a 9.2% November decline that was less than initially estimated. Consensus expectations had been for a decline to 1.225M. For the year, new home sales set a new record of 1.280M, up 6.7% from 2004.
Sales gains out West, up 11.1% (12.9% y/y), and in the Midwest, up 22.7% (-8.0% y/y), offset declines in the Northeast (0.0% y/y) and in the South (4.0% y/y).
The median price of a new single family home fell 2.2% (-3.4% y/y) to $221,800. For the year, prices rose to an average $231,350 (6.2% Y/Y).
The figures from the Census Department reflect home sales counted at the time of sales contract or deposit.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E90401/@E90401.HTM">Homes Sales (000s, AR)</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>1,269</td>
<td>1,233</td>
<td>1.8%</td>
<td>1,280</td>
<td>1,200</td>
<td>1,091</td>
</tr>
</tbody>
</table>
</body>
</html>

December new single-family home sales increased 2.9% to 1.269M after a 9.2% November decline that was less than initially estimated. Consensus expectations had been for a decline to 1.225M. For the year, new home sales set a new [...]

New Home Sales Finished a Record 2005 Firm, Prices Soft

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127a.jpg" width="353">
US real GDP growth last quarter weakened to the slowest in over four years. Even when the 1.1% advance is combined with 3Q, the 2.6% average gain was the weakest since early 2003 and fell short of Consensus expectations for a 2.8% rise.
Domestic demand growth suffered due to a collapse in the demand for autos. Sales incentives had pumped up 3Q vehicle &amp; parts demand by 12.6% (AR) but the 44.9% decline last quarter pulled the demand level to its lowest since 2001. As a result, real PCE grew just 1.1% (3.0% y/y) during 4Q05.
Outside of autos, real consumer demand was firm last quarter as suggested by a 12.5% (10.6% y/y) advance in furniture &amp; household appliances, a 10.8% (6.6% y/y) rise in apparel and a 3.2% (2.9% y/y) increase in services spending.
Business fixed investment also eased due to a shortfall in spending on transportation equipment, off 17.6% (+1.5% y/y). Investment in industrial equipment rose 10.6% (5.6% y/y) and spending on information processing equipment &amp; software rose 9.1% (13.7% y/y).
Lower defense spending, which reversed all of the 3Q gain with a 13.1% (+0.5% y/y) decline, lowered government spending by 2.4% (+1.2% y/y). The decline in defense subtracted 0.7% percentage points from 4Q GDP growth.
Growth in residential investment eased to 3.5% (7.7% y/y), the slowest quarterly advance in a year.
The drag on GDP growth from a wider foreign trade deficit ballooned to 1.2 percentage points as imports grew 9.1% (4.6% y/y), the fastest rate of growth in a year. Exports rose 2.4% (5.7% y/y), steady with the 3Q rate of growth.
Countering the drag from foreign trade, inventories contributed a large 1.5 percentage points to GDP growth, the most since early 2002.
The chain price index grew 3.0% versus a Consensus expectation for a 2.5% rise. The upside surprise during 4Q was due to a 4.9% (3.5% y/y) increase in the price index for private fixed investment which raised the price index for domestic final sales by 3.4% (3.5% y/y).
Global Economic Expansion Rolls On Into 2006 from the Federal Reserve Bank of Atlanta can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=7C7CADB5-5056-9F06-998A5B38EE1874DC&amp;method=display"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained 2000$, % AR</a></th>
<th scope="col">4Q &#39;05 (Advance)</th>
<th scope="col">3Q &#39;05</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.1%</td>
<td>4.1%</td>
<td>3.1%</td>
<td>3.5%</td>
<td>4.2%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>1.5%</td>
<td>-0.4%</td>
<td>-0.2%</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>-0.3%</td>
<td>4.6%</td>
<td>3.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Foreign Trade Effect</td>
<td>-1.2%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.5%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>0.8%</td>
<td>4.5%</td>
<td>3.3%</td>
<td>3.9%</td>
<td>4.4%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>3.0%</td>
<td>3.3%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.6%</td>
<td>2.0%</td>
</tr>
</tbody>
</table>


</html>

US real GDP growth last quarter weakened to the slowest in over four years. Even when the 1.1% advance is combined with 3Q, the 2.6% average gain was the weakest since early 2003 and fell short of Consensus expectations for a 2.8% [...]

US 4Q GDP Weak Due To Lower Autos & Lower Defense

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127a.jpg" width="353">
US real GDP growth last quarter weakened to the slowest in over four years. Even when the 1.1% advance is combined with 3Q, the 2.6% average gain was the weakest since early 2003 and fell short of Consensus expectations for a 2.8% rise.
Domestic demand growth suffered due to a collapse in the demand for autos. Sales incentives had pumped up 3Q vehicle &amp; parts demand by 12.6% (AR) but the 44.9% decline last quarter pulled the demand level to its lowest since 2001. As a result, real PCE grew just 1.1% (3.0% y/y) during 4Q05.
Outside of autos, real consumer demand was firm last quarter as suggested by a 12.5% (10.6% y/y) advance in furniture &amp; household appliances, a 10.8% (6.6% y/y) rise in apparel and a 3.2% (2.9% y/y) increase in services spending.
Business fixed investment also eased due to a shortfall in spending on transportation equipment, off 17.6% (+1.5% y/y). Investment in industrial equipment rose 10.6% (5.6% y/y) and spending on information processing equipment &amp; software rose 9.1% (13.7% y/y).
Lower defense spending, which reversed all of the 3Q gain with a 13.1% (+0.5% y/y) decline, lowered government spending by 2.4% (+1.2% y/y). The decline in defense subtracted 0.7% percentage points from 4Q GDP growth.
Growth in residential investment eased to 3.5% (7.7% y/y), the slowest quarterly advance in a year.
The drag on GDP growth from a wider foreign trade deficit ballooned to 1.2 percentage points as imports grew 9.1% (4.6% y/y), the fastest rate of growth in a year. Exports rose 2.4% (5.7% y/y), steady with the 3Q rate of growth.
Countering the drag from foreign trade, inventories contributed a large 1.5 percentage points to GDP growth, the most since early 2002.
The chain price index grew 3.0% versus a Consensus expectation for a 2.5% rise. The upside surprise during 4Q was due to a 4.9% (3.5% y/y) increase in the price index for private fixed investment which raised the price index for domestic final sales by 3.4% (3.5% y/y).
Global Economic Expansion Rolls On Into 2006 from the Federal Reserve Bank of Atlanta can be found <a href="http://www.frbatlanta.org/invoke.cfm?objectid=7C7CADB5-5056-9F06-998A5B38EE1874DC&amp;method=display"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained 2000$, % AR</a></th>
<th scope="col">4Q &#39;05 (Advance)</th>
<th scope="col">3Q &#39;05</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>1.1%</td>
<td>4.1%</td>
<td>3.1%</td>
<td>3.5%</td>
<td>4.2%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>1.5%</td>
<td>-0.4%</td>
<td>-0.2%</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>-0.3%</td>
<td>4.6%</td>
<td>3.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Foreign Trade Effect</td>
<td>-1.2%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.5%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>0.8%</td>
<td>4.5%</td>
<td>3.3%</td>
<td>3.9%</td>
<td>4.4%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>3.0%</td>
<td>3.3%</td>
<td>3.0%</td>
<td>2.8%</td>
<td>2.6%</td>
<td>2.0%</td>
</tr>
</tbody>
</table>
New Home Sales Finished a Record 2005 Firm, Prices Soft 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 27, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127b.jpg" width="353">
December new single-family home sales increased 2.9% to 1.269M after a 9.2% November decline that was less than initially estimated. Consensus expectations had been for a decline to 1.225M. For the year, new home sales set a new record of 1.280M, up 6.7% from 2004.
Sales gains out West, up 11.1% (12.9% y/y), and in the Midwest, up 22.7% (-8.0% y/y), offset declines in the Northeast (0.0% y/y) and in the South (4.0% y/y).
The median price of a new single family home fell 2.2% (-3.4% y/y) to $221,800. For the year, prices rose to an average $231,350 (6.2% Y/Y).
The figures from the Census Department reflect home sales counted at the time of sales contract or deposit.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E90401/@E90401.HTM">Homes Sales (000s, AR)</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>1,269</td>
<td>1,233</td>
<td>1.8%</td>
<td>1,280</td>
<td>1,200</td>
<td>1,091</td>
</tr>
</tbody>
</table>
Japan CPI Rises in December, a Second Consecutive Year/Year Increase 
by <a href="/comment/Stone.html">Carol Stone</a> January 27, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060127c.jpg" width="353">
Japan business and government leaders today were excited to report a second straight month of positive consumer price performance. The most widely followed CPI series is the total excluding fresh food, and it rose 0.1% year-on-year in December, following an equal move in November. The index was flat in October. So, by this gauge, the nation has not experienced deflation since early autumn. This development is already sparking talk of monetary policy changes as it perhaps signals that the long era of deflation has finally concluded. There was further encouragement from the local Tokyo area index, which moved into positive territory for January.
The upward price movements in the national index came in several sectors: housing costs, clothing, transportation and fuel. There was also less deflation in communications charges and in furniture and appliance prices. A separate &quot;core&quot; rate which, similar those in other countries, excludes energy as well as food, rose to +0.1% in December, its first positive reading. There is only slightly more than a year&#39;s history for this measure in Japan, however, so this move is less meaningful.
While the &quot;increases&quot; in the aggregate CPI series are minimal, they are the first since mid-1998, that is, more than seven years ago. The trend at that time was headed clearly downward, in the wake of the Asian currency crisis and in the face of general weakness of the Japanese economy. Now, finally, prices are firming, and this on the back of better demand. Retail sales in December, also reported today, rose 0.8% month-to-month in December, making 2005 the first year of positive growth in these sales since 1996. So perhaps there is in fact room for encouragement about the state of the Japanese economy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J5/@J504/@J504.HTM">Japan CPI: Yr/Yr % Changes, NSA</a></th>
<th scope="col">Jan 2006</th>
<th scope="col">Dec 2005</th>
<th scope="col">Nov 2005</th>
<th scope="col">Oct 2005</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">CPI Headline*</td>
<td>--</td>
<td>+0.1</td>
<td>+0.1</td>
<td>0.0</td>
<td>-0.2</td>
<td>0.0</td>
<td>-0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Total CPI</td>
<td>--</td>
<td>-0.1</td>
<td>-0.8</td>
<td>-0.7</td>
<td>+0.2</td>
<td>-0.4</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">Commodities ex Fresh Food</td>
<td>--</td>
<td>+0.2</td>
<td>0.0</td>
<td>+0.1</td>
<td>-0.1</td>
<td>-0.3</td>
<td>-1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Fresh Food</td>
<td>--</td>
<td>-7.5</td>
<td>-16.8</td>
<td>-14.2</td>
<td>+9.3</td>
<td>-6.6</td>
<td>+9.6</td>
</tr>
<tr>
<td class="firstcol">Services ex Imputed Rent</td>
<td>--</td>
<td>0.0</td>
<td>0.0</td>
<td>-0.4</td>
<td>-0.5</td>
<td>+0.3</td>
<td>+0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Total CPI, Ku-area of Tokyo</td>
<td>+0.1</td>
<td>-0.2</td>
<td>-0.3</td>
<td>-0.3</td>
<td>-0.4</td>
<td>-0.1</td>
<td>-0.7</td>
</tr>
</tbody>
</table>


</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060126c.jpg" width="353">
The Bank for International Settlements today reported international banking statistics for Q3 2005, on a provisional basis. These data are contained in Haver&#39;s BIS database, which includes basically all the tables in the BIS Quarterly Review. The objective of this highly detailed data collection effort is to provide indications of the exposure of reporting countries&#39; banking systems to international developments. There are 39 reporting countries whose central banks provide comprehensive data on gross external assets and liabilities of their nation&#39;s banks with immediate borrowers. These reporting countries are mostly developed countries, but banks in emerging economies, such as Brazil, Mexico and Turkey, also report, along with a number of offshore banking centers. Claims and liabilities are classified by country and sector of the counter-party, by currency and by type of instrument, among other features. Of these 39 countries, 30 also report &quot;consolidated&quot; data, which net out inter-bank flows and indicate the amount of &quot;ultimate&quot; risk, including derivatives as well as on-balance-sheet items. In the following discussion, we look simply at the total of gross claims -- or assets -- for Q3 held by banks in various countries and the distribution of the so-called &quot;vis-&agrave;-vis&quot; countries which have incurred them.
At the end of September, external claims of banks in the 39 reporting countries totaled $20.713 trillion. This compares with $20.268 trillion on June 30 and $19,198.3 billion at the end of 2004. The largest claims are assets of banks in the UK, $4.122 trillion. The US is third in this ranking, having $1.965 trillion in foreign assets, while Germany is second at $2.184 trillion. Banks in Japan, France and the Cayman Islands all have more than $1.0 trillion in external assets.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060126d.jpg" width="353">
Frequently, in considering banking figures such as these, the public tends to focus on the debts of developing or emerging market countries. But, as measured here, these are smaller than might be expected: BIS reporting banks&#39; assets in these countries came to only $1.338 trillion, 6.5% of the total. In an absolute sense, of course, $1.3 trillion is a large amount, and it probably carries more risk than the substantially bigger assets in more developed countries. The largest claims in this group of countries involve China and South Korea.
By type, loans constitute about three-quarters of these banking system assets. By currency, US dollar assets totaled $8.435 trillion on September 30. The next biggest currency is the euro, with $7.798 trillion. Non-trivial amounts are also denominated in yen, pounds and Swiss francs.
This is a quarterly release, with year-end 2005 likely to be released on April 25. The BIS established these reports as the eurocurrency markets developed in the 1970s. They were enhanced following significant international incidents, especially including the original Mexican debt crisis in 1983 and the Russian default in 1998.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/BIS/BIS.HTM">BIS</a> (All Data in Trillions US $)</th>
<th scope="col">Q3 2005</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
Year-End
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Total</td>
<td>20.713</td>
<td>20.268</td>
<td>19.808</td>
<td>19.198</td>
<td>15.999</td>
<td>13.370</td>
</tr>
<tr class="odd">
<td class="firstcol">UK Bank Assets</td>
<td>4.122</td>
<td>4.031</td>
<td>3.974</td>
<td>37.87</td>
<td>3.093</td>
<td>2.514</td>
</tr>
<tr>
<td class="firstcol">German Bank Assets</td>
<td>2.184</td>
<td>2.167</td>
<td>2.191</td>
<td>2.151</td>
<td>1.786</td>
<td>1.384</td>
</tr>
<tr class="odd">
<td class="firstcol">Claims on Developed Countries</td>
<td>16.372</td>
<td>16.038</td>
<td>15.765</td>
<td>15.206</td>
<td>12.714</td>
<td>10.619</td>
</tr>
<tr>
<td class="firstcol">Claims on Developing Countries</td>
<td>1.338</td>
<td>1.266</td>
<td>1.251</td>
<td>1.180</td>
<td>1.007</td>
<td>0.877</td>
</tr>
<tr class="odd">
<td class="firstcol">US Dollar Denominated</td>
<td>8.435</td>
<td>8.197</td>
<td>7.662</td>
<td>7.356</td>
<td>6.362</td>
<td>5.664</td>
</tr>
<tr>
<td class="firstcol">Euro Denominated (US$ value)</td>
<td>7.798</td>
<td>7.663</td>
<td>7.760</td>
<td>7.564</td>
<td>6.026</td>
<td>4.501</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bank for International Settlements today reported international banking statistics for Q3 2005, on a provisional basis. These data are contained in Haver's BIS database, which includes basically all the tables in the BIS Quarterly [...]

BIS Totals $20.7 Trillion in International Banking Assets on 9/30

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060126b.jpg" width="353">
Initial claims for unemployment insurance ticked 11,000 higher to 283,000 following a little revised 36,000 decline the prior week. Consensus expectations had been for 305,000 claims.
During the last ten years there has been a (negative) 75% correlation between the level of initial jobless insurance claims and the m/m change in payroll employment.
The four-week moving average of initial claims fell further to 288,750 (-14.1% y/y), its lowest level since June 2000.
Continuing unemployment insurance claims increased 53,000 following a deepened 154,000 decline the prior week.
The insured rate of unemployment held at 2.0% for the second 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">01/21/06</th>
<th scope="col">01/14/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>283</td>
<td>272</td>
<td>-11.8%</td>
<td>332</td>
<td>343</td>
<td>402</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,581</td>
<td>-7.0%</td>
<td>2,663</td>
<td>2,924</td>
<td>3,532</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance ticked 11,000 higher to 283,000 following a little revised 36,000 decline the prior week. Consensus expectations had been for 305,000 claims. During the last ten years there has been a [...]

Initial Jobless Insurance Claims Up A Bit

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250430N1.jpg

250430O1.jpg

Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

250430P1.jpg

250430Q1.jpg

Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

250430R1.jpg

250430S1.jpg

- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

250430A.jpg

250430B.jpg

High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

250430C.jpg

250430D.jpg

- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

250430F20.jpg

250430G20.jpg

The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

250430F5.jpg

250430G5.jpg

The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

250430H5.jpg

250430I5.jpg

- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

250430J4.jpg

250430K4.jpg

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 62,000 (1.4% y/y) during April after increasing 147,000 (1.4% y/y) during March, revised from 155,000. A 124,000 April rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.5% y/y during April, from 4.6% y/y in March and from 4.7% y/y in the prior two months. Manufacturing sector pay grew 4.6% y/y during April, down from 4.8% y/y in March. Construction sector pay was unchanged at 4.7% y/y. Natural resource & mining sector pay grew 4.4% y/y. Financial sector pay rose 5.1% y/y, while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.3% y/y as did trade, transportation & utilities pay. Information pay rose 4.1% y/y. Median annual pay for “job changers” rose 6.9% y/y after 6.7% y/y in March.

Small business hiring (less than 50 employees) rose 11,000 (0.6% y/y) after rising 18,000 (0.6% y/y) in March, revised down from 52,000. Employment at medium-sized firms (50-499,000 employees) rose 40,000 (1.1% y/y) after rising 43,000 (1.1% y/y). Large business hiring (500+ employees) rose 12,000 (3.4% y/y) in April, after rising 61,000 (3.6% y/y) in March, revised from 59,000.

Goods-producing employment rose 26,000 (1.3% y/y) in April, after rising 16,000 (1.3% y/y) during March, revised from 24,000. Manufacturing jobs rose 4,000 (-0.2% y/y) after rising 17,000 (-0.3% y/y) in March. The number of construction sector jobs rose 16,000 (3.4% y/y) in April, following a 2,000 (3.6% y/y) March increase, revised from 6,000. Natural resources & mining jobs rose 6,000 (2.8% y/y) in April after falling 3,000 (+1.9% y/y) in March.

The number of service-producing jobs rose 34,000 (1.4% y/y) during April, following a rise of 131,000 (1.4% y/y) in March. Professional & business services employment fell 2,000 (0.6% y/y) after rising 46,000 (0.7% y/y) in the prior month, revised from 57,000. Employment in the financial industry rose 20,000 (2.1% y/y) in April, after rising 38,000 (2.0% y/y) in March. Leisure and hospitality employment increased 27,000 (3.0% y/y), following a 23,000 (2.9% y/y) March increase, revised from 17,000. The number of education & health care jobs fell 23,000 (1.6% y/y) in April, following a 15,000 (1.8% y/y) rise in March, revised from 12,000. Information sector employment fell 8,000 (-0.1% y/y) after a rise of 3,000 (0.2% y/y) in March. The number of jobs in trade, transportation & utilities rose 21,000 (0.4% y/y) in April, after falling 4,000 (+0.4% y/y) in March, revised from a 6,000 fall. Employment in “other” services rose fell 1,000 (+3.2% y/y) following a 10,000 (3.4% y/y) rise in March, revised from 11,000.

By region, employment in the Northeast increased 10,000 (1.9% y/y) in April, following an increase of 95,000 (2.0% y/y) in March, revised from 89,000. Employment in the Midwest rose 42,000 (1.5% y/y) after a gain of 84,000 (1.4% y/y) in March, revised from 81,000. In the South, employment rose 3,000 (1.3% y/y) during April, after rising 10,000 (1.4% y/y) in March, revised from 27,000. In the West, employment rose 9,000 (0.6% y/y) after declining 43,000 (+0.6% y/y), revised from a 41,000 decline in March.

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

250430L4.jpg

250430M4.jpg

- Employment increase is modest in both services & factory sectors.
- Wage growth for “job stayers” moderates.
- Small and medium-sized business employment slows.

Economy in Brief: January 2006

Jump to:

U.S. Personal Income & Spending Firm

U.S. Personal Income & Spending Firm

Japan CPI Rises in December, a Second Consecutive Year/Year Increase

New Home Sales Finished a Record 2005 Firm, Prices Soft

US 4Q GDP Weak Due To Lower Autos & Lower Defense

US 4Q GDP Weak Due To Lower Autos & Lower Defense

BIS Totals $20.7 Trillion in International Banking Assets on 9/30

Initial Jobless Insurance Claims Up A Bit