Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129b.jpg" width="353">
Orders for nondefense aircraft soared 50.4% m/m (100.6% y/y) in October. That combined with a more than doubling (111.1% y/y) of defense aircraft bookings, caused total durable goods orders to jump 3.4% last month and therefore recovered all of the little revised 2.0% decline in September. Consensus expectations had been for a 1.5% rise in October orders.
Less the volatile transportation sector altogether, durable goods orders rose 0.3% after a 0.2% slip in September which was shallower than the decline initially reported.
Orders for nondefense capital goods recovered about two thirds of the prior month&#39;s drop with a 6.7% spike. Less aircraft these orders rose 1.3% following a 1.7% September decline that was deeper than initially estimated. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129a.jpg" width="353">
Falling orders for computers &amp; electronic products have been a drag on the capital goods total of late. They fell 1.3% (+5.7% y/y) in October for the third hard decline in the last four months. Computer orders fell 1.7% m/m though the y/y gain of 11.0% was respectable due to a sharp 13.5% jump back in August. Orders for electrical equipment orders also have been erratic, but the trend is up. Despite a 3.5% decline in October (+12.3% y/y) the three month average level rose to its highest since early 2001. Machinery orders, in contrast, have been consistently strong. A 2.1% (8.5% y/y) rise in October pulled the three month average of machinery orders to a record high.
Shipments of durable goods rose 1.4% (6.9% y/y) in October due to broad based industry gains. Less the transportation sector, shipments rose 1.2% (7.5% y/y) with the standout being a 10.0% y/y gain in electrical equipment.
Order backlogs rose a strong 1.5% (12.0% y/y) driven partially by a 2.0% (14.4% y/y) rise in transportation. Less transportation backlogs still were firm for the third straight month, though the ratio of backlogs to shipments did slip slightly from its recent high.
Durable inventories increased 0.4% (4.6% y/y) following an upwardly revised 0.1% Rise in September. The I/S ratio for durable goods fell to its lowest since April of last year.

<table border="0" cellspacing="0" width="100%">
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<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>3.4%</td>
<td>-2.0%</td>
<td>11.4%</td>
<td>9.5%</td>
<td>4.1%</td>
<td>-3.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>8.7%</td>
<td>11.7%</td>
<td>3.1%</td>
<td>-6.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>6.7%</td>
<td>-8.6%</td>
<td>19.4%</td>
<td>11.0%</td>
<td>4.2%</td>
<td>-9.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>1.3%</td>
<td>-1.7%</td>
<td>10.7%</td>
<td>9.5%</td>
<td>4.8%</td>
<td>-10.5%</td>
</tr>
</tbody>
</table>
New Home Sales; There's Life Yet 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 29, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129c.jpg" width="353">
New single-family home sales rose a surprising 13.0% last month to a record 1.424M, adding to upwardly revised levels in September and August. The m/m advance was the strongest since 1993 and the October level by far exceeded Consensus expectations for a decline to 1.20M.
Home sales often strengthen as buyers attempt to beat further increases in interest rates.
Sales were notably strong in the Northeast where a 43.3% (-16.5% y/y) rise recouped nearly all of the prior two months&#39; declines while sales out West recovered all of the prior two months&#39; weakness with a 46.9% (8.8% y/y) jump. Sales in the South rose a lesser 1.9% (27.5% y/y) but that followed gains during the prior two months. In the Midwest, sales reversed much the gain in September with a 9.5% decline that was the fourth decline in five months and left sales down 17.4% versus the May peak.
The median price of a new single family home rose 1.6% m/m (0.9% y/y) after a 2.4% decline in September that was shallower than originally estimated.
The figures from the Census Department reflect home sales counted at the time of sales contract or deposit.

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<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">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">New Single-Family</td>
<td>1,424</td>
<td>1,260</td>
<td>9.0%</td>
<td>1,200</td>
<td>1,091</td>
<td>976</td>
</tr>
</tbody>
</table>
Consumer Confidence Recovered 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 29, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129d.jpg" width="353">
The Conference Board reported that it&#39;s November index of Consumer Confidence recovered to the highest level since August. The 16.1% m/m jump contrasted to Consensus expectations for a lesser gain to 90.0 and it was the strongest m/m increase since early 2003. The gain exceeded the 10.0% m/m rebound in Consumer sentiment reported last week by the University of Michigan.
During the last twenty years there has been a 52% correlation between the level of consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.
The index of consumers&#39; expectations ballooned 26.7% m/m (-1.6% y/y) as optimism rose that during the next six months business conditions would get better, more jobs would be created and that incomes would rise.
Consumers&#39; assessment of the present situation also improved and recovered some of the prior two months&#39; decline (+18.4% y/y). Though an increased percentage of respondents indicated business conditions were good, jobs were viewed as hard to get by a lesser 23.2% of survey participants.
The Conference Board&#146;s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1401/@EF1401.HTM">Conference Board</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>98.9</td>
<td>85.2</td>
<td>6.8%</td>
<td>96.1</td>
<td>79.8</td>
<td>96.6</td>
</tr>
</tbody>
</table>
Chain Store Sales Backpedaled, Gas Prices Down Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 29, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129e.jpg" width="353">
The International Council of Shopping Centers (ICSC)-UBS survey indicated that during Thanksgiving week, chain store sales slipped 0.7% following the prior period&#39;s 1.0% jump. The latest left the average level of sales in November 1.2% above October which rose 0.1% from September.
During the last ten years there has been a 51% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.
The leading indicator of chain store sales from ICSC slipped 0.3% (-2.0% y/y) during the latest week following two consecutive weeks of increases.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart. 
The latest decline in store sales occurred despite a further drop in gasoline prices. The retail average price of gasoline in the U.S. fell a nickel last week to $2.15 (+10.7% y/y).

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">11/26/05</th>
<th scope="col">11/19/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>454.8</td>
<td>458.0</td>
<td>5.1%</td>
<td>4.6%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Denmark's Third Quarter GDP Growth Rate Tops That of Hungary and the Philippines 
by <a href="/comment/Curley.html">Louise Curley</a> November 29, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129g.jpg" width="353">
November is probably the busiest month for the release of economic growth estimates for the third quarter in individual countries. Today Gross Domestic Product data for Hungary, Denmark and the Philippines were released. Denmark&#39;s GDP was 4.70% above the third quarter of 2005, compared with 4.46% for Hungary and 4.09% for the Philippines. In terms of developed versus developing countries we have Denmark and Hungary in Europe. In terms of the location of developing countries we have Hungary in Eastern Europe and the Philippines in Asia.
First take a look at the year-to-year growth in the developed country, Denmark, and the developing country, Hungary--both in Europe--as shown in the first chart. Over the past five years until the third quarter of this year, Hungary has grown at a significantly higher rate than that of Denmark. In the third quarter, however, Denmark&#39;s growth rate was 4.70% compared with Hungary&#39;s, 4.46%. Not only has Denmark&#39;s growth rate exceeded that of Hungary in the third quarter, but since the second quarter of 2004, growth in Denmark, a non Euro Zone country, has been greater than that of the Euro Zone as a whole. The quarter-to-quarter growth rates so far this year show some weakness in Hungary in contrast to relatively steady advances in Denmark.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051129f.jpg" width="353">
Now, contrast the year-to-year growth rates of the two developing countries in the second chart. The higher growth rate of the Philippines until this last quarter probably reflects the dynamism of the Pacific Rim economies versus the more subdued recoveries of the emerging countries of Eastern Europe. In the third quarter of this year, however, Hungary&#39;s economic grew 1% while that of the Philippines was virtually unchanged. 

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Growth in Gross Domestic Product</th>
<th scope="col">Q3 05&nbsp; %</th>
<th scope="col">Q2 05 % </th>
<th scope="col">Q1 05 %</th>
<th scope="col">2004 %</th>
<th scope="col">2003 %</th>
<th scope="col">2002 %&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;Year-to Year&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Denmark</td>
<td>4.70</td>
<td>3.06</td>
<td>2.13</td>
<td>2.07</td>
<td>0.6</td>
<td>0.46</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Hungary</td>
<td>4.46</td>
<td>4.15</td>
<td>2.88</td>
<td>4.23</td>
<td>2.94</td>
<td>3.50</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Philippines</td>
<td>4.09</td>
<td>5.15</td>
<td>4.49</td>
<td>6.02</td>
<td>4.51</td>
<td>4.45</td>
</tr>
<tr class="odd">
<td class="firstcol">Quarter-to-Quarter</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Denmark</td>
<td>1.39</td>
<td>1.60</td>
<td>0.54</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Hungary</td>
<td>0.97</td>
<td>2.08</td>
<td>-0.08</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Philippines</td>
<td>-0.02</td>
<td>2.20</td>
<td>1.27</td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>


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Orders for nondefense aircraft soared 50.4% m/m (100.6% y/y) in October. That combined with a more than doubling (111.1% y/y) of defense aircraft bookings, caused total durable goods orders to jump 3.4% last month and therefore [...]

U.S. Durable Goods Rebound; Aircraft Orders Soared

Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128d.jpg" width="353">
The statistical offices of the former components of Czechoslovakia--the Czech and Slovak Republics released data on business and consumer confidence this morning.Each country produces measures of consumer and industrial confidence and a composite measure of confidence.
The Composite Indicator for Czech Republic is a weighted average of seasonally adjusted confidence indicators for industry, construction, trade and of the consumer expressed in terms of percent balances. The Slovak Economic Sentiment Indicator, expressed in terms of an index with base 2000=100), is composed of the industrial confidence indicator (40%), the construction confidence indicator (20%), the retail trade confidence indicator (20%) and the consumer confidence indicator (20%). It is not possible to compare the degree of overall confidence in the two countries, since one measure is expressed in index form and the other a percent balance, but trends in the two measures can be compared. The trend in the Slovak Economic Sentiment Index has shown a marked improvement since early 2004. In November the index was up 2.37% from October and 4.06% from November, 2004. The trend in the composite measure of confidence for the Czech Republic was down after a big improvement in early 2004 but has begun to improve since August of this year. The percent balance in November was unchanged from October when it stood at 8 and was 2 percentage points above November, 2004. The trends in the two composite measures are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128e.jpg" width="353">
Since measures of consumer and business in both countries are expressed in terms of percent balances it is possible to compare the degree of consumer and industrial confidence in the countries. The fact that the percent balance in consumer confidence in the Czech Republic was 0 in November while that in Slovakia was -14.6 suggests that there are more pessimistic consumers than optimistic ones in Slovakia in November than in the Czech Republic. This has been true over the past five years and can be seen in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128f.jpg" width="353">
Although the Slovak economy has been increasing faster than that of the Czech Republic, business confidence is moderately below that of the Czech Republic. In November the excess of business optimists over pessimists was 6.7% compared with 3.0% in October and 8.7% a year ago. The corresponding figures for the Czech Republic were 10%, 11% and 10%. The third chart comparing the percent balances in business confidence in the two countries shows some improvement in recent months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Czech and Slovak Republic: Confidence Measures</a> &nbsp; (% balance)</th>
<th scope="col">Nov 05 %</th>
<th scope="col">Oct 05 % </th>
<th scope="col">Nov 04 %</th>
<th scope="col">M/M % Pts</th>
<th scope="col">Y/Y&nbsp; % &nbsp; Pts</th>
<th scope="col">2004 %&nbsp; </th>
<th scope="col">2003 %</th>
<th scope="col">2002 %&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>8</td>
<td>8</td>
<td>6</td>
<td>0</td>
<td>2</td>
<td>4</td>
<td>1</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Slovak Republic*</td>
<td>&nbsp;112.9</td>
<td>110.3&nbsp;</td>
<td>108.5&nbsp;</td>
<td>2.36&nbsp;</td>
<td>4.06&nbsp;</td>
<td>106.2&nbsp;</td>
<td>105.3&nbsp;</td>
<td>105.2&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>0</td>
<td>-6</td>
<td>-4</td>
<td>6</td>
<td>4</td>
<td>-13</td>
<td>-15</td>
<td>-7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Slovak Republic</td>
<td>-14.6</td>
<td>-17.3</td>
<td>-18.1</td>
<td>2.7</td>
<td>3.5</td>
<td>-22.9</td>
<td>-34.8</td>
<td>-30.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Business Confidence</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>10</td>
<td>11</td>
<td>10</td>
<td>-1</td>
<td>0</td>
<td>8</td>
<td>5</td>
<td>4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Slovak Republic</td>
<td>6.7</td>
<td>3.0</td>
<td>8.7</td>
<td>3.7</td>
<td>-2.0</td>
<td>6.8</td>
<td>4.6</td>
<td>4.6</td>
</tr>
</tbody>
</table>
</body>
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The statistical offices of the former components of Czechoslovakia--the Czech and Slovak Republics released data on business and consumer confidence this morning.Each country produces measures of consumer and industrial confidence and [...]

Confidence Improving in the Czech and Slovak Republics

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128c.jpg" width="353">
Total existing home sales fell 2.7% m/m to 7.090M (AR) in October according to the National Association of Realtors. The September level of sales was revised slightly higher. Consensus expectations for sales last month had been for stability at 7.20M. 
Sales of single-family homes led the October decline with a 2.5% drop to 6.23 million. Lower sales of condos &amp; co-ops also were weak and fell 4.4% (+6.2% y/y).
The data cover sales closed in the latest and previous months, and contrast to the new home sales data which count sales at the signing of a contract. 
Single family home sales fell throughout the country in October. In the Northeast sales posted a large 8.0% (-2.4% y/y) decline from September&#39;s level which had matched the June peak. In the South, sales reversed half of the prior month&#39;s gain with a 1.9% (+7.2% y/y) decline.In the Midwest single family sales slipped 1.4% (0.0% y/y), off 4.7% from the August peak, and in the West sales fell 1.3% m/m (+3.4% y/y for the third decline in the last four months. 
The median price of an existing single-family home gained back more than half of the prior month&#39;s decline with a 1.9% rise to $216,200 (16.6% y/y). Prices are not seasonally adjusted.
The latest release from the National Association of Realtors is available <a href="http://www.realtor.org/research.nsf/pages/EHSPage?OpenDocument">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/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Home Sales</td>
<td>7,090</td>
<td>7,290</td>
<td>3.7%</td>
<td>6,723</td>
<td>6,170</td>
<td>5,653</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single Family Home Sales</td>
<td>6,230</td>
<td>6,390</td>
<td>3.3%</td>
<td>5,913</td>
<td>5,441</td>
<td>4,995</td>
</tr>
<tr class="odd">
<td class="firstcol">Single Family Median Home Price ($,000) </td>
<td>$216.2 </td>
<td>$21 2.2 </td>
<td>16.6% </td>
<td>$182.8 </td>
<td>$169.1 </td>
<td>$157.6 </td>
</tr>
</tbody>
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Total existing home sales fell 2.7% m/m to 7.090M (AR) in October according to the National Association of Realtors. The September level of sales was revised slightly higher. Consensus expectations for sales last month had been for [...]

U.S. Existing Home Sales Soften

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128b.jpg" width="353">
Mass layoffs fell in half last month from a September count that was bloated by establishment closures due to Hurricanes Katrina &amp; Rita. Year to year, the number of mass layoffs also fell by 14.6%, continuing the downtrend in place since 2001.
During the last ten years there has been a (negative) 87% correlation between the three month average level of layoff announcements and the y/y change in payroll employment.
The number of persons affected by mass layoffs in October fell nearly two-thirds m/m.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128a.jpg" width="353">
By industry, factory sector layoff announcements in October more than reversed the prior month&#39;s increase. The number of layoff events as a result fell below the year earlier level but the number of persons affected nevertheless rose 1.5% y/y with increases concentrated in the transportation, computer and paper industries.
The Mass Layoff Statistics (MLS) program collects reports on mass layoff actions that result in workers being separated from their jobs. Monthly mass layoff numbers are from establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a 5-week period.
How Predictable is Fed Policy? from St. Louis Federal Reserve Bank President William Poole can be found <a href="http://research.stlouisfed.org/publications/review/05/11/Poole.pdf"> 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/WEEKLY/@W5/@W507/@W507.HTM">Mass Layoffs</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">All US Industries (# Events, SA)</td>
<td>1,088</td>
<td>2,220</td>
<td>-14.6%</td>
<td>15,900</td>
<td>19,155</td>
<td>20,472</td>
</tr>
<tr>
<td class="firstcol">Total (# Persons, SA)</td>
<td>106,238</td>
<td>287,692</td>
<td>-15.3%</td>
<td>1,588,483</td>
<td>1,936,463</td>
<td>2.256,014</td>
</tr>
</tbody>
</table>
</body>
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Mass layoffs fell in half last month from a September count that was bloated by establishment closures due to Hurricanes Katrina & Rita. Year to year, the number of mass layoffs also fell by 14.6%, continuing the downtrend in place [...]

Mass Layoffs Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128c.jpg" width="353">
Total existing home sales fell 2.7% m/m to 7.090M (AR) in October according to the National Association of Realtors. The September level of sales was revised slightly higher. Consensus expectations for sales last month had been for stability at 7.20M. 
Sales of single-family homes led the October decline with a 2.5% drop to 6.23 million. Lower sales of condos &amp; co-ops also were weak and fell 4.4% (+6.2% y/y).
The data cover sales closed in the latest and previous months, and contrast to the new home sales data which count sales at the signing of a contract. 
Single family home sales fell throughout the country in October. In the Northeast sales posted a large 8.0% (-2.4% y/y) decline from September&#39;s level which had matched the June peak. In the South, sales reversed half of the prior month&#39;s gain with a 1.9% (+7.2% y/y) decline.In the Midwest single family sales slipped 1.4% (0.0% y/y), off 4.7% from the August peak, and in the West sales fell 1.3% m/m (+3.4% y/y for the third decline in the last four months. 
The median price of an existing single-family home gained back more than half of the prior month&#39;s decline with a 1.9% rise to $216,200 (16.6% y/y). Prices are not seasonally adjusted.
The latest release from the National Association of Realtors is available <a href="http://www.realtor.org/research.nsf/pages/EHSPage?OpenDocument">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/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Home Sales</td>
<td>7,090</td>
<td>7,290</td>
<td>3.7%</td>
<td>6,723</td>
<td>6,170</td>
<td>5,653</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single Family Home Sales</td>
<td>6,230</td>
<td>6,390</td>
<td>3.3%</td>
<td>5,913</td>
<td>5,441</td>
<td>4,995</td>
</tr>
<tr class="odd">
<td class="firstcol">Single Family Median Home Price ($,000) </td>
<td>$216.2 </td>
<td>$21 2.2 </td>
<td>16.6% </td>
<td>$182.8 </td>
<td>$169.1 </td>
<td>$157.6 </td>
</tr>
</tbody>
</table>
Mass Layoffs Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 28, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128b.jpg" width="353">
Mass layoffs fell in half last month from a September count that was bloated by establishment closures due to Hurricanes Katrina &amp; Rita. Year to year, the number of mass layoffs also fell by 14.6%, continuing the downtrend in place since 2001.
During the last ten years there has been a (negative) 87% correlation between the three month average level of layoff announcements and the y/y change in payroll employment.
The number of persons affected by mass layoffs in October fell nearly two-thirds m/m.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128a.jpg" width="353">
By industry, factory sector layoff announcements in October more than reversed the prior month&#39;s increase. The number of layoff events as a result fell below the year earlier level but the number of persons affected nevertheless rose 1.5% y/y with increases concentrated in the transportation, computer and paper industries.
The Mass Layoff Statistics (MLS) program collects reports on mass layoff actions that result in workers being separated from their jobs. Monthly mass layoff numbers are from establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a 5-week period.
How Predictable is Fed Policy? from St. Louis Federal Reserve Bank President William Poole can be found <a href="http://research.stlouisfed.org/publications/review/05/11/Poole.pdf"> 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/WEEKLY/@W5/@W507/@W507.HTM">Mass Layoffs</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">All US Industries (# Events, SA)</td>
<td>1,088</td>
<td>2,220</td>
<td>-14.6%</td>
<td>15,900</td>
<td>19,155</td>
<td>20,472</td>
</tr>
<tr>
<td class="firstcol">Total (# Persons, SA)</td>
<td>106,238</td>
<td>287,692</td>
<td>-15.3%</td>
<td>1,588,483</td>
<td>1,936,463</td>
<td>2.256,014</td>
</tr>
</tbody>
</table>
Confidence Improving in the Czech and Slovak Republics  
by <a href="/comment/Curley.html">Louise Curley</a> November 28, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128d.jpg" width="353">
The statistical offices of the former components of Czechoslovakia--the Czech and Slovak Republics released data on business and consumer confidence this morning.Each country produces measures of consumer and industrial confidence and a composite measure of confidence.
The Composite Indicator for Czech Republic is a weighted average of seasonally adjusted confidence indicators for industry, construction, trade and of the consumer expressed in terms of percent balances. The Slovak Economic Sentiment Indicator, expressed in terms of an index with base 2000=100), is composed of the industrial confidence indicator (40%), the construction confidence indicator (20%), the retail trade confidence indicator (20%) and the consumer confidence indicator (20%). It is not possible to compare the degree of overall confidence in the two countries, since one measure is expressed in index form and the other a percent balance, but trends in the two measures can be compared. The trend in the Slovak Economic Sentiment Index has shown a marked improvement since early 2004. In November the index was up 2.37% from October and 4.06% from November, 2004. The trend in the composite measure of confidence for the Czech Republic was down after a big improvement in early 2004 but has begun to improve since August of this year. The percent balance in November was unchanged from October when it stood at 8 and was 2 percentage points above November, 2004. The trends in the two composite measures are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128e.jpg" width="353">
Since measures of consumer and business in both countries are expressed in terms of percent balances it is possible to compare the degree of consumer and industrial confidence in the countries. The fact that the percent balance in consumer confidence in the Czech Republic was 0 in November while that in Slovakia was -14.6 suggests that there are more pessimistic consumers than optimistic ones in Slovakia in November than in the Czech Republic. This has been true over the past five years and can be seen in the second chart.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051128f.jpg" width="353">
Although the Slovak economy has been increasing faster than that of the Czech Republic, business confidence is moderately below that of the Czech Republic. In November the excess of business optimists over pessimists was 6.7% compared with 3.0% in October and 8.7% a year ago. The corresponding figures for the Czech Republic were 10%, 11% and 10%. The third chart comparing the percent balances in business confidence in the two countries shows some improvement in recent months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/emerging.htm">Czech and Slovak Republic: Confidence Measures</a> &nbsp; (% balance)</th>
<th scope="col">Nov 05 %</th>
<th scope="col">Oct 05 % </th>
<th scope="col">Nov 04 %</th>
<th scope="col">M/M % Pts</th>
<th scope="col">Y/Y&nbsp; % &nbsp; Pts</th>
<th scope="col">2004 %&nbsp; </th>
<th scope="col">2003 %</th>
<th scope="col">2002 %&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>8</td>
<td>8</td>
<td>6</td>
<td>0</td>
<td>2</td>
<td>4</td>
<td>1</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Slovak Republic*</td>
<td>&nbsp;112.9</td>
<td>110.3&nbsp;</td>
<td>108.5&nbsp;</td>
<td>2.36&nbsp;</td>
<td>4.06&nbsp;</td>
<td>106.2&nbsp;</td>
<td>105.3&nbsp;</td>
<td>105.2&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>0</td>
<td>-6</td>
<td>-4</td>
<td>6</td>
<td>4</td>
<td>-13</td>
<td>-15</td>
<td>-7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Slovak Republic</td>
<td>-14.6</td>
<td>-17.3</td>
<td>-18.1</td>
<td>2.7</td>
<td>3.5</td>
<td>-22.9</td>
<td>-34.8</td>
<td>-30.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Business Confidence</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Czech Republic&nbsp;</td>
<td>10</td>
<td>11</td>
<td>10</td>
<td>-1</td>
<td>0</td>
<td>8</td>
<td>5</td>
<td>4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Slovak Republic</td>
<td>6.7</td>
<td>3.0</td>
<td>8.7</td>
<td>3.7</td>
<td>-2.0</td>
<td>6.8</td>
<td>4.6</td>
<td>4.6</td>
</tr>
</tbody>
</table>


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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051123e.jpg" width="353">
Italy&#39;s private institute ISAE reported its monthly consumer survey results for November this morning. They show an improving trend in the overall confidence indicator, albeit well below the highs of about four years ago. The indicator is 108.8 this month, 1980=100 and seasonally adjusted, up 3.2 points from October and well above the average of 101.5 for 2004.
Looking at some of the broad components, it&#39;s a little hard to see the total index&#39;s better than 7% improvement in people&#39;s confidence levels over last year&#39;s average level. Only the same tiny portion of survey respondents believe the &quot;general situation&quot; is getting better, and the number of those perceiving a worsening trend has declined only minimally. Household financial expectations rated a -7 in November, compared with -8 in 2004. Unemployment expectations seem still to be deteriorating. The share of respondents looking for unemployment to increase over the coming year was 48%, compared with 40% for last year as a whole and only 35% in 2002. This group has taken away from those expecting steady unemployment, which has fallen to 35% this month from 44% for 2004. These movements toward increasing concerns about unemployment extend a pattern that has prevailed since 2001. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051123f.jpg" width="353">
However, there are some positive hints on the inflation front. More consumers look for inflation to pick up than did so last year, but these are many fewer than expected so in 2001 and 2002. This is illustrated in the second graph, where it is also seen that the November figures show marked improvement from October. These price expectations are giving some aid to plans for &quot;major purchases&quot;; the outlook there is still absolutely negative, but it has stabilized in recent months. Referring to durable goods, the survey item &quot;present ability for purchases&quot; has a 10% &quot;favorable&quot; reading in November, up from 7 last year. The &quot;unfavorable&quot; reading is 58% compared with 58% last year. These hardly indicate a consumer spending boom on the horizon, but they do suggest that consumers are less stressed about the buying environment than they have been for some time.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Italy ISAE Consumer Survey</th>
<th scope="col">Nov 2005</th>
<th scope="col">Oct 2005</th>
<th scope="col">Nov 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Confidence Indicator (SA, 1980 =100)</td>
<td>108.8</td>
<td>105.6</td>
<td>103.8</td>
<td>101.5</td>
<td>106.2</td>
<td>115.8</td>
<td>122.6</td>
</tr>
<tr>
<td colspan="8">General Situation Last 12 Mos.</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Improving</td>
<td>4</td>
<td>3</td>
<td>4</td>
<td>3</td>
<td>4</td>
<td>9</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Worsening</td>
<td>72</td>
<td>77</td>
<td>76</td>
<td>77</td>
<td>73</td>
<td>54</td>
<td>43</td>
</tr>
<tr class="odd">
<td colspan="8">Price Trends Next 12 Mos.</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rapid Increase</td>
<td>7</td>
<td>11</td>
<td>6</td>
<td>5</td>
<td>7</td>
<td>16</td>
<td>21</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Modest Increase</td>
<td>17</td>
<td>21</td>
<td>13</td>
<td>14</td>
<td>15</td>
<td>35</td>
<td>37</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Flat</td>
<td>47</td>
<td>41</td>
<td>52</td>
<td>54</td>
<td>51</td>
<td>31</td>
<td>25</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Unsure</td>
<td>10</td>
<td>8</td>
<td>8</td>
<td>5</td>
<td>5</td>
<td>2</td>
<td>5</td>
</tr>
<tr>
<td colspan="8">Unemployment Next 12 Mos.</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Large Increase</td>
<td>14</td>
<td>17</td>
<td>13</td>
<td>8</td>
<td>8</td>
<td>7</td>
<td>7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Modest Increase</td>
<td>34</td>
<td>33</td>
<td>32</td>
<td>32</td>
<td>31</td>
<td>28</td>
<td>23</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Unchanged</td>
<td>35</td>
<td>35</td>
<td>36</td>
<td>44</td>
<td>42</td>
<td>43</td>
<td>39</td>
</tr>
</tbody>
</table>
</body>
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Italy's private institute ISAE reported its monthly consumer survey results for November this morning. They show an improving trend in the overall confidence indicator, albeit well below the highs of about four years ago. The [...]

Italian Consumer Confidence Improves in November as Inflation Concerns Moderate

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051123b.jpg" width="353">
Initial claims for unemployment insurance rose 30,000 to 335,000 last week and reversed the little revised 23,000 decline the prior week. Consensus expectations had been for a lesser increase to 311,000 claims.
Hurricane related claims totaled 21,000 and brought the total of the three storms during the last twelve weeks to 582,000.
The four-week moving average of initial claims ticked up slightly to 323,250 (-2.5% y/y).
Continuing claims for unemployment insurance rose a sharp 59,000 following three successive weeks of decline.
The insured rate of unemployment held at 2.2% for the ninth consecutive week.
Minutes of the Federal Open Market Committee November 1, 2005 can be found <a href="http://www.federalreserve.gov/fomc/minutes/20051101.htm"> here</a>.
Estimating the &quot;Neutral&quot; Real Interest Rate in Real Time from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-27.pdf"> 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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">11/19/05</th>
<th scope="col">11/12/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>335</td>
<td>305</td>
<td>3.4%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,824</td>
<td>3.1%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
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Initial claims for unemployment insurance rose 30,000 to 335,000 last week and reversed the little revised 23,000 decline the prior week. Consensus expectations had been for a lesser increase to 311,000 claims. Hurricane related [...]

Initial Claims for Jobless Insurance Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051123a.jpg" width="353">
The Conference Board&#39;s Index of Help-Wanted Advertising held at 38 in October versus the downwardly revised September level and 38 in August. The average level so far this year is 39.
During the last ten years there has been a 62% correlation between the level of help-wanted advertising and the three month change in non-farm payrolls.
The proportion of labor markets with rising want-ad volume improved further to 57% in October after gains during the prior two months.
The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month.
The latest help wanted report from the Conference Board is available <a href="http://www.conference-board.org/economics/helpwanted.cfm">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Oct &#39;04</th>
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<td class="firstcol">National Help Wanted Index</td>
<td>38</td>
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The Conference Board's Index of Help-Wanted Advertising held at 38 in October versus the downwardly revised September level and 38 in August. The average level so far this year is 39. During the last ten years there has been a 62% [...]

Help-Wanted Advertising Stable

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

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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.

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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**.

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- 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

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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**.

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

Personal Income, Consumption, and Prices in March

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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

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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.

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- 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

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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.

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- 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: November 2005

Jump to:

U.S. Durable Goods Rebound; Aircraft Orders Soared

Confidence Improving in the Czech and Slovak Republics

U.S. Existing Home Sales Soften

Mass Layoffs Down

U.S. Existing Home Sales Soften

Italian Consumer Confidence Improves in November as Inflation Concerns Moderate

Initial Claims for Jobless Insurance Higher

Help-Wanted Advertising Stable