Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125d.jpg" align="right" border="0" height="265" width="353">The job
market continued to improve last week. The Labor Department reported
that initial claims for unemployment insurance fell to 466,000 from a
downwardly revised 501,000 during the prior week. The latest level was
the lowest since early-September of last year and are down&nbsp;
sharply from the peak reached in March of 674,000 claims. The four-week
moving average of claims fell to 497,000 and the latest weekly figure
was lower than Consensus expectations for 500,000 claims.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125e.jpg" align="right" border="0" height="265" width="353">
Continuing
claims for unemployment insurance during the latest week fell 109,000
to their lowest level since late February. The decline reflects the
improved job market but may also be a function of the exhaustion of
benefits. Continuing claims provide an indication of workers' ability
to find employment. The four-week average of continuing claims fell
modestly to 5,614,750. This series dates back to
1966.Extended benefits for unemployment insurance
rose fell modestly w/w and averaged 539,531 in early-November versus
550,343 during October.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125f.jpg" align="right" border="0" height="265" width="353">
The insured rate of unemployment fell to 4.1%
and matched its lowest since late-March. The rate reached a high of
5.2% during late-June. During the last ten years, there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.he highest insured unemployment rates in the
week ending November 7 were in Puerto Rico (6.2%), Oregon (5.5), Nevada
(5.1), Alaska (5.1), Wisconsin (4.9), Pennsylvania (4.9), California
(4.7), Michigan (4.6), and South Carolina (4.4). The lowest insured
unemployment rates were in North Dakota (1.1%), Virginia (1.9), Texas
(2.5), Maine (2.7), Wyoming (2.8), Ohio (3.2), Maryland (2.8), New York
(3.5), Mississippi (3.5) and Florida (3.7).The unemployment insurance
claims data is available in Haver's WEEKLY database
and the state data is in the REGIONW database.The
minutes to the latest FOMC meeting can be found
<a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091104.pdf">here</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><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>&nbsp;</th>
<th scope="col">11/21/09</th>
<th scope="col">11/14/09</th>
<th scope="col">11/07/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>466</td>
<td>501</td>
<td>505</td>
<td>-10.4%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">ContinuingClaims</td>
<td>--</td>
<td>5,423</td>
<td>5,613</td>
<td>34.9%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.1</td>
<td>4.3</td>
<td>3.1(11/2008)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

The job market continued to improve last week. The Labor Department reported that initial claims for unemployment insurance fell to 466,000 from a downwardly revised 501,000 during the prior week. The latest level was the lowest since [...]

U.S. Weekly Initial Claims Insurance For Jobless Insurance Fall To New Low

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125a.jpg" align="right" border="0" height="265" width="353">Negative job
growth continued to minimize personal income growth last month. Personal
income gained 0.2% during October after an upwardly revised
like increase in September. The latest figure matched Consensus
expectations. While the gains have been small, they are improved from
early this year due to easier declines in employment which have been
accompanied by higher gov't transfer payments. Wages &amp;
salaries were unchanged last month after a revised 0.1% September
increase. Year-to-year wages fell 3.6% following a 2.1% increase during
2008. Wages in the factory sector fell 0.5% (-11.2% y/y) after a
minimal September decline. In the service sector wages rose just 0.1%
(-2.6% y/y), but continuing to offset some of this weakness has been
the government sector where wages rose 2.7% y/y.Growth in
unemployment insurance payments has slowed recently. They increased
just 0.1% last month after a 10.4% 3Q increase and a 27.4% 2Q gain.
Interest income rose 0.5% (-5.6% y/y) as the decline in rates found a
bottom while dividend income fell by 0.2% (-21.2% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125b.jpg" align="right" border="0" height="265" width="353">
 Disposable
personal income rose an improved 0.4% due to lower tax
payments. Adjusted for inflation real disposable income rose 0.2% after
a 0.4% 3Q decline. The saving rate slipped modestly to 4.6% from an
upwardly revised 4.6% during September. The rate remained up from last
year and more than double the 2007 level due to reduced spending.Personal
spending gained 0.3% as durables spending increased 0.2%
(0.1% y/y). Spending on motor vehicles recovered 8.6% (3.5% y/y) after
the September drop. That increase was offset by a 0.6% (-4.0% y/y)
decline in spending on furniture &amp; appliances. Spending on
nondurables increased 0.4% (-1.4% y/y) as outlays on apparel rose for
the fourth straight month (0.5% y/y)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125c.jpg" align="right" border="0" height="265" width="353">
. Outlays on gasoline rose 0.7%
with higher prices but were down 17.9% from one year ago. Outlays on
services increased 0.5% (1.8% y/y) as spending on health care continued
quite strong posting a 5.6% gain versus last year. The PCE
chain price index increased 0.3% during October lifted by a
firm 2.1% increase in gasoline costs. Less food-and-energy, "core"
prices were again soft and posted just a 0.2% increase. Prices for
durable goods rose just 0.1% as home furnishing prices fell (-1.9% y/y)
while prices for services gained a steady 1.2% y/y.The personal
income &amp; consumption figures are available in Haver's USECON
and USNA databases.
<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> (%)&nbsp;</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3</td>
<td>-1.0</td>
<td>2.9</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;Disposable
Personal Income</td>
<td>0.4</td>
<td>0.2</td>
<td>0.3</td>
<td>2.4</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption
Expenditures</td>
<td>0.7</td>
<td>-0.6</td>
<td>1.3</td>
<td>0.9</td>
<td>3.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>4.4</td>
<td>4.6</td>
<td>3.9</td>
<td>2.9 (Oct. '08)</td>
<td>2.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.3</td>
<td>0.1</td>
<td>0.3</td>
<td>0.2</td>
<td>3.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Less food &amp; energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>1.4</td>
<td>2.4</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</body></html>

Negative job growth continued to minimize personal income growth last month. Personal income gained 0.2% during October after an upwardly revised like increase in September. The latest figure matched Consensus expectations. While the [...]

U.S. Personal Income Gains Minimally As Spending Recovers

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125a.jpg" align="right" border="0" height="265" width="353">Negative job
growth continued to minimize personal income growth last month. Personal
income gained 0.2% during October after an upwardly revised
like increase in September. The latest figure matched Consensus
expectations. While the gains have been small, they are improved from
early this year due to easier declines in employment which have been
accompanied by higher gov't transfer payments. 
Wages &amp;
salaries were unchanged last month after a revised 0.1% September
increase. Year-to-year wages fell 3.6% following a 2.1% increase during
2008. Wages in the factory sector fell 0.5% (-11.2% y/y) after a
minimal September decline. In the service sector wages rose just 0.1%
(-2.6% y/y), but continuing to offset some of this weakness has been
the government sector where wages rose 2.7% y/y.
Growth in
unemployment insurance payments has slowed recently. They increased
just 0.1% last month after a 10.4% 3Q increase and a 27.4% 2Q gain.
Interest income rose 0.5% (-5.6% y/y) as the decline in rates found a
bottom while dividend income fell by 0.2% (-21.2% y/y).
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125b.jpg" align="right" border="0" height="265" width="353">
 Disposable
personal income rose an improved 0.4% due to lower tax
payments. Adjusted for inflation real disposable income rose 0.2% after
a 0.4% 3Q decline. The saving rate slipped modestly to 4.6% from an
upwardly revised 4.6% during September. The rate remained up from last
year and more than double the 2007 level due to reduced spending.
Personal
spending gained 0.3% as durables spending increased 0.2%
(0.1% y/y). Spending on motor vehicles recovered 8.6% (3.5% y/y) after
the September drop. That increase was offset by a 0.6% (-4.0% y/y)
decline in spending on furniture &amp; appliances. Spending on
nondurables increased 0.4% (-1.4% y/y) as outlays on apparel rose for
the fourth straight month (0.5% y/y)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125c.jpg" align="right" border="0" height="265" width="353">
. Outlays on gasoline rose 0.7%
with higher prices but were down 17.9% from one year ago. Outlays on
services increased 0.5% (1.8% y/y) as spending on health care continued
quite strong posting a 5.6% gain versus last year.
 The PCE
chain price index increased 0.3% during October lifted by a
firm 2.1% increase in gasoline costs. Less food-and-energy, "core"
prices were again soft and posted just a 0.2% increase. Prices for
durable goods rose just 0.1% as home furnishing prices fell (-1.9% y/y)
while prices for services gained a steady 1.2% y/y.
The personal
income &amp; consumption figures are available in Haver's USECON
and USNA databases.
<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> (%)&nbsp;</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3</td>
<td>-1.0</td>
<td>2.9</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;Disposable
Personal Income</td>
<td>0.4</td>
<td>0.2</td>
<td>0.3</td>
<td>2.4</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption
Expenditures</td>
<td>0.7</td>
<td>-0.6</td>
<td>1.3</td>
<td>0.9</td>
<td>3.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>4.4</td>
<td>4.6</td>
<td>3.9</td>
<td>2.9 (Oct. '08)</td>
<td>2.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.3</td>
<td>0.1</td>
<td>0.3</td>
<td>0.2</td>
<td>3.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Less food &amp; energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>1.4</td>
<td>2.4</td>
<td>2.4</td>
</tr>
</tbody>
</table>

 U.S. Weekly Initial Claims
Insurance For Jobless Insurance Fall To New Low 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 25, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125d.jpg" align="right" border="0" height="265" width="353">The job
market continued to improve last week. The Labor Department reported
that initial claims for unemployment insurance fell to 466,000 from a
downwardly revised 501,000 during the prior week. The latest level was
the lowest since early-September of last year and are down&nbsp;
sharply from the peak reached in March of 674,000 claims. The four-week
moving average of claims fell to 497,000 and the latest weekly figure
was lower than Consensus expectations for 500,000 claims.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125e.jpg" align="right" border="0" height="265" width="353">Continuing
claims for unemployment insurance during the latest week fell 109,000
to their lowest level since late February. The decline reflects the
improved job market but may also be a function of the exhaustion of
benefits. Continuing claims provide an indication of workers' ability
to find employment. The four-week average of continuing claims fell
modestly to 5,614,750. This series dates back to
1966.
Extended benefits for unemployment insurance
rose fell modestly w/w and averaged 539,531 in early-November versus
550,343 during October.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091125f.jpg" align="right" border="0" height="265" width="353">The
insured rate of unemployment fell to 4.1%
and matched its lowest since late-March. The rate reached a high of
5.2% during late-June. During the last ten years, there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.
he highest insured unemployment rates in the
week ending November 7 were in Puerto Rico (6.2%), Oregon (5.5), Nevada
(5.1), Alaska (5.1), Wisconsin (4.9), Pennsylvania (4.9), California
(4.7), Michigan (4.6), and South Carolina (4.4). The lowest insured
unemployment rates were in North Dakota (1.1%), Virginia (1.9), Texas
(2.5), Maine (2.7), Wyoming (2.8), Ohio (3.2), Maryland (2.8), New York
(3.5), Mississippi (3.5) and Florida (3.7).
The unemployment insurance
claims data is available in Haver's WEEKLY database
and the state data is in the REGIONW database.
The
minutes to the latest FOMC meeting can be found
<a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091104.pdf">here</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><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>&nbsp;</th>
<th scope="col">11/21/09</th>
<th scope="col">11/14/09</th>
<th scope="col">11/07/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>466</td>
<td>501</td>
<td>505</td>
<td>-10.4%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">ContinuingClaims</td>
<td>--</td>
<td>5,423</td>
<td>5,613</td>
<td>34.9%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.1</td>
<td>4.3</td>
<td>3.1(11/2008)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>

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U.S. Personal Income GainsMinimally As Spending Recovers

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124i.jpg" align="right" border="0" height="265" width="353">Overall
business confidence in Germany and in France improved slightly in
November. Confidence in both countries, however, is still
subdued. In Germany, confidence is measured in two
ways: (1) as a percent difference between the optimists and the
pessimists regarding a particular question and (2) as an index based on
the percent differences with the year 2000=100.&nbsp; Although the
excess of pessimists over optimists regarding the current situation
continued to decline in November, there was still a significant excess,
25.1%.&nbsp; Germans have been much less pessimistic regarding the
outlook six months ahead and in November there was actually a small,
0.2%, excess of optimists over pessimists on the outlook.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124j.jpg" align="right" border="0" height="265" width="353">
&nbsp; The
overall climate indicator, which is a combination of present conditions
and future expectations, improved but still showed an excess of
pessimists over optimists, 12.9%.&nbsp; (The percent balances
between the optimists and pessimists for the three indicators are shown
in the first chart.) In France, the measures of confidence
are so constructed by INSEE (Institute National de la Statistiques et
des Etudes Economiques) that the long term averages are equal to
100.&nbsp; In November, all the indexes: overall confidence at 87,
confidence in the construction industry at 93, industry at 89 and
services at 86 are still below their long term averages. (The French
business confidence indicators are shown in the second
chart.)&nbsp; <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124k.jpg" align="right" border="0" height="265" width="353">
INSEE also publishes turning point indicators that
attempt to detect at the earliest possible moment turning points of the
business cycle.&nbsp; The series tracks the difference between the
probability that the economy is growing versus the probability that it
is contracting and&nbsp; is evaluated between +1 and -1.&nbsp;
A value of +1 indicates that the economy is growing strongly, and one
of -1 indicates that the economy is contracting sharply.&nbsp; A
value close to zero indicates an economy near to its long term average
and is neither growing nor contracting significantly.&nbsp;
(Turning points for the Composite and the Industry Survey Indicators
are shown in the third chart.)&nbsp; The Composite turning point
indicator has been at +1 now for five months, indicating continuing
recovery. The turning point indicator for the Industry Survey, however,
has been falling and in November was negative, suggesting at least some
deceleration of activity in this sector.&nbsp; The November Climate
indicator for Industry was 89, unchanged from October, after a run of
seven increases since March of this year.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">
GERMANY&nbsp; IFO % Balance </th>
<th scope="col">Nov 09&nbsp;</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug&nbsp; 09</th>
<th scope="col">Jul 08</th>
<th scope="col">Jun 09&nbsp;</th>
<th scope="col">May 09&nbsp;</th>
<th scope="col">Apr 09</th>
<th scope="col">Mar 09</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Current Conditions</td>
<td>-25.1</td>
<td>-28.6</td>
<td>-29.1</td>
<td>-30.8</td>
<td>-34.3</td>
<td>-38.1</td>
<td>-34.9</td>
<td>-36.0</td>
<td>-37.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Expectations</td>
<td>0.2</td>
<td>-3.9</td>
<td>-6.0</td>
<td>-7.5</td>
<td>-16.6</td>
<td>-18.4</td>
<td>-25.5</td>
<td>-29.7</td>
<td>-34.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Overall Climate</td>
<td>-12.7</td>
<td>-16.7</td>
<td>-17.9</td>
<td>-19.5</td>
<td>-25.7</td>
<td>-28.5</td>
<td>-31.8</td>
<td>-32.9</td>
<td>-36.1</td>
</tr>
<tr>
<td colspan="10">FRANCE Business Confidence
(LT Avg =100)</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>86</td>
<td>85</td>
<td>79</td>
<td>75</td>
<td>70</td>
<td>68</td>
<td>64</td>
<td>60</td>
<td>60</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>93</td>
<td>93</td>
<td>93</td>
<td>92</td>
<td>91</td>
<td>92</td>
<td>92</td>
<td>92</td>
<td>95</td>
</tr>
<tr class="odd">
<td class="firstcol">Industry</td>
<td>89</td>
<td>89</td>
<td>86</td>
<td>82</td>
<td>79</td>
<td>77</td>
<td>74</td>
<td>71</td>
<td>69</td>
</tr>
<tr class="odd">
<td class="firstcol">Composite</td>
<td>87</td>
<td>86</td>
<td>83</td>
<td>79</td>
<td>76</td>
<td>74</td>
<td>71</td>
<td>69</td>
<td>68</td>
</tr>
<tr>
<td colspan="10">FRANCE Turning Points</td>
</tr>
<tr class="odd">
<td class="firstcol">Industry</td>
<td>-0.3</td>
<td>0.6</td>
<td>0.5</td>
<td>0.8</td>
<td>0.8</td>
<td>0.9</td>
<td>0.6</td>
<td>0.4</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Composite</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>1.0</td>
<td>0.1</td>
<td>-0.6</td>
<td>-0.7</td>
<td>-0.9</td>
</tr>
</tbody>
</table>
</body></html>

Overall business confidence in Germany and in France improved slightly in November. Confidence in both countries, however, is still subdued. In Germany, confidence is measured in two ways: (1) as a percent difference between the [...]

Business Confidence In Germany And France

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124h.jpg" align="left" border="0" height="265" width="353">
Euro-Area orders are still falling year-over-year. As the
chart shows the Yr/Yr drop is being steadily mitigated. Both
foreign-sourced orders and domestic orders (in-region orders) are
rebounding smartly after their recession-induced drop.
Of the EU&#8217;s big four economies Germany and France are doing
best with orders surging at stunningly strong 3- and 6-month rates of
growth. Italy&#8217;s orders are still falling over both those periods as are
orders in the UK. UK orders, in fact, are dropping at a horrific 31%
annual rate in the three month period ended in Sept. demonstrating a
severe drop off sparked by a 15.1% order drop in the month of August
alone.
Needless to say the Euro-Area, while doing better, remains a
very heterogeneous community. The orders rebound itself, is also not
altogether uniform. The detailed figures revealed September's orders
were driven by heavy transport equipment, such as ships, railway and
aerospace equipment, which tend to be volatile. Excluding heavy
transport equipment, orders dropped 1.2% from August and were 18.2%
weaker than in September last year. Orders for intermediate goods
dropped 2.1% in September from August, but orders for capital goods,
durable consumer goods and nondurable consumer goods all rose.
On balance the orders trends show that the zone is doing
better. As in the US a number of Zone economies did better on the back
of government schemes to boost auto sales coupled with scrappage
requirements; these programs are starting to lapse with some negative
consequences for orders and growth.
For the time being though the Euro-Area is on the mend. The
Markit PMIs showed that both MFG and Services sectors continued to
improve in November. Germany&#8217;s IFO report showed continued improvement
in November as well. The Markit data showed the rate of improvement is
slowing down. The bottom line for now is that improvement continues but
the pace of the recovery remains a keen issue and one on which incoming
reports have not been altogether optimistic or uniform. The
backtracking in the UK orders improvement and the slowdown in the
November Markit indices&#8217; improving trends are two recent pieces of
disappointing data.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup><thead><tr>
<th scope="col" colspan="10">
Euro-Area-13
and UK Industrial Orders</th>
</tr>
<tr>
<th scope="col" class="firstcol">Saar
except m/m
</th>
<th scope="col" colspan="3">Mo/Mo</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Sep &nbsp; 09</th>
<th scope="col">Aug 09</th>
</tr>
<tr>
<td class="firstcol">Ezone
Detail</td>
<td class="firstcol">Sep-09</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG
Orders</td>
<td>1.5%</td>
<td>0.6%</td>
<td>4.4%</td>
<td>29.0%</td>
<td>35.8%</td>
<td>23.6%</td>
<td>19.1%</td>
<td>-16.5%</td>
<td>-23.2%</td>
</tr>
<tr>
</tr>
<tr>
<td class="firstcol" colspan="10">Memo:MFG</td>
</tr>
<tr class="odd">
<td class="firstcol">Total
Orders</td>
<td>1.5%</td>
<td>0.6%</td>
<td>4.4%</td>
<td>29.0%</td>
<td>35.8%</td>
<td>23.6%</td>
<td>19.1%</td>
<td>-16.5%</td>
<td>-23.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">E-13
Domestic MFG orders</td>
<td>6.5%</td>
<td>-3.2%</td>
<td>5.1%</td>
<td>38.3%</td>
<td>40.3%</td>
<td>22.4%</td>
<td>5.4%</td>
<td>-13.4%</td>
<td>-21.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">E-13
Foreign MFG orders</td>
<td>7.3%</td>
<td>-5.0%</td>
<td>5.0%</td>
<td>31.1%</td>
<td>32.8%</td>
<td>26.3%</td>
<td>13.9%</td>
<td>-17.3%</td>
<td>-24.9%</td>
</tr>
<tr>
<td class="firstcol">Countries:</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany
(MFG):</td>
<td>1.5%</td>
<td>2.5%</td>
<td>2.0%</td>
<td>26.9%</td>
<td>40.6%</td>
<td>29.8%</td>
<td>35.0%</td>
<td>-16.7%</td>
<td>-24.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">France(Ind):</td>
<td>5.7%</td>
<td>2.9%</td>
<td>4.7%</td>
<td>67.4%</td>
<td>42.3%</td>
<td>33.8%</td>
<td>6.0%</td>
<td>-5.6%</td>
<td>-14.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy
(Ind):</td>
<td>5.2%</td>
<td>-8.6%</td>
<td>2.4%</td>
<td>-5.8%</td>
<td>-16.5%</td>
<td>-3.8%</td>
<td>-16.4%</td>
<td>-21.4%</td>
<td>-29.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK
(Engineering Industy):</td>
<td>2.3%</td>
<td>-15.1%</td>
<td>4.7%</td>
<td>-31.7%</td>
<td>-26.0%</td>
<td>-3.0%</td>
<td>-3.5%</td>
<td>-30.9%</td>
<td>-13.1%</td>
</tr>
</thead>
</table>
</body></html>

Euro-Area orders are still falling year-over-year. As the chart shows the Yr/Yr drop is being steadily mitigated. Both foreign-sourced orders and domestic orders (in-region orders) are rebounding smartly after their recession-induced [...]

Euro-Area Orders Continue To Claw Their Way Back

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124g.jpg" width="353">
As they have since June, gasoline prices moved sideways last week. The pump price for regular gasoline of $2.64 per gallon was near $2.63 averaged during June. Nevertheless, prices remain up from the December low of $1.61. This week, wholesale gasoline prices fell from last week. The figures are reported by the U.S. Department of Energy and can be found in Haver&#39;s WEEKLY &amp; DAILY databases.
Notwithstanding the stability of gasoline prices, crude oil prices have moved higher and light sweet crude (WTI) rose to an average $78.36 per barrel last week from $74.89 averaged last month and from the December low of $32.37. Yesterday, the spot market price for light sweet crude oil fell to $76.56 per barrel.
Behind the stabilization in gasoline prices is a leveling of past gains in gasoline demand. Last week, it posted a 1.1% decline versus one year ago versus a 3.9% increase as of last month. Demand for residual fuel oil increased 23.0% y/y while distillate demand fell 10.6% y/y.
Natural gas prices have declined during the last four weeks to an average $3.35 per mmbtu (-49.9% y/y). They remained down by two-thirds from the high reached in early-July of last year of $13.19/mmbtu.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">11/23/09</th>
<th scope="col">11/16/09</th>
<th scope="col">11/09/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per Gallon, Regular)</td>
<td>2.64</td>
<td>2.63</td>
<td>2.67</td>
<td>39.5%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>78.36</td>
<td>78.21</td>
<td>79.04</td>
<td>49.7%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
</body>
</html>

As they have since June, gasoline prices moved sideways last week. The pump price for regular gasoline of $2.64 per gallon was near $2.63 averaged during June. Nevertheless, prices remain up from the December low of $1.61. This week, [...]

Weekly Gasoline Prices Meander Sideways

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124e.jpg" align="right" border="0" height="265" width="353">
Consumers
were distressed this past winter. Malaise is the best word to describe
consumer confidence since then. The Conference Board indicated that
consumer confidence during November rose just 1.6% from October
following sharp declines during the prior five months. Though the level
of confidence is up sharply from this winter's low, it has moved
sideways since the spring. The Conference Board data can be found in
Haver's CBDB database.During the last ten years
there has been an 86% correlation between the level of consumer
confidence and the y/y change in real consumer spending.Consumers'
assessment of the current economic conditions slipped this month and
was near the historic low. It remained off by almost two-thirds from
one-year earlier. Jobs were seen as hard to get by 49.8% of respondents
and jobs were seen as plentiful by only 3.2% which was near the series'
historic low. Business conditions were seen as good by just 8.1% and
that also was near the series' low. Consumers who thought business
conditions were bad rose slightly to 45.7%. While off somewhat from its
high, the reading was still nearly the highest since 1983.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124f.jpg" align="right" border="0" height="265" width="353">
The expectations component of confidence recovered a piece of its large
October decline and the index remained near the highest level since
late-2007. Fewer expected business conditions &amp; employment to
improve but a large deterioration from here also was not expected.
Expectations for the inflation rate in twelve months held stable at
5.3%, the lowest level since 2007 and down from last year's high of
7.7%. Interest rates in twelve months were expected to be higher by
51.3% of respondents, while a reduced 12.9% expected rates to fall. A
greatly increased 36.3% of respondents expected stock prices to rise.
Consumers continued to manage their spending plans
cautiously. A reduced 2.0% plan to buy a home during the next six
months while just 23.2% plan to buy a major appliance. That's versus
30.9% back in 2007. Only 4.4% plan to buy an automobile versus 6.0% in
2007. Just 2.1% plan to buy a new one.b&gt;Housing's
Great Fall: Putting Household Balance Sheets Back Together Again
from the Federal Reserve Bank of St. Louis is available <a href="http://www.stlouisfed.org/publications/re/articles/?id=1716">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board&nbsp;(SA, 1985=100) </th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y %</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>49.5</td>
<td>48.7</td>
<td>53.4</td>
<td>10.7</td>
<td>57.9</td>
<td>103.4</td>
<td>105.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>21.0</td>
<td>21.1</td>
<td>23.0</td>
<td>-50.4</td>
<td>69.9</td>
<td>128.8</td>
<td>130.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>68.5</td>
<td>67.0</td>
<td>73.7</td>
<td>48.3</td>
<td>50.0</td>
<td>86.4</td>
<td>89.7</td>
</tr>
</tbody>
</table>
</body></html>

Consumers were distressed this past winter. Malaise is the best word to describe consumer confidence since then. The Conference Board indicated that consumer confidence during November rose just 1.6% from October following sharp [...]

U.S. Consumer Confidence Gains M/M

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124c.jpg" align="right" border="0" height="265" width="353">The rise in
home prices slowed with the recent plateau in home sales. The September
S&amp;P/Case-Shiller Home Price Composite
Index of twenty metro-markets edged up 0.3% after an average 1.0% rise
during each of the prior three months. The latest increase lessened the
y/y decline to 9.4% from its worst of -19.0% in January. Consensus
expectations had been for a y/y decline of 9.1% for March. In addition,
prices were down by nearly one-third since the peak in May 2006. Not
seasonally adjusted prices rose 0.3% during September after a 1.2%
August increase.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091124d.jpg" align="right" border="0" height="265" width="353">The
Case-Shiller composite index of home prices in 10
metropolitan areas, which has a longer history and dates back to 1987,
also firmed last month by 1.0% (-10.7% y/y). This measure also is down
by nearly one-third since the 2006 peak.
 The Case-Shiller index of 20
U.S. cities and their surrounding areas is value-weighted. A greater
index weight is assigned to more expensive homes and the series dates
back only to 2001. The S&amp;P/Case-Shiller home price series can
be found in Haver's USECON database and the city
data highlighted below is in the REGIONAL database.
The latest press release is available <a href="http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_102706.pdf">here</a>
. An overview of the S&amp;P/Case-Shiller home price series can be
found <a href="http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html">here</a>.·&nbsp;Home
prices in some areas of the country have firmed lately though they
remain down year-to-year.
Prices in
Chicago were quite firm for the third straight month and rose 1.1%
(-10.7% y/y) and in San Francisco prices have been strong for five
months (-7.9% y/y). In San Diego prices also were up solidly for the
fourth month (-5.7% y/y) and prices in Minneapolis were quite strong
for the last four months. However, they remain off 11.3% from one year
ago. In Phoenix prices rose for the fourth straight month (-21.9% y/y).
In Los Angeles home prices also were stronger and rose for the fourth
month (-9.0% y/y).
The monthly S&amp;P Case Shiller Home Price
data can be found in Haver's USECON database and
the regional data is available in the REGIONAL database.
Do Macroeconomic Announcements Move Inflation
Forecasts?
from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/review/09/09/part2/Amstad.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (SA, Jan 00 = 100)</th>
<th scope="col">September m/m</th>
<th scope="col">August m/m</th>
<th scope="col">July m/m</th>
<th scope="col">Sept. y/y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>0.3%</td>
<td>1.1%</td>
<td>1.1%</td>
<td>-9.4%</td>
<td>-15.7%</td>
<td>-3.8%</td>
<td>7.6%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">&nbsp; Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Atlanta</td>
<td>0.5</td>
<td>0.7</td>
<td>1.6</td>
<td>-9.4</td>
<td>-8.5</td>
<td>0.7</td>
<td>4.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Boston</td>
<td>-0.2</td>
<td>1.0</td>
<td>0.5</td>
<td>-3.4</td>
<td>-5.7</td>
<td>-4.0</td>
<td>-1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Chicago</td>
<td>1.1</td>
<td>1.3</td>
<td>2.0</td>
<td>-10.7</td>
<td>-10.0</td>
<td>-1.0</td>
<td>6.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Dallas</td>
<td>-0.3</td>
<td>0.0</td>
<td>0.8</td>
<td>-1.2</td>
<td>-3.3</td>
<td>0.5</td>
<td>3.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Denver</td>
<td>0.2</td>
<td>0.6</td>
<td>0.6</td>
<td>-1.2</td>
<td>-4.9</td>
<td>-1.7</td>
<td>2.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Los Angeles</td>
<td>0.7</td>
<td>1.2</td>
<td>1.2</td>
<td>-9.0</td>
<td>-24.2</td>
<td>-5.2</td>
<td>11.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
New York</td>
<td>-0.2</td>
<td>0.3</td>
<td>0.9</td>
<td>-9.0</td>
<td>-7.4</td>
<td>-2.8</td>
<td>7.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
San Francisco</td>
<td>1.7</td>
<td>2.5</td>
<td>3.0</td>
<td>-7.9</td>
<td>-24.3</td>
<td>-4.5</td>
<td>4.5</td>
</tr>
</tbody>
</table>

</body></html>

The rise in home prices slowed with the recent plateau in home sales. The September S&P/Case-Shiller Home Price Composite Index of twenty metro-markets edged up 0.3% after an average 1.0% rise during each of the prior three months. [...]

Case-Shiller Home Price Gains Slow After Three Months Of Strength

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 2009

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