Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426e.jpg" width="353">
The total number of mortgage applications dropped 3.7% last week, down hard for the third consecutive period. In April applications are 2.4% below the March average which fell 1.0% from February.
Purchase applications fell another 4.4% w/w and that pulled the April average 0.7% below March which rose 0.2% versus February.
During the last ten years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
Applications to refinance dropped 2.4% and in April are 4.9% below the March average.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426f.jpg" width="353">
The effective interest rate on a conventional 30-year mortgage eased slightly to 6.75% from 6.78% the prior week while the rate on 15-year financing slipped to 6.45%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities and during the last ten years there has been a (negative) 82% correlation between purchase applications and the effective rate on a 30-Year mortgage.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">04/21/06</th>
<th scope="col">04/14/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>548.6</td>
<td>569.6</td>
<td>-23.0%</td>
<td>708.6</td>
<td>735.1</td>
<td>1,067.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>389.4</td>
<td>407.4</td>
<td>-19.2%</td>
<td>470.9</td>
<td>454.5</td>
<td>395.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,489.4</td>
<td>1,526.1</td>
<td>-27.4%</td>
<td>2,092.3</td>
<td>2,366.8</td>
<td>4,981.8</td>
</tr>
</tbody>
</table>
</body>
</html>

The total number of mortgage applications dropped 3.7% last week, down hard for the third consecutive period. In April applications are 2.4% below the March average which fell 1.0% from February. Purchase applications fell another [...]

Mortgage Applications Plummet

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426c.jpg" width="353">
Last month new home sales showed surprising resilience with a 13.8% jump to 1.21 million (SAAR), the highest level this year. The jump contrasted to Consensus expectations for a more moderate increase to 1.115M and a 10.9% drop during February was little revised.
Despite last month&#39;s increase in sales, the latest level was 11.5% below last July&#39;s peak and sales during the first quarter were 9.4% below the 2005 average.
On the up trend has been the number of homes up for sale. That figure rose 2.8% last month and it&#39;s up by nearly one quarter during the last twelve months. Most pronounced is the 60.6% y/y gain in homes for sale in the Northeast.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426d.jpg" width="353">
Gains in March sales throughout the nation were robust but most pronounced was a 35.7% (-13.1% y/y) jump out West which recovered about all of the prior month&#39;s plunge. Sales in the Midwest also were strong and rose 10.9% (-8.9% y/y) while sales in the Northeast rose 4.7% (-15.2% y/y). The 6.9% gain in sales down South (-2.3% y/y) recovered nearly all of the declines during the prior two months.
Prices were under pressure as suggested by a 6.5% (-2.2% y/y decline in the median sales price. The average sales price fell 7.1% (-3.6% y/y) suggesting either more price discounting of large homes or greater sales declines of large homes.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E904.HTM">U.S. New Homes</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales (AR, 000&#39;s)</td>
<td>1,213</td>
<td>1,066</td>
<td>-7.2%</td>
<td>1,279</td>
<td>1,200</td>
<td>1,091</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA)</td>
<td>$224,200</td>
<td>$239,900</td>
<td>-2.2%</td>
<td>$234,208</td>
<td>$217,817</td>
<td>$191,383</td>
</tr>
</tbody>
</table>
</body>
</html>

Last month new home sales showed surprising resilience with a 13.8% jump to 1.21 million (SAAR), the highest level this year. The jump contrasted to Consensus expectations for a more moderate increase to 1.115M and a 10.9% drop during [...]

New Home Sales Surged Unexpectedly

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426a.jpg" width="353">
New orders for durable goods jumped 6.1% last month and the 3.4% February increase was upwardly revised. The jump pulled the y/y increase in orders to 17.7%, its strongest in six years, and the m/m gain by far outpaced Consensus expectations for a 1.8% rise. Moreover, the details of the report were constructive for factory sector activity.
During the last ten years there has been a 69% correlation between the y/y change in durable goods orders and the change in output of durable goods.
Higher orders for nondefense aircraft &amp; parts led last month&#39;s strength with a 71.1% (329.3% y/y) spike that followed the 59.9% February spurt. And new orders for motor vehicles &amp; parts reversed the prior month&#39;s decline with a 2.8% (4.2% y/y) rise.
Less the transportation sector altogether, durable goods orders rose 2.8% which more than made up for a little revised 1.1% decline during February.
Orders for computers &amp; electronic products were notably strong last month and posted a 7.5% (7.4% y/y) gain while machinery orders recouped about all of the prior month&#39;s decline with a 7.5% (16.3% y/y) increase. Also strong were orders for fabricated metals which increased 1.3% (7.1% y/y) and orders for primary metals rose 1.1% (8.5% y/y). Electrical equipment orders were the laggard last month and fell 1.8% (+13.2% y/y) after a 4.1% February drop.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426b.jpg" width="353">
Orders for nondefense capital goods jumped 12.1% with higher Boeing orders but orders less aircraft still increased 3.0% after a 0.8% February decline that was shallower than initially reported.
During the last ten years there has been an 87% correlation between the y/y change in capital goods orders less aircraft and the y/y change in business fixed investment in equipment &amp; software from the GDP accounts.
Shipments of durable goods increased 0.3% (7.6% y/y) following a 0.4% February rise and less the transportation sector shipments were unchanged (8.1% y/y) following a 0.4% February increase. During the last ten years there has been an 82% correlation between the y/y change in durable goods shipments and the change in industrial production of durable goods.
Order backlogs surged 2.8% (20.9% y/y), a jump dominated by the strength in unfilled orders for aircraft &amp; parts which rose 6.6% (70.6% y/y). Less transportation backlogs also were strong and rose 1.3% (10.8% y/y) lifting the ratio of backlogs to shipments outside of transportation to the highest level since November.
Durable inventories rose 0.7% (3.0% y/y) after a 0.4% February decline. Less transportation inventories rose an identical 0.7% (3.4% y/y) while the inventory to sales ratio outside of the transportation sector rose to the highest level since November.

<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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>6.1%</td>
<td>3.4%</td>
<td>17.7%</td>
<td>8.6%</td>
<td>9.5%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>2.8%</td>
<td>-1.1%</td>
<td>9.6%</td>
<td>8.6%</td>
<td>11.7%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>12.1%</td>
<td>4.0%</td>
<td>31.5%</td>
<td>20.0%</td>
<td>11.0%</td>
<td>4.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>3.0%</td>
<td>-0.8%</td>
<td>11.8%</td>
<td>10.7%</td>
<td>9.5%</td>
<td>4.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

New orders for durable goods jumped 6.1% last month and the 3.4% February increase was upwardly revised. The jump pulled the y/y increase in orders to 17.7%, its strongest in six years, and the m/m gain by far outpaced Consensus [...]

U.S. Durable Goods Orders' Rise = Factory Sector Resilience

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426a.jpg" width="353">
New orders for durable goods jumped 6.1% last month and the 3.4% February increase was upwardly revised. The jump pulled the y/y increase in orders to 17.7%, its strongest in six years, and the m/m gain by far outpaced Consensus expectations for a 1.8% rise. Moreover, the details of the report were constructive for factory sector activity.
During the last ten years there has been a 69% correlation between the y/y change in durable goods orders and the change in output of durable goods.
Higher orders for nondefense aircraft &amp; parts led last month&#39;s strength with a 71.1% (329.3% y/y) spike that followed the 59.9% February spurt. And new orders for motor vehicles &amp; parts reversed the prior month&#39;s decline with a 2.8% (4.2% y/y) rise.
Less the transportation sector altogether, durable goods orders rose 2.8% which more than made up for a little revised 1.1% decline during February.
Orders for computers &amp; electronic products were notably strong last month and posted a 7.5% (7.4% y/y) gain while machinery orders recouped about all of the prior month&#39;s decline with a 7.5% (16.3% y/y) increase. Also strong were orders for fabricated metals which increased 1.3% (7.1% y/y) and orders for primary metals rose 1.1% (8.5% y/y). Electrical equipment orders were the laggard last month and fell 1.8% (+13.2% y/y) after a 4.1% February drop.
Orders for nondefense capital goods jumped 12.1% with higher Boeing orders but orders less aircraft still increased 3.0% after a 0.8% February decline that was shallower than initially reported.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426b.jpg" width="353">
During the last ten years there has been an 87% correlation between the y/y change in capital goods orders less aircraft and the y/y change in business fixed investment in equipment &amp; software from the GDP accounts.
Shipments of durable goods increased 0.3% (7.6% y/y) following a 0.4% February rise and less the transportation sector shipments were unchanged (8.1% y/y) following a 0.4% February increase. During the last ten years there has been an 82% correlation between the y/y change in durable goods shipments and the change in industrial production of durable goods.
Order backlogs surged 2.8% (20.9% y/y), a jump dominated by the strength in unfilled orders for aircraft &amp; parts which rose 6.6% (70.6% y/y). Less transportation backlogs also were strong and rose 1.3% (10.8% y/y) lifting the ratio of backlogs to shipments outside of transportation to the highest level since November.
Durable inventories rose 0.7% (3.0% y/y) after a 0.4% February decline. Less transportation inventories rose an identical 0.7% (3.4% y/y) while the inventory to sales ratio outside of the transportation sector rose to the highest level since November.

<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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>6.1%</td>
<td>3.4%</td>
<td>17.7%</td>
<td>8.6%</td>
<td>9.5%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>2.8%</td>
<td>-1.1%</td>
<td>9.6%</td>
<td>8.6%</td>
<td>11.7%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>12.1%</td>
<td>4.0%</td>
<td>31.5%</td>
<td>20.0%</td>
<td>11.0%</td>
<td>4.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>3.0%</td>
<td>-0.8%</td>
<td>11.8%</td>
<td>10.7%</td>
<td>9.5%</td>
<td>4.8%</td>
</tr>
</tbody>
</table>
New Home Sales Surged Unexpectedly 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 26, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426c.jpg" width="353">
Last month new home sales showed surprising resilience with a 13.8% jump to 1.21 million (SAAR), the highest level this year. The jump contrasted to Consensus expectations for a more moderate increase to 1.115M and a 10.9% drop during February was little revised.
Despite last month&#39;s increase in sales, the latest level was 11.5% below last July&#39;s peak and sales during the first quarter were 9.4% below the 2005 average.
On the up trend has been the number of homes up for sale. That figure rose 2.8% last month and it&#39;s up by nearly one quarter during the last twelve months. Most pronounced is the 60.6% y/y gain in homes for sale in the Northeast.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426d.jpg" width="353">
Gains in March sales throughout the nation were robust but most pronounced was a 35.7% (-13.1% y/y) jump out West which recovered about all of the prior month&#39;s plunge. Sales in the Midwest also were strong and rose 10.9% (-8.9% y/y) while sales in the Northeast rose 4.7% (-15.2% y/y). The 6.9% gain in sales down South (-2.3% y/y) recovered nearly all of the declines during the prior two months.
Prices were under pressure as suggested by a 6.5% (-2.2% y/y decline in the median sales price. The average sales price fell 7.1% (-3.6% y/y) suggesting either more price discounting of large homes or greater sales declines of large homes.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E904.HTM">U.S. New Homes</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales (AR, 000&#39;s)</td>
<td>1,213</td>
<td>1,066</td>
<td>-7.2%</td>
<td>1,279</td>
<td>1,200</td>
<td>1,091</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA)</td>
<td>$224,200</td>
<td>$239,900</td>
<td>-2.2%</td>
<td>$234,208</td>
<td>$217,817</td>
<td>$191,383</td>
</tr>
</tbody>
</table>
Mortgage Applications Plummet 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 26, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426e.jpg" width="353">
The total number of mortgage applications dropped 3.7% last week, down hard for the third consecutive period. In April applications are 2.4% below the March average which fell 1.0% from February.
Purchase applications fell another 4.4% w/w and that pulled the April average 0.7% below March which rose 0.2% versus February.
During the last ten years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
Applications to refinance dropped 2.4% and in April are 4.9% below the March average.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426f.jpg" width="353">
The effective interest rate on a conventional 30-year mortgage eased slightly to 6.75% from 6.78% the prior week while the rate on 15-year financing slipped to 6.45%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities and during the last ten years there has been a (negative) 82% correlation between purchase applications and the effective rate on a 30-Year mortgage.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">04/21/06</th>
<th scope="col">04/14/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>548.6</td>
<td>569.6</td>
<td>-23.0%</td>
<td>708.6</td>
<td>735.1</td>
<td>1,067.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>389.4</td>
<td>407.4</td>
<td>-19.2%</td>
<td>470.9</td>
<td>454.5</td>
<td>395.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,489.4</td>
<td>1,526.1</td>
<td>-27.4%</td>
<td>2,092.3</td>
<td>2,366.8</td>
<td>4,981.8</td>
</tr>
</tbody>
</table>
UK GDP: Broader, Steadier Growth in Q1 
by <a href="/comment/Stone.html">Carol Stone</a> April 26, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426g.jpg" width="353">
In the UK, the first major economy to report for Q1, growth maintained a 0.6% quarterly rate, the same as in Q4. However, growth was much more evenly balanced among various sectors, so the gain can be viewed more favorably because it is more broadly based.
Production industries, in particular, turned up after four consecutive quarterly declines, and at 0.7% growth, had their best performance since Q3 1999. All three major sectors, mining (including oil and gas extraction), manufacturing and utilities, participated.
Service industries, in contrast, slowed from their pace in the second half of last year, although their 0.6% growth remained in a range that has characterized the last several years. In Q1, the distribution, lodging and catering industries were flat following a sizable increase in Q4. Transportation and communications increased 0.9% after Q4&#39;s 1.5%; this sector has been somewhat less volatile in recent quarters than the saw-tooth pattern it has generally traced over the past 20 years. The business services and finance sector has been smoothing even more. It grew almost exactly 1.0% in Q1, equal to its six-quarter average increase. So while the latest gain isn&#39;t the largest ever, it is far more likely to be sustained than the pointed ups and downs of the years before 2004.
So the UK experienced growth this past quarter that is steadier and broader than before. This combination, like diversity in an investment portfolio, puts that economy in a better position to withstand adverse developments in the months ahead, such as still higher energy prices or other inflationary stresses. <img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426h.jpg" width="353"><img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060426i.jpg" width="353">

<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/UK/@U2/@U2.HTM">United Kingdom:</a> (Chained, SA, 2002=100)</th>
<th scope="col">Q1 2006</th>
<th scope="col">Q4 2005</th>
<th scope="col">Q3 2005</th>
<th scope="col">Year/ Year</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP*</td>
<td>0.6</td>
<td>0.6</td>
<td>0.5</td>
<td>2.2</td>
<td>1.8</td>
<td>3.1</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Production Industries</td>
<td>0.7</td>
<td>-0.9</td>
<td>-0.7</td>
<td>-1.0</td>
<td>-1.9</td>
<td>0.6</td>
<td>-0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Service Industries</td>
<td>0.6</td>
<td>1.0</td>
<td>0.8</td>
<td>3.0</td>
<td>2.8</td>
<td>3.5</td>
<td>2.7</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425e.jpg" width="353">
Following on yesterday&#39;s reports on business confidence from France and Belgium, two more reports were released today from Germany and the Netherlands. In Germany, the IFO institute&#39;s index rose to 105.9 in April from 105.4 in March. This was the highest level since April, 1991. In terms of the diffusion index, which shows the percent balance of opinion of the respondents, the excess of optimists over pessimists was 11.0%, up from 10.0% in March. Both measures have been rising for the past four months. The consensus had predicted a slight decline for April. Business confidence has also risen in the Netherlands over the past four months and now the excess of optimists over pessimists is 6.1%, the highest since November 2000. The percent balances for Germany and the Netherlands are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425f.jpg" width="353">
In spite of the show of confidence in the current situation, business is beginning to show a little caution regarding the outlook. In Germany the percentage of respondents who expect better conditions six months ahead over those who expect worse condition fell from 13.9% to 13.4%. In the Netherlands the percentage of respondents who expect increased production over the next six months over those who expect lower production fell from 22% to 17% in April. The latter figure is not seasonally adjusted whereas the German figure is.
In addition to the overall measure of the business climate, the IFO also provides measures of the business climate for its component industries--manufacturing, construction, wholesale and retail trade. Also available at a later date are data for the components of the manufacturing industry and a wealth of other detail. Current conditions in manufacturing, construction and wholesale trade all improved in April but the conditions in the retail trade sector deteriorated slightly after a sharp improvement earlier in the year.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425g.jpg" width="353">
Available since May, 2001, are the results of the IFO&#39;s survey of about 2000 firms in the business-oriented segments of the tertiary sector (excluding distribution, financial services, leasing, insurance and government.) This indicator is not yet seasonally adjusted and has not yet been incorporated into the IFO Business Climate Index for industry and trade. In general those engaged in the service sector have had a more positive appraisal of the business climate than those engaged in industry and trade as can be seen in the second chart which compares the diffusion index for the service sector with that for industry and trade.
After September 11, 2001 consumer confidence in the Netherlands fell much more sharply than business confidence and it has yet to reach a point where the optimists outweigh the pessimists, however, the excess of pessimists is diminishing. The third chart compares consumer and business confidence in the Netherlands.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Confidence Measures Percent Balances</th>
<th scope="col">Apr 06</th>
<th scope="col">Mar 06</th>
<th scope="col">Apr 05</th>
<th scope="col">M/M Dif </th>
<th scope="col">Y/Y Dif</th>
<th scope="col">2005</th>
<th scope="col">2004&nbsp;</th>
<th scope="col">2003 &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany: IFO Business Climate Total</td>
<td>11.0</td>
<td>10.0</td>
<td>-14.8</td>
<td>1.0</td>
<td>25.8</td>
<td>-9.8</td>
<td>-9.9</td>
<td>-17.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>20.7</td>
<td>19.2</td>
<td>-4.9</td>
<td>1.5</td>
<td>25.6</td>
<td>1.1</td>
<td>4.4</td>
<td>-7.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Construction</td>
<td>-13.9</td>
<td>-17.6</td>
<td>-37.8</td>
<td>3.7</td>
<td>23.9</td>
<td>-37.2</td>
<td>-42.2</td>
<td>-43.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale Trade</td>
<td>10.7</td>
<td>9.6</td>
<td>-17.4</td>
<td>1.1</td>
<td>28.1</td>
<td>-9.9</td>
<td>-16.6</td>
<td>-25.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Retail Trade</td>
<td>-5.3</td>
<td>-1.8</td>
<td>-31.1</td>
<td>-3.5</td>
<td>25.8</td>
<td>-28.0</td>
<td>-30.8</td>
<td>-22.6</td>
</tr>
<tr>
<td class="firstcol">Service (Not Included in Total)</td>
<td>23.5</td>
<td>21.0</td>
<td>5.5</td>
<td>2.5</td>
<td>18.0</td>
<td>8.1</td>
<td>6.5</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Expectations Total</td>
<td>13.4</td>
<td>13.9</td>
<td>-10.2</td>
<td>-0.5</td>
<td>23.6</td>
<td>-5.2</td>
<td>-2.1</td>
<td>-6.6</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">The Netherlands</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Producers&#39; Confidence</td>
<td>6.1</td>
<td>5.8</td>
<td>-0.1</td>
<td>0.2</td>
<td>6.2</td>
<td>0.6</td>
<td>-0.1</td>
<td>-5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expected Production</td>
<td>17</td>
<td>22</td>
<td>10</td>
<td>-5</td>
<td>7</td>
<td>6</td>
<td>4</td>
<td>1</td>
</tr>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>-6</td>
<td>-10</td>
<td>-16</td>
<td>4</td>
<td>10</td>
<td>-22</td>
<td>-25</td>
<td>-35</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Climate</td>
<td>6</td>
<td>-1</td>
<td>-10</td>
<td>7</td>
<td>16</td>
<td>-23</td>
<td>-32</td>
<td>-56</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Willingness to buy</td>
<td>-14</td>
<td>-15</td>
<td>-20</td>
<td>1</td>
<td>6</td>
<td>-22</td>
<td>-21</td>
<td>-21</td>
</tr>
</tbody>
</table>
</body>
</html>

Following on yesterday's reports on business confidence from France and Belgium, two more reports were released today from Germany and the Netherlands. In Germany, the IFO institute's index rose to 105.9 in April from 105.4 in March. [...]

German and Dutch Business Confidence Continues to Rise: Dutch Consumers Less Negative

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425b.jpg" width="353">
 Total existing home sales rose 0.3% to 6.920M last month following a 5.0% spurt during February that was revised down slightly from the initial figure. The gain reported by the National Association of Realtors contrasted to Consensus expectations for a decline to 6.69M.
Sales of single-family homes rose 0.3% after a 4.5% jump during February that was little revised. 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. 
In the Northeast, sales posted a strong gain for the second consecutive month (6.0% y/y) and rose to a record high level. Sales in the Midwest also rose, but moderately (3.6% y/y), while sales out West fell 2.3% and were 16.2% below the peak last June. Sales in the South also fell for second consecutive month (+2.1% y/y).
The median price of an existing single-family home rose a slight 0.2% following four consecutive months of decline. Past price levels were, however, upwardly revised though at $217,300 the median price still was 5.4% below the August peak. 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">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Home Sales</td>
<td>&nbsp;6,920</td>
<td>6,900</td>
<td>-0.7%</td>
<td>7,064</td>
<td>6,722</td>
<td>6,176</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single Family Home Sales</td>
<td>6,070</td>
<td>6,050</td>
<td>-0.5%</td>
<td>6,170</td>
<td>5,912</td>
<td>5,443</td>
</tr>
<tr class="odd">
<td class="firstcol">Single Family Median Home Price (000) </td>
<td>$217.3 </td>
<td>$216.8 </td>
<td>7.8% </td>
<td>$206.3</td>
<td>$182.8 </td>
<td>$169.1 </td>
</tr>
</tbody>
</table>


</html>

Total existing home sales rose 0.3% to 6.920M last month following a 5.0% spurt during February that was revised down slightly from the initial figure. The gain reported by the National Association of Realtors contrasted to Consensus [...]

U.S. Existing Home Sales Increased Unexpectedly

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425d.jpg" width="353">
The April Index of Consumer Confidence from the Conference Board added 2.0% to the prior month&#39;s upwardly revised 4.7% increase. The increase to 109.6 compared to Consensus expectations for a decline to 106.2 and the latest was the highest since May 2002. The University of Michigan&#39;s preliminary April Index of Consumer Sentiment rose 0.3% (1.7% y/y).
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.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425c.jpg" width="353">
Consumers&#39; assessment of the present situation increased 2.2% and rose for the sixth consecutive month (19.7% y/y). The percentages of respondents who viewed jobs as plentiful (29.1%) and as hard to get (19.6) were at the respective highest and lowest since mid-2003.
The index of consumers&#39; expectations rose another 1.8% (6.0% y/y) as expectations for employment rose but expectations for business conditions and income sagged. Expectations for stock prices rose .
Price inflation expected in twelve months rose to 5.2% from 4.8% expected in February but down sharply from the 6.8% expected last September.
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%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<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">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>109.6</td>
<td>107.5</td>
<td>12.4%</td>
<td>100.3</td>
<td>96.1</td>
<td>79.8</td>
</tr>
</tbody>
</table>
</body>
</html>

The April Index of Consumer Confidence from the Conference Board added 2.0% to the prior month's upwardly revised 4.7% increase. The increase to 109.6 compared to Consensus expectations for a decline to 106.2 and the latest was the [...]

Consumer Confidence Rose To Four Year High

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060425a.jpg" width="353">
Chain store sales slipped just 0.2% last week following two consecutive weeks of strong gain, according to the International Council of Shopping Centers (ICSC)-UBS survey.
Chain store sales in April are 1.4% above the March average which rose 0.7% from February.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The leading indicator of chain store sales was unchanged (-0.4% y/y) after the prior week&#39;s unrevised 0.3% decline. In April, the leading indicator is down 0.4% from the March average which rose 0.3% from February.
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.
Retail gasoline prices surged thirteen cents last week to $2.91 per gallon (30.3% y/y) and lifted the April average to $2.74. Relief from the recent upward pressure may have been in evidence yesterday as spot market gasoline prices fell sharply to $2.18 per gallon from $2.35 on Friday.
The Road to Price Stability from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/pubs/feds/2006/200605/200605pap.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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">04/22/06</th>
<th scope="col">04/15/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>474.6</td>
<td>475.6</td>
<td>4.1%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


</html>

Chain store sales slipped just 0.2% last week following two consecutive weeks of strong gain, according to the International Council of Shopping Centers (ICSC)-UBS survey. Chain store sales in April are 1.4% above the March average [...]

Chain Store Sales Hold The High Ground, Gas Prices Surge Further

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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


Privacy Policy

Disclaimer

Contact us

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250430N1.jpg

250430O1.jpg

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

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

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

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

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

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

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

250430P1.jpg

250430Q1.jpg

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

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

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

250430R1.jpg

250430S1.jpg

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

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

Michael J. Moran

250430A.jpg

250430B.jpg

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

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

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

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

250430C.jpg

250430D.jpg

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

Personal Income, Consumption, and Prices in March

250430F20.jpg

250430G20.jpg

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

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

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

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

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

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

U.S. Pending Home Sales Surge in March

Sandy Batten

250430F5.jpg

250430G5.jpg

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

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

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

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

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

250430H5.jpg

250430I5.jpg

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

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

250430J4.jpg

250430K4.jpg

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

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

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

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

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

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

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

250430L4.jpg

250430M4.jpg

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

Economy in Brief: April 2006

Jump to:

Mortgage Applications Plummet

New Home Sales Surged Unexpectedly

U.S. Durable Goods Orders' Rise = Factory Sector Resilience

U.S. Durable Goods Orders' Rise = Factory Sector Resilience

German and Dutch Business Confidence Continues to Rise: Dutch Consumers Less Negative

U.S. Existing Home Sales Increased Unexpectedly

Consumer Confidence Rose To Four Year High

Chain Store Sales Hold The High Ground, Gas Prices Surge Further