Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429h.jpg" align="left" border="0" height="265" width="353">
The latest ISAE (Institute for Studies and Economic Analysis)
surveys of confidence among entrepreneurs in Italy continue to show
weakness. Even among retailers where confidence has held up fairly
well, it declined 4.0% in April from March but was still only 2.5%
below April 2007. Confidence among manufacturers and miners, which has
been declining for over a year, declined 2.1% in April from March, and
was 11.4% below April 2007. Confidence in the construction industry is
available only through March. In that month confidence in the
construction industry was down 3.7% from February and was 16.4% below
March, 2007. These three confidence indicators are expressed as indexes
with base year 2000 and are shown in the first chart.
The ISAE survey of confidence in the service industries is
expressed in terms of percent balances. In April the excess of
optimists over pessimists in all the service industries increased from
2.7% to 4.0% but in April 2007, the excess of optimists was 44.7%.
Confidence in the personal service sector declined the most (-13 basis
points) from March to April. Confidence in the business sector declined
by 5 basis points and confidence in the financial sector services rose
2 basis points. Trends in confidence in the total, business, personal
and financial sectors of the service industry are shown in the second
and third charts where the steep declines in confidence over the past
year in all areas are apparent.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429i.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429j.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">ITALY
ISAE SURVEYS&nbsp;</th>
<th scope="col">Apr 08</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">Apr 07</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Manufacturing
&amp; Mining (2000=100)</td>
<td>86.9</td>
<td>88.8</td>
<td>98.1</td>
<td>-2.14</td>
<td>-11.42</td>
<td>94.3</td>
<td>95.8</td>
<td>87.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade (2000=100)</td>
<td>106.2</td>
<td>110.6</td>
<td>108.9</td>
<td>-3.98</td>
<td>-2.48</td>
<td>110.2</td>
<td>108.2</td>
<td>101.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Services (%
balance)&nbsp;</td>
<td>4.0</td>
<td>2.7</td>
<td>44.7</td>
<td>1.3</td>
<td>-40.7</td>
<td>27.7</td>
<td>28.9</td>
<td>13.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Personal
Services</td>
<td>2</td>
<td>11</td>
<td>42</td>
<td>-13</td>
<td>-40</td>
<td>25</td>
<td>24</td>
<td>14</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business
Services</td>
<td>8</td>
<td>13</td>
<td>47</td>
<td>-5</td>
<td>-39</td>
<td>30</td>
<td>33</td>
<td>13</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Financial
Services</td>
<td>-14</td>
<td>-16</td>
<td>8.0</td>
<td>2</td>
<td>-22</td>
<td>0</td>
<td>9</td>
<td>12</td>
</tr>
</tbody>
</table>

</body></html>

The latest ISAE (Institute for Studies and Economic Analysis) surveys of confidence among entrepreneurs in Italy continue to show weakness. Even among retailers where confidence has held up fairly well, it declined 4.0% in April from [...]

Italian Business Confidence

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429f.jpg" align="left" border="0" height="265" width="353">
The S&amp;P/Case-Shiller Composite 20
home price index fell 2.7% m/m in February and that followed declines
of similar magnitude during the prior three months. This index of U.S.
home prices has fallen in each month since its peak in July
of 2006 and the decline totals 14.8% during that period. The series
dates back only to 2000.
The index of 20 U.S. cities and their surrounding areas is not
adjusted for the quality or the size of a home. The home price index
from the Office of Federal Housing Enterprise Oversight (OFHEO) does
make these adjustments. This series indicates that during the fourth
quarter of 2007 house prices rose a negligible 0.8% y/y, the weakest
gain since 1990.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429g.jpg" align="right" border="0" height="265" width="353">
The Case-Shiller composite index of homes in 10 metropolitan
areas fell 2.8% (-13.6% y/y) in February. This series dates back to
1987.
Home prices in Las Vegas Nevada were quite weak and fell 22.8%
y/y while prices in Miami were off 21.7%. Home prices also fell a sharp
19.2% y/y in San Diego, where they are off by one quarter from their
2006 peak, and in Los Angeles prices fell 19.4% y/y.
Relatively moderate declines were again registered in New York
(-6.6% y/y), Chicago (-8.5% y/y), Denver (-5.5% y/y), Seattle (-2.7%
y/y) and Dallas (-4.1% y/y).
The latest press release from Standard &amp; Poor's can be
found <a href="http://www2.standardandpoors.com/spf/pdf/index/CS_HomePrice_Release_042952.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>.
The S&amp;P/Case-Shiller home price series can be found in
Haver's REGIONAL database.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (NSA, Jan 00 = 100)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">20 City Composite
Index</td>
<td>175.94</td>
<td>180.75</td>
<td>-12.7%</td>
<td>-3.8%</td>
<td>7.6%</td>
<td>15.8%</td>
</tr>
</tbody>
</table>
</body></html>

The S&P/Case-Shiller Composite 20 home price index fell 2.7% m/m in February and that followed declines of similar magnitude during the prior three months. This index of U.S. home prices has fallen in each month since its peak in July [...]

Case-Shiller Home Price Index Posts 12.7% y/y Decline

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429d.jpg" align="left" border="0" height="265" width="353">
The Conference Board reported that consumer confidence in
April fell 5.5% after a 13.7% m/m decline in March. That March decline
was slightly less than indicated initially and the April drop about
matched Consensus expectations.
The present conditions index led the April decline with a
10.9% m/m drop to the lowest level since late 2003. By region the index
is off most notably in the Pacific, mid-Atlantic, the South Atlantic,
and in the New England states.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429e.jpg" align="right" border="0" height="265" width="353">
Just 15.3% of respondents saw business conditions as good, the
lowest since 2003. Jobs as plentiful were seen by a much lessened 16.6%
while 27.9% saw jobs as hard to get, the highest since late 2004.
The expectations component of the index ticked up all of 1.4%
after two months of double digit decline. The percentage of respondents
expecting better business conditions and more jobs rose slightly while
expectations for an increase in income fell. Expectations for the
inflation rate surged again to 6.8%, the highest level since 2005.
Respondents planning to buy a household appliance rose
slightly but remained well off the early 2007 highs. Plan to but a new
automobile rose slightly m/m but also remained well off earlier highs.
Consumer Confidence Surveys: Can They Help Us
Forecast Consumer Spending in Real Time? is a 2006 article
from the Federal Reserve Bank of Philadelphia. It answers "no" and it
is available <a href="http://www.philadelphiafed.org/files/br/br_q3-2006-1_consumer_confidence.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">Conference
Board &nbsp;(SA, 1985=100)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y %</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>62.3</td>
<td>65.9</td>
<td>-41.4</td>
<td>103.4</td>
<td>105.9</td>
<td>100.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>80.7</td>
<td>90.6</td>
<td>-34.6</td>
<td>128.8</td>
<td>130.2</td>
<td>116.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>50.1</td>
<td>49.4</td>
<td>-43.2</td>
<td>86.4</td>
<td>89.7</td>
<td>89.7</td>
</tr>
</tbody>
</table>
</body></html>

The Conference Board reported that consumer confidence in April fell 5.5% after a 13.7% m/m decline in March. That March decline was slightly less than indicated initially and the April drop about matched Consensus expectations. The [...]

Consumer Confidence Fell in April, As Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429a.jpg" width="353">
The International Council of Shopping Centers reported, in its ICSC-UBS Chain Store survey, that sales recovered 0.9% last week after the prior period&#39;s 0.7% slip.
So far in April, sales have risen 1.0% from March after sales were about unchanged during that month.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
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.
During the latest week the leading indicator of chain store sales from ICSC-UBS slipped 0.1% (-2.1% y/y) after the 0.6% decline during the prior week.
The chain store sales figures are available in Haver&#39;s SURVEYW database.

<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">04/26/08</th>
<th scope="col">04/19/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>496.3</td>
<td>491.8</td>
<td>1.9%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


</html>

The International Council of Shopping Centers reported, in its ICSC-UBS Chain Store survey, that sales recovered 0.9% last week after the prior period's 0.7% slip.

U.S. Chain Store Sales Recovered Last Week

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429b.jpg" width="353">
The retail price for a gallon of regular gasoline rose another ten cents last week to $3.60 per gallon, according to the U.S. Department of Energy survey.Prices have now risen 55 cents (18.0%) since the end of last year.
Spot market prices for gasoline may have reached a plateau this week. Yesterday&#39;s wholesale price for a gallon of non-oxygenated gasoline was $2.92 per gallon, equal to last week&#39;s average.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080429c.jpg" width="353">
At $118.75, yesterday&#39;s price for a barrel of WTI crude oil also was near last week&#39;s average of $119.21/bbl.
Natural gas prices, however, continued to surge. A jump yesterday in the wholesale price of natural gas to $11.04 per mmbtu followed last week&#39;s surge to an average $10.49/mmbtu.
Weekly gasoline prices can be found in Haver&#39;s WEEKLY database, daily prices are found in the DAILY database.
Oil and the U.S. Macro economy: An Update and a Simple Forecasting Exercise is a working paper from the Federal Reserve Bank of St. Louis and it is available <a href="http://research.stlouisfed.org/wp/2008/2008-009.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">04/28/08</th>
<th scope="col">04/21/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Gasoline ($ per Gallon)</td>
<td>3.60</td>
<td>3.51</td>
<td>21.3%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>119.21</td>
<td>114.41</td>
<td>82.9%</td>
<td>94.00</td>
<td>61.11</td>
<td>58.16</td>
</tr>
</tbody>
</table>


</html>

The retail price for a gallon of regular gasoline rose another ten cents last week to $3.60 per gallon, according to the U.S. Department of Energy survey.Prices have now risen 55 cents (18.0%) since the end of last year. Spot market [...]

U.S. Gasoline Prices Rose Another Dime to $3.60 per Gallon

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080428f.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s Business confidence index is in the bottom 30 percent
of its range since 1999. Orders
are in about the bottom 25th percentile of their
range. Orders for consumer goods are in the bottom 15 percentile of
their range. Investment goods continue to be the strongest of the
sectors and consumer goods in the weakest sector. The last period in
which the business index fell more sharply was in 2001. The index was
last lower in early 2005. Production is extremely weak for consumer
goods and weak for investment goods. Investment goods production is in
the 40th percent of range while consumer goods
are in the 11th percentile of their range.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Italy ISAE
Business Sentiment </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Since January 1999</td>
</tr>
<tr class="even">
<td class="f7irstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Percentile</td>
<td>Rank</td>
</tr>
<tr class="odd">
<td class="firstcol">Biz Confidence</td>
<td>86.9</td>
<td>88.8</td>
<td>89.5</td>
<td>91.1</td>
<td>30.4</td>
<td>84</td>
</tr>
<tr>
<td class="firstcol" colspan="7">TOTAL
INDUSTRY</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="7">Order
books &amp;
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-19</td>
<td>-16</td>
<td>-13</td>
<td>-8</td>
<td>23.8</td>
<td>78</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic</td>
<td>-20</td>
<td>-16</td>
<td>-16</td>
<td>-15</td>
<td>26.2</td>
<td>78</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-20</td>
<td>-17</td>
<td>-17</td>
<td>-11</td>
<td>29.5</td>
<td>62</td>
</tr>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>5</td>
<td>3</td>
<td>5</td>
<td>5</td>
<td>66.7</td>
<td>51</td>
</tr>
<tr class="odd">
<td class="firstcol">Production</td>
<td>-14</td>
<td>-11</td>
<td>-13</td>
<td>-12</td>
<td>26.5</td>
<td>81</td>
</tr>
<tr>
<td class="firstcol" colspan="7">INTERMEDIATE</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="7">Order
books &amp;
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-18</td>
<td>-17</td>
<td>-14</td>
<td>-13</td>
<td>32.7</td>
<td>70</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic</td>
<td>-19</td>
<td>-16</td>
<td>-14</td>
<td>-17</td>
<td>34.0</td>
<td>68</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-17</td>
<td>-19</td>
<td>-21</td>
<td>-13</td>
<td>40.7</td>
<td>60</td>
</tr>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>6</td>
<td>4</td>
<td>4</td>
<td>3</td>
<td>72.4</td>
<td>15</td>
</tr>
<tr class="odd">
<td class="firstcol">Production</td>
<td>-13</td>
<td>-13</td>
<td>-13</td>
<td>-14</td>
<td>31.0</td>
<td>62</td>
</tr>
<tr>
<td class="firstcol" colspan="7">INVESTMENT
GOODS</td>

</tr>
<tr class="odd">
<td class="firstcol" colspan="7">Order
books &amp;
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-13</td>
<td>1</td>
<td>-4</td>
<td>1</td>
<td>38.4</td>
<td>59</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic</td>
<td>-18</td>
<td>-6</td>
<td>-8</td>
<td>-5</td>
<td>36.8</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-14</td>
<td>0</td>
<td>-8</td>
<td>-1</td>
<td>33.9</td>
<td>60</td>
</tr>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>6</td>
<td>0</td>
<td>6</td>
<td>4</td>
<td>62.2</td>
<td>34</td>
</tr>
<tr class="odd">
<td class="firstcol">Production</td>
<td>-4</td>
<td>3</td>
<td>-4</td>
<td>-1</td>
<td>40.9</td>
<td>45</td>
</tr>
<tr>
<td class="firstcol" colspan="7">CONSUMER
GOODS</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="7">Order
books &amp;
Demand</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-23</td>
<td>-22</td>
<td>-23</td>
<td>-18</td>
<td>13.6</td>
<td>92</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic</td>
<td>-23</td>
<td>-23</td>
<td>-24</td>
<td>-21</td>
<td>13.9</td>
<td>88</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-26</td>
<td>-20</td>
<td>-18</td>
<td>-24</td>
<td>19.1</td>
<td>89</td>
</tr>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>3</td>
<td>3</td>
<td>6</td>
<td>6</td>
<td>53.8</td>
<td>66</td>
</tr>
<tr class="odd">
<td class="firstcol">Production</td>
<td>-21</td>
<td>-18</td>
<td>-20</td>
<td>-17</td>
<td>11.1</td>
<td>96</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Total number
of months: 118</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s Business confidence index is in the bottom 30 percent of its range since 1999. Orders are in about the bottom 25th percentile of their range. Orders for consumer goods are in the bottom 15 percentile of their range. Investment [...]

Italy's Biz Confidence Continues to Sink

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080428a.jpg" align="left" border="0" height="265" width="353">
The French service sector climate indicator is down sharply in
the current month form 104 to 102 after being as high as 109 in January
to start the year. Service sector sentiment has been steadily eroding.
The climate indicator is in the 63 percentile of its range. The gauge
of employment expected in the next three months is lower in the 58th
percentile of its range. 
 

The slip in the service sector is both steady and widespread.
France is coming off a period when the service climate has been in the
top 94th percentile of its range. But conditions in France have been
deteriorating rapidly. Morale and activity gauges from other large EMU
economies have been off peak. France itself is succumbing to these
adverse pressures. French Finance Minister Christine Lagarde said
Sunday that the Federal Reserve has a policy of very low interest rates
and the ECB has kept interest rates elevated and that the differential
in rates between the two is a little too big at the moment. This
continues a policy of being obliquely critical of the tight ECB
interest rate policy. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="11" scope="col"> France INSEE Services Survey Jan 2000-date</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Climate Indicator</td>
<td>102</td>
<td>104</td>
<td>106</td>
<td>109</td>
<td>63.3</td>
<td>51</td>
<td>113</td>
<td>83</td>
<td>30</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 3-Mos MAV</td>
<td>104</td>
<td>106</td>
<td>108</td>
<td>109</td>
<td>68.7</td>
<td>48</td>
<td>113</td>
<td>85</td>
<td>28</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 12-Mos MAV</td>
<td>109</td>
<td>110</td>
<td>110</td>
<td>110</td>
<td>94.1</td>
<td>10</td>
<td>110</td>
<td>91</td>
<td>20</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>-3</td>
<td>-1</td>
<td>-1</td>
<td>2</td>
<td>61.3</td>
<td>55</td>
<td>9</td>
<td>-22</td>
<td>31</td>
<td>-1</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales</td>
</tr>
<tr>
<td class="firstcol">Observed 3-Mos</td>
<td>9</td>
<td>17</td>
<td>13</td>
<td>13</td>
<td>69.0</td>
<td>28</td>
<td>18</td>
<td>-11</td>
<td>29</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Expected 3-Mos</td>
<td>9</td>
<td>5</td>
<td>10</td>
<td>14</td>
<td>70.4</td>
<td>36</td>
<td>17</td>
<td>-10</td>
<td>27</td>
<td>7</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales Price</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>5</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>75.0</td>
<td>2</td>
<td>8</td>
<td>-4</td>
<td>12</td>
<td>0</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>2</td>
<td>1</td>
<td>0</td>
<td>0</td>
<td>70.0</td>
<td>10</td>
<td>5</td>
<td>-5</td>
<td>10</td>
<td>0</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Employment</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>11</td>
<td>17</td>
<td>17</td>
<td>7</td>
<td>78.6</td>
<td>9</td>
<td>17</td>
<td>-11</td>
<td>28</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>9</td>
<td>12</td>
<td>19</td>
<td>14</td>
<td>58.3</td>
<td>17</td>
<td>19</td>
<td>-5</td>
<td>24</td>
<td>5</td>
</tr>
</tbody>
</table>
</body></html>

The French service sector climate indicator is down sharply in the current month form 104 to 102 after being as high as 109 in January to start the year. Service sector sentiment has been steadily eroding. The climate indicator is in [...]

French Service Sector Outlook and Climate Gauges Slip

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: April 2008

Jump to:

Italian Business Confidence

Case-Shiller Home Price Index Posts 12.7% y/y Decline

Consumer Confidence Fell in April, As Expected

U.S. Chain Store Sales Recovered Last Week

U.S. Gasoline Prices Rose Another Dime to $3.60 per Gallon

Case-Shiller Home Price Index Posts 12.7% y/y Decline

Italy's Biz Confidence Continues to Sink

French Service Sector Outlook and Climate Gauges Slip