Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 
 
 <a href="/comment/130828a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130828a.png"></a>
 <a href="/comment/130828b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130828b.png"></a>
 
 The Mortgage Bankers Association reported that the recent increase in mortgage interest rates
 gained momentum last week. The 14 basis point w/w increase was the
 largest in two months. Moreover, the effective
 interest rate on a 15-year mortgage of 3.93% was the highest level since
 July 2011. That compared to the early-May low of 2.89%. The effective rate
 on a 30-year fixed rate loan also increased sharply last week to 4.92%
 while the rate on a Jumbo 30-year loan rose to 4.88%. The effective
 interest rate on an adjustable 5-year mortgage rose further w/w to 3.64%,
 up from its low of 2.59% at the beginning of May.
 
 Accompanying the rise in financing rates was a 2.5% decline (-44.1%
 y/y) last week in the Mortgage Bankers' Total Mortgage Market Index.
 Applications to refinance an existing loan declined another 5.4%
 (-56.9% y/y) and were down by two-thirds from the September peak. Home purchase
 mortgage applications moved 2.4% higher (5.3% y/y) but they've fallen 14.1%
 since the early-May peak.
 
 Applications for fixed interest rate loans fell by 45.9% y/y while
 adjustable rate loan applications were off 5.4% y/y. The average mortgage
 loan size was $213,00. The average size loan for home purchases was $253,300
 last week while for refinancings it was $186,300.
 
 The survey covers over 75 percent of all U.S. retail residential
 mortgage applications, and has been conducted weekly since 1990.&nbsp;
 Respondents include mortgage bankers, commercial banks and thrifts.&nbsp;
 Base period and value for all indexes is March 16, 1990=100. The figures
 for weekly mortgage applications and interest rates are available in
 Haver's SURVEYW database.&nbsp;
 
 <a href="/comment/130828c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130828c.png"></a>
 <a href="/comment/130828d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130828d.png"></a>
 
 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
 <thead>
 <tr>
 <th class="firstcol" scope="col" >MBA Mortgage
 Applications (SA, 3/16/90=100)</th>
 <th scope="col" >08/23/13</th>
 <th scope="col" >08/16/13</th>
 <th scope="col" >08/09/13</th>
 <th scope="col" >Y/Y%</th>
 <th scope="col" >2012</th>
 <th scope="col" >2011</th>
 <th scope="col" >2010</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Total Market Index</td>
 <td >439.2</td>
 <td >450.4</td>
 <td >471.9</td>
 <td >-44.1</td>
 <td >813.8</td>
 <td >572.3</td>
 <td >659.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Purchase</td>
 <td >189.4</td>
 <td >184.9</td>
 <td >182.7</td>
 <td >5.3</td>
 <td >187.8</td>
 <td >182.6</td>
 <td >199.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Refinancing</td>
 <td >1,871.8</td>
 <td >1,979.6</td>
 <td >2,145.3</td>
 <td >-56.9</td>
 <td >4,505.0</td>
 <td >2,858.4</td>
 <td >3,348.1</td>
 </tr>
 <tr>
 <td class="firstcol" >15-Year Mortgage Effective Interest
 Rate (%)</td>
 <td >3.93</td>
 <td >3.79</td>
 <td >3.69</td>
 <td >3.22 
 (8/12)</td>
 <td >3.25</td>
 <td >3.97</td>
 <td >4.39</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Mortgage Bankers Association reported that the recent increase in mortgage interest rates gained momentum last week. The 14 basis point w/w increase was the largest in two months. Moreover, the effective interest rate on a 15-year [...]

U.S. Mortgage Interest Rates Reach Two-Year High

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 
 
 <a href="/comment/130827j_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827j.png"></a>
 <a href="/comment/130827k_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827k.png"></a>
 
 The Conference Board's Consumer Confidence Index ticked up to 81.5 this
 month from an upwardly revised 81.0 during July, last month reported as
 80.3. The level of the confidence index peaked at 82.1 in
 June. Consensus expectations were for a slip to 79.0. During the last ten
 years, there has been a 47% correlation between the level of confidence
 and the three-month change in real PCE.
 
 Holding back the overall level of confidence was a decline in
 consumers' assessment of the present economic situation. This index fell
 to 70.7 from its cycle-high of 73.6. A lessened 18.4% of respondents
 viewed business conditions as good. Also, an increased 55.6% believed that
 jobs were not plentiful. That's somewhat surprising since just 33.0%
 thought that jobs were hard to get, the least since October 2008. 
 
 The expectations component of confidence rose to
 88.7 and made up a piece of its July decline. It remained down, however,
 from the June peak of 91.1. Expectations for business conditions held
 steady month-to-month, but remained greatly improved versus the January
 low. The sense of employment prospects improved slightly yet remained
 below the June high. Expectations for the inflation rate in twelve months
 were roughly steady m/m at 5.5%, down from the 6.7% high in 2011.
 Expectations for higher interest rates in twelve months slipped to 67.9%
 of respondents. That followed last month's surge to the highest level
 since July 2006. The percentage expecting higher stock prices recovered
 moderately after last month's sharp decline.
 
 The consumer confidence index for those under 35 years backpedaled from
 its July high. Confidence amongst middle-aged individuals reached a new
 cycle high, while confidence amongst individuals over 55 years fell
 backward following two months of increase.
 
 The Consumer Confidence data is available in Haver's CBDB&nbsp;database.
 
 <a href="/comment/130827l_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827l.png"></a>
 <a href="/comment/130827m_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827m.png"></a>
 
 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
 <thead>
 <tr>
 <th class="firstcol" scope="col" >Conference Board (SA,
 1985=100)</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Jul</th>
 <th scope="col" >Jun</th>
 <th scope="col" >Y/Y %</th>
 <th scope="col" >2012</th>
 <th scope="col" >2011</th>
 <th scope="col" >2010</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Consumer Confidence Index</td>
 <td >81.5</td>
 <td >81.0</td>
 <td >82.1</td>
 <td >33.0</td>
 <td >67.1</td>
 <td >58.1</td>
 <td >54.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Present Situation</td>
 <td >70.7</td>
 <td >73.6</td>
 <td >68.7</td>
 <td >52.0</td>
 <td >49.8</td>
 <td >36.1</td>
 <td >25.7</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Expectations</td>
 <td >88.7</td>
 <td >86.0</td>
 <td >91.1</td>
 <td >24.8</td>
 <td >78.6</td>
 <td >72.8</td>
 <td >73.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Consumer Confidence By Age Group</td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Under 35 Years</td>
 <td >101.5</td>
 <td >106.0</td>
 <td >101.1</td>
 <td >29.8</td>
 <td >86.5</td>
 <td >77.3</td>
 <td >70.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Aged 35-54 Years</td>
 <td >88.4</td>
 <td >80.5</td>
 <td >84.6</td>
 <td >32.5</td>
 <td >68.5</td>
 <td >59.8</td>
 <td >55.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Over 55 Years</td>
 <td >66.7</td>
 <td >68.2</td>
 <td >70.5</td>
 <td >40.7</td>
 <td >56.6</td>
 <td >47.3</td>
 <td >47.4</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Conference Board's Consumer Confidence Index ticked up to 81.5 this month from an upwardly revised 81.0 during July, last month reported as 80.3. The level of the confidence index peaked at 82.1 in June. Consensus expectations [...]

U.S. Consumer Confidence Ticks Up M/M

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>

	 
 
 
 
 

 
<a href="/comment/130827i_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827i.png" align="left"></a>
The Ifo index continues to rise in August. The all-sector climate index is up to 7.6 in August from 5.0 in July. At that point it stands in the top 20% of its historic queue (80.5 percentile). These queue standings place the current reading in its percentile position of its ordered queue of data from November 1991 to date. Note that queue percentile positions are quite different from range percentile standings (% range). The queue measure uses all historic values to position the current reading. The range percentile places the current value between its historic highs and lows and therefore uses only three values in its formulation. If there is an outlier - high or low - the range reading might not be representative. Since the queue reading is based on all data it is representative. 

Manufacturing improved sharply to 11.1 from 7.9. Its queue standing, despite its relatively higher net reading, is relatively lower than for the all-sector climate index as it stands only at at the border of the top one third of its historic queue, at the 66th percentile.

Construction is the sector that has weakened the most in August. It's fallen from a -1.5 reading in July to a -4.2 reading in August. However, when measured against its own history, this negative reading emerges as a relatively strong reading. Even the -4.2 reading stands the top six percentile of the construction sector's historic queue. You can see this in the table as the construction sector's average score is -27.4.

Wholesaling, a sector that includes international trade, improved very sharply in August to a +7.7 net reading from a -0.2 mark in July. At that standing, wholesaling is in the top 18 percentile of its historic queue. 

Retailing has slipped in August. Its reading has fallen to 2.6 from 3.0. Even so, this is a relatively strong reading for retailing whose period average is -14.4. At its August level retailing stands in the top portion of its 88th percentile.

While we think the right way to filter these current diffusion values from the Ifo is to measure them relative to their historic past, it's clear that retailing is hardly the driving force for improvement of the index in Germany. Despite the setback this month in retailing, its 2.6 reading is the highest since July 2012 apart from the higher number that was produced last month. And even the July 2012 figure appears to been aberrant as it emerged after a 0.4 reading and then submerged itself with a -5.0 reading the very next month. The last really strong string of German retail responses ran from July of 2010 to July 2011. 

Despite the fact that the German economy is doing better, there is little evidence that it's doing better in a way that's going to benefit the other countries of the euro-Zone. It will benefit the aggregate measures of euro-Zone activity because of the weight that the German economy has in the various euro-Zone statistics. But that's quite different from generating economic activity that spreads to boost activity in other countries that occupy the Zone. That step still appears to be missing. Although retailing has improved smartly in the last two months compared to a long previous string of data, those readings are still well below levels that could be construed as providing locomotive effects for the rest of the European Monetary Union

The standing for current conditions in the German economy moved up very sharply to 12.5 in August from 8.9 in July; at that level it sits in the 80th percentile of its historic queue. However, expectations which did improve to +2.9 from +1.1 show a relatively more modest, sitting at the 69th percentile of their historic range (just short of the top 30%). In Germany, as current conditions have improved, expectations continue to linger at lower levels reflecting some degree of suspicion about the permanence of the current improvement.

Both current conditions and expectations readings have been waffling. Current conditions were generally much stronger from July 2010 to August 2012. Since then the current condition index has dipped and has been trying to reestablish itself for the entirety of 2013.

Business expectations are relatively solid from March 2010 through June 2011. Thereafter, there came some erratic slippage, a number of negative values, some switch back into the positive followed by another string of negatives. Currently, business expectations are positive for three months in a row following two months of declines, two months of increases before that, and preceded by a nine month string of negative readings. So, is Germany finally out of the woods? Are three 'plus' values conclusive evidence?

The positive expectations readings are encouraging. However, they are still too-low to be viewed with any kind of enthusiasm. The relative standing of German expectations compared to the relative standing of German assessments of current conditions strongly suggest that this is exactly how the Germans view the situation themselves. They view the current conditions as "pretty good," but assess the future with a good deal more skepticism. However, that skepticism has come with bit more optimism as we are coming off of three straight months of positive readings...

Our theme is perhaps a bit different from some others. It is not that Germany is going to lead the European Union to the promised-land. Rather it's that the European Union cannot begin to approach the promised-land until most of the Union is on board with solid growth. Germany must play a role but not simply by growing more. Germany must take a role in altering the Union's structure to encourage more growth. This will involve some check-book diplomacy. Germany does not have an economy designed to drag the rest of Europe into its growth orbit. The German economy is essentially a loner. It's an economy that's driven by export-led growth. It's an economy that actually feasts on increases in the domestic demand of its neighbors because of its extreme competitiveness. As such, it's actually the improvement in the surrounding countries, as well as in countries well-outside of the European Monetary Union, that can help to drive the German economy. For these reasons it may well be that the improvement in Germany is some indication that conditions are improving within the the rest of the European Union to some extent. However, there are still many things in the Union that need to be fixed; to be put on a more solid footing before it can be sure of growth- sustainable growth. For that reason we continue to remain somewhat skeptical about European progress and we share with Germans their uneasy assessment about the future; part of that is the uncertainty about the role that the Germans themselves are prepared to play. That probably will not emerge until after the mid-September German elections.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827.png" width="700" height="614"></html>

The Ifo index continues to rise in August. The all-sector climate index is up to 7.6 in August from 5.0 in July. At that point it stands in the top 20% of its historic queue (80.5 percentile). These queue standings place the current [...]

German Ifo Index Advances as Expectations Lag

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 
 
 <a href="/comment/130827e_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827e.png"></a>
 <a href="/comment/130827f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827f.png"></a>
 
 The price for a gallon of regular gasoline was unchanged last
 week at $3.55 last week (-5.9% y/y). Prices remained down from the $3.78
 per gallon peak reached late in February. Haver Analytics constructs
 seasonal factors to account for seasonal volatility. The adjusted price
 also was stable w/w at $3.46 per gallon and remained below the February
 peak of $3.94.
 
 Light sweet crude oil prices slipped to $105.47 per barrel (+9.3%
 y/y). Yesterday, prices edged up to $105.92. Prices have jumped from the
 June 2012 low of $80.29. Brent crude oil prices rose slightly last week to
 $111.13 per barrel (-3.8% y/y) yet they remained down from the February
 high of $118.09.
 
 Natural gas prices ticked higher to $3.50 per mmbtu (25.0% y/y)
 and were $3.55 yesterday, down from the April peak of $4.26.
 
 The demand for gasoline rose 2.0% y/y last week. Residual
 fuel oil needs, used for heating, fell 26.8% y/y but distillate demand
 increased 2.8% y/y. Gasoline inventories increased 7.7% y/y.
 
 The energy price data are reported by the U.S. Department of Energy and
 can be found in Haver's WEEKLY database. The daily figures are in DAILY
 and the gasoline demand figures are in OILWKLY.
 
 <a href="/comment/130827g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827g.png"></a>
 <a href="/comment/130827h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827h.png"></a>
 
 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
 <thead>
 <tr>
 <th class="firstcol" scope="col" >Weekly Energy Prices</th>
 <th scope="col" >08/26/13</th>
 <th scope="col" >08/19/13</th>
 <th scope="col" >08/12/13</th>
 <th scope="col" >Y/Y%</th>
 <th scope="col" >2012</th>
 <th scope="col" >2011</th>
 <th scope="col" >2010</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Retail Gasoline ($ per Gallon,
 Regular)</td>
 <td >3.55</td>
 <td >3.55</td>
 <td >3.56</td>
 <td >-5.9</td>
 <td >3.62</td>
 <td >3.52</td>
 <td >2.78</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Light Sweet Crude Oil, WTI ($ per
 bbl.)</td>
 <td >105.47</td>
 <td >106.97</td>
 <td >105.15</td>
 <td >9.3</td>
 <td >94.20</td>
 <td >95.14</td>
 <td >79.51</td>
 </tr>
 <tr>
 <td class="firstcol" >Natural Gas ($/mmbtu, LA)</td>
 <td >3.50</td>
 <td >3.35</td>
 <td >3.32</td>
 <td >26.0</td>
 <td >2.75</td>
 <td >3.99</td>
 <td >4.00</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The price for a gallon of regular gasoline was unchanged last week at $3.55 last week (-5.9% y/y). Prices remained down from the $3.78 per gallon peak reached late in February. Haver Analytics constructs seasonal factors to account [...]

U.S. Gasoline Prices Remain Unchanged

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 
 
 <a href="/comment/130827a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827a.png"></a>
 <a href="/comment/130827b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827b.png"></a>

 Home price inflation eased further in June. The seasonally adjusted
 Case-Shiller 20 City Home Price Index rose 0.9% (12.1% y/y) on a
 seasonally adjusted basis after a 1.0% May gain. It was the third
 consecutive month of lessened increase following the 1.9% March jump. The
 result was to drop the 3-month annualized rate of increase to 15.3% from
 its record 20.2% recorded in March. Home prices in the narrower 10 city
 group rose 1.1% in June (11.9% y/y). Not adjusted for normal seasonal
 variation, the Case-Shiller Home Price Index rose 2.2% in June after a 2.5%
 May increase.
 The lessened monthly gain in the composite price index reflected
 price declines in five major metropolitan areas including Detroit,
 Minneapolis, Boston, Washington, D.C. and Cleveland. Lessened monthly
 gains were logged in most other cities with the exceptions of Los Angeles,
 Portland and Tampa.
 The Case-Shiller home price series is value-weighted, i.e., a greater
 index weight is assigned to more expensive homes. It is a three-month
 moving average and is calculated using the &quot;repeat sales
 method,&quot; where the item measured is the price change for a specific
 house compared to the price for that same house the last time it sold. The
 nation-wide S&amp;P/Case-Shiller home price indexes can be found in
 Haver's USECON database, and the city data highlighted below are in
 the REGIONAL database.
 
 <a href="/comment/130827c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827c.png"></a>
 <a href="/comment/130827d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130827d.png"></a>
 
 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
 <thead>
 <tr>
 <th class="firstcol" scope="col" >S&amp;P Case-Shiller
 Home Price Index (SA, %)</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Apr</th>
 <th scope="col" >Jun 
 Y/Y</th>
 <th scope="col" >2012</th>
 <th scope="col" >2011</th>
 <th scope="col" >2010</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >20 City Composite Index</td>
 <td >0.9</td>
 <td >1.0</td>
 <td >1.7</td>
 <td >12.1</td>
 <td >0.9</td>
 <td >-3.9</td>
 <td >1.3</td>
 </tr>
 <tr class="grey2">
 <td class="firstcol" >Regional Indicators</td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 <td ></td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Las Vegas</td>
 <td >2.2</td>
 <td >2.6</td>
 <td >2.4</td>
 <td >24.9</td>
 <td >-0.3</td>
 <td >-6.5</td>
 <td >-7.7</td>
 </tr>
 <tr>
 <td class="firstcol" >San Francisco</td>
 <td >1.9</td>
 <td >2.0</td>
 <td >2.7</td>
 <td >24.5</td>
 <td >3.5</td>
 <td >-4.9</td>
 <td >9.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Los Angeles</td>
 <td >1.6</td>
 <td >1.4</td>
 <td >2.8</td>
 <td >19.9</td>
 <td >0.7</td>
 <td >-3.4</td>
 <td >5.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Phoenix</td>
 <td >0.9</td>
 <td >1.1</td>
 <td >1.3</td>
 <td >19.8</td>
 <td >13.9</td>
 <td >-7.3</td>
 <td >-0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >San Diego</td>
 <td >2.2</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >19.3</td>
 <td >1.2</td>
 <td >-4.4</td>
 <td >7.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Atlanta</td>
 <td >1.0</td>
 <td >1.1</td>
 <td >1.9</td>
 <td >19.0</td>
 <td >-7.8</td>
 <td >-7.0</td>
 <td >-2.4</td>
 </tr>
 <tr>
 <td class="firstcol" >Detroit</td>
 <td >-1.4</td>
 <td >2.4</td>
 <td >1.7</td>
 <td >16.4</td>
 <td >8.0</td>
 <td >0.0</td>
 <td >-3.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Miami</td>
 <td >1.3</td>
 <td >1.6</td>
 <td >2.5</td>
 <td >14.8</td>
 <td >5.1</td>
 <td >-4.9</td>
 <td >-2.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Portland</td>
 <td >1.1</td>
 <td >0.6</td>
 <td >1.4</td>
 <td >11.8</td>
 <td >1.7</td>
 <td >-7.1</td>
 <td >-3.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Seattle</td>
 <td >0.9</td>
 <td >1.4</td>
 <td >1.2</td>
 <td >11.8</td>
 <td >2.1</td>
 <td >-6.6</td>
 <td >-3.6</td>
 </tr>
 <tr>
 <td class="firstcol" >Minneapolis</td>
 <td >-1.1</td>
 <td >-0.4</td>
 <td >3.0</td>
 <td >11.5</td>
 <td >6.0</td>
 <td >-8.2</td>
 <td >3.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Tampa</td>
 <td >0.8</td>
 <td >0.7</td>
 <td >0.8</td>
 <td >11.1</td>
 <td >2.7</td>
 <td >-6.6</td>
 <td >-4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >Denver</td>
 <td >0.3</td>
 <td >0.6</td>
 <td >0.6</td>
 <td >9.4</td>
 <td >4.5</td>
 <td >-2.1</td>
 <td >0.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Dallas</td>
 <td >0.4</td>
 <td >0.6</td>
 <td >0.9</td>
 <td >8.0</td>
 <td >3.2</td>
 <td >-2.4</td>
 <td >0.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Chicago</td>
 <td >0.3</td>
 <td >1.5</td>
 <td >1.6</td>
 <td >7.3</td>
 <td >-2.8</td>
 <td >-6.8</td>
 <td >-3.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Boston</td>
 <td >-0.2</td>
 <td >0.2</td>
 <td >1.3</td>
 <td >6.7</td>
 <td >0.5</td>
 <td >-2.0</td>
 <td >1.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Washington, D.C.</td>
 <td >-0.2</td>
 <td >0.4</td>
 <td >0.9</td>
 <td >5.7</td>
 <td >2.1</td>
 <td >-0.4</td>
 <td >4.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Cleveland</td>
 <td >-0.1</td>
 <td >-0.3</td>
 <td >0.0</td>
 <td >3.5</td>
 <td >-0.1</td>
 <td >-4.3</td>
 <td >0.7</td>
 </tr>
 <tr>
 <td class="firstcol" >New York</td>
 <td >0.5</td>
 <td >0.6</td>
 <td >0.9</td>
 <td >3.3</td>
 <td >-2.4</td>
 <td >-3.1</td>
 <td >-1.5</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Home price inflation eased further in June. The seasonally adjusted Case-Shiller 20 City Home Price Index rose 0.9% (12.1% y/y) on a seasonally adjusted basis after a 1.0% May gain. It was the third consecutive month of lessened [...]

U.S. Case-Shiller Home Price Index Increase Eases Again

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>

	 
 
 
 
 
 
<a href="/comment/130826e_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826e.png" align="left"></a>
While everyone is getting warm and fuzzy about the improvement in growth and in growth prospects for the European Monetary Union, the Union continues to face important issues. One issue is that growth is uneven, as we have seen. The Union overall is posting a rise in GDP while a number of important members continue to be mired in recession; along with that there are persisting differences in the evolution of inflation.

In looking at the recent history and problems in this monetary union, we can argue about whether the real problem has been fiscal differences or differences in regional inflation. While they may be related, they are not the same thing. 

With countries in the periphery still suffering weak growth, their distress is not altogether bottling up inflation. Spain's overall PPI is growing at an 8.3% annual rate over three months compared to Germany where the index is declining at a 0.3% annual rate over three months. Year-over-year Spain's inflation is not so different up by 0.9% compared to Germany at 0.6%.

The biggest inflation divergence is in the table- fortunately - are among the Zone's single currency members those countries that are not in the single currency framework but are members of the economic union. Year-over-year the UK has a 4.5% inflation rate while Sweden is at a -2.7% inflation rate in the overall PPI.

Looking at single currency members only, that would be Germany, Spain, Portugal, Austria, Denmark and Finland, we see that over six months PPI prices are falling everywhere except in Portugal where inflation is flat at zero. However, turning to three-months, there's a difference with only Germany and Finland showing continuing price declines while Spain is posting and 8.3% annual rate of increase, Austria a 4.9% rate, and Portugal at a 2.3% rate of increase along with Denmark.

Of course, the European central bank prefers to look at inflation through the lens of the CPI, and the harmonized index of consumer prices. But inflation pressures at the producer or the wholesale level can eventually become a problem at the consumer level. And, of course, one of the things that inflation divergence tells us is that the economic union is not very well integrated and spells a problem for policy no matter what it looks at since indicator divergence (be it inflation or growth) says that there is no single gauge or group of countries it can or should look at to set policy. 

If the economic union were well-integrated, inflation divergence could not and would not persist. Prosperity would come to regions that had lower inflation (output costs), that would bring an increase in output, a migration of labor and eventually cause some increase in prices there. Meanwhile, high inflation areas (high cost areas) would become less prosperous, would cut back on output, would lose labor and prices would recede. In a truly integrated monetary union profitability, sector prices, and output prices would be determined in a single framework -- not in multiple local arenas -- with persisting differences. There would always be some regional differences, but essentially those differences would be bounded by economic competition and arbitrage. The point is that in the European Union these forces really don't exist in any strong fashion. Because of this failing, the European Union needs to do other things to try to create unity in its region-wide markets. Having adopted some harmonization rules, while a laudable exercise, is not enough.

We're going to continue to monitor inflation differences in producer prices and consumer prices in all different ways because we think that these are evidence of regional disparities that once again lead to regional problems. We still think that the best way to analyze the euro-Zone is by looking at its constituent members rather than the overall index of pooled data. The problem with pooled data is those data have weights that emphasize an economy's size. That means that Germany is going to get a tremendous weight when looking at what's going on in the euro-Zone as a single unit. However, the point that has been made time and time again is that the euro-Zone is running nothing that is anything like an optimal currency area. Anyone trying to prove that it is, gives off the unmistakable sounds of someone trying to smash a square peg through a round hole. 

The euro-Zone is first and foremost a political union that has a number of odd bedfellows thrown in together for the sake of political stability. Therefore the euro-Zone is a mismatched economic zone and that creates political tensions. Since it ultimately is a political animal we have to be aware of incipient political tensions that are going to be caused by the lack of economic suitability among the countries have been pulled together in the single zone with a single currency and a single monetary policy. The question is whether these countries can come to the necessary political accommodations given their unsuited economic circumstances. That means we have to continue to look at the divergence within the Zone in order to understand it and to assess its progress and viability. That means that looking at overall euro-Zone data will lead to an important loss of information. We recommend looking at the euro-trees instead of the euro-forest.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826.png" width="768" height="614"></html>

While everyone is getting warm and fuzzy about the improvement in growth and in growth prospects for the European Monetary Union, the Union continues to face important issues. One issue is that growth is uneven, as we have seen. The [...]

Inflation Trend-Differences Hamper Policy in EMU

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 
 <a href="/comment/130826a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826a.png"></a>
 <a href="/comment/130826b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826b.png"></a>
 
 New orders for durable goods slumped 7.3% last month (-0.3% y/y)
 following a downwardly revised 3.9% increase during June, earlier reported
 as a 4.2% advance. The decline compared to consensus expectations for a
 3.7% drop. Fewer orders for transportation equipment led the decline with
 a 19.4% slump (-11.8% y/y). Aircraft orders dropped 44.3% (-32.0% y/y)
 held back by a 52.3% shortfall (-39.9% y/y) in nondefense bookings. Motor
 vehicle parts orders offset some of this decline with a 0.5% gain
 (5.4% y/y). 
 Outside of the transportation sector, orders growth has moderated. Orders
 less transportation slipped 0.6% (+5.9% y/y) following a 0.1% June uptick.
 Electrical equipment orders declined 4.3% (+4.3% y/y) after an unchanged
 in June while computers &amp; electronic products fell 3.6% (-0.7% y/y)
 following a 0.8% June decline. Orders for computers &amp; related products
 fell 19.9% (-22.7% y/y). Machinery orders were unchanged (+13.0% y/y) as
 were orders for primary metals (4.1% y/y). The 15.4% decline (-3.4% y/y)
 in nondefense capital goods orders reflected the drop in aircraft. A 3.3%
 shortfall (8.4% y/y) in orders elsewhere was the first drop in five
 months. 
 Shipments of durable goods slipped 0.3% (+2.1% y/y), the third
 shortfall in the last four months. Transportation shipments slipped 0.1%
 (+5.6% y/y). Shipments excluding transportation were off 0.4% (+0.7% y/y)
 led by a 3.2% drop (-9.2% y/y) in computers &amp; electronic products.
 Shipments of nondefense capital goods fell 1.4% (+1.2% y/y), the third
 decline in the last four months, while excluding aircraft orders were off
 1.5% (+0.8% y/y).
 Inventories of durable goods rose 0.4% (2.5% y/y), the first meaningful
 increase since February. Excluding transportation inventories rose 0.2%
 but were unchanged y/y. Unfilled orders for durable goods gained 0.4%
 (4.3% y/y). Excluding transportation backlogs gained 0.9% (2.3% y/y) and
 have firmed following a decline during all of last year.
 The durable goods figures are available in Haver's USECON database.
 The Action Economics consensus forecast figure is in the AS1REPNA
 database. 
 
 
 <a href="/comment/130826c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826c.png"></a>
 <a href="/comment/130826d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/130826d.png"></a>
 
 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
	
 <thead>
 <tr>
 <th class="firstcol" scope="col" >Durable Goods NAICS
 Classification</th>
 <th>Jul</th>
 <th>Jun</th>
 <th>May</th>
 <th>Y/Y</th>
 <th>2012</th>
 <th>2011</th>
 <th>2010</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >New Orders</td>
 <td >-7.3</td>
 <td >3.9</td>
 <td >5.5</td>
 <td >-0.3</td>
 <td >4.1</td>
 <td >11.0</td>
 <td >23.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Transportation</td>
 <td >-19.4</td>
 <td >11.7</td>
 <td >15.1</td>
 <td >-11.8</td>
 <td >8.9</td>
 <td >14.9</td>
 <td >49.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Total Excluding Transportation</td>
 <td >-0.6</td>
 <td >0.1</td>
 <td >1.3</td>
 <td >5.9</td>
 <td >2.1</td>
 <td >9.5</td>
 <td >15.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Nondefense Capital
 Goods</td>
 <td >-15.4</td>
 <td >7.1</td>
 <td >12.8</td>
 <td >-3.4</td>
 <td >3.7</td>
 <td >15.3</td>
 <td >27.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Excluding
 Aircraft</td>
 <td >-3.3</td>
 <td >1.3</td>
 <td >2.1</td>
 <td >8.4</td>
 <td >2.1</td>
 <td >11.6</td>
 <td >12.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Shipments</td>
 <td >-0.3</td>
 <td >-0.1</td>
 <td >1.3</td>
 <td >2.1</td>
 <td >6.4</td>
 <td >9.4</td>
 <td >11.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Inventories</td>
 <td >0.4</td>
 <td >0.2</td>
 <td >-0.1</td>
 <td >2.5</td>
 <td >4.5</td>
 <td >10.8</td>
 <td >9.4</td>
 </tr>
 <tr>
 <td class="firstcol" >Unfilled Orders</td>
 <td >0.4</td>
 <td >2.1</td>
 <td >1.2</td>
 <td >4.3</td>
 <td >3.7</td>
 <td >10.0</td>
 <td >5.2</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

New orders for durable goods slumped 7.3% last month (-0.3% y/y) following a downwardly revised 3.9% increase during June, earlier reported as a 4.2% advance. The decline compared to consensus expectations for a 3.7% drop. Fewer [...]

U.S. Durable Goods Orders Decline Sharply; Orders Excluding Transportation Slip

<html>

<head>
<meta http-equiv="Content-Type" content="text/html; charset=windows-1252">
<meta name="GENERATOR" content="Microsoft FrontPage 4.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title>U</title>
</head>



<div id="content">
 </div>
 <div id="entire" class="col">
 </div>
 <div id="rightside">
 </div>
 
 
 Strength in the housing market continues to exhibit itself in
 rising selling prices. The U.S. House Price Index from the Federal
 Housing and Finance Agency (FHFA) rose 0.7% during May following a
 0.5% April rise. The 7.3% y/y rate of increase was double the gain
 during all of last year. During the last three months prices have
 risen at a firmer 11.2% annual rate.
 Home price appreciation was broad-based in the U.S. It continued
 to be greatest in the Pacific (15.8% y/y) and Mountain (12.7% y/y)
 states. Lesser gains were logged across the country with prices in
 the East South Central region up the least (2.7% y/y).
 The FHFA house price index is a weighted repeat sales index. It
 measures average price changes in repeat sales or refinancings on
 the same properties. It is based on transactions involving
 conforming, conventional mortgages purchased or securitized by
 Fannie Mae or Freddie Mac. Only mortgage transactions on single
 family properties are included. The FHFA data is available in
 Haver's USECON database.&nbsp;
 <table class="centered" border="0" cellSpacing="0" width="1231">
 <thead>
 <tr>
 <th class="firstcol" width="745">FHFA U.S. House Price Index
 Purchase Only (SA %)</th>
 <th scope="col" width="68">May</th>
 <th scope="col" width="69">Apr</th>
 <th scope="col" width="69">Mar</th>
 <th scope="col" width="69">Y/Y</th>
 <th scope="col" width="69">2012</th>
 <th scope="col" width="69">2011</th>
 <th scope="col" width="69">2010</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="745">Total</td>
 <td align="center" width="68">0.7</td>
 <td align="center" width="69">0.5</td>
 <td align="center" width="69">1.5</td>
 <td align="center" width="69">7.3</td>
 <td align="center" width="69">3.5</td>
 <td align="center" width="69">-4.1</td>
 <td align="center" width="69">-2.9</td>
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; Pacific</td>
 <td align="center" width="68">0.8</td>
 <td align="center" width="69">1.8</td>
 <td align="center" width="69">2.4</td>
 <td align="center" width="69">15.8</td>
 <td align="center" width="69">4.9</td>
 <td align="center" width="69">-7.0</td>
 <td align="center" width="69">-2.2</td>
 
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; Mountain</td>
 <td align="center" width="68">-0.1</td>
 <td align="center" width="69">1.9</td>
 <td align="center" width="69">1.3</td>
 <td align="center" width="69">12.7</td>
 <td align="center" width="69">8.2</td>
 <td align="center" width="69">-6.9</td>
 <td align="center" width="69">-6.5</td>
 
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; South Atlantic</td>
 <td align="center" width="68">1.8</td>
 <td align="center" width="69">-0.6</td>
 <td align="center" width="69">1.3</td>
 <td align="center" width="69">8.0</td>
 <td align="center" width="69">4.1</td>
 <td align="center" width="69">-5.2</td>
 <td align="center" width="69">-4.8</td>
 
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; West South Central</td>
 <td align="center" width="68">0.9</td>
 <td align="center" width="69">0.1</td>
 <td align="center" width="69">0.3</td>
 <td align="center" width="69">6.1</td>
 <td align="center" width="69">4.3</td>
 <td align="center" width="69">-1.1</td>
 <td align="center" width="69">-0.3</td>
 
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; East North Central</td>
 <td align="center" width="68">0.5</td>
 <td align="center" width="69">0.7</td>
 <td align="center" width="69">1.8</td>
 <td align="center" width="69">4.7</td>
 <td align="center" width="69">2.2</td>
 <td align="center" width="69">-3.7</td>
 <td align="center" width="69">-3.2</td>
 
 </tr>
 <tr>
 
 <td class="firstcol" width="745">&nbsp; West North Central</td>
 <td align="center" width="68">-0.0</td>
 <td align="center" width="69">0.2</td>
 <td align="center" width="69">1.1</td>
 <td align="center" width="69">4.4</td>
 <td align="center" width="69">3.5</td>
 <td align="center" width="69">-3.3</td>
 <td align="center" width="69">-2.0</td>
 
 </tr>
 <tr class="odd">
 <td class="firstcol" width="745">&nbsp; New England</td>
 <td align="center" width="68">0.8</td>
 <td align="center" width="69">0.1</td>
 <td align="center" width="69">1.3</td>
 <td align="center" width="69">3.9</td>
 <td align="center" width="69">-0.1</td>
 <td align="center" width="69">-2.2</td>
 <td align="center" width="69">-2.3</td>
 </tr>
 <tr>
 <td class="firstcol" width="745">&nbsp; Middle Atlantic</td>
 <td align="center" width="68">0.9</td>
 <td align="center" width="69">0.4</td>
 <td align="center" width="69">1.5</td>
 <td align="center" width="69">3.3</td>
 <td align="center" width="69">-0.0</td>
 <td align="center" width="69">-3.2</td>
 <td align="center" width="69">-1.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="745">&nbsp; East South Central</td>
 <td align="center" width="68">-1.5</td>
 <td align="center" width="69">0.8</td>
 <td align="center" width="69">1.8</td>
 <td align="center" width="69">2.7</td>
 <td align="center" width="69">2.6</td>
 <td align="center" width="69">-2.6</td>
 <td align="center" width="69">-2.8</td>
 </tr>
 </tbody>
 </table>
 
 
 
 <td> 
 New England: Maine, New Hampshire, Vermont,
 Massachusetts, Rhode Island and Connecticut 
 Middle Atlantic: New York, New Jersey &amp;
 Pennsylvania. 
 East North Central: Michigan, Wisconsin, Illinois,
 Indiana and Ohio. 
 West North Central: North Dakota, South Dakota,
 Minnesota, Nebraska, Iowa, Kansas and Missouri. 
 South Atlantic: Delaware, Maryland, District of
 Columbia, Virginia, West Virginia, North Carolina, South
 Carolina, Georgia and Florida. 
 East South Central: Kentucky, Tennessee, Mississippi
 and Alabama. 
 West South Central: Oklahoma, Arkansas, Texas and
 Louisiana. 
 Mountain: Montana, Idaho, Wyoming, Nevada, Utah,
 Colorado, Arizona and New Mexico. 
 Pacific: Hawaii, Alaska, Washington, Oregon and
 California. 
 </td>
 &nbsp;
 
 
 
 &nbsp;
 
 
 




</html>

Strength in the housing market continues to exhibit itself in rising selling prices. The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) rose 0.7% during May following a 0.5% April rise. The 7.3% y/y rate of [...]

FHFA Home Price Index Builds Upward Momentum

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: August 2013

Jump to: