Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030825b.jpg" width="353">
Both the Netherlands and Belgium reported slight increases in business confidence, however, the levels of confidence remain at historically low levels. In the Netherlands, the balance of of opinion among producers in manufacturing rose 0.4 percentage points from a minus 7.4% to a minus 7.0%. In Belgium the rise in industry opinion as reported in the BNB (Banque Nationale de Belgique) survey was 3.8 percentage points from minus 16% in July to minus 12.2% in August.. Consumer confidence also increased. In the Netherlands, consumer confidence after having declined in July to its lowest level since the survey began in 1986, rose 6 percentage points in August, recovering to the levels prevailing in the first half of the year. In Belgium, consumer confidence has held up better than in the Netherlands, but remains relatively weak. It rose 2 percentage points from minus 13% in July to minus 11% in August

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Measures of Confidence</th>
<th scope="col"></th>
<th scope="col"></th>
<th scope="col"></th>
% Change
<th scope="col"></th>
<th scope="col"></th>
<th scope="col"></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;(Percent Balance)</td>
<td>Aug 03</td>
<td>July 03</td>
<td>Aug 02</td>
<td>M/M</td>
<td>Y/Y</td>
<td>2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr>
<td class="firstcol">Business</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Netherlands</td>
<td>-7.0</td>
<td>-7.4</td>
<td>1.3</td>
<td>0.4</td>
<td>-8.3</td>
<td>-1.6</td>
<td>-1.1</td>
<td>6.8</td>
</tr>
<tr>
<td class="firstcol">Belgium</td>
<td>-12.2</td>
<td>-16</td>
<td>-6.3</td>
<td>3.8</td>
<td>-5.6</td>
<td>-7.9</td>
<td>-9.4</td>
<td>4.2</td>
</tr>
<tr class="odd">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Netherlands</td>
<td>-34</td>
<td>-40</td>
<td>-28</td>
<td>6</td>
<td>-6</td>
<td>-20</td>
<td>-1</td>
<td>24</td>
</tr>
<tr>
<td class="firstcol">Belgium</td>
<td>-11</td>
<td>-13</td>
<td>-3</td>
<td>2</td>
<td>-8</td>
<td>-2</td>
<td>-0</td>
<td>13</td>
</tr>
</tbody>
</table>
</body>
</html>

Both the Netherlands and Belgium reported slight increases in business confidence, however, the levels of confidence remain at historically low levels. In the Netherlands, the balance of of opinion among producers in manufacturing [...]

Measures of Business and Consumer Confidence Rise in Belgium and the Netherlands but Remain Low

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030825a.jpg" width="353">
Sales of existing single family homes surged to a record high of 6.12M last month and beat Consensus expectations for sales of 5.90M. July sales jumped 5.0%, the largest m/m increase since January 2002, and were up 13.8% y/y. Sales in past months were unrevised.
The figures reflect closings of past home sales.
The Realtors&#39; Association chief economist David Lereah indicated that &quot;When mortgage interest rates first began to rise from record lows, it appears some buyers jumped into the market to take advantage of good affordability conditions before interest rates moved even higher.&quot;
Sales rose in each of the country&#39;s regions. In the Northeast sales jumped 7.7% m/m (11.1% y/y) and in the South sales rose 7.0% (14.4% y/y). More moderate gains were logged in the West, up 1.9% (14.8% y/y), and in the Midwest where sales rose 3.9% (12.6% y/y).
The median price of an existing home surged to $182,100 (+12.1% y/y).
The latest release from the National Association of Realtors is available <a href="http://www.realtor.org/publicaffairsweb.nsf/pages/JulyEHS03?OpenDocument">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;6,120</td>
<td>&nbsp;5,830</td>
<td>13.8%</td>
<td>5,595</td>
<td>5,292</td>
<td>5,158</td>
</tr>
</tbody>
</table>
</body>
</html>

Sales of existing single family homes surged to a record high of 6.12M last month and beat Consensus expectations for sales of 5.90M. July sales jumped 5.0%, the largest m/m increase since January 2002, and were up 13.8% y/y. Sales in [...]

Existing Home Sales Surged

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030822b.jpg" width="353">
Similar to a number of other nations, growth in South Korea has diminished in early 2003. And similar to other countries, exports are at least partially to blame. Total GDP (in 1995 won) for the second quarter was up just 1.9% from a year ago, more notably including outright quarter-to-quarter declines in the two latest periods. Second quarter exports were down 0.9% from the first, breaking a string of six quarters of gains, some running at 5%-6% quarterly rates, which began as the US recession was ending in late 2001. For Korea, the slowing in export volume is no small matter: in that nation, exports constitute 57% of real GDP and they are larger than private consumption.
Other segments of the Korean economy also weakened, most especially investment in equipment and consumption expenditures. These latter were down in both the first two quarters of 2003, contributing, along with the slowdown in exports, to the two-quarter decline in total GDP.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GDP &amp; Selected Components (% Changes)</th>
<th scope="col">2nd Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">1st Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">Year/Year</th>
4th Qtr/4th Qtr
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr>
<td class="firstcol">Total GDP</td>
<td>-0.7</td>
<td>-0.4</td>
<td>1.9</td>
<td>6.8</td>
<td>3.5</td>
<td>5.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Private Consumption</td>
<td>-1.4</td>
<td>-2.2</td>
<td>-2.2</td>
<td>4.3</td>
<td>7.2</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol">Gross Fixed Capital Formation</td>
<td>-1.7</td>
<td>1.9</td>
<td>3.5</td>
<td>6.8</td>
<td>4.9</td>
<td>2.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>-0.9</td>
<td>0.2</td>
<td>10.3</td>
<td>24.2</td>
<td>-1.9</td>
<td>14.3</td>
</tr>
</tbody>
</table>
</body>
</html>

Similar to a number of other nations, growth in South Korea has diminished in early 2003. And similar to other countries, exports are at least partially to blame. Total GDP (in 1995 won) for the second quarter was up just 1.9% from a [...]

Korean Economy Weakening

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030822a.jpg" width="353">
The Weekly Leading Index of the US economy published by the Economic Cycle Research Institute (ECRI) slipped the week of August 8th, but the 0.8% w/w decline did little to dent the strong series uptrend in place since the middle of March. During that period the leading index has risen roughly 8%.
The uptrend has raised the six-month growth rate of the weekly index to 13.2%, the highest growth rate since 1983.
Higher stock prices, lower claims for jobless insurance and higher commodity prices figure large in the leader&#39;s uptrend.
During the last five years there has been a 59% correlation between growth in the leading index and next quarter&#39;s growth in real GDP.
Construction of the ECRI Leading Index differs from the Index of Leading Economic Indicators published by the Conference Board. Nevertheless there has been a 77% correlation between the y/y percent change in the two series over the last 20 years.
The components of the ECRI weekly leading index are money supply plus stock &amp; bond mutual funds, the JOC-ECRI industrial materials price index, mortgage applications, bond quality spreads, stock prices, bond yields, and initial jobless insurance claims.
The median lead of the ECRI index at business cycle peaks has been 10.5 months and at cycle troughs 3.0 months. The sideways movement of the leading index in 2002 may or may not signal something about the economy&#39;s growth rate.
For more on ECRI and the Weekly Leading Index go to <a href="http://businesscycle.com">businesscycle.com</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/weekly/@W8/@W801/@W801.HTM">ECRI Leading Index</a></th>
<th scope="col">8/08/03</th>
<th scope="col">8/01/03</th>
<th scope="col">Growth Rate</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Weekly</td>
<td>127.5</td>
<td>128.5</td>
<td>13.2%</td>
<td>1.2%</td>
<td>-5.3%</td>
<td>-0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>July</td>
<td>June</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Monthly</td>
<td>127.2</td>
<td>124.7</td>
<td>10.8%</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

The Weekly Leading Index of the US economy published by the Economic Cycle Research Institute (ECRI) slipped the week of August 8th, but the 0.8% w/w decline did little to dent the strong series uptrend in place since the middle of [...]

ECRI Weekly Leading Indicators Slip, Uptrend Strong

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030821b.jpg" width="353">
The German Federal Statistics Office reported the details of second quarter GDP Thursday. As highlighted in the preliminary release a week ago, adverse developments in exports exerted a major drag on growth. They fell 2.3% following a 0.3% decrease in the first quarter, and stood 1.5% below a year ago. Consumption was virtually flat for the latest quarter, while fixed investment was mixed. Equipment outlays declined slightly, but expenditures on construction projects and other fixed assets turned higher. Nonetheless, three quarters have now passed since GDP in Germany has shown any increase, and commentators are starting to say the country&#146;s economy has fallen back into recession. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GDP &amp; Selected Components (% Changes)</th>
<th scope="col">2nd Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">1st Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">Year/Year</th>
4th Qtr/4th Qtr
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr>
<td class="firstcol">Total GDP</td>
<td>-0.1</td>
<td>-0.2</td>
<td>-0.6</td>
<td>0.5</td>
<td>0.5</td>
<td>1.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Consumption</td>
<td>0.0</td>
<td>0.5</td>
<td>0.8</td>
<td>-0.6</td>
<td>1.3</td>
<td>1.1</td>
</tr>
<tr>
<td class="firstcol">Gross Fixed Capital Formation</td>
<td>.2</td>
<td>-1.2</td>
<td>-2.4</td>
<td>-5.1</td>
<td>-6.0</td>
<td>2.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>-2.3</td>
<td>-0.3</td>
<td>-1.5</td>
<td>5.4</td>
<td>0.1</td>
<td>15.8</td>
</tr>
</tbody>
</table>
U.K. Industry, Consumer Demand Show Firming Tendencies 
by <a href="/comment/Stone.html">Carol Stone</a> August 21, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030821c.jpg" width="353">
The UK seems to be managing some hesitant improvement. The August Industrial Trends Survey conducted by the Confederation of British Industry (CBI) remains in negative territory, with its order book reading at -24. But that recovered from July&#146;s -37 and achieved the best reading since November of last year. This could well be due to growing retail demand. Retail sales over the three months to July showed a fourth month of decent trend growth after a pause during the winter. These sales decreased 0.4% on a month-to-month basis, but that followed a sizable 2.0% increase in June. The more commonly followed three-month moving average maintained a 0.4% pace, similar to the prior three months.
At the same time, the UK too is suffering a drag from exports, as those orders in the CBI survey for August remained at July&#146;s -32 level, similar to the showings of several recent months. The pound has weakened against the euro, which would ordinarily suggest gains in UK exports. But possibly the slowing impact on the UK&#146;s biggest trading partners of the very strong euro has pulled down their demand curve for UK products at any exchange rate.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">U.K.</th>
<th scope="col">August 2003 </th>
<th scope="col"> July 2003 </th>
<th scope="col">August 2002</th>
 Annual Average
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"> 2002 </td>
<td> 2001 </td>
<td> 2000 </td>
</tr>
<tr>
<td class="firstcol">CBI Survey (% Balance)</td>
<td>-24</td>
<td>-37</td>
<td>-24</td>
<td>-27</td>
<td>-26</td>
<td>-15</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Sales Volume (3-Mo % Change)</td>
<td>4.7 (Annual Rate)</td>
<td>9.0 (Annual Rate)</td>
<td>4.4 (Y/Y)</td>
<td>5.4</td>
<td>5.9</td>
<td>4.5</td>
</tr>
</tbody>
</table>
</body>
</html>

The German Federal Statistics Office reported the details of second quarter GDP Thursday. As highlighted in the preliminary release a week ago, adverse developments in exports exerted a major drag on growth. They fell 2.3% following a [...]

German GDP Detail Confirms Export Drag

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030821a.jpg" width="353">
Initial claims for unemployment insurance fell to 386,000 but the prior week&#39;s level was revised up slightly to 403,000. Consensus expectations had been for claims of 395,000.
The Labor Department indicated that last week&#39;s power outage had &quot;minimal&quot; effects on the figures.
The latest initial claims figure was for the survey week for August payrolls. Claims were down 29,000 (7.0%) from the July survey period.
The four-week moving average of initial claims fell just slightly to 394,250 (+1.1% y/y).
Continuing claims for unemployment insurance rose 41,000 (1.1%) w/w. The prior week&#39;s level was revised lower. Continuing claims have risen in three of the last four weeks.
The insured rate of unemployment was stable at 2.9%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">8/16/03</th>
<th scope="col">8/09/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>386.0</td>
<td>403.0</td>
<td>-2.5%</td>
<td>404.3</td>
<td>406.0</td>
<td>299.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,673</td>
<td>4.5%</td>
<td>3,575</td>
<td>3,022</td>
<td>2,114</td>
</tr>
</tbody>
</table>
Leading Indicators Rose Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 21, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030821d.jpg" width="353">
The Conference Board reported that the Composite Index of Leading Economic Indicators rose for the fourth consecutive month in July. The 0.4% gain was as expected but the prior month&#39;s increase was revised up to 0.3% from 0.1% reported last month.
Gains amongst the leaders&#39; component series fell to 50% but the diffusion of the prior month&#39;s gain was revised up to 70% from 55%. The percentage of leading components rising over a six month period rose to 60%, the highest level in a year.
A steeper yield curve had the largest positive influence on theJuly leading index. That added to significant positive contributions from a higher money supply and lower claims for unemployment insurance. The largest negative influences came from shorter weekly hours worked, lower building permits and lower consumer expectations.
The Leading index is based on eight previously reported economic data series and two that are estimated.
The coincident indicators rose but just slightly for the second month in three.
The ratio of coincident-to-lagging indicators was unchanged at a record high level. The ratio is an indicator of excess relative to actual economic performance.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world.

<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/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Leading</td>
<td>0.4%</td>
<td>0.3%</td>
<td>1.4%</td>
<td>2.1%</td>
<td>-0.9%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.1%</td>
<td>0.0%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-0.4%</td>
<td>3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.1%</td>
<td>-0.8%</td>
<td>-2.4%</td>
<td>-4.4%</td>
<td>-1.3%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
Philadelphia Fed Index Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 21, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030821e.jpg" width="353">
The Philadelphia Fed&#146;s August index of general business conditions rose quite a bit more than expected to the highest level since June 1998. The rise to 22.1 from 8.3 in July was versus Consensus expectations for a reading of 10.0.
August was the third consecutive positive reading for the general business conditions index following three months negative.
Gains amongst the sub indexes were broad based except that the employment index retraced virtually all of the prior month&#39;s improvement and returned to negative territory. New orders &amp; shipments were strong and inventories continued to rise for the third consecutive month.
During the last twenty years there has been a 67% correlation between the level of the Philadelphia Fed Business Conditions Index and quarterly growth in real GDP. The correlation with quarterly growth in factory sector industrial production has been 77%.
The business conditions index reflects a separate survey question, not the sub indexes.
A separate survey of expected business conditions in six months rose to 62.0, the highest reading since June 1992.
The prices paid index surged to 16.0, the highest level since April.
The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.phil.frb.org/files/bos/bos0803.html">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/SURVEYS/@S5/@S504/@S504.HTM">Philadelphia Fed Business Outlook</a></th>
<th scope="col">Aug</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>22.1</td>
<td>8.3</td>
<td>-0.3</td>
<td>7.7</td>
<td>-17.2</td>
<td>8.3</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>16.0</td>
<td>-6.5</td>
<td>22.1</td>
<td>12.2</td>
<td>-0.9</td>
<td>27.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance fell to 386,000 but the prior week's level was revised up slightly to 403,000. Consensus expectations had been for claims of 395,000. The Labor Department indicated that last week's power [...]

Initial Claims for Jobless Insurance Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030820d.jpg" width="353">
French GDP decreased in the second quarter, dragged down by weakness in business capital spending and exports. Household consumption also declined. Only government consumption and investment showed any notable gains. This sluggish overall result for the quarter cut the year-on-year performance to virtually zero, the first non-positive outcome since the end of 1993.
Forecasters had anticipated a flat result on the quarter, so this number undercut expectations. As in Germany, the weakness in exports suggests that the strong euro is at least partly to blame. In turn, foreign exchange markets have already begun to reflect the associated growth slowdown in Europe; the euro had fallen more than 6% by August 19 to $1.1117 from an early June peak of $1.1870.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GDP &amp; Selected Components (% Changes)</th>
<th scope="col">2nd Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">1st Quarter 2003 &nbsp;(Q/Q)</th>
<th scope="col">Year/Year</th>
4th Qtr/4th Qtr
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr>
<td class="firstcol">Total GDP</td>
<td>-0.3</td>
<td>0.2</td>
<td>0.0</td>
<td>1.4</td>
<td>0.7</td>
<td>3.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Household Consumption</td>
<td>-0.2</td>
<td>0.5</td>
<td>1.1</td>
<td>1.5</td>
<td>2.6</td>
<td>2.2</td>
</tr>
<tr>
<td class="firstcol">Gross Fixed Capital Formation: &nbsp; Nonfinancial Companies</td>
<td>-0.6</td>
<td>0.0</td>
<td>-3.2</td>
<td>9.5</td>
<td>-0.7</td>
<td>-4.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>-0.6</td>
<td>-1.8</td>
<td>-2.6</td>
<td>3.8</td>
<td>-4.8</td>
<td>13.9</td>
</tr>
</tbody>
</table>
</body>
</html>

French GDP decreased in the second quarter, dragged down by weakness in business capital spending and exports. Household consumption also declined. Only government consumption and investment showed any notable gains. This sluggish [...]

French Economy Declines Unexpectedly in Second Quarter

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030820b.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association fell another 10.7% last week following the 16.1% drop the week prior. Since the peak in late May mortgage applications are down by almost two-thirds.
Purchase applications have weakened. Last week mortgage applications for home purchase fell 4.9% and that added to a 10.3% decline the week prior. Since the peak in late May purchase applications have fallen 15.4%.
During the last ten years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance continued to plummet. They fell 14.9% last week and by nearly one third in just the last two weeks. Refinancings were down 72.4% from the peak in late May.
Interest rates on a conventional 30-Year mortgage moved back up, rising 24 basis points w/w to 6.52%. That was versus a low for 30-Year financing of 5.31% in the second week of June. The effective rate on a 15-year mortgage rose to 5.91%, up 29 basis points w/w.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders.
For the August Senior Loan Officer Survey on Bank Lending Practices from the Federal Reserve Board, click <a href="http://www.federalreserve.gov/boarddocs/snloansurvey/200308/default.htm">here</a>.
Visit the Mortgage Bankers Association site at <a href="http://www.mbaa.org/">www.mbaa.org.</a>

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">8/15/03</th>
<th scope="col">8/08/03</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>736.7</td>
<td>824.6</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>389.5</td>
<td>409.6</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,756.8</td>
<td>3,238.4</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>
U.S. Budget Deficit Deepened in July 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 20, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/030820a.jpg" width="353">
The U.S. Government budget deficit deepened last month to $54.2B. That was versus of deficit of $29.2B in July &#39;02. The deficit was slightly deeper than most analysts had expected.
The Federal government&#39;s deficit totaled $320.4B through the first ten months of this fiscal year. That is versus a deficit of $145.5B through the first ten months of FY2002.
Net receipts for the first ten months of FY03 fell 3.9% versus last year. Individual tax payments fell 6.9% and corporate income taxes were down 14.8%. Social insurance contributions rose 1.7% and excise taxes also rose just slightly. 
Federal net expenditures rose 7.1% versus last fiscal year&#39;s first ten months. Defense spending surged 15.9% to 18.4% of the Federal budget. Spending on health programs was strong as well, up 11.3%, and spending on education surged 17.0% to 3.8% of the budget. Spending on income security rose 8.1% to 16.0% of the Federal budget and Medicare outlays rose 8.3% to 11.5% of the budget. Social Security outlays rose 4.1% to 21.9% of the budget. Interest expense fell 10.0% y/y.
For a report titled &quot;Understanding State Budget Troubles&quot; from the Federal Reserve Bank of San Francisco click <a href="http://www.frbsf.org/publications/economics/letter/2003/el2003-23.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">June &#39;02</th>
<th scope="col">FY2002</th>
<th scope="col">FY2001</th>
<th scope="col">FY2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$-54.2B</td>
<td>$21.2B</td>
<td>$-29.2B</td>
<td>$-157.8B</td>
<td>$127.3B</td>
<td>$236.4B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revenues</td>
<td>$123.6B</td>
<td>$193.1B</td>
<td>-8.1%</td>
<td>-6.9%</td>
<td>-1.7%</td>
<td>10.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>$177.8B</td>
<td>$171.8B</td>
<td>8.7%</td>
<td>7.9%</td>
<td>4.2%</td>
<td>5.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

The index of mortgage applications compiled by the Mortgage Bankers Association fell another 10.7% last week following the 16.1% drop the week prior. Since the peak in late May mortgage applications are down by almost two-thirds. [...]

Mortgage Applications Down

Blue Chip forecasters expect US to lead aggressive policy rate cuts over coming year—apart from Japan

Ratio of job openings to the number unemployed in the US now below pre-pandemic level

U.S. layoffs not showing as much cooling in labor markets as unemployment rate

While goods prices have moderated, service price inflation remains elevated and sticky

Since Jan 2023, BCEI US outlook has improved, worsened for Japan and the euro area

Persistent negative US economic surprises leading to big rate-cut expectations

Germany is Euro area weakling

Flash PMIs show good start to Q3 in US; loss of momentum in the euro area

Chinese economy on downtrend could threaten global economy

Working age population labor force participation near all-time high as retirements increase

Blue Chip forecasters look for widespread policy rate cuts just ahead

Flash June PMIs point to a widespread slowdown apart from the US

Announcement of snap French election is causing concern across Europe

The UK economy’s post-pandemic under-performance relative to its pre-pandemic trend

US Beveridge Curve back to near pre-pandemic levels

Negative economic surprises in the US but positive in Europe, especially the UK

Latest PMIs show US losing momentum while RoW is gaining momentum

Sticky services prices behind sticky overall PCE inflation

Flash April PMIs point to slower growth in the US but a pickup in Europe and Japan

Outlook strengthens for US while it weakens for other major economies

Crude petroleum prices are having a big impact on inflation expectations

Inflation surprising to upside in the US; by contrast to the downside in the euro area

 Gross Domestic Income is catching up with GDP

FOMC expects GDP growth above trend over the next three years

US core CPI inflation has begun to reaccelerate

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

240910T5.jpg

240910U5.jpg

The NFIB Small Business Optimism Index declined to 91.2 during August after rising to 93.7 in July, according to the Small Business Economic Trends survey conducted by the National Federation of Independent Business. The index held steady y/y but has improved from a March low of 88.5. Eight of the 10 index components declined last month. The NFIB Small Business Uncertainty Index increased to 92 in August. It remained higher than its recent low of 65 in November 2023.

The outlook for business conditions in the next six months deteriorated in the latest survey. The net balance of respondents expecting the economy to improve fell to -13% in August from -7% in July but remained higher than a record-low of -61% in June 2022. Expected real sales fell to a net -18% in August, a five-month low. The latest reading as increased from a low of -29% in July 2022. A steady net -16% of respondents reported higher nominal sales in the past three months, down from the most recent positive reading of 1% in May 2022.

Plans to make capital outlays increased to 24% in August following three straight months at 23%. This reading was up from its recent low of 20% in March but remained below a high of 31% in October 2021. Plans to expand business fell to 4% in August after rising to 5% in July and holding at 4% for the prior four consecutive months. Expected credit conditions deteriorated to -8% in August, after three consecutive months at -7, and remained below its high six months ago.

On the labor front, 56% of respondents reported few or no qualified workers to fill job openings in August, up from 49% in July and the highest percentage since September of last year. These readings were below a high of 61% in May 2022. A net 13% planned to increase employment in August, below the most recent high of 18% in November of last year and a peak of 32% in August 2021.

Overall earnings trends deteriorated sharply last month to the weakest reading since March 2020, falling to -37% in August from -30% in July.

On the pricing front, the net percent raising their average selling prices declined to 20% in August, down from 22% in July and below a high of 66% in March of 2022. The percentage planning to raise prices edged higher to 25% in August from 24% in July but remained well below a high of 52% in March 2022.

Wage inflation held steady as a net 33% of respondents raised compensation during the last three months, the same as in July but below 38% reported in the June survey. Compensation peaked at 50% in January 2022. A net 20% of firms planned to raise worker compensation in the next three months, up from 18% in July but below a high of 32% in October 2022.

Inflation continued to be the single most important issue facing small businesses, as reported by 24% of NFIB members in August. The quality of labor was the second most important concern as reported by 21% of members. Other major concerns were taxes, 13%, the cost of labor, 9%, and government requirements, 8%.

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

240910V5.jpg

240910W5.jpg

- Expectations for economy & sales decline.
- Employment plans weaken but job openings surge.
- Prices ease but expectations edge higher.

U.S. NFIB Small Business Optimism Index Backpedals in August

240910C2.jpg

240910D2.jpg

Retail gasoline prices for all grades weakened to $3.36 per gallon (-14.7% y/y) in the week ended September 9 from $3.41 per gallon in the previous week. Prices were below the late-April high of $3.79 per gallon and at the lowest level since the second week of February. They also were below the all-time high of $5.11 in the week ended June 13, 2022. Prices are increased, however, versus the low of $3.18 per gallon in the third week of December. Retail prices for on-highway diesel fuel declined to $3.56 per gallon (-21.7% y/y) last week compared to $3.63 in the prior week. These prices reached a high of $4.63 per gallon in the third week of September of last year.

The average price of West Texas Intermediate crude oil weakened to $69.33 per barrel (-20.5% y/y) in the week ended September 6 from $75.97 per barrel in the prior week. Prices roughly equaled the lowest level since the last week of June 2023 and were lower than the $91.45 high in the last week of September 2023. They peaked at $142.46 per barrel in the week of July 4, 2008. Yesterday, the price of West Texas Intermediate crude oil was $68.71 per barrel. The price of European Brent crude oil fell to $75.25 per barrel (-17.6% y/y) in the week ended September 6 compared to $80.83 in the prior week. The price of Brent has recently ranged from a low of $73.55 in the week ended June 30, 2023 to a high of $127.40 in the week ended June 10, 2022. Yesterday, the price was $72.37 per barrel.

Natural gas prices averaged $2.04/mmbtu (-19.0% y/y) in the week ended September 6 compared to $1.90 in the prior week. Prices recently touched a high of $2.73/mmbtu in the second week of June and they remained above their low of $1.40/mmbtu in the second week of March. Prices reached a high of $9.56/mmbtu averaged in the last week of August 2022. Yesterday, the price of natural gas was $2.03/mmbtu.

Gasoline demand increased 0.9% y/y in the four weeks ended August 30 after improving 1.1% y/y in the four weeks ended August 23. Demand for all petroleum products weakened 1.6% y/y in the last four weeks after falling 2.9% y/y in the previous period. Crude oil input to refineries rose 0.3% y/y in the four weeks ended August 30 after a 0.4% y/y decline during the previous four-week period.

Gasoline inventories rose 2.1% y/y in the week of August 30 after rising 0.5% y/y in the prior week. Inventories of residual fuel oil fell 2.3% y/y after declining 1.9% y/y in the previous week. Crude oil inventories, including the Strategic Petroleum Reserve, rose 4.0% y/y in the week of August 30, the same as during the prior week.

Measured in days’ supply, gasoline inventories were 24.0 days in the week ended August 30 following 23.9 days one week earlier. The recent low was 23.4 days in the week of June 30, 2023. Crude oil inventories fell to 25.0 days in the week of August 30. These compare to a recent high of 31.9 days in the week of March 3, 2023 and a low of 25.0 days in the week of September 1, 2023.

These data are reported by the Energy Information Administration of the U. S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** and **USENERGY** databases.

- Gasoline prices fall to seven-month low.
- Crude oil prices decline sharply.
- Natural gas prices rise slightly.

U.S. Gasoline & Crude Oil Prices Decline in Latest Week

Robert Brusca

240910E.jpg

Inflation of the European Monetary Union in August rose by 0.2% compared with 0.3% gain in July and a 0.2% rise in June. The three-month inflation rate at 2.5%, however, is part of a slow progression higher that compares to a 2.2% annual rate over six months and a 2.1% annual rate over 12 months, a moderate but clear accelerating pattern.

**Country level trends**
The four largest countries in the monetary union also are exhibiting patterns that suggest or that outright demonstrate, inflation acceleration at least based on headline measures. Germany is the largest monetary union economy and is a slight exception with a 2.2% inflation rate over three months, down from 2.5% over six months but up from 2.1% over 12 months. France demonstrates inflation rising from 2.2% over 12 months to a pace of 2.4% over six months to a strong 3.6% over three months. In Italy, inflation transitions from a low 1.3% over 12 months to a 3% pace over six months, to another strong pace of 3.7% over three months. Spain is the true exception with inflation well behaved across most of the cohorts at 2.3% over 12 months, an elevated pace but not by much, especially when compared to a 0.7% pace over six months that only ticks up to a 0.8% annual rate over three months.

**Monthly results by country**
The inflation process among these four large countries is still somewhat mercurial as August showed declines in inflation in Germany and Italy on a month-to-month basis while Spain's inflation was flat. On the face of it, this is good news; however, July brought an increase in prices of 0.8% month-to-month in Italy, 0.5% in Germany, 0.4% in France with a moderate 0.2% gain in Spain. So whatever the three-month pace is, it's the product of some fairly erratic monthly numbers and therefore not yet something that we can consider to be very reliable.

**Core inflation**
Core inflation is a different story. Here we get core or at least an ex-energy reading from Germany, Italy, and Spain. The August readings are contained with German ex-energy inflation up by 0.2%, Italian core inflation up by 0.1% and Spain’s core inflation up by 0.3%. These are decelerations from stronger gains in July across the board. And two of these three countries also had larger increases in June than they had in August. Looking at the progression of core inflation for Germany, the 12-month ex-energy rate is 2.5%, the six-month pace is 2.6%, and the three-month pace is 2.4%; all pretty steady stuff. Italy shows core inflation at 2.4% over six months and 12 months that moves up to 3.1% over three months. Spain shows core inflation at 2.7% over 12 months, up to 2.8% over six months and up to 4.3% over three months.

The performance of Brent oil prices explains the headline/core difference as oil prices fell over these progressively longer periods; over shorter periods oil prices have fallen faster tending to push headline inflation down faster over these short horizons contributing to the illusion of inflation deceleration. Even so, deceleration is not a pattern that is detectable in headline inflation for these countries.

The bottoms line here is that core inflation is still stuck and too high and that is too much evidence of inflation accelerating even in the face of easing oil prices for monetary policy to seek further accommodation.

240910.jpg

As we peruse the inflation trends, we find they are accompanied by output trends that are erratic even more than they are weak. Median output among the early reporting EMU members in July shows a gain of 1.0% compared to a gain of 0.4% in June. These contrast to a 0.5% drop in May. Median output among this group falls by 3.7% annualized over three months, rises by 1.5% annualized over six months, and falls by 0.9% over 12 months. And output is falling on the median measure in the quarter-to-date (early in Q3). Still, we also see output trends accelerate more than they decelerate across countries in June and July with a proportion of about 60% accelerating to 40% not accelerating.  Over three months, that full period shows acceleration in only about one third of reporters; output accelerates in half the reporters over six months and for two-thirds of them over 12 months.

240910 2.jpg

**Mixed, as well as, mixed-up trends**
On balance, the performance of inflation and industrial output in the EMU is mixed. Over three months the output trend is especially hard to pin down with declines of 26.5%, 18.3% and 17% annualized for some reporters juxtaposed to increases of 23.7% annualized, 18.4% annualized and 11.1% annualized- and, of course, more. In such a mixed constellation of growth rates, it is hard to discern trend. However, Portugal, the Netherlands, France and Germany, each reporter shows declines in each of the broader sequential periods- they also show deterioration is worsening. Belgium, Finland and Ireland, a decidedly smaller class of economy, all show persistent IP expansion and acceleration. The quarter-to-date shows declines outnumber increases across EMU members by two-to-one. Still, a lot of these trends are rooted in sharp declines logged in July. The gyrating three-month growth rates also are important contributors to growth results over six months and 12 months. When three-month growth rates are turbulent, they tend to impart their turbulence across the timeline.

For now there is more weakening in this report that I would like to see, but it also is still a mixed report. PMI data remind us that while manufacturing has been weak there has been countervailing strength in services to support growth. The failure of inflation data to clearly fall into line and weaken also is suggestive of a more mixed real sector economic performance. With such data trends in progress, central banks are likely to continue to play the waiting game.

Europe

Core Inflation in Key EMU Members: Mostly Above Target and Not Falling

240909R5.jpg

240909S5.jpg

Consumer credit outstanding strengthened $25.5 billion (1.9% y/y) in July after rising $5.2 billion in June, revised from $8.9 billion, and increasing $11.7 billion in May, revised from $13.9 billion. It was the largest runup in loan balances since November 2022. A $10.2 billion increase had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income stood basically unchanged at 24.3% in July, a ratio that has drifted lover the last two years.

Revolving credit outstanding, which includes credit cards, rose $10.6 billion in July (6.6% y/y) following a $0.4 billion decline in June and an $8.5 billion May rise. Revolving credit outstanding held by depository institutions rose 7.2% y/y, down from a high of 17.0% y/y growth in August 2022. Revolving credit held by finance companies fell 8.3% y/y while revolving credit held by credit unions rose 6.3% y/y in July, below the 16.4% y/y peak in February 2022.

Nonrevolving credit outstanding increased $14.8 billion (0.3% y/y) in July after increasing $5.6 billion in June and rising $3.2 billion in May. Nonrevolving credit held by banks fell a lessened 1.8% y/y while finance company credit rose 3.8% y/y. Credit union nonrevolving balances was fairly steady y/y, off from 20.3% y/y growth in January 2023. Federal government balances rose 0.2% y/y to $1.49 trillion.

The value of student loans outstanding totaled $1.75 trillion at the end of June, down 0.9% y/y, and there was $1.56 trillion in motor vehicle loans at the end of June, up 1.8% from a year earlier.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

240909T5.jpg

240909U5.jpg

- Revolving credit outstanding rebounds.
- Nonrevolving credit gain almost triples.

U.S. Consumer Credit Usage Surges in July

240909L1.jpg

240909M1.jpg

Wholesale trade inventories increased 0.2% (0.4% y/y) during July after holding steady in June, revised from 0.2%, and an unrevised 0.5% May gain. The increase compared to a 0.3% rise expected in the Informa Global Markets Survey and compared to a 0.3% gain in the advance report issued two weeks ago.

Durable goods inventories edged 0.1% higher last month (2.6% y/y) following a 0.2% decline. Machinery inventories, the largest sector, fell 0.3% (+12.0% y/y) while motor vehicles & parts, the second largest grouping, edged 0.1% higher (11.8% y/y). Electrical equipment inventories rose 0.5% (-4.0% y/y). Inventories of nondurable goods increased 0.5% (-3.2% y/y) following a 0.4% rise. Drug inventories, which make up a quarter of nondurable inventories, rose 2.5% (4.4% y/y). Grocery inventories, the second largest category, eased 0.6% (-2.3% y/y). Petroleum inventories dropped 1.7% (-9.1% y/y). Apparel inventories edged 0.1% higher (-15.1% y/y) and chemical inventories weakened 0.5% (-8.8% y/y).

Sales at the wholesale level strengthened 1.1% (2.9% y/y) in July after a 0.3% June decline, revised from -0.6%. A 0.2% July rise had been expected in the Action Economics Forecast Survey.

Durable goods sales increased 0.5% in July (3.2% y/y) after a 0.6% increase. Sales of electrical equipment, the largest sector, rose 0.2% (9.7% y/y), the same as in June. Professional and commercial equipment sales, which includes computers, jumped 1.2% (6.0% y/y), while vehicle sales rose 0.4% (5.4% y/y). Nondurable product sales improved 1.6% (2.6% y/y) after declining 1.6% in June. Petroleum product sales, the largest category, rose 3.9% (1.3% y/y). Drug store sales jumped 1.5% (9.3% y/y) while grocery store sales gained 0.3% (2.8% y/y). Sales of apparel jumped 2.5% (3.7% y/y) while chemical sales declined 0.9% (-2.9% y/y). Paper sales rose 0.9% (-2.1% y/y).

The inventory-to-sales (I/S) ratio at the wholesale level eased to 1.35 in July from 1.36 in June and has been moving sideways for the last year.

The I/S ratio for durable goods was minimally changed at 1.80. The machinery ratio declined to 3.09 while motor vehicles rose to 1.89. The I/S ratio for nondurable goods eased to 0.94, down from 1.01 early last year. The petroleum industry I/S ratio slipped to 0.32, and the drug industry moved up to 1.02. Apparel's I/S ratio of 2.19 stood below its 2.67 level one year earlier.

The wholesale trade figures are available in Haver's **USECON** database. The expectations figure for inventories is contained in the **MMSAMER** database. Expectations for sales are from the **AS1REPNA** database.

240909N1.jpg

240909O1.jpg

- Inventory gain extends trend of moderate accumulation.
- Jump in sales concentrates in nondurables.
- Inventory-to-sales ratio continues sideways movement.

Economy in Brief: August 2003

Jump to: