Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100128a.jpg" style="width: 353px; height: 265px;" align="right">
The pace of improvement in factory sector activity eased after
material improvement early last year. Durable goods orders during
December provided another indication of a slower rate of gain with a
0.3% increase following two months of modest declines which were
revised lower. A 2.0% December increase had been the Consensus
expectation. The recently flat orders pattern nevertheless left orders
6.3% above the March low. For all of last year, orders fell 19.9%
following a 6.0% drop during 2008.</p>
<p>Transportation sector orders provided much of the shortfall
during the last two months with 2.0% and 8.1% declines. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100128b.jpg" style="width: 353px; height: 265px;" align="right">
These were led
by sharply lower orders for nondefense aircraft &amp; parts which
fell by one-half during all of last year after a one-third 2008
decline. New orders for motor vehicles &amp; parts improved
slightly during the second half of 2009 but were off by one-quarter for
the year.</p>
<p>Primary metals orders improved sharply during the second half
of last year but still were off by one-third for 2009. Machinery orders
also improved steadily during the second half but fell 25% for the year
as a whole. Electrical equipment orders were volatile m/m and fell
19.1% for the year. Orders for computers &amp; related equipment
also showed sketchy improvement late in the year but nevertheless fell
10.6% for 2009 overall.</p>
<p>Capital goods orders ended 2009 on a firm note. Nondefense
capital goods orders less aircraft rose 1.3% (-2.0% y/y) and rose 12.3%
from the April low.</p>
<p>Shipments of durable goods jumped 2.9% during December (-3.9%
y/y) and firmed by 7.2% during the second half of 2009. Shipments of
primary metals have been notably strong (2.0% y/y) logging a one-third
increase since mid-year. Machinery shipments also firmed late in the
year (-16.0% y/y) as did electrical equipment shipments (-8.4% y/y).</p>
<p>Perhaps the factory sector's inventory cycle is ending but
it's not over. Durable goods inventories slipped 0.2% during December
(-11.3% y/y) after similar declines during the prior two months. These
declines followed monthly drops between 1.0% and 1.7% during the first
nine months of the year. As a result of the decumulation the ratio of
inventories-to-shipments was at its lowest since October of 2008, off
sharply from the January high.. The pace of the decline in unfilled
orders accelerated at a yearend with a 1.2% drop (-10.4% y/y) after a
0.7% November decline. The transportation sector saw the largest
shortfall (-11.7% y/y). Less transportation, backlogs were roughly
unchanged during the last three months of 2009 (-8.7% y/y).</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100128c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100128d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM" style="color: white;"><b>NAICS Classification</b>
</a>(%)</th>
<th scope="col"><b>December</b></th>
<th scope="col"><b><span>November</span></b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>0.3</td>
<td>-0.4</td>
<td>-0.1</td>
<td>-3.1</td>
<td>-19.9</td>
<td>-6.0</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>0.9</td>
<td>2.1</td>
<td>-0.5</td>
<td>0.5</td>
<td>-17.4</td>
<td>-1.4</td>
<td>-0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-0.2</td>
<td>-3.0</td>
<td>2.0</td>
<td>-2.2</td>
<td>-24.0</td>
<td>-7.0</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>1.3</td>
<td>3.1</td>
<td>-1.8</td>
<td>-2.0</td>
<td>-18.3</td>
<td>-0.5</td>
<td>-2.7</td>
</tr>
</tbody>
</table>
</body></html>

The pace of improvement in factory sector activity eased after material improvement early last year. Durable goods orders during December provided another indication of a slower rate of gain with a 0.3% increase following two months [...]

U.S. Durable Goods Orders' Improvement Abates

U.S. Durable Goods Orders'Improvement Abates

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127h.jpg" style="width: 312px; height: 265px;" align="right"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127i.jpg" style="width: 312px; height: 265px;" align="right">
</p>
The Federal
Open Market Committee today left the Federal funds rate in a "range
from 0 to 1/4 percent." The Fed funds rate remained unchanged from
late-2008 at its lowest level ever. The discount rate also was left
unchanged at 0.5%. The action was as expected.<p></p>
<p>
The FOMC statement
regarding the economy was upgraded slightly. "Information received
since the Federal Open Market Committee met in December suggests that
economic activity has continued to strengthen and that the
deterioration in the labor market is abating."
</p>
<p>Regarding inflation the
statement was succinct. "With substantial resource slack continuing to
restrain cost pressures and with longer-term inflation expectations
stable, inflation is likely to be subdued for some time."</p>
<p> Finally, the
Fed left little-changed its prior comments on the improved functioning
of financial markets. Moreover, one board member indicated "that
economic and financial conditions had changed sufficiently that the
expectation of exceptionally low levels of the federal funds rate for
an extended period was no longer warranted."</p>
<p>A complete text of the
Fed's latest press release can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/20100127a.htm">here</a>
.</p>
<p> The Haver databases <b>USECON, WEEKLY </b>and <b>DAILY</b>
contain the figures from the Federal Reserve Board.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col"><b>Current</b></th>
<th scope="col"><b>Last</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Federal Funds Rate, % (Target)</td>
<td>0.00 - 0.25</td>
<td>0.00 - 0.25</td>
<td>0.16</td>
<td>1.93</td>
<td>5.02</td>
</tr>
<tr>
<td class="firstcol">Discount Rate, %</td>
<td>0.50</td>
<td>0.50</td>
<td>0.50</td>
<td>2.39</td>
<td>5.86</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The Fed funds rate remained unchanged from late-2008 at its lowest level ever. The discount rate also was left unchanged at 0.5%. [...]

FOMC Leaves Interest Rates Unchanged

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127e.jpg" style="width: 353px; height: 265px;" align="right">The
latest estimates of the federal government's budget deficit were
released yesterday by the Congressional Budget Office. Though this
fiscal year's deficit estimate of $1.3 trillion was down slightly from
2009 due to the end of the latest recession, it remained near a record.
As a percentage of GDP, the 9.2% deficit was near its peak and triple
the 2008 figure. </p>
<p>With the end of the recession revenues are
expected to rise 3.3% after the huge decline last year. Thereafter, as
the economic recovery matures revenue growth is expected in the
double-digits for both 2011 and 2012. Subpar growth in employment is
expected, however, to hold revenue growth below recoveries. A subpar
recovery in corporate profits also would contribute to low federal
revenue growth. </p>
<p>This year the projected deficit would lift
the national debt to $13.3 trillion. At 91% of GDP that is the highest
level since 1950. </p>
<p>The CBO's latest budget projections are
available in Haver's <b>USECON</b> database. </p>
<p><b>Budget
Outlook 2010</b> from the Congressional Budget Office can be
found <a href="http://www.cbo.gov/ftpdocs/108xx/doc10871/BudgetOutlook2010_Jan.cfm">here</a>.</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127f.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Ongressional
Budget Office Projections</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2010</b></th>
<th scope="col"><b>2011</b></th>
<th scope="col"><b>2012</b></th>
<th scope="col"><b>2013</b></th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol"><b>Federal Budget Deficit
</b>($ Billion)</td>
<td>1,414</td>
<td>1,349</td>
<td>980</td>
<td>650</td>
<td>539</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
% of GDP</td>
<td>10.0</td>
<td>9.2</td>
<td>6.5</td>
<td>4.1</td>
<td>3.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Revenues</td>
<td>-16.6</td>
<td>3.3</td>
<td>22.8</td>
<td>11.0</td>
<td>8.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Outlays</td>
<td>17.9</td>
<td>0.2</td>
<td>3.6</td>
<td>-1.0</td>
<td>4.0</td>
</tr>
<tr>
<td colspan="6"><b>Underlying Assumptions</b></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Nominal GDP</td>
<td>-1.4</td>
<td>2.5</td>
<td>2.7</td>
<td>4.9</td>
<td>6.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Real GDP</td>
<td>-2.9</td>
<td>1.6</td>
<td>1.8</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer
Price Index</td>
<td>-0.3</td>
<td>2.4</td>
<td>1.4</td>
<td>1.2</td>
<td>1.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Unemployment Rate</td>
<td>9.3</td>
<td>10.1</td>
<td>9.5</td>
<td>8.0</td>
<td>6.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; 10-Year
Treasury Note Rate</td>
<td>3.2</td>
<td>3.6</td>
<td>3.9</td>
<td>4.2</td>
<td>4.5</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The latest estimates of the federal government's budget deficit were released yesterday by the Congressional Budget Office. Though this fiscal year's deficit estimate of $1.3 trillion was down slightly from 2009 due to the end of the [...]

U.S. Federal Budget Deficit Projections Falling From Lofty Heights

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127d.jpg" align="left" border="0" height="265" width="353"></p>
<p>Despite great strides made in the improvement in business and
household confidence since the pit of the recession, levels of
confidence for business and households remain at levels that are below
par. Both series, while still climbing, are showing signs of slowing
the pace of that advance.</p>
<p>The industry climate reading stands in the 43rd percentile of
its range well below the mid point and at an index of 92 it stands well
below the mean value of 100 as well. The only reading that stands above
its mean is the RECENT trend for production. Unfortunately the likely
trend is at the 47th percentile of its range, below the midpoint and at
a reading of -7 it is below its mean reading of +5. The orders trends
are improving but they have a very long way to go just to get back to
neutral.</p>
<p>The story for the household sector is much the same as for
business, except weaker. At -29 the confidence reading for households
is below neutral and in fact is much weaker than that standing short of
the one-third mark of its range. The mean reading stands at -19 but
confidence reads -29 in January.</p>
<p>While the strongest reading from the consumer is a positive
reading on the household&#8217;s current financial standing (a reading in the
81st percentile of its range) the next highest reading is a 77th
percentile reading on the prospect for unemployment. These two readings
are diametrically opposed. French consumers fear unemployment yet see
that they are in a relatively strong current financial situation, even
as the economy is putting its worst days behind it. This is surely a
prescription for the consumer to keep his wallet locked up tightly.</p>
<p>Responses show that living standards are thought to have
improved and to be improving. Yet these readings are low in their
respective ranges and well short of historic median values.</p>
<p>Savings is one of the bright spots. While standing in the 59th
and 65th percentiles both the responses for &#8216;favorable to save&#8217; and
&#8216;ability to save&#8217; are near or above historic median values.</p>
<p>Spending, a key parameter for getting recovery in gear is
still rated as subpar. Households&#8217; response to the question &#8216;is it a
favorable time to spend?&#8217; resides just short of the 40th range
percentile and at a raw reading of -19 that is short of its median
value of -14.</p>
<p>In short the business sector and the consumer sector see
ongoing progress</p>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="11"> INSEE Industry
Survey</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">&nbsp;</td>
<td colspan="2">Since Jan 1990</td>
<td colspan="4">Since Jan 1990</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan<br>
10</td>
<td>Dec<br>
09</td>
<td>Nov<br>
09</td>
<td>Oct<br>
09</td>
<td>Percentile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Climate</td>
<td>92</td>
<td>88</td>
<td>90</td>
<td>89</td>
<td>43.4</td>
<td>186</td>
<td>122</td>
<td>69</td>
<td>53</td>
<td>100</td>
</tr>
<tr class="odd">
<td colspan="11" class="firstcol">Production</td>
</tr>
<tr>
<td class="firstcol">Recent
Trend</td>
<td>-4</td>
<td>-10</td>
<td>-8</td>
<td>-8</td>
<td>59.3</td>
<td>111</td>
<td>44</td>
<td>-74</td>
<td>118</td>
<td>-8</td>
</tr>
<tr>
<td class="firstcol">Likely
trend</td>
<td>-7</td>
<td>-5</td>
<td>-1</td>
<td>-1</td>
<td>47.1</td>
<td>211</td>
<td>30</td>
<td>-40</td>
<td>70</td>
<td>5</td>
</tr>
<tr class="odd">
<td colspan="11" class="firstcol">Orders/Demand</td>
</tr>
<tr>
<td class="firstcol">Orders&amp;Demand</td>
<td>-45</td>
<td>-52</td>
<td>-52</td>
<td>-52</td>
<td>22.2</td>
<td>215</td>
<td>25</td>
<td>-65</td>
<td>90</td>
<td>-17</td>
</tr>
<tr>
<td class="firstcol">Fgn Orders&amp;Demand</td>
<td>-45</td>
<td>-54</td>
<td>-46</td>
<td>-49</td>
<td>25.5</td>
<td>215</td>
<td>31</td>
<td>-71</td>
<td>102</td>
<td>-13</td>
</tr>
<tr class="odd">
<td colspan="11" class="firstcol">Prices</td>
</tr>
<tr>
<td class="firstcol">Likely Sales Price
Trend</td>
<td>-11</td>
<td>-18</td>
<td>-13</td>
<td>-9</td>
<td>25.5</td>
<td>205</td>
<td>24</td>
<td>-23</td>
<td>47</td>
<td>0</td>
</tr>
</tbody>
</table>
<br>
<p>The consumer is still not solidly underpinned by the notion
that government has stabilized the economic environment. Even though
consumers are feeling relatively financially settled they are fearful
of the future and therefore are not very prone to spend. Spending
proclivity is lagging behind improvements in financial well being. This
is an issue for policymakers. It is not necessarily a call out for any
new program but for leadership to take steps to reassure an
economically frightened public that is better off than it suspects and
whose fear could become a catalyst for backsliding.</p>
<p>As for business its progress is steady and there is no concern
about inflation. But even as current conditions have improved, here
again we see reluctance to extrapolate ongoing improvement into the
future. The orders data manifest this result with still weak (although
improving) readings for orders and demand that seem to get a greater
weight than their improving trend. What is lacking in France is
confidence and more certainty about the future.</p>
<p>That predicament may also be a statement about the e-Zone in
which France is firmly embedded. The whole of the e-zone is still
struggling with several states still battling horrific issues. In this
environment the euro, the strap that binds Europe together may be more
of a corset that restrains optimism since the healthy countries are
more afraid of being pulled down by or made to assist those that are
struggling. Europe seems to have been able to cobble together an
economic structure that has doe it more harm than good. The area is
bound together by a common currency that protects the imprudent from
the consequences of their own actions. Fiscal transgression is not
easily exported since fiscal accounts are kept separate. There is no
sharing of the public expenditure pot in Europe except for certain
consolidated government funding. Still there is a stigma. And you may
recall how the Latin American Debt crisis brought down all of Latin
America despite there being no common currency and no shared fiscal
responsibility of any type &#8211; just proximity and shared culture. Europe
is walking a very shaking tightrope and has not figured out yet how to
remedy its problems. France is but an example.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="8"> INSEE Household
Monthly Survey</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">&nbsp;</td>
<td colspan="3">Since Jan 1990</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan<br>
10</td>
<td>Dec<br>
09</td>
<td>Nov<br>
09</td>
<td>Oct<br>
09</td>
<td>Percentile</td>
<td>Rank %</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Household
Confidence</td>
<td>-29</td>
<td>-30</td>
<td>-30</td>
<td>-34</td>
<td>31.6</td>
<td>21.6</td>
<td>-19</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Living
Standards&nbsp;</td>
</tr>
<tr>
<td class="firstcol">past 12
Mos</td>
<td>-62</td>
<td>-65</td>
<td>-65</td>
<td>-70</td>
<td>18.4</td>
<td>16.2</td>
<td>-40</td>
</tr>
<tr>
<td class="firstcol">Next
12-Mos</td>
<td>-34</td>
<td>-36</td>
<td>-35</td>
<td>-39</td>
<td>33.3</td>
<td>24.9</td>
<td>-21</td>
</tr>
<tr>
<td class="firstcol">Unemployment: Next
12</td>
<td>64</td>
<td>62</td>
<td>63</td>
<td>65</td>
<td>77.7</td>
<td>88.4</td>
<td>33</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Price
Developments</td>
</tr>
<tr>
<td class="firstcol">Past
12Mo</td>
<td>-22</td>
<td>-25</td>
<td>-27</td>
<td>-28</td>
<td>28.9</td>
<td>55.2</td>
<td>-16</td>
</tr>
<tr>
<td class="firstcol">Next
12-Mos</td>
<td>-37</td>
<td>-42</td>
<td>-46</td>
<td>-45</td>
<td>24.7</td>
<td>53.1</td>
<td>-35</td>
</tr>
<tr class="odd">
<td colspan="8">Savings</td>
</tr>
<tr>
<td class="firstcol">
Favorable to save</td>
<td>21</td>
<td>12</td>
<td>13</td>
<td>8</td>
<td>59.1</td>
<td>46.1</td>
<td>22</td>
</tr>
<tr>
<td class="firstcol">Ability
to save Next 12</td>
<td>-4</td>
<td>-6</td>
<td>-7</td>
<td>-11</td>
<td>65.5</td>
<td>83.8</td>
<td>-9</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Spending</td>
</tr>
<tr>
<td class="firstcol">Favorable
for major purchase</td>
<td>-19</td>
<td>-20</td>
<td>-19</td>
<td>-24</td>
<td>39.7</td>
<td>40.2</td>
<td>-14</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Financial
Situation</td>
</tr>
<tr>
<td class="firstcol"> Current</td>
<td>20</td>
<td>18</td>
<td>17</td>
<td>13</td>
<td>81.0</td>
<td>97.5</td>
<td>12</td>
</tr>
<tr>
<td class="firstcol">Past 12
MOs</td>
<td>-21</td>
<td>-21</td>
<td>-22</td>
<td>-25</td>
<td>48.4</td>
<td>29.0</td>
<td>-17</td>
</tr>
<tr>
<td class="firstcol"> Next
12-Mos</td>
<td>-10</td>
<td>-10</td>
<td>-8</td>
<td>-12</td>
<td>40.0</td>
<td>15.8</td>
<td>-2</td>
</tr>
<tr class="even">
<td colspan="8" class="firstcol">Number of
observations
in the period = 241</td>
</tr>
</tbody>
</table>
</body></html>

Despite great strides made in the improvement in business and household confidence since the pit of the recession, levels of confidence for business and households remain at levels that are below par. Both series, while still [...]

French Biz And Household Sectors Continue Process Of Repair

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127a.jpg" style="width: 353px; height: 265px;" align="right">For
new or existing home sales, December was a bleak month. Following
Monday's report that existing home sales dropped sharply, the Commerce
Department reported today that new home sales fell 7.6% m/m to 342,000
from an upwardly revised November level. The latest was the fourth
decline in the last five months. December sales were the lowest since
last March and off 75.4% from the 2005 peak. Near term home sales
should be helped by the recent extension of the Federal government's
tax credit which now it is for all home buyers and not just first-time
purchases. The December sales figure fell well short of Consensus
expectations for 370,000 sales.</p>
<p><b>The
December results capped a dismal year.</b> <b>For 2009 as
a whole new home sales totaled 372,000 which was the lowest level since
the numbers were first tallied in 1963. </b></p>
<p>Home
prices firmed during December though the November figure was revised
down. The median price of a new single-family home rose to $221,300
which was the highest level since May. The increase pared the y/y
decline to 3.6% from its worst of -14.5% this past February. For all of
2009 median home prices fell 7.3% after a 5.5% decline during
2008.</p>
<p>Price discounts and lower housing starts drove down the
inventory of unsold homes by more than one-third y/y to its lowest
since early-1971. The months' supply of unsold homes rose modestly to
8.1 months but remained down from the high of 12.4 months in January
'09. Despite the shrinkage of inventory, it still took a record median
13.9 months to sell a new home. </p>
<p><b>Inflation: Mind the
Gap</b> from the Federal Reserve Bank of San Francisco is
available <a href="http://www.frbsf.org/publications/economics/letter/2010/el2010-02.html">here</a>.</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100127c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>US
New Homes</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>Total Sales</b>
(SAAR, 000s)</td>
<td>342</td>
<td>370</td>
<td>408</td>
<td>-8.6%</td>
<td>372</td>
<td>481</td>
<td>769</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>40</td>
<td>28</td>
<td>33</td>
<td>33.3</td>
<td>31</td>
<td>35</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>43</td>
<td>73</td>
<td>56</td>
<td>-27.1</td>
<td>54</td>
<td>69</td>
<td>118</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>178</td>
<td>192</td>
<td>224</td>
<td>-7.8</td>
<td>201</td>
<td>264</td>
<td>409</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>81</td>
<td>77</td>
<td>95</td>
<td>-12.0</td>
<td>87</td>
<td>113</td>
<td>178</td>
</tr>
<tr>
<td class="firstcol"><b>Median Price</b>
(NSA, $)</td>
<td>221,300</td>
<td>210,300</td>
<td>213,700</td>
<td>&nbsp;-3.6</td>
<td>213,567</td>
<td>230,408</td>
<td>243,742</td>
</tr>
</tbody>
</table>
</span>
</body></html>

For new or existing home sales, December was a bleak month. Following Monday's report that existing home sales dropped sharply, the Commerce Department reported today that new home sales fell 7.6% m/m to 342,000 from an upwardly [...]

U.S. New Home Sales Drop Again & Remain 75% Below Peak

U.S. New Home Sales Drop Again& Remain 75% Below Peak

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100125d.jpg" align="left" border="0" height="265" width="353"></p>
<p>Belgium is a small open EMU economy that tends to lead the way
in the Euro-business cycle. It is headed higher once again in January.
The chart above shows that the Belgium MFG index usually surges early
and peaks ahead of the indices for Germany and EMU. At this point in
the cycle Belgium is doing that again. After leading the parade higher,
the Belgian National Bank index of MFG paused, but has resumed its move
higher. That&#8217;s good news for Europe.</p>
<p>Belgium is a small open economy that sits at the cross roads
of Euro-activity. Its index is usually the first released among the
Zone members so it is a natural as a bellwether from a timing
standpoint. To underscore that point the index reliably tends to lead
the Europe&#8217;s cycle hence paying attention to this small country&#8217;s
economic data makes considerable sense.</p>
<p>Just today Germany sharply revised up its orders in November
that it had released on Friday, leading to upward revisions to November
EMU orders as well. Now in fresh data from January, the Belgian bank
index is continuing to gain momentum. The overall Belgian index has
improved its reading for the 10th month in a row. Manufacturing is back
to improving after a one-month misstep; MFG has improved in eight of
the last ten months.</p>
<p>The Belgian index places MFG in the top two thirds of its
range. Business services stand in the top 40% of its range. Wholesaling
and retailing are near mid-range in the 47th percentile. Construction
is lagging badly in Belgium standing in the eighth percentile of its
range.</p>
<p>For MFG the orders assessment is very up beat with both
domestic and foreign orders in the 60th and 70th percentiles of their
respective ranges. Like Germany and EMU, Belgium shows that foreign
orders are the greater source for growth. Production stands even higher
in the 75th percentile of its range.</p>
<p>On balance the Belgian Bank index is a bit reassuring ahead of
the release of the monthly German reports form Zew and the IFO as well
as the EMU-wide releases from the European Commission. There has been
some sputtering in European and in US data recently. Does the Belgian
index point to a re-emergence of up beat reports for the month ahead?
We shall soon see, but based on historic relationships, the best bet is
that it does point to better euro-reports for the month ahead.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="9"> Belgium National
Bank Indices</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>3Mo Change</td>
<td>6MO Change</td>
<td>12Mo Change</td>
<td>Percentile</td>
</tr>
<tr>
<td class="firstcol">Total Ind</td>
<td>-7.0</td>
<td>-7.9</td>
<td>-8.8</td>
<td>7.2</td>
<td>15.8</td>
<td>20.6</td>
<td>60.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;MFG</td>
<td>-7.2</td>
<td>-9.3</td>
<td>-8.6</td>
<td>8.6</td>
<td>14.7</td>
<td>21.8</td>
<td>67.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Prod</td>
<td>7.0</td>
<td>4.0</td>
<td>6.0</td>
<td>-2.0</td>
<td>13.0</td>
<td>28.0</td>
<td>75.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Dom Ord</td>
<td>-4.0</td>
<td>-9.0</td>
<td>-9.0</td>
<td>5.0</td>
<td>6.0</td>
<td>13.0</td>
<td>60.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; FGN Ord</td>
<td>8.0</td>
<td>-3.0</td>
<td>-3.0</td>
<td>-1.0</td>
<td>15.0</td>
<td>43.0</td>
<td>70.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Prices</td>
<td>3.0</td>
<td>-9.0</td>
<td>-8.0</td>
<td>11.0</td>
<td>20.0</td>
<td>12.0</td>
<td>66.7%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Current
assess</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Tot Ord</td>
<td>-34.0</td>
<td>-38.0</td>
<td>-36.0</td>
<td>2.0</td>
<td>15.0</td>
<td>15.0</td>
<td>33.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Fgn Ord</td>
<td>-34.0</td>
<td>-38.0</td>
<td>-34.0</td>
<td>4.0</td>
<td>15.0</td>
<td>19.0</td>
<td>38.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Inventories</td>
<td>-13.0</td>
<td>-12.0</td>
<td>-10.0</td>
<td>-8.0</td>
<td>-9.0</td>
<td>-11.0</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Wholesale&amp;
Retail</td>
<td>-9.0</td>
<td>-6.3</td>
<td>-10.0</td>
<td>8.1</td>
<td>8.6</td>
<td>18.3</td>
<td>47.5%</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>-15.7</td>
<td>-9.1</td>
<td>-10.0</td>
<td>-5.0</td>
<td>0.2</td>
<td>-0.2</td>
<td>8.0%</td>
</tr>
<tr>
<td class="firstcol">Business Services</td>
<td>3.1</td>
<td>-1.4</td>
<td>-7.8</td>
<td>13.0</td>
<td>38.6</td>
<td>37.1</td>
<td>59.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Comparisons:</td>
<td colspan="3"></td>
<td colspan="3">Changes lag one month</td>
<td>1-Mo Lag</td>
</tr>
<tr>
<td class="firstcol">EU Index: Industry</td>
<td>#N/A</td>
<td>-16.0</td>
<td>-19.0</td>
<td>8.0</td>
<td>9.0</td>
<td>17.0</td>
<td>48.9%</td>
</tr>
<tr>
<td class="firstcol">Gy Index:Industry</td>
<td>#N/A</td>
<td>-19.0</td>
<td>-21.0</td>
<td>10.0</td>
<td>10.0</td>
<td>15.0</td>
<td>42.3%</td>
</tr>
<tr>
<td class="firstcol">Compare: BNB Index</td>
<td>--&nbsp;</td>
<td>--&nbsp;</td>
<td>&nbsp;--</td>
<td>9.9</td>
<td>10.3</td>
<td>20.9</td>
<td>Since&nbsp;Jan-96</td>
</tr>
</tbody>
</table>
</body></html>

Belgium is a small open EMU economy that tends to lead the way in the Euro-business cycle. It is headed higher once again in January. The chart above shows that the Belgium MFG index usually surges early and peaks ahead of the indices [...]

Belgium Leads The Way, Pauses Then Resumes Its Climb

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

Resilient US economy is pushing up longer-term inflation expectations and interest rates

Positive US economic data surprises leading to upward adjustment of interest rate expectations

Recent aggressive policy easing in China has given a massive boost to equity prices

FOMC expects much more easing now than in June

US is clear world leader in business capital spending on artificial intelligence

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

250314F0.jpg

250314G0.jpg

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) eased 0.2% (-3.6% y/y) in January to 100.7 after rising 1.5% to 100.9 in December and falling 2.9% in November to 99.4. The level of home affordability has risen 12.0% from its low of 89.9 in October 2023. It remains 43.8% below the high of 179.2 in April 2020.

The slip in affordability in January reflected a 1.6% drop (+5.0% y/y) in the median price of an existing single-family home to $402,000 which was offset by a rise in mortgage rates to 7.04% from 6.80% in December. The price decline was the sixth in the last seven months from the record $432,900 in June. The rise in mortgage rates compared to a September low of 6.26% and a 7.14% high during May. It remained increased from a December 2020 low of 2.73%. These changes raised the principal & interest payment by 0.8% (8.4% y/y) to $2,148 per month. That was well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a steady 24.8% of income during January. They remained up from a low of 14.0% in April 2020.

The rise in housing costs in January was accompanied by improvement in median family income. It increased 0.7% (4.5% y/y) to a record $103,850 after rising 0.3% in December and 0.4% in November.

Housing affordability was mixed m/m across the country in January. The index rose 0.4% (-5.9% y/y) to 134.2 in the Midwest. It remains the most affordable region of the country. In the South, the index eased 0.6% (-2.5% y/y) to 103.3 and the affordability index in the Northeast fell 1.9% (-8.7% y/y) to 89.9. In the West, where homes are the least affordable, the index weakened 1.8% (-5.5% y/y) to 69.8 in January.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022 (98.8).

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

250314H0.jpg

250314I0.jpg

- Home prices ease but mortgage rates rise.
- Median income strengthens.
- Affordability weakens in most of country.

U.S. Housing Affordability Is Little Changed in January

Carol Stone, CBE

250314F2.jpg

250314G2.jpg

Yesterday, March 13, the Federal Reserve published the Financial Accounts for Q4 2024. They show, among numerous other things, that domestic nonfinancial participants in the U.S. economy had borrowings that represented 11.4% of GDP during Q4. This is down moderately from 12.3% in Q3 and produced an amount for the whole year of 2024 of 11.9% of GDP. The quarterly amounts cited here are at seasonally adjusted annual rates.

In Q4, the largest borrowing sector was the federal government, which used $2,602.9 billion, or 8.8% of GDP, up from $2,261 billion in Q3, or 7.7% of GDP.  Households borrowed $624.3 billion or 2.1% of GDP; this amount included $294.3 billion of home mortgages and $133.1 billion of consumer credit.

Nonfinancial business corporations actually paid down debt of $64.1 billion in Q4, or 0.2% of GDP. In Q1 of 2024, businesses had borrowed $698.2 billion and for the whole year, they borrowed $436.6 billion or 1.5% of GDP. State and local governments paid down $46.0 billion in Q4; for the whole year they did use $97.8 billion or 0.3% of GDP.

In addition to domestic borrowers, the foreign sector borrowed $341.3 billion in Q4, or 1.1% of GDP and up from $196.7 billion in Q3.  For all of 2024, foreign participants used $345.5 billion, or 1.2% of GDP.

The Financial Accounts data are in Haver's **FFUNDS** database. The Federal Reserve is the main source, while associated information is compiled in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA); those nonfinancial data are carried in Haver's **USNA** database as well as in **FFUNDS**. Note that revisions are common throughout the accounts with every quarterly release.

250314H2.jpg

250314I2.jpg

- Nonfinancial sectors together borrowed 11.4% of GDP in Q4.
- Not surprisingly, the largest borrowing sector was the federal government.
- Households had sizable amounts of home mortgage borrowing, though this was less than in Q3.
- Businesses paid down debt in Q4.

U.S. Economic Sectors Borrowed Moderately in Q4 and for All of 2024

Andrew Cates

**Falling US growth momentum**
The latest Blue Chip Economic Indicators survey reflects a shifting global economic landscape, with the US experiencing a notable loss of momentum. After climbing above 2.0% on the back of a strong economic performance in late 2024, consensus forecasts for US growth in 2025 have now been revised downward for the first time in nearly a year. This reversal reflects weaker-than-expected economic data and emerging challenges tied to the policy shifts of the new administration. The downgrade in US growth projections also coincides with a further downward revision to an already subdued outlook for the UK and the euro area, reinforcing concerns about a sluggish global growth outlook (chart 1).

250313Z1.jpg

**Global inflation expectations**
In the meantime the same survey reveals growing concerns about the inflation outlook in the US and Europe this year, and possibly reflecting the impact of US tariff policies on global price pressures. Japan’s inflation forecast for 2025 has also surged, as rising import costs and shifting trade dynamics have additionally contributed to stronger price pressures. This all stands in contrast to China with inflation expectations for this year falling below 1%, reinforcing concerns about deflation and weak demand (chart 2).

250313Z2.jpg

**Global bond markets**
Recent shifts in 10-year government bond yields reflect changing market expectations. While yields have risen sharply in Germany, China, and Japan, they have fallen in the US. Germany’s increase is tied to expanded defense spending and industrial subsidies, while China’s reflects a shift toward more aggressive fiscal easing, with its deficit target rising to 4% of GDP to counter deflation and weak demand. In contrast, falling US yields signal a reassessment of growth expectations under the new administration. This divergence suggests capital may be flowing toward economies with stronger fiscal stimulus, potentially weakening the dollar, increasing borrowing costs for US businesses, and complicating efforts to revive domestic manufacturing.

250313Z3.jpg

**Overseas holdings of US Securities**
Latest data show that foreign-holdings of US long-term securities have risen steadily over the past decade, with a notable acceleration in the past two years. The most recent data additionally highlights a significant increase in foreign ownership of US corporate equities, reflecting, until recently, investor confidence in US companies.

250313Z4.jpg

**Industrialisation versus de-industrialisation**
Recent US policy shifts—particularly higher tariffs on Chinese imports—aim to address the long-term decline in domestic manufacturing jobs. However, their effectiveness is uncertain, given the growing role of automation and AI in reshaping industrial production. While tariffs may offer short-term relief, they are unlikely to reverse decades of global manufacturing shifts. China’s rise from a low-value agrarian economy to an industrial powerhouse has reshaped trade patterns, while US industrial employment has steadily declined, mirroring trends in other advanced economies. Meanwhile, Vietnam and other emerging markets have absorbed manufacturing capacity, benefiting from shifting supply chains. The real challenge for US policymakers is not just bringing back jobs but ensuring domestic industries stay competitive amid changing cost structures and technological advancements.

250313Z5.jpg

**Global competitiveness**
Historically, China's low unit labour costs provided it with a significant advantage, fuelling its manufacturing boom and accelerating the offshoring of US industrial jobs. However, as China's wages have risen due to economic development and increased productivity, and as US unit labour costs have remained relatively stable, the gap has narrowed considerably. Yet, still high labour costs in the US – coupled with rising trade barriers and rising input costs - still pose a challenge to the effectiveness of US policies, as firms may still find it difficult to maintain competitiveness without significant productivity gains. Indeed, as suggested above, there is a real risk that firms may instead accelerate their shift toward automation or relocate production to other low-cost regions (e.g. Vietnam), undermining the broader economic rationale for these interventions. The erosion of economic goodwill, combined with rising costs and financial market instability, additionally suggest that while the strategic objectives of US policy may be clear, the long-term implications remain highly uncertain.

250313Z6.jpg

The recent financial market volatility, marked by sharp swings in bond yields and equity market repricing, reflects growing uncertainty about the trajectory of the US economy amid a rapidly shifting policy environment. The US administration’s latest tariff measures, and their conflicting objectives, have amplified uncertainty, stifled risk appetite and further ignited inflation concerns (charts 1 and 2). Markets are grappling with the inflationary impact of rising import costs, the potential supply chain disruptions caused by abrupt shifts in trade policy, and the broader implications of protectionism on corporate investment. Meanwhile, recent policy announcements from Germany and China, coupled with firming inflationary pressures in Japan, have pushed global (ex-US) bond yields sharply higher, potentially amplifying global financial instability (charts 3 and 4). These shifts could profoundly reshape global trade and investment, not just through economic fundamentals but also through a growing erosion of goodwill toward the United States. As policy unpredictability forces companies and governments to hedge against potential disruptions, trust in the stability of US economic leadership is weakening. At the same time, concerns are mounting over the effectiveness of US policy choices, particularly in relation to one of its core ambitions—reshoring manufacturing jobs (charts 5 and 6). The question remains whether these interventions will achieve their intended goals or simply accelerate automation and supply chain realignment elsewhere.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3jhzSO4G2WNbw3KYrYFowF?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

<iframe allow="autoplay *; encrypted-media *; fullscreen *; clipboard-write" frameborder="0" height="175" style="width:100%;max-width:660px;overflow:hidden;border-radius:10px;" sandbox="allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation" src="https://embed.podcasts.apple.com/us/podcast/from-blue-to-red/id1706849345?i=1000699027560"></iframe>

Charts of the Week: From Blue to Red

250313J4.jpg

250313K4.jpg

The Producer Price Index for final demand held steady (+3.2% y/y) during February after increasing 0.6% in January, revised from 0.4% and rising an unrevised 0.5% in December according to the Bureau of Labor Statistics (BLS). The February reading compared to a 0.2% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.2% (3.3% y/y) last month after an unrevised 0.3% January increase, and an unrevised 0.4% gain in December. The PPI excluding food & energy eased 0.1% (+3.4% y/y) after rising 0.5% in January, revised from 0.3%. A 0.3% increase had been expected.

Energy prices declined 1.2% (-3.7% y/y) during February, after rising 1.8% in January. Gasoline costs fell 4.7% (-8.2% y/y) after rising 0.3% while home heating oil prices declined 9.8% (-12.2% y/y) after a 6.5% strengthening. Electric power prices rose 0.5% (0.9% y/y) in February following a 0.4% January decline and natural gas costs strengthened 1.3% (6.7% y/y) following a 3.8% surge. Diesel fuel prices declined 3.9% (-18.5% y/y) after a 10.5% jump.

Final demand food prices rose 1.7% (5.9% y/y) in February, following a 1.0% January gain. Egg prices jumped 28.1% (136.6% y/y) following a 44.0% increase. Prices for fresh and dry vegetables rose 6.0% (-16.3% y/y) after falling 22.3% in January. Beef & veal prices declined 1.8% (+9.5% y/y) after a 5.7% rise while dairy product prices rose 0.1% (5.7% y/y) after a 0.4% increase.

Final demand goods prices excluding food & energy rose 0.4% (2.1% y/y) in February following a 0.2% rise. Core finished consumer goods prices rose 0.4% (2.1% y/y) after a decline of 0.2% in January. Core nondurable goods prices strengthened 0.6% (2.3% y/y) last month after falling 0.4% in January. Durable consumer goods prices improved 0.2% (1.6% y/y), after edging 0.1% higher in January. Capital equipment prices rose 0.2% (2.5% y/y) last month following a 0.3% gain. Core government-purchased goods prices rose 0.2% (2.4% y/y) in January, after a 0.6% January increase.

Final demand services prices declined 0.2% (+3.9% y/y) last month after rising 0.6% in January. Trade services prices fell 1.0% (+4.0% y/y) last month following a 1.2% gain. Trade of finished goods prices declined 1.1% (3.6% y/y) and reversed the January rise. Prices for final demand transportation and warehousing services held steady (+2.6% y/y) in February, after strengthening 0.9% in January. Services prices less these costs rose 0.2% (4.0% y/y) last month, after a rise of 0.3% in January.

Construction costs eased 0.1% (+1.7% y/y) in February, after increasing 0.4% during January.

Prices for intermediate demand of processed goods rose 0.5% (0.3% y/y) following a 1.0% jump. Processed energy goods prices rose 0.5% last month after increasing 3.6% in January, while food prices rose 2.0% following a 0.7% January gain.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

250313L4.jpg

250313M4.jpg

- Energy prices weaken and food prices firm.
- Price gains in core goods pick up.
- Services prices decline.

U.S. PPI Is Unchanged in February; Rise in Core Index Moderates

250313A5.jpg

250313B5.jpg

Initial claims for unemployment insurance were 220,000 seasonally adjusted in the week ended March 8, just slightly less than the 222,000 the week before; that earlier amount was revised marginally from 221,000 reported before. In the latest week, the Action Economics Forecast Survey had expected 230,000. In this March 8 week, the four-week moving average was 226,000.

The total number of unemployment insurance beneficiaries was 1.87 million in the week ended March 1, down from 1.897 million in the week ended February 22. The four-week moving average was 1.872 million through the March 1st week, up from 1.866 million the week before.

The insured unemployment rate, that is, the total number of beneficiaries as a percent of covered employment, remained at 1.2%, which has held since March 2023.

Economic conditions vary widely across states and territories. In the week ended February 22, the highest rates were in Rhode Island (3.37%), New Jersey (2.90%), Massachusetts (2.58%), Minnesota (2.57%) and California (2.42%). The lowest rates were in Florida (0.36%), Alabama (0.44%), Virginia (0.46%), Tennessee and North Carolina (both 0.56%) and Mississippi (0.58%). Rates in other notable states include New York (2.08%), Pennsylvania (2.03%) and Texas (1.12%). These state rates are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

250313C5.jpg

250313D5.jpg

- Initial claims were less than forecast.
- Total recipients of unemployment insurance also fell.
- Insured unemployment rate still 1.2%.

Economy in Brief: January 2010

Jump to: