Louise Curley

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427l.jpg" style="width: 353px; height: 265px;" align="right">France,
Germany, Italy and Switzerland released indicators of consumer
confidence today.&nbsp; The latest data for the Swiss indicator,
the UBS Consumption Indicator, are for March.&nbsp; Those for
Italy, ISAE's consumer survey, and France, INSEE's household survey,
are for April and those for Germany, GfK's consumer climate survey,
May.
After some loss of confidence at the end of last year and
early
this year, due largely to the rise in energy prices, consumer
confidence in Switzerland, Italy and Germany has recovered as can be
seen in the first chart.&nbsp; French consumers, however, have on
balance become more negative, as shown in the second chart.&nbsp;
It should be noted that since its inception in April, 1986, that the
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427m.jpg" style="width: 353px; height: 265px;" align="right">only
time the non seasonally adjusted French measure of consumer
confidence has reported a positive balance of opinion was during the
period from July 1999 to May 2001, as seen in the second
chart.&nbsp; The average balance of opinion over the whole span is
-18.&nbsp;&nbsp;
 The measures of consumer confidence vary from
country to country.&nbsp; Balances of opinion in German and France,
an index with a base year of 1980 for Italy and a so-called index for
Switzerland.&nbsp; The Swiss indicator has no base year and is an
index in the sense that "it points to, identifies or highlights a
particular trend or condition" (Definition of index, no.3 in Chambers
21st Century Dictionary).&nbsp; One way to judge current values is
to relate them to the average of the data over its history, which is
shown in the last column of the following table.&nbsp; Consumer
confident in Germany at 3.8 in May is above its long term average of
3.3, as is Swiss consumer confidence, which in March was 1.708 compared
with its long term average of 1.501.&nbsp; In April, French
consumer confidence at -37 was well below its long term average of -18
while Italian consumer confidence of 107.7 was&nbsp; moderately
below its long term average of 112.7
(1980=100).&nbsp;&nbsp;&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">May 10&nbsp;</th>
<th scope="col">Apr 10&nbsp;</th>
<th scope="col">Mar 10</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Average*</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany: GFK
Consumer Climate % Bal</td>
<td>3.8</td>
<td>3.4</td>
<td>3.2</td>
<td>3.3</td>
<td>3.4</td>
<td>3.6</td>
<td>3.9</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">France: INSEE
Household Survey</td>
<td>&nbsp;--</td>
<td>-37</td>
<td>-35</td>
<td>-34</td>
<td>-29</td>
<td>-33</td>
<td>-32</td>
<td>-18</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy: ISAE
Consumer Survey1980=100</td>
<td>&nbsp;--</td>
<td>107.7</td>
<td>105.3</td>
<td>107.2</td>
<td>112.1</td>
<td>111.2</td>
<td>111.2</td>
<td>112.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Switzerland: UBS
Consumption Indicator</td>
<td>&nbsp;--</td>
<td>&nbsp;--</td>
<td>1.708</td>
<td>1.201</td>
<td>1.322</td>
<td>1.201</td>
<td>1.279</td>
<td>1.501</td>
</tr>
<tr>
<td class="firstcol" colspan="9">*Average
over the span
of available
data</td>
</tr>
</tbody>
</table>

</body></html>

France, Germany, Italy and Switzerland released indicators of consumer confidence today. The latest data for the Swiss indicator, the UBS Consumption Indicator, are for March. Those for Italy, ISAE's consumer survey, and France, [...]

An Assortment Of Consumer Confidence Indicators

Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427i.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Improvement in consumers' mood continued this month according
to the Conference Board. Their consumer confidence index rose 10.7% m/m
to 57.9, its highest level since September 2008. The gain handily
outpaced the Consensus expectation for a rise to 53.5. During the last
ten years there has been an 86% correlation between the level of
consumer confidence and the y/y change in real consumer spending. The
Conference Board data can be found in Haver's CBDB
database.
Consumers' assessment of the present situation jumped 13.5%
m/m after a similar March rise, off a near-record low. Jobs were seen
as hard to get by a reduced 45.0% of respondents but jobs were seen as
plentiful by only 4.8%. That was up just slightly from the series'
historic low reached in November. Also improved was the percentage of
respondents who saw business conditions as good. The percentage of
consumers who thought business conditions were bad fell to 40.2%, off
ten points from its peak during the recession.
The expectations component of confidence also improved m/m to
its highest level just before the recession. Improved expectations for
employment led the gain but expectations for business conditions and
income rose just slightly. Expectations for the inflation rate in
twelve months slipped to 5.3% and that remained down from last year's
high of 7.7%. Interest rates in twelve months were expected to be
higher by an increased 56.3%, the highest since 2007. A much-reduced
12.2% expected rates to fall. An increased 35.0% of respondents
expected stock prices to rise. That was near the recent high.
A reduced 2.0% of those surveyed plan to buy a home during the
next six months. An improved 27.4% plan to buy a major appliance,
though 30.9% planned to buy one back in 2007. An improved 5.1% plan to
buy an automobile versus 6.0% in 2007 and a greater 2.3% plan to buy a
new one, just off the series' historic low.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427j.jpg" style="width: 312px; height: 265px;"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427k.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">Conference
Board&nbsp;(SA, 1985=100)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y %</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>57.9</td>
<td>52.3</td>
<td>46.4</td>
<td>41.9</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>28.6</td>
<td>25.2</td>
<td>21.7</td>
<td>12.2</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>77.4</td>
<td>70.4</td>
<td>62.9</td>
<td>51.8</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
</body></html>

Improvement in consumers' mood continued this month according to the Conference Board. Their consumer confidence index rose 10.7% m/m to 57.9, its highest level since September 2008. The gain handily outpaced the Consensus expectation [...]

U.S. Consumer Confidence Improves Further

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427f.jpg" style="width: 312px; height: 265px;">

April has been a firm month for energy prices and a gallon of regular
gasoline averaged its highest price since October 2008. Last
week, it remained near the prior week's high of $2.85 which was up by
77% since the December, 2008 low. Yesterday, the spot market price for
a gallon of regular gasoline held onto its level late last week. The
figures are reported by the U.S. Department of Energy and can be found
in Haver's WEEKLY &amp; DAILY databases.
Crude oil costs slipped last week but an upward trend has been
behind the rise in gasoline prices. The price for a barrel of light
sweet crude (WTI) again fell slightly last week to $83.04 but for the
month averaged $84.22 versus $81.01 during March. Prices remain up by
two-and-one half times the 2008 low.
A firming of demand has helped energy prices move higher.
Weekly gasoline usage was up 1.1% last week versus one year ago and
that compares with a 3.0% decline in early-February. The demand for
residual fuel oil jumped 10.5% but distillate demand fell 4.1% y/y.
Inventories of crude oil and petroleum products rose slightly last
month but were down slightly from one year ago. That contrasts with a
strong inventory accumulation into September of last year.
U.S. natural gas prices were steady last week at $4.00 per
mmbtu (+15.8% y/y). Prices reached a high of $6.50 early in January.
Nevertheless, prices remained nearly double the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427h.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/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">04/26/10</th>
<th scope="col">04/19/10</th>
<th scope="col">04/12/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.85</td>
<td>2.86</td>
<td>2.86</td>
<td>39.0%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>83.04</td>
<td>84.60</td>
<td>85.97</td>
<td>73.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>
</body></html>

April has been a firm month for energy prices and a gallon of regular gasoline averaged its highest price since October 2008. Last week, it remained near the prior week's high of $2.85 which was up by 77% since the December, 2008 low. [...]

U.S. Petroleum Prices Maintain Their Higher Level

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427b.jpg" style="width: 312px; height: 265px;">
Earlier improvement in home prices continued to weaken during
February. Seasonally adjusted, the Case-Shiller Home Price Index
slipped 0.1% and continued its sideways pattern since September.
Nevertheless, the 0.7% increase versus last February compares to a
19.0% y/y rate of decline at its worst, roughly one year ago.
The narrower 10 City Composite Index rose a seasonally
adjusted 0.1% (1.5% y/y). Over the last year, prices rose 1.5% versus a
19.4% decline at its worst.
The performance of home prices continues to vary around the
country. During February, the 12-month gain in prices was strongest in
the West. Prices in Washington D.C. and Dallas rose moderately but
widespread declines were logged elsewhere.
The Case-Shiller home price series are value-weighted, i.e., a
greater index weight is assigned to more expensive homes. The
S&amp;P/Case-Shiller home price series can be found in Haver's USECON
database and the city data highlighted below is in the REGIONAL
database.
Achieving Fiscal Sustainability is the
title of this morning's speech by Fed Chairman Ben S. Bernanke and it
can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20100427a.htm">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427d.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">S&amp;P/Case-Shiller
Home Price Index (SA)</th>
<th scope="col">February m/m</th>
<th scope="col">January m/m</th>
<th scope="col">December m/m</th>
<th scope="col">Feb. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>-0.1</td>
<td>0.3</td>
<td>0.3</td>
<td>0.7</td>
<td>-13.3</td>
<td>-15.7</td>
<td>-3.8</td>
</tr>
<tr>
<td colspan="8"> Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">
Atlanta</td>
<td>-0.9</td>
<td>-0.5</td>
<td>0.0</td>
<td>-0.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Boston</td>
<td>-0.5</td>
<td>0.3</td>
<td>0.7</td>
<td>1.8</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Chicago</td>
<td>-1.0</td>
<td>-0.8</td>
<td>-0.7</td>
<td>-2.9</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Dallas</td>
<td>-1.4</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.7</td>
<td>-2.3</td>
<td>-3.3</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">
Denver</td>
<td>-0.2</td>
<td>-0.1</td>
<td>-0.0</td>
<td>3.7</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Los Angeles</td>
<td>0.2</td>
<td>1.9</td>
<td>1.2</td>
<td>5.4</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
New York</td>
<td>-0.2</td>
<td>-0.2</td>
<td>-0.4</td>
<td>-4.1</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">
San Francisco</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>12.0</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>
</body></html>

Earlier improvement in home prices continued to weaken during February. Seasonally adjusted, the Case-Shiller Home Price Index slipped 0.1% and continued its sideways pattern since September. Nevertheless, the 0.7% increase versus [...]

Case-Shiller Home Price IndexContinues Sideways Movement

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427b.jpg" style="width: 312px; height: 265px;">

Earlier improvement in home prices continued to weaken during
February. Seasonally adjusted, the Case-Shiller Home Price Index
slipped 0.1% and continued its sideways pattern since September.
Nevertheless, the 0.7% increase versus last February compares to a
19.0% y/y rate of decline at its worst, roughly one year ago.
The narrower 10 City Composite Index rose a seasonally
adjusted 0.1% (1.5% y/y). Over the last year, prices rose 1.5% versus a
19.4% decline at its worst.
The performance of home prices continues to vary around the
country. During February, the 12-month gain in prices was strongest in
the West. Prices in Washington D.C. and Dallas rose moderately but
widespread declines were logged elsewhere.
The Case-Shiller home price series are value-weighted, i.e., a
greater index weight is assigned to more expensive homes. The
S&amp;P/Case-Shiller home price series can be found in Haver's USECON
database and the city data highlighted below is in the REGIONAL
database.
Achieving Fiscal Sustainability is the
title of this morning's speech by Fed Chairman Ben S. Bernanke and it
can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20100427a.htm">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427d.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">S&amp;P/Case-Shiller
Home Price Index (SA)</th>
<th scope="col">February m/m</th>
<th scope="col">January m/m</th>
<th scope="col">December m/m</th>
<th scope="col">Feb. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>-0.1</td>
<td>0.3</td>
<td>0.3</td>
<td>0.7</td>
<td>-13.3</td>
<td>-15.7</td>
<td>-3.8</td>
</tr>
<tr>
<td colspan="8"> Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">
Atlanta</td>
<td>-0.9</td>
<td>-0.5</td>
<td>0.0</td>
<td>-0.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Boston</td>
<td>-0.5</td>
<td>0.3</td>
<td>0.7</td>
<td>1.8</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Chicago</td>
<td>-1.0</td>
<td>-0.8</td>
<td>-0.7</td>
<td>-2.9</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Dallas</td>
<td>-1.4</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.7</td>
<td>-2.3</td>
<td>-3.3</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">
Denver</td>
<td>-0.2</td>
<td>-0.1</td>
<td>-0.0</td>
<td>3.7</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Los Angeles</td>
<td>0.2</td>
<td>1.9</td>
<td>1.2</td>
<td>5.4</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
New York</td>
<td>-0.2</td>
<td>-0.2</td>
<td>-0.4</td>
<td>-4.1</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">
San Francisco</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>12.0</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>
U.S. Petroleum Prices Maintain
Their Higher Level 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 27, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427f.jpg" style="width: 312px; height: 265px;">

April has been a firm month for energy prices and a gallon of regular
gasoline averaged its highest price since October 2008. Last
week, it remained near the prior week's high of $2.85 which was up by
77% since the December, 2008 low. Yesterday, the spot market price for
a gallon of regular gasoline held onto its level late last week. The
figures are reported by the U.S. Department of Energy and can be found
in Haver's WEEKLY &amp; DAILY databases.
Crude oil costs slipped last week but an upward trend has been
behind the rise in gasoline prices. The price for a barrel of light
sweet crude (WTI) again fell slightly last week to $83.04 but for the
month averaged $84.22 versus $81.01 during March. Prices remain up by
two-and-one half times the 2008 low.
A firming of demand has helped energy prices move higher.
Weekly gasoline usage was up 1.1% last week versus one year ago and
that compares with a 3.0% decline in early-February. The demand for
residual fuel oil jumped 10.5% but distillate demand fell 4.1% y/y.
Inventories of crude oil and petroleum products rose slightly last
month but were down slightly from one year ago. That contrasts with a
strong inventory accumulation into September of last year.
U.S. natural gas prices were steady last week at $4.00 per
mmbtu (+15.8% y/y). Prices reached a high of $6.50 early in January.
Nevertheless, prices remained nearly double the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427h.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/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">04/26/10</th>
<th scope="col">04/19/10</th>
<th scope="col">04/12/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.85</td>
<td>2.86</td>
<td>2.86</td>
<td>39.0%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>83.04</td>
<td>84.60</td>
<td>85.97</td>
<td>73.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>
U.S. Consumer Confidence Improves
Further 
by <a href="/comment/Moeller.html">Tom
Moeller&nbsp;</a> April 27, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427i.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Improvement in consumers' mood continued this month according
to the Conference Board. Their consumer confidence index rose 10.7% m/m
to 57.9, its highest level since September 2008. The gain handily
outpaced the Consensus expectation for a rise to 53.5. During the last
ten years there has been an 86% correlation between the level of
consumer confidence and the y/y change in real consumer spending. The
Conference Board data can be found in Haver's CBDB
database.
Consumers' assessment of the present situation jumped 13.5%
m/m after a similar March rise, off a near-record low. Jobs were seen
as hard to get by a reduced 45.0% of respondents but jobs were seen as
plentiful by only 4.8%. That was up just slightly from the series'
historic low reached in November. Also improved was the percentage of
respondents who saw business conditions as good. The percentage of
consumers who thought business conditions were bad fell to 40.2%, off
ten points from its peak during the recession.
The expectations component of confidence also improved m/m to
its highest level just before the recession. Improved expectations for
employment led the gain but expectations for business conditions and
income rose just slightly. Expectations for the inflation rate in
twelve months slipped to 5.3% and that remained down from last year's
high of 7.7%. Interest rates in twelve months were expected to be
higher by an increased 56.3%, the highest since 2007. A much-reduced
12.2% expected rates to fall. An increased 35.0% of respondents
expected stock prices to rise. That was near the recent high.
A reduced 2.0% of those surveyed plan to buy a home during the
next six months. An improved 27.4% plan to buy a major appliance,
though 30.9% planned to buy one back in 2007. An improved 5.1% plan to
buy an automobile versus 6.0% in 2007 and a greater 2.3% plan to buy a
new one, just off the series' historic low.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427j.jpg" style="width: 312px; height: 265px;"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427k.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">Conference
Board&nbsp;(SA, 1985=100)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y %</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>57.9</td>
<td>52.3</td>
<td>46.4</td>
<td>41.9</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>28.6</td>
<td>25.2</td>
<td>21.7</td>
<td>12.2</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>77.4</td>
<td>70.4</td>
<td>62.9</td>
<td>51.8</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
An Assortment Of Consumer
Confidence Indicators 
by <a href="/comment/Curley.html">Louise
Curley</a> April 27, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427l.jpg" style="width: 353px; height: 265px;" align="right">France,
Germany, Italy and Switzerland released indicators of consumer
confidence today.&nbsp; The latest data for the Swiss indicator,
the UBS Consumption Indicator, are for March.&nbsp; Those for
Italy, ISAE's consumer survey, and France, INSEE's household survey,
are for April and those for Germany, GfK's consumer climate survey,
May.
After some loss of confidence at the end of last year and
early
this year, due largely to the rise in energy prices, consumer
confidence in Switzerland, Italy and Germany has recovered as can be
seen in the first chart.&nbsp; French consumers, however, have on
balance become more negative, as shown in the second chart.&nbsp;
It should be noted that since its inception in April, 1986, that the
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427m.jpg" style="width: 353px; height: 265px;" align="right">only
time the non seasonally adjusted French measure of consumer
confidence has reported a positive balance of opinion was during the
period from July 1999 to May 2001, as seen in the second
chart.&nbsp; The average balance of opinion over the whole span is
-18.&nbsp;&nbsp;
 The measures of consumer confidence vary from
country to country.&nbsp; Balances of opinion in German and France,
an index with a base year of 1980 for Italy and a so-called index for
Switzerland.&nbsp; The Swiss indicator has no base year and is an
index in the sense that "it points to, identifies or highlights a
particular trend or condition" (Definition of index, no.3 in Chambers
21st Century Dictionary).&nbsp; One way to judge current values is
to relate them to the average of the data over its history, which is
shown in the last column of the following table.&nbsp; Consumer
confident in Germany at 3.8 in May is above its long term average of
3.3, as is Swiss consumer confidence, which in March was 1.708 compared
with its long term average of 1.501.&nbsp; In April, French
consumer confidence at -37 was well below its long term average of -18
while Italian consumer confidence of 107.7 was&nbsp; moderately
below its long term average of 112.7
(1980=100).&nbsp;&nbsp;&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">May 10&nbsp;</th>
<th scope="col">Apr 10&nbsp;</th>
<th scope="col">Mar 10</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Average*</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany: GFK
Consumer Climate % Bal</td>
<td>3.8</td>
<td>3.4</td>
<td>3.2</td>
<td>3.3</td>
<td>3.4</td>
<td>3.6</td>
<td>3.9</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">France: INSEE
Household Survey</td>
<td>&nbsp;--</td>
<td>-37</td>
<td>-35</td>
<td>-34</td>
<td>-29</td>
<td>-33</td>
<td>-32</td>
<td>-18</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy: ISAE
Consumer Survey1980=100</td>
<td>&nbsp;--</td>
<td>107.7</td>
<td>105.3</td>
<td>107.2</td>
<td>112.1</td>
<td>111.2</td>
<td>111.2</td>
<td>112.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Switzerland: UBS
Consumption Indicator</td>
<td>&nbsp;--</td>
<td>&nbsp;--</td>
<td>1.708</td>
<td>1.201</td>
<td>1.322</td>
<td>1.201</td>
<td>1.279</td>
<td>1.501</td>
</tr>
<tr>
<td class="firstcol" colspan="9">*Average
over the span
of available
data</td>
</tr>
</tbody>
</table>

</body></html>

Case-Shiller Home PriceIndexContinues Sideways Movement

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Almost two weeks ago, the Department of Statistics in
Singapore released its flash estimate of first quarter year over the
year growth of the economy of the city state--13.1%. The year to year
growth in the manufacturing sector was estimated at 30.0%, as shown in
the first chart.
Today March data for industrial production and five industry
clusters--Electronics, Chemicals, Biomedicals, Precision Engineering
and Transport were released. We have aggregated the monthly data to
quarterly data for comparison with the GDP data. The year to year
increases in Industrial Production are very close to those for
Manufacturing in the GNP data, as can be seen in the table below.
The 30.0% year to year change in the quarterly GNP data for
manufacturing in the first quarter of 2010 was due to a 70.3% year to
year increase in the production of Electronics, a 37.2% increase in the
production of Biomedicals, a 32.0% increase in the production of
Precision Engineering products and a 17.3% increase in the production
of Chemicals. The production of Transport equipment actually declined
14.2% in the first quarter. The year to year percent changes in the
quarterly data for the production of Electronics, Chemicals, Precision
Engineering and Transport clusters are shown in the second chart. The
year to year changes in the production of Biomedicals is shown in a
separate, the third, chart. The pattern of production in all five has
been erratic but most notably in that of Biomedicals.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Singapore:
Year to Year % Change</th>
<th scope="col">Q1 10&nbsp;</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 08</th>
<th scope="col">Q2 08</th>
<th scope="col">Q1 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Gross Domestic
Product</td>
<td>13.1</td>
<td>4.0</td>
<td>0.6</td>
<td>-3.1</td>
<td>-9.4</td>
<td>-4.2</td>
<td>0.0</td>
<td>2.5</td>
<td>6.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Manufacturing</td>
<td>30.0</td>
<td>2.2</td>
<td>2.6</td>
<td>-0.4</td>
<td>-23.8</td>
<td>-10.7</td>
<td>-11.0</td>
<td>-5.6</td>
<td>12.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Industrial
Production&nbsp; (2007=100)y/y%</td>
<td>32.9</td>
<td>2.5</td>
<td>7.5</td>
<td>-0.6</td>
<td>-23.8</td>
<td>-10.7</td>
<td>-10.9</td>
<td>-5.6</td>
<td>12.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Electronics</td>
<td>70.3</td>
<td>28.0</td>
<td>-1.2</td>
<td>-19.4</td>
<td>-36.6</td>
<td>-23.2</td>
<td>-5.4</td>
<td>-0.9</td>
<td>3.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Chemicals</td>
<td>17.3</td>
<td>12.9</td>
<td>-5.3</td>
<td>-16.5</td>
<td>-22.6</td>
<td>-16.9</td>
<td>-0.1</td>
<td>1.0</td>
<td>1.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Biomedicals</td>
<td>37.2</td>
<td>-24.2</td>
<td>64.3</td>
<td>64.9</td>
<td>-23.5</td>
<td>1.46</td>
<td>-35.8</td>
<td>-28.1</td>
<td>49.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Precision Engineering</td>
<td>32.0</td>
<td>5.5</td>
<td>-15.8</td>
<td>-22.0</td>
<td>-29.1</td>
<td>-15.5</td>
<td>-7.1</td>
<td>-2.7</td>
<td>-2.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Transport</td>
<td>-14.2</td>
<td>-16.7</td>
<td>-8.6</td>
<td>-2.0</td>
<td>7.2</td>
<td>8.2</td>
<td>5.4</td>
<td>9.9</td>
<td>4.7</td>
</tr>
</tbody>
</table>
</body></html>

Almost two weeks ago, the Department of Statistics in Singapore released its flash estimate of first quarter year over the year growth of the economy of the city state--13.1%. The year to year growth in the manufacturing sector was [...]

The Components Of The 30% Y/Y Growth In Singapore's Manufacturing Production In Q 1

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
It's not that an $8,000 home-buyer tax credit alone lifted
March new home sales, it's that it will no longer be offered by the
Federal government after next week.The result was that new
home sales jumped 26.9% from February to 411,000 (AR). March
sales were the highest level since last July but it followed four
consecutive months of decline. The latest greatly exceeded of Consensus
expectations for 325,000 sales.
Home prices dipped last month, but that followed a firm
February increase. The net-result was a 4.3% price increase versus last
March which was the cycle low. Nevertheless, prices remain down 18.5%
from the 2007 peak.Price discounts have been lowering the inventory of
unsold homes to its lowest level since 1991. At the current sales rate,
the months' supply of unsold homes dropped to 6.7 from its 2009 high of
12.4 months. However, despite all this improvement it still
took a record median 14.4 months to sell a new home as of March.
A rebound from severe winter weather probably helped sales in
the Northeast. They rose by more than one-third from February and were
double last year's level. That monthly increase failed, however, to
make up the February decline. Sales in South also showed a hefty 43.5%
rise m/m but were up just 18.5% from last March. Elsewhere, the
credit's positive effect seemed smaller. Sales in the West sales rose
5.7% but they were up by one-quarter from last year while sales in the
Mid-west rose just 4.3% after a 13.0% February decline.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423g.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">US
New Homes</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales
(SAAR, 000s)</td>
<td>411</td>
<td>324</td>
<td>338</td>
<td>23.8%</td>
<td>372</td>
<td>481</td>
<td>769</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>38</td>
<td>28</td>
<td>41</td>
<td>100.0</td>
<td>31</td>
<td>35</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>49</td>
<td>47</td>
<td>54</td>
<td>11.4</td>
<td>54</td>
<td>69</td>
<td>118</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>231</td>
<td>161</td>
<td>168</td>
<td>18.5</td>
<td>201</td>
<td>264</td>
<td>409</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>93</td>
<td>88</td>
<td>75</td>
<td>25.7</td>
<td>87</td>
<td>113</td>
<td>178</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>214,000</td>
<td>221,600</td>
<td>215,800</td>
<td>4.3</td>
<td>214,500</td>
<td>230,408</td>
<td>243,742</td>
</tr>
</tbody>
</table>
</body></html>

It's not that an $8,000 home-buyer tax credit alone lifted March new home sales, it's that it will no longer be offered by the Federal government after next week.The result was that new home sales jumped 26.9% from February to 411,000 [...]

U.S. New Home Sales Jump With Tax Credit, But It Still Took A Long Time To Close The Deal

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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**.

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- 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

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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.

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- 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).

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**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).

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**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.

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**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.

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**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.

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**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.

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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.

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Charts of the Week: From Blue to Red

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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.

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- 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

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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.

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

Economy in Brief: April 2010

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