Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040930b.jpg" width="353">
Personal income grew a moderate 0.4% last month following the 0.2% uptick in July that was revised slightly up. Consensus expectations had been for a 0.5% increase.
Wages &amp; salaries rose 0.4% (+4.6% y/y) and earlier months&#39; figures were revised higher. Manufacturing wages jumped 0.8% (2.6% y/y) while wages in private service producing industries rose 0.3% (5.4% y/y).
Personal disposable income rose 0.4% (3.7% y/y) and inflation adjusted disposable income rose the same 0.4% (1.6% y/y).
&quot;Labor&#39;s Share&quot; from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20040801/cover.pdf"> here</a>.
Consumer spending was unchanged following the upwardly revised 1.1% jump in July. Durables purchases fell due to lower light vehicle sales. Purchases of non-durable goods and services both rose a modest 0.2%. 
The PCE chain price index fell slightly for the second consecutive month. Prices less food &amp; energy also fell (+1.4% y/y) as durables prices (-0.5% m/m, -2.1% y/y) continued lower. Services prices rose just 0.1% (2.5% y/y).

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM"> Disposition of Personal Income</a></th>
<th scope="col">Aug</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4%</td>
<td>0.2%</td>
<td>5.0%</td>
<td>3.2%</td>
<td>1.8%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.0%</td>
<td>1.1%</td>
<td>5.1%</td>
<td>5.2%</td>
<td>4.6%</td>
<td>4.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>0.9%</td>
<td>0.5%</td>
<td>2.2%</td>
<td>1.4%</td>
<td>2.0%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>-0.0%</td>
<td>-0.0%</td>
<td>2.1%</td>
<td>1.9%</td>
<td>1.4%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Chicago Purchasing Agents' Index Rebounded 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 30, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040930d.jpg" width="353">
The Chicago Purchasing Managers Business Barometer for September recovered just over half of the prior month&#39;s decline with a 4.0 point gain to 61.3. Consensus expectations had been for a lesser rise to 57.5.
During the last ten years there has been a 73% correlation between the level of the Chicago Business Barometer and the three month change in factory sector industrial output. That correlation has risen to 85% during the last five years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040930c.jpg" width="353">
The new orders index jumped to 68.7, recovering all of the 10.7 drop in August. The employment index at 53.9, added 2.8 points to the 5.5 rise. During the last twenty years there has been an 81% correlation between the level of this employment index and the three month change in factory sector employment.
The index of prices paid remained quite firm at 86.4. During the last ten years there has been a 77% correlation between the Chicago price index and the y/y change in the &quot;core&quot; intermediate goods PPI.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM"> Chicago Purchasing Managers Index, SA</a></th>
<th scope="col"> Sept</th>
<th scope="col">Aug</th>
<th scope="col">Sept&nbsp;&#39;03</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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</thead>
<tbody>
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<td class="firstcol">Business Barometer</td>
<td>61.3</td>
<td>57.3</td>
<td>53.0</td>
<td>54.7</td>
<td>52.7</td>
<td>41.4</td>
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<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>68.7</td>
<td>58.0</td>
<td>54.8</td>
<td>58.0</td>
<td>56.2</td>
<td>42.3</td>
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<td class="firstcol">Prices Paid</td>
<td>86.4</td>
<td>86.6</td>
<td>53.0</td>
<td>55.8</td>
<td>56.9</td>
<td>50.4</td>
</tr>
</tbody>
</table>
Help-Wanted Advertising Remained Depressed 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 30, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040930e.jpg" width="353">
The National Index of Help-Wanted Advertising published by the Conference Board remained at 37 in August after the decline in July to the lowest level of the year.
During the last ten years there has been a 91% correlation between the level of help-wanted advertising and the year-to-year change in non-farm payrolls. The stall in help wanted indicates that most, if not all, of the y/y improvement in non-farm payroll growth has been due to fewer job losses, not improved hiring.
The proportion of labor markets with rising want-ad volume rose to 49% from a depressed 41% in July.
The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month.
&quot;Why Did the Average Duration of Unemployment Become So Much Longer?&quot; from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr194.html"> here</a>. 

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/CBDB/@C3/@C3.HTM">Conference Board</a></th>
<th scope="col"> Aug</th>
<th scope="col">July</th>
<th scope="col">Aug &#39;03</th>
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<td class="firstcol">National Help Wanted Index</td>
<td>37</td>
<td>37</td>
<td>37</td>
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Initial Claims for Jobless Insurance Again Raised by Hurricanes 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 30, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040930a.jpg" width="353">
Initial claims for unemployment insurance surged another 18,000 last week to 369,000 after a 15,000 gain the prior week. Consensus expectations had been for 335,000 claims. Prior years&#39; figures were slightly revised.
The US Labor Department indicated that last week&#39;s claims number primarily reflected hurricanes Charley, Frances and Ivan. The largest increase in initial claims for the week ending Sept. 18 was in Florida (+8,797).
The 4-week moving average of initial claims rose to 343,500 (-14.2% y/y). During the last ten years there has been an 81% (negative) correlation between the monthly average of initial claims and the y/y change in payroll employment.
Continuing claims for unemployment insurance fell 3,000.
The insured rate of unemployment remained at 2.3% where it has hovered since the end of April.

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<th scope="col" class="firstcol"> <a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM"> Unemployment Insurance (000s)</a></th>
<th scope="col"> 09/25/04</th>
<th scope="col"> 09/18/04</th>
<th scope="col">Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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<td class="firstcol">Initial Claims</td>
<td>369</td>
<td>351</td>
<td>-7.8%</td>
<td>402</td>
<td>404</td>
<td>406</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,873</td>
<td>-20.0%</td>
<td>3,531</td>
<td>3,570</td>
<td>3,018</td>
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Personal income grew a moderate 0.4% last month following the 0.2% uptick in July that was revised slightly up. Consensus expectations had been for a 0.5% increase. Wages & salaries rose 0.4% (+4.6% y/y) and earlier months' figures [...]

U.S. Personal Income Up Moderately

Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040929c.jpg" width="353">
Industrial product prices in Canada were basically unchanged in August, rising just 0.1% from July. This not-seasonally-adjusted index is up 4.9% from August 2003 and seems to be moderating a bit after a substantial run-up during the spring and early summer.
Petroleum is an obvious culprit in the sharp upturn in this wholesale price index. As seen in the table below, petroleum and coal prices have surged more than 21% in the last 12 months. Large as this increase is, it is noticeably smaller than the peak year-on-year gain of 31% in May.
Petroleum products are not the only source of upward pressure on the array of industrial prices. Metals too have risen sharply. Beginning in June and July of last year, all the various metals prices turned very much higher. Nickel products began to rise in June 2003, copper, aluminum and &quot;other&quot; (mostly tin and lead) in July, and iron and steel products this past January. For Canada, these developments carry more weight than in the US. Mining and durable goods manufacturing in Canada account for approximately 14% of gross value added in the economy. In the US, by comparison, these two sectors comprise about 9-1/2% of GDP. These share calculations were done in chained dollars and are rough, since such shares are not technically additive in chained terms. But they give a general impression of the significance of these price movements to the two countries: nearly one-seventh of the Canadian economy is directly impacted by the oil and metal product prices, but less than one-tenth of the US economy. Notably, however, most metals prices began to slow in April and May. This eases cost pressures for some industries in Canada, but also pares revenue growth for the metals producers, making this sector a two-edged sword for the Canadian economy. 

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<th scope="col" class="firstcol">Year/Year % Change</th>
<th scope="col">Aug 2004</th>
<th scope="col">Jul 2004</th>
<th scope="col">Jun 2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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<td class="firstcol">Industrial Product Price Index</td>
<td>4.9</td>
<td>5.2</td>
<td>6.9</td>
<td>-3.5</td>
<td>2.8</td>
<td>-2.4</td>
</tr>
<tr>
<td class="firstcol">ex Petroleum &amp; Coal</td>
<td>3.8</td>
<td>3.9</td>
<td>5.6</td>
<td>-3.6</td>
<td>1.6</td>
<td>-0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Petroleum &amp; Coal</td>
<td>21.1</td>
<td>25.2</td>
<td>27.4</td>
<td>-2.4</td>
<td>26.2</td>
<td>-29.3</td>
</tr>
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<td class="firstcol">Primary Metals</td>
<td>22.4</td>
<td>24.3</td>
<td>23.7</td>
<td>0.7</td>
<td>8.5</td>
<td>-7.6</td>
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Industrial product prices in Canada were basically unchanged in August, rising just 0.1% from July. This not-seasonally-adjusted index is up 4.9% from August 2003 and seems to be moderating a bit after a substantial run-up during the [...]

Canadian Industrial Product Prices Appear to Peak Out Following Surges in Petroleum & Metals

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040929a.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association jumped 4.9% last week. The average for mortgage applications in September is 7.4% ahead of August.
The effective interest rate on a conventional 30-year mortgage ticked lower to 5.91% versus 6.04% averaged in August. In May, 30-year financing averaged 6.53%. The effective rate on a 15-year mortgage fell to 5.33%, down from 5.97% averaged in May.
Applications to refinance added 7.7% to the prior week&#39;s 4.1% gain and for September are 12.9% ahead of August. Purchase applications rose 2.7% and for September are 3.5% higher than in August.
During the last ten years there has been a 60% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
&quot;Federal Government Debt and Interest Rates&quot; from the American Enterprise Institute can be found <a href="http://www.aei.org/publications/pubID.20885/pub_detail.asp"> here</a>.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM"> MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">09/24/04</th>
<th scope="col">09/17/04</th>
<th scope="col"> Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
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<td class="firstcol">Total Market Index</td>
<td>724.7</td>
<td>690.7</td>
<td>2.5%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>469.1</td>
<td>456.6</td>
<td>17.9%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,211</td>
<td>2,052.5</td>
<td>-11.8%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
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The index of mortgage applications compiled by the Mortgage Bankers Association jumped 4.9% last week. The average for mortgage applications in September is 7.4% ahead of August. The effective interest rate on a conventional 30-year [...]

Again, Lower Rates Raised Mortgage Refinancing

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040929b.jpg" width="353">
US real GDP growth last quarter was revised up to 3.3% as the estimated drag from foreign trade deficit erosion was lessened. Consensus expectations had been for an upward revision to just 3.0%.
Corporate profit growth was revised up to 2.9% (AR, 19.0% y/y). The earlier reported boom US nonfinancial corporate sector profit growth was revised higher to 26.2% (AR, 27.9% y/y). The rise in profits per unit of output was raised to 4.7% q/q (20.7% y/y).
Import growth was lowered slightly to 12.6% (10.7% y/y) and export growth was revised up slightly to 7.3% (AR, 10.8% y/y).
Inventory investment also was revised up slightly.
Growth in domestic final demand was little revised at 3.5%.
Prices grew the same 3.2% as estimated earlier.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM"> Chained 2000$, % AR</a></th>
<th scope="col"> 2Q &#39;04 (Revised)</th>
<th scope="col"> 2Q &#39;04 (Prelim.)</th>
<th scope="col"> 1Q &#39;04 (Final)</th>
<th scope="col"> Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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</thead>
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<td class="firstcol">GDP</td>
<td>3.3%</td>
<td>2.8%</td>
<td>4.5%</td>
<td>4.8%</td>
<td>3.0%</td>
<td>1.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>0.8%</td>
<td>0.7%</td>
<td>1.2%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>2.5%</td>
<td>2.1%</td>
<td>3.3%</td>
<td>4.1%</td>
<td>3.1%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-1.1%</td>
<td>-1.4%</td>
<td>-0.8%</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.5%</td>
<td>3.4%</td>
<td>3.9%</td>
<td>4.4%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
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<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>3.2%</td>
<td>3.2%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.7%</td>
<td>2.4%</td>
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</tbody>
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US real GDP growth last quarter was revised up to 3.3% as the estimated drag from foreign trade deficit erosion was lessened. Consensus expectations had been for an upward revision to just 3.0%. Corporate profit growth was revised up [...]

2Q US GDP Growth Revised Higher

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040929b.jpg" width="353">
US real GDP growth last quarter was revised up to 3.3% as the estimated drag from foreign trade deficit erosion was lessened. Consensus expectations had been for an upward revision to just 3.0%.
Corporate profit growth was revised up to 2.9% (AR, 19.0% y/y). The earlier reported boom US nonfinancial corporate sector profit growth was revised higher to 26.2% (AR, 27.9% y/y). The rise in profits per unit of output was raised to 4.7% q/q (20.7% y/y).
Import growth was lowered slightly to 12.6% (10.7% y/y) and export growth was revised up slightly to 7.3% (AR, 10.8% y/y).
Inventory investment also was revised up slightly.
Growth in domestic final demand was little revised at 3.5%.
Prices grew the same 3.2% as estimated earlier.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM"> Chained 2000$, % AR</a></th>
<th scope="col"> 2Q &#39;04 (Revised)</th>
<th scope="col"> 2Q &#39;04 (Prelim.)</th>
<th scope="col"> 1Q &#39;04 (Final)</th>
<th scope="col"> Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">GDP</td>
<td>3.3%</td>
<td>2.8%</td>
<td>4.5%</td>
<td>4.8%</td>
<td>3.0%</td>
<td>1.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>0.8%</td>
<td>0.7%</td>
<td>1.2%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>2.5%</td>
<td>2.1%</td>
<td>3.3%</td>
<td>4.1%</td>
<td>3.1%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-1.1%</td>
<td>-1.4%</td>
<td>-0.8%</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>3.5%</td>
<td>3.4%</td>
<td>3.9%</td>
<td>4.4%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>3.2%</td>
<td>3.2%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.7%</td>
<td>2.4%</td>
</tr>
</tbody>
</table>
Again, Lower Rates Raised Mortgage Refinancing 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 29, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040929a.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association jumped 4.9% last week. The average for mortgage applications in September is 7.4% ahead of August.
The effective interest rate on a conventional 30-year mortgage ticked lower to 5.91% versus 6.04% averaged in August. In May, 30-year financing averaged 6.53%. The effective rate on a 15-year mortgage fell to 5.33%, down from 5.97% averaged in May.
Applications to refinance added 7.7% to the prior week&#39;s 4.1% gain and for September are 12.9% ahead of August. Purchase applications rose 2.7% and for September are 3.5% higher than in August.
During the last ten years there has been a 60% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
&quot;Federal Government Debt and Interest Rates&quot; from the American Enterprise Institute can be found <a href="http://www.aei.org/publications/pubID.20885/pub_detail.asp"> here</a>.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org"> here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM"> MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">09/24/04</th>
<th scope="col">09/17/04</th>
<th scope="col"> Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>724.7</td>
<td>690.7</td>
<td>2.5%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>469.1</td>
<td>456.6</td>
<td>17.9%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,211</td>
<td>2,052.5</td>
<td>-11.8%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
</tr>
</tbody>
</table>
</body>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040928e.jpg" width="353">
Consumer confidence among Dutch consumers fell to -22 in September from -19 in August. Consumers became less willing to purchase goods as the balance of those willing to purchase goods went to -20 from -17 in August. At the same time, consumers viewed the current climate somewhat less favorably with the balance dropping from -22 in August to -24 in September. In spite of these declines, the general trend of consumer confidence has been upward since March of 2003 and the three indicators of confidence are all well above year ago levels.
Confidence among producers in the Netherlands increased from 0.5 in August to 0.7 in September. Expectations of improved production trends outweighed appraisals of the current production and new order trends.
As shown in the attached chart, producer confidence has been in positive territory since May of this year--the first time this has occurred since March of 2001 except of a brief spike in September, 2002. Thus, the optimists among producers are beginning to outweigh the pessimists. In the case of consumers, however, the pessimist still outweigh the optimists by a wide margin.

<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;&nbsp;&nbsp;&nbsp;&nbsp; Per Cent Balance</th>
<th scope="col">Sep 04</th>
<th scope="col">Aug&nbsp; 04</th>
<th scope="col">Sep&nbsp; 03</th>
<th scope="col">M/M pts</th>
<th scope="col">Y/Y pts</th>
<th scope="col">2003 %</th>
<th scope="col">&nbsp;2002&nbsp;%</th>
<th scope="col">&nbsp; 2001&nbsp;%</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer confidence</td>
<td>-22</td>
<td>-19</td>
<td>-34</td>
<td>-3</td>
<td>12</td>
<td>-25</td>
<td>-20</td>
<td>-1</td>
</tr>
<tr>
<td class="firstcol">Economic climate</td>
<td>-24</td>
<td>-22</td>
<td>-51</td>
<td>-2</td>
<td>26</td>
<td>-56</td>
<td>-39</td>
<td>-25</td>
</tr>
<tr class="odd">
<td class="firstcol">Willingness to buy</td>
<td>-20</td>
<td>-17</td>
<td>-24</td>
<td>-3</td>
<td>4</td>
<td>-22</td>
<td>-8</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Producer confidence</td>
<td>&nbsp;0.7</td>
<td>0.5</td>
<td>-4.9</td>
<td>0.2</td>
<td>5.6</td>
<td>-5.6</td>
<td>-1.6</td>
<td>-1.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Production trend</td>
<td>-9</td>
<td>2</td>
<td>-9</td>
<td>-11</td>
<td>0</td>
<td>1</td>
<td>2</td>
<td>-1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Expected production trend</td>
<td>12</td>
<td>2</td>
<td>13</td>
<td>10</td>
<td>-1</td>
<td>1</td>
<td>6</td>
<td>4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;New order trend</td>
<td>-4</td>
<td>0</td>
<td>-7</td>
<td>-4</td>
<td>3</td>
<td>-2</td>
<td>1</td>
<td>-3</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer confidence among Dutch consumers fell to -22 in September from -19 in August. Consumers became less willing to purchase goods as the balance of those willing to purchase goods went to -20 from -17 in August. At the same time, [...]

Dutch Consumer Confidence Falls Slightly While Producer Confidence Rises Slightly: Both Are Well Above the Lows of 2003

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040928a.jpg" width="353">
The average price for unleaded regular gasoline rose for the second consecutive week to $1.92 per gallon, up 2.7% from the prior week and up from $1.88 averaged in August.
The inflation adjusted &quot;real&quot; price of gasoline remained below well below the early 1981 peak, but the roughly 50% increase during the last two years rivals the gain leading to the prior peak.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040928b.jpg" width="353">
The rise accompanied a jump in crude oil prices. The price of West Texas Intermediate crude surged yesterday to $49.65 per barrel versus roughly $43.00/bbl. early in the month. In August WTI crude averaged $44.94/bbl.
Wholesale natural gas prices last week were $5.45/mmbtu (+21.4% y/y) versus the May high of $6.54.
For the latest Short Term Energy Outlook from the US Department of Energy click <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/daily/@D3/@D306/@D306.HTM">Energy Prices</a></th>
<th scope="col">09/27/04</th>
<th scope="col">12/31/03</th>
<th scope="col">Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">US Retail Gasoline, Regular ($/Gal.)</td>
<td>$1.92</td>
<td>$1.48</td>
<td>20.5%</td>
<td>$1.56</td>
<td>$1.35</td>
<td>$1.42</td>
</tr>
<tr>
<td class="firstcol">Domestic Spot Market Price: West Texas Intermediate ($/Barrel)</td>
<td>$49.65</td>
<td>$32.55</td>
<td>74.6%</td>
<td>$32.78</td>
<td>$31.23</td>
<td>$19.38</td>
</tr>
</tbody>
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The average price for unleaded regular gasoline rose for the second consecutive week to $1.92 per gallon, up 2.7% from the prior week and up from $1.88 averaged in August. The inflation adjusted "real" price of gasoline remained below [...]

Gasoline Prices Up as Crude Oil Nears $50 per Barrel

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/040928d.jpg" width="353">
Chain store sales fell another 0.3% last week as Hurricane Jeanne hit Florida&#39;s east coast on Friday, according to the International Council of Shopping Centers (ICSC)-UBS. The decline followed a 1.1% drop the prior week prompted by Hurricane Ivan.
The decline lowered September sales so far 0.7% below the August average which was unchanged from July.
During the last ten years there has been a 60% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"> <a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM"> ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">09/25/04</th>
<th scope="col">09/18/04</th>
<th scope="col">Y/Y</th>
<th scope="col"> 2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>433.5</td>
<td>434.7</td>
<td>3.5%</td>
<td>2.9%</td>
<td>3.6%</td>
<td>2.1%</td>
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Chain store sales fell another 0.3% last week as Hurricane Jeanne hit Florida's east coast on Friday, according to the International Council of Shopping Centers (ICSC)-UBS. The decline followed a 1.1% drop the prior week prompted by [...]

U.S. Chain Store Sales Again Battered By A Hurricane

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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Mortgage applications eased 0.5% (+21.6% y/y) in the week ending August 22 after falling 1.4% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans rose 2.2% (24.3% y/y) last week, following a 0.1% gain in the prior week. Applications to refinance a home loan fell 3.5% (+18.6% y/y) last week, following a 3.1% decline in the week of August 15.

The effective interest rate on a 30-year fixed-rate loan was unchanged at 6.86% in the week ending August 22 for the third straight week. It remained down from a high of 7.28% in the second week of January. The rate on 15-year fixed-rate mortgages rose to 6.22% in the latest week from 6.13% in the week of August 15. Conversely, the rate on 30-year Jumbo loans eased to 6.80% last week from 6.82% one week earlier. The rate on a 5-year ARM fell to 6.19% in the week of August 22 after rising to 6.24% in the prior week.

The share of applications for refinancing an existing loan fell to 45.3% of total applications in the week ending August 22 after easing to 46.1% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity edged lower to 8.40% in the latest week after falling to 8.60% in the week of August 15.

The average size of a mortgage loan fell 1.2% (+2.9% y/y) to $383,000 in the week of August 22, following a 2.7% decline in the prior week. The average size of a purchase loan rose 1.0% (1.5% y/y) to $433,400 in the latest week after rising 0.5% in the week ending August 15. The average size of a loan to refinance a mortgage fell 5.2% (+4.2% y/y) to $322,200 last week, after falling 7.3% to $339,800 in the prior week. It was increased from a low of $277,900 in the last week of May.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Purchase applications increase while loan refinancing eases.
- Fixed-interest rate on 30-year loan holds at four-month low.
- Average loan size declines again.

U.S. Mortgage Applications Edge Lower in Latest Week as Interest Rates Steady

Robert Brusca

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The GfK consumer climate indicator for Germany slipped in September to -23.6 from -21.7 in August. The slippage brings the index to its weakest level since April 2025 and in fact it's the weakest reading since May 2024 with only two-monthly exceptions.

The components for the GfK index are up to date through August. The economic index in August fell to -7.4, its weakest reading since December 2022. The decline in August was both sharp and deep.  Income expectations backed-off; after a reading of 15.2 in July, the index fell to 4.1 in August and was last weaker in March 2025. The propensity to buy index weakened again for the second month in a row to -10.1 in August from -9.2 in July; it's the weakest reading since February 2025.

**Percentile standings**
The percentile standing for the climate index and its components show climate is still very weak at a 9.7 percentile standing among data back to mid-2002. Economic expectations have a 23.7 percentile standing, the propensity to buy has a 28.8 percentile standing, while income expectations have a 38.8 percentile standing. These count percentiles or queue percentiles however you like to think of them, are all quite weak. The median in terms of this sort of gauge occurs at the 50th percentile reading, so all of these readings are well below their historic medians and data back to mid-2002.

**Consumer confidence – selected other Europe**
Other European confidence measures are up to date through August in France where the INSEE confidence measure slipped to 87 from 88.3 while in the United Kingdom the confidence measure improved to -17 in August from -19 in July. Italy's confidence reading is up to date only through July, and on that timeline, it showed a one-month improvement to 97.2, up from June’s 96.1. Italian confidence has the strongest standing at a 76.8 percentile standing, the U.K. has a 40.3 percentile standing, while France has a 19.8 percentile standing. There's a good deal of variation in how consumers perceive current circumstances. Based on these standings, Germany has the lowest assessment in the its lower 10 percentile, while Italy sees a top 25 percentile standing, the U.K. sees an assessment that's about 10 percentile points below its median, while France is at its 20th percentile closer to the German metric in standing. It's a substantial variation especially since three of these countries are in the European Monetary Union.

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On balance, consumers are concerned about global economic conditions. The tariff situation is in flux and beginning to settle into a hardened pattern. The Russia-Ukraine war is undergoing attempts to stop it, but neither participant seems willing to accept the conditions that the other requires for either a ceasefire or cessation of hostilities. Russia is increasingly looking as if it is beleaguered and under pressure as the U.S. seems to be edging closer to providing more support to Ukraine. Conditions in the Middle East remained as entangled and hostile as ever. Globally inflation continues to hover slightly above central banks’ targets in most places although it does not show much sign of drifting higher or lower as economic conditions continue to be weak. The Federal Reserve appears to be flirting more with the prospects of rate cuts, as the president mounts efforts to try to exert his influence or even outright control over the central bank. This is something that is going to bear some close watching.

Germany

German Climate Stabilizes But Eco-expectations Plunge

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The Conference Board's Index of Consumer Confidence declined 1.3% (-7.8% y/y) to 97.4 in August after increasing 3.7%, revised from 2.1%, in July and falling an unrevised 3.3% in June. An August reading of 96.5 had been expected in the Action Economics Forecast Survey. The index remained 13.7% below its November peak.

The Expectations Index declined 1.6% (-13.3% y/y) this month after rising 8.7% in July, revised from 6.4%, and falling 5.0% in June. The Present Situation index fell 1.2% (-2.5% y/y) after easing 0.2% in July, revised from down 1.1% and falling 1.8% in June.

The percentage of respondents assessing business conditions as “good” rose to 22.0% in August after holding steady at 20.5% in July. The index reached its highest level since October. The percentage assessing conditions as “bad” edged higher to 14.2% after falling to 13.6% in July. The appraisal of labor market conditions eased as 29.7% described “jobs plentiful” versus 29.9% in July. Jobs were viewed as “hard to get” by 20.0% of respondents this month, up from 18.9% in July. This measure has risen from 11.0% in January 2024. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) fell to 9.7% compared to 11.0% in July and 12.2% in June. This measure remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions improved this month as an increased 19.5% of respondents expect conditions to improve over the next six months, after 19.0% did so in July, while 21.9% expect them to worsen, after falling to 22.7% in July. On employment, 17.9% expect the number of jobs to increase over the next six months versus 18.0% in July. The percentage expecting the number of jobs to decline in the next six months rose to 26.8% after falling to 25.1% in July. A lessened 18.3% of respondents expect income to increase in six months, down from 18.7% in July. That remained off a high of 20.7% in November and compares to 12.6% who expect income to decrease, up from 11.8% in July.

The expected rate of price inflation over the next twelve months rose to 6.2% in August after falling to 5.7% in July. These remain up from a low of 5.0% in November. Interest rates are expected to rise this year by an increased 54.0% of respondents, and this remained up from a 45.5% November 2024 low. The percentage of respondents expecting equity prices to increase over the next twelve months fell to 47.4%, but remained up from a low of 37.6% in April and the most since January, while the percentage expecting a decline in stock prices rose to 30.3% after declining to 28.1% in July.

The percentage of respondents planning to buy a home held steady at 5.7% this month after falling from 6.1% in June. Plans to purchase an automobile rose to 12.0% this month, up from a low of 10.6% in April.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Monthly decline is slight, level remains up sharply from April low.
- Expectations and present situation readings decline.
- Inflation expectations rise after falling for two months.

U.S. Consumer Confidence Weakens in August; Inflation Expectations Rise

Sandy Batten

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Durable goods orders fell 2.8% m/m (+3.3% y/y) in July on top of a slightly downwardly revised 9.4% monthly decline in June (previous -9.3% m/m). A 4.0% m/m decline had been expected by the Action Economics Forecast Survey. Once again, plummeting nondefense aircraft orders were the key factor behind the overall decline in July. Excluding nondefense aircraft orders, the remaining orders rose 0.2% m/m in July after a 0.3% m/m decline in June.

Orders excluding transportation increased by a solid 1.1% m/m (+3.8% y/y) in July following a 0.3% monthly gain in June. The July monthly increase matched the September 2024 gain as the largest in more than two years. Orders for nondefense aircraft plunged 32.7% m/m in July, on top of a 52.7% monthly decline in June. Apart from the plunge in aircraft orders, orders in other major groups posted solid increases. Orders for motor vehicles increased 0.3%, their third consecutive monthly gain. Orders for primary metals jumped 1.5% m/m, the largest monthly gain since April 2024. Fabricated metals orders rose 0.7% m/m after a 0.1% monthly decline in June. Machinery orders soared 1.8% m/m, the largest monthly increase since January. Orders for computers and electronic equipment increased 0.6% m/m. Orders for electrical equipment and appliances jumped 2.0% m/m, the largest increase since last December.

The capital spending data in this report augured a solid beginning for Q3 business spending on equipment. Shipments of core capital goods (nondefense capital goods shipments excluding aircraft) are a reliable coincident indicator of business spending on equipment in the national accounts. They increased 0.7% m/m in July, the largest monthly gain since April 2023, and are up more than 4% annualized in July from the Q2 average. Moreover, core capital goods orders rebounded in July, jumping 1.1% m/m after a 0.6% monthly decline in June.

Total manufacturing shipments increased 0.8% m/m (+1.8% y/y) in July following a 0.6% monthly increase in June. Shipments of durable goods rose a solid 1.4% m/m (+3.6% y/y), the largest monthly gain since May 2023. Excluding shipments of transportation goods, remaining shipments increased 1.0% m/m in July, the largest monthly increase since January 2023. Gains were widespread across major sectors with each one reporting an increase in July. Transportation shipments rose 2.3% m/m, led by a 15.5% monthly jump in shipments of nondefense aircraft and parts. Shipments of computers rose 4.5% m/m, their first monthly gain in three months. Shipments of nondurable goods edged up 0.2% m/m (-0.1% y/y), their third consecutive monthly increase.

Unfilled durable goods orders were unchanged in July from June (+7.0% y/y). Inventories of all manufactured goods increased 0.3% m/m in July (+1.4% y/y), the largest monthly gain since last December. Inventories of durable goods rose 0.3% m/m (+1.8% y/y), their fifth consecutive monthly increase. Motor vehicle inventories jumped 0.8% m/m, their largest monthly increase since October 2023. Aircraft inventories slipped 0.2% m/m, their third consecutive monthly decline. Inventories of nondurable goods increased 0.2% m/m in July (+0.8% y/y), the same monthly gain as in June.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Durable goods orders fell 2.8% m/m in July on top of a 9.4% monthly drop in June.
- Once again, weak nondefense aircraft orders were the key factor; nondefense aircraft orders plunged 33% m/m in July on top of a 53% m/m decline in June.
- In contrast, orders excluding transportation rose a solid 1.1% m/m in July, their largest monthly gain since September 2024.
- Core capital goods orders rebounded, and shipments posted a solid gain.

U.S. Advance Durable Goods Orders Dragged Down Again by Aircraft in July

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U.S. house prices weakened 0.2% (+2.6% y/y) during June after easing 0.1% in May, revised from down 0.2% and falling an unrevised 0.3% in April. The annual increase is well below its recent high of 7.2% in February 2024, according to the Federal Housing Finance Agency (FHFA) House Price Index.

House price changes were mixed across the nine Census divisions of the country. Prices fell 0.8% (+5.0% y/y) in New England and 0.1% (+4.6% y/y) in the East North Central region. Prices were down 1.1% (+0.1% y/y) in the South Atlantic region, 0.4% (+3.1% y/y) in the East South Central region and 0.3% (+1.5% y/y) in the Mountain regions. Prices also eased 0.1% (+0.7% y/y) in the Pacific region, off for the fifth straight month. House price increases were logged in the middle Atlantic region where they rose 1.1% (7.2% y/y). Prices also increased 0.3% (4.3% y/y) in the West North Central region and 0.2% (1.4% y/y) in the West South Central region.

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The FHFA data are available in Haver’s USECON database.

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- Prices edge lower for third straight month.
- Annual increase is near two-year low.
- Price changes are uneven amongst regions.

Economy in Brief: 2004

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U.S. Personal Income Up Moderately

Canadian Industrial Product Prices Appear to Peak Out Following Surges in Petroleum & Metals

Again, Lower Rates Raised Mortgage Refinancing

2Q US GDP Growth Revised Higher

2Q US GDP Growth Revised Higher

Dutch Consumer Confidence Falls Slightly While Producer Confidence Rises Slightly: Both Are Well Above the Lows of 2003

Gasoline Prices Up as Crude Oil Nears $50 per Barrel

U.S. Chain Store Sales Again Battered By A Hurricane