Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003c.jpg" width="353">
The value of construction put in place matched Consensus expectations and rose 0.4% in August following an upwardly revised 0.3% July gain.
Private building activity rose 0.4% led by a 0.8% gain in nonresidential building. Lodging building rose a strong 3.2% (-8.3% y/y) and multi-retail building added 1.6% (30.7% y/y) to the 12.5% spike in July. Office construction fell 1.1% (+4.2% y/y) for the third decline in the last four months.
Residential building rose 0.2% as new single family building increased 0.3% (7.5% y/y) for the second consecutive month. The value of residential improvements rose a modest 0.4% (-0.4% y/y) but the value is off 14.3% from the February peak.
Public construction spending rose 0.5% following upwardly revised gains during prior months led by a 1.4% (14.9% y/y) jump in construction activity on highways &amp; streets, nearly one third of the value of public construction spending.
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">Aug</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.1%</td>
<td>10.9%</td>
<td>5.4%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.4%</td>
<td>0.1%</td>
<td>5.3%</td>
<td>13.6%</td>
<td>6.3%</td>
<td>-0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>0.2%</td>
<td>0.0%</td>
<td>5.9%</td>
<td>18.2%</td>
<td>12.9%</td>
<td>8.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>0.8%</td>
<td>0.4%</td>
<td>3.7%</td>
<td>3.9%</td>
<td>-5.4%</td>
<td>-13.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>0.5%</td>
<td>0.6%</td>
<td>9.2%</td>
<td>2.5%</td>
<td>2.7%</td>
<td>5.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

The value of construction put in place matched Consensus expectations and rose 0.4% in August following an upwardly revised 0.3% July gain. Private building activity rose 0.4% led by a 0.8% gain in nonresidential building. Lodging [...]

U.S. Construction Spending Up

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003b.jpg" width="353">
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector jumped unexpectedly to 59.4 from 53.6 in September. Consensus expectations had been for a decline to 52.0.
During the last twenty years there has been a 64% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
Each of the index&#39;s five components rose though the 7.4 point rise in new orders to a more than one year high and a like gain in production seemed noteworthy after earlier months&#39; easing. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003a.jpg" width="353">
The rise in the inventories index to the second highest level of the year suggests that the destocking efforts of the prior five months are winding down. The vendor deliveries index increased to highest since last October. 
The rate of factory sector job creation rose slightly though the index at 53.1 contrasts with recent government data that suggest job loss. During the last twenty years there has been a 67% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
Pricing in the factory sector firmed even more to the highest since last October. The prices paid index rose to 78.0 on top of last month&#39;s increase.
Hurricane Katrina and the Employment Situation report for September 2005, to be released this Friday, from the U.S. Department of Labor is available <a href="http://www.bls.gov/katrina/empsitbrief.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Sept &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>59.4</td>
<td>53.6</td>
<td>59.1</td>
<td>60.5</td>
<td>53.3</td>
<td>52.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>63.8</td>
<td>56.4</td>
<td>59.9</td>
<td>63.5</td>
<td>57.9</td>
<td>56.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>78.0</td>
<td>62.5</td>
<td>76.0</td>
<td>79.8</td>
<td>59.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector jumped unexpectedly to 59.4 from 53.6 in September. Consensus expectations had been for a decline to 52.0. During the last [...]

ISM Index Lifted by Hurricane Rebuilding & Inventory Restocking

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003b.jpg" width="353">
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector jumped unexpectedly to 59.4 from 53.6 in September. Consensus expectations had been for a decline to 52.0.
During the last twenty years there has been a 64% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
Each of the index&#39;s five components rose though the 7.4 point rise in new orders to a more than one year high and a like gain in production seemed noteworthy after earlier months&#39; easing. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003a.jpg" width="353">
The rise in the inventories index to the second highest level of the year suggests that the destocking efforts of the prior five months are winding down. The vendor deliveries index increased to highest since last October. 
The rate of factory sector job creation rose slightly though the index at 53.1 contrasts with recent government data that suggest job loss. During the last twenty years there has been a 67% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
Pricing in the factory sector firmed even more to the highest since last October. The prices paid index rose to 78.0 on top of last month&#39;s increase.
Hurricane Katrina and the Employment Situation report for September 2005, to be released this Friday, from the U.S. Department of Labor is available <a href="http://www.bls.gov/katrina/empsitbrief.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Sept &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>59.4</td>
<td>53.6</td>
<td>59.1</td>
<td>60.5</td>
<td>53.3</td>
<td>52.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>63.8</td>
<td>56.4</td>
<td>59.9</td>
<td>63.5</td>
<td>57.9</td>
<td>56.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>78.0</td>
<td>62.5</td>
<td>76.0</td>
<td>79.8</td>
<td>59.6</td>
<td>57.6</td>
</tr>
</tbody>
</table>
U.S. Construction Spending Up  
by <a href="/comment/Moeller.html">Tom Moeller</a>  October 3, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003c.jpg" width="353">
The value of construction put in place matched Consensus expectations and rose 0.4% in August following an upwardly revised 0.3% July gain.
Private building activity rose 0.4% led by a 0.8% gain in nonresidential building. Lodging building rose a strong 3.2% (-8.3% y/y) and multi-retail building added 1.6% (30.7% y/y) to the 12.5% spike in July. Office construction fell 1.1% (+4.2% y/y) for the third decline in the last four months.
Residential building rose 0.2% as new single family building increased 0.3% (7.5% y/y) for the second consecutive month. The value of residential improvements rose a modest 0.4% (-0.4% y/y) but the value is off 14.3% from the February peak.
Public construction spending rose 0.5% following upwardly revised gains during prior months led by a 1.4% (14.9% y/y) jump in construction activity on highways &amp; streets, nearly one third of the value of public construction spending.
These more detailed categories represent the Census Bureau&#146;s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">Aug</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.1%</td>
<td>10.9%</td>
<td>5.4%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.4%</td>
<td>0.1%</td>
<td>5.3%</td>
<td>13.6%</td>
<td>6.3%</td>
<td>-0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>0.2%</td>
<td>0.0%</td>
<td>5.9%</td>
<td>18.2%</td>
<td>12.9%</td>
<td>8.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonresidential</td>
<td>0.8%</td>
<td>0.4%</td>
<td>3.7%</td>
<td>3.9%</td>
<td>-5.4%</td>
<td>-13.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Public</td>
<td>0.5%</td>
<td>0.6%</td>
<td>9.2%</td>
<td>2.5%</td>
<td>2.7%</td>
<td>5.7%</td>
</tr>
</tbody>
</table>
Japan's Tankan Survey Moderately Disappointing 
by <a href="/comment/Curley.html">Louise Curley</a> October 3, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003d.jpg" width="353">
Preliminary results of .the Bank of Japan&#39;s Tankan Survey were moderately disappointing, falling short of consensus expectations. The percent balance between optimists and pessimists evaluating the current conditions in the third quarter was 19%, compared with 18% for the second quarter. The consensus was 20-21%. The forecast for the fourth quarter is for an excess of 18% for optimists over pessimists. Although the results have fallen short of expectation, they continue to show a healthy increase of optimists over pessimists, compared to the past, as can be seen in the two attached charts, which show the appraisals of current conditions and forecasts for the following quarter. To show some perspective we have added the DISCONTINUED series to the current data that are available only from early 2004.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051003e.jpg" width="353">
The major differences between the current and the discontinued series are (1) a revised industrial classification, (2) changed sampling measures to conform with the 2001 census and (3) a change in the definition of size from one based on the number of employees to one based on capitalization.
Several commentators have suggested that the high price of oil has played a significant role in dampening business confidence. In an interview with the Financial Times, Kazuo Momma, head of economic assessment and projection at the bank of Japan, while granting the serious direct effects of the high price of oil on Japanese business confidence, also stressed his longer term concerns. &quot;We are more worried about the indirect, second wave effects coming from the slowdown of the world economy, particularly the US and China.&quot; 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/JAPAN.HTM">Tankan Survey</a></th>
<th scope="col">Q 4&nbsp; 05&nbsp;</th>
<th scope="col">Q3 05</th>
<th scope="col">Q2 04</th>
<th scope="col">Q1 05</th>
<th scope="col">Q4 04</th>
<th scope="col">Q3 04&nbsp;</th>
<th scope="col">Q2 04</th>
<th scope="col">Q1 04</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Large Manufacturing Enterprises</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>&nbsp;</td>
<td>19</td>
<td>18</td>
<td>14</td>
<td>22</td>
<td>26</td>
<td>22</td>
<td>12</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Forecast</td>
<td>18</td>
<td>17</td>
<td>14</td>
<td>15</td>
<td>21</td>
<td>21</td>
<td>12</td>
<td>6</td>
</tr>
</tbody>
</table>
</body>
</html>

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930e.jpg" width="353">
As we have noted recently, European economic performance has been basically flat. Today, another piece of evidence in this direction comes from France, which reported its August unemployment rate steady at July&#39;s 9.9%. This does continue the reversal of a modest uptick in the rate to 10.2% in March, April and May. So conditions are not worsening, as it might have appeared during the spring. But the foundation appears fairly tenuous ahead of a winter when heating and other energy costs are likely to be burdensome for even the strongest economies.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930f.jpg" width="353">
These data, reported by age group, highlight another feature of the French labor market: the extraordinarily high unemployment rate among younger workers. The overall rate has risen a moderate 1.3 percentage points from a low of 8.6% in the spring of 2001. But that for workers under age 25, now at 23.1%, is up 5.5 percentage points over the same period. Similarly, the total number of unemployed is now 2.712 million, up 17.7% from 2.304 in March 2001, while those under 25 have increased to 625,000 from 452,000, a substantial 38.3% advance. Among the other age groups featured in the French data, for &quot;middle-aged&quot; workers, ages 25-49, unemployment has risen only modestly, with their rate at 9.0%, up from 8.0% at its mid-2001 low and the number unemployed up only about 8% during that period. Older workers have seen a larger percentage increase in their idle numbers, nearly 32%, but their rate is up just 0.9 percentage point from 6.2% to 7.1%. Perhaps more notably, since mid-2003 the rate for this last group is actually down a bit and the mid-range group has seen its rate flat.
Over a longer period, the picture for the youngest group gives greater concern; they have seen their number unemployed ratchet downward from about 1.0 million in 1985 to the 625,000 mentioned earlier, but their unemployment rate is virtually the same at 23%-plus. Thus, by implication, job opportunities for young would-be French workers have diminished markedly. 

<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/FRANCE/FRANCE.HTM">France</a>&nbsp; Unemployment Rates Seasonally Adjusted</th>
<th scope="col">Aug 2005</th>
<th scope="col">July 2005</th>
<th scope="col">June 2005</th>
<th scope="col">Aug 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>9.9</td>
<td>9.9</td>
<td>10.1</td>
<td>10.0</td>
<td>10.0</td>
<td>9.8</td>
<td>9.1</td>
</tr>
<tr>
<td class="firstcol">Age under 25</td>
<td>23.1</td>
<td>23.0</td>
<td>23.3</td>
<td>22.6</td>
<td>22.4</td>
<td>20.7</td>
<td>19.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Age 25 - 49</td>
<td>9.0</td>
<td>9.0</td>
<td>9.1</td>
<td>9.1</td>
<td>9.1</td>
<td>8.9</td>
<td>8.3</td>
</tr>
<tr>
<td class="firstcol">Age 50-plus</td>
<td>7.1</td>
<td>7.1</td>
<td>7.1</td>
<td>7.3</td>
<td>7.3</td>
<td>7.5</td>
<td>6.9</td>
</tr>
</tbody>
</table>
</body>
</html>

As we have noted recently, European economic performance has been basically flat. Today, another piece of evidence in this direction comes from France, which reported its August unemployment rate steady at July's 9.9%. This does [...]

French Unemployment Little Changed in Short-Run, but Young Workers Suffer Significant Joblessness

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930d.jpg" width="353">
The Chicago Purchasing Managers Business Barometer improved unexpectedly in September to 60.5, recovering most of the 14.3 point decline in August. Consensus expectations had been for a slight increase to 52.
During the last ten years there has been a 65% correlation between the level of Chicago PMI and the three month change in factory sector industrial production.
The new orders index rose 16.9 points after a 23.1 point drop in August but the production index gained back less than half of the 14.3 point August shortfall. Employment fell for the fifth month in the last six. During the last ten years there has been a 75% correlation between the level of the employment index and the three month change in factory sector employment.
The index of prices surged 13.4 points to the highest level since Januarys. During the last ten years there has been an 86% correlation between the Chicago price index and the three month change in the &quot;core&quot; intermediate goods PPI.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">&nbsp;Sept &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Business Barometer</td>
<td>60.5</td>
<td>49.2</td>
<td>64.3</td>
<td>62.9</td>
<td>54.6</td>
<td>52.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>63.4</td>
<td>46.5</td>
<td>71.8</td>
<td>67.0</td>
<td>58.0</td>
<td>56.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid</td>
<td>76.3</td>
<td>62.9</td>
<td>86.9</td>
<td>80.1</td>
<td>55.8</td>
<td>56.9</td>
</tr>
</tbody>
</table>
</body>
</html>

The Chicago Purchasing Managers Business Barometer improved unexpectedly in September to 60.5, recovering most of the 14.3 point decline in August. Consensus expectations had been for a slight increase to 52. During the last ten years [...]

Chicago Purchasing Agents' Index Improved Unexpectedly

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930c.jpg" width="353">
The University of Michigan indicated that its final reading of consumer sentiment during September was unchanged from the preliminary indication of a 13.7% m/m decline to 76.9, the lowest level in over ten years. The September decline followed a 7.7% drop in August and Consensus expectations had been for improvement to 78.0 in August.
During the last ten years there has been a 78% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
Consumer expectations were depressed 17.7% as the index of expected business conditions during the next 12 months cratered 39.2% (-46.6% y/y). Unemployment was expected to rise but interest rates were expected to decline.
The mean expected inflation rate for the next twelve months rose to 5.5% from 3.7% in August and that helped erode expectations for real income by 1.3% (-7.3% y/y).
The current conditions index fell 9.3% m/m, roughly double the decline in August. Sentiment regarding personal finances tumbled 12.0% m/m and was at its worst level in over two years.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Sept (Final)</th>
<th scope="col">Sept (Prelim.)</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>76.9</td>
<td>76.9</td>
<td>89.1</td>
<td>-18.4%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>98.1</td>
<td>97.7</td>
<td>108.2</td>
<td>-5.4%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>63.3</td>
<td>63.6</td>
<td>76.9</td>
<td>-28.1%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan indicated that its final reading of consumer sentiment during September was unchanged from the preliminary indication of a 13.7% m/m decline to 76.9, the lowest level in over ten years. The September decline [...]

U.S. Consumer Sentiment Remained Depressed

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930b.jpg" width="353">
Personal income fell 0.1% last month after an unrevised 0.3% gain in July. Consensus expectations had been for a 0.3% August increase. The Commerce Department indicated that declines in rental &amp; proprietors&#39; income due to Hurricane Katrina probably reduced the two measures by a combined $100 billion annualized.
Wages &amp; salaries rose 0.2% (6.6% y/y) in August following an upwardly revised 0.7% increase in July. Factory sector wages rose 0.1% (4.7% y/y) after a 0.5% July increase. Service sector wages rose 0.2% (7.7% y/y) after an upwardly revised 0.9% July surge.
Disposable personal income fell 0.1% (+4.4% y/y) following two months of 0.4% increase. Adjusted for prices which rose 0.5%, take home pay fell 0.5% (+1.4% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930a.jpg" width="353">
Personal consumption expenditures fell 0.5% due to a sharp drop in light vehicle sales that pulled spending on durables down 8.9% (+3.2% y/y). Nondurables outlays surged 1.1% (9.4% y/y). Spending on gasoline &amp; fuel oil rose 5.7% (32.4% y/y) pumped by an 8.6% m/m increase in gasoline prices that rose another 16.8% this month. Services spending increased 0.4% (5.9% y/y) for the second consecutive month.
The personal savings rate remained negative for the third consecutive month. Nevertheless, the Federal Reserve indicated last week that household sector net worth (from the Flow of Funds Accounts) improved in 2Q to a four year high due to an increase in owners&#39; equity in real estate which has averaged 11.3% per year since 2001.
The PCE chain price index rose 0.5% last month. Less food &amp; energy prices rose 0.2% (2.0% y/y) following two months of 0.1% gain.
What&#39;s Driving Wage Inequality? from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/economic_research/economic_quarterly/pdfs/summer2005/steelmanweinberg.pdf"> here</a>.
Inflation Modeling: A Policy Maker&#39;s Perspective, remarks made by Federal Reserve Board Governor Donald L. Kohn is available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050929/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@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">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>5.6%</td>
<td>5.9%</td>
<td>3.2%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>-0.5%</td>
<td>1.2%</td>
<td>6.6%</td>
<td>6.5%</td>
<td>4.9%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>-0.7%</td>
<td>-1.1%</td>
<td>1.5%</td>
<td>1.7%</td>
<td>2.1%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.5%</td>
<td>0.3%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>1.9%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>2.0%</td>
<td>1.3%</td>
<td>1.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Personal income fell 0.1% last month after an unrevised 0.3% gain in July. Consensus expectations had been for a 0.3% August increase. The Commerce Department indicated that declines in rental & proprietors' income due to Hurricane [...]

U.S. Personal Income Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930b.jpg" width="353">
Personal income fell 0.1% last month after an unrevised 0.3% gain in July. Consensus expectations had been for a 0.3% August increase. The Commerce Department indicated that declines in rental &amp; proprietors&#39; income due to Hurricane Katrina probably reduced the two measures by a combined $100 billion annualized.
Wages &amp; salaries rose 0.2% (6.6% y/y) in August following an upwardly revised 0.7% increase in July. Factory sector wages rose 0.1% (4.7% y/y) after a 0.5% July increase. Service sector wages rose 0.2% (7.7% y/y) after an upwardly revised 0.9% July surge.
Disposable personal income fell 0.1% (+4.4% y/y) following two months of 0.4% increase. Adjusted for prices which rose 0.5%, take home pay fell 0.5% (+1.4% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930a.jpg" width="353">
Personal consumption expenditures fell 0.5% due to a sharp drop in light vehicle sales that pulled spending on durables down 8.9% (+3.2% y/y). Nondurables outlays surged 1.1% (9.4% y/y). Spending on gasoline &amp; fuel oil rose 5.7% (32.4% y/y) pumped by an 8.6% m/m increase in gasoline prices that rose another 16.8% this month. Services spending increased 0.4% (5.9% y/y) for the second consecutive month.
The personal savings rate remained negative for the third consecutive month. Nevertheless, the Federal Reserve indicated last week that household sector net worth (from the Flow of Funds Accounts) improved in 2Q to a four year high due to an increase in owners&#39; equity in real estate which has averaged 11.3% per year since 2001.
The PCE chain price index rose 0.5% last month. Less food &amp; energy prices rose 0.2% (2.0% y/y) following two months of 0.1% gain.
What&#39;s Driving Wage Inequality? from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/economic_research/economic_quarterly/pdfs/summer2005/steelmanweinberg.pdf"> here</a>.
Inflation Modeling: A Policy Maker&#39;s Perspective, remarks made by Federal Reserve Board Governor Donald L. Kohn is available <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/20050929/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@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">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>5.6%</td>
<td>5.9%</td>
<td>3.2%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>-0.5%</td>
<td>1.2%</td>
<td>6.6%</td>
<td>6.5%</td>
<td>4.9%</td>
<td>4.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>-0.7%</td>
<td>-1.1%</td>
<td>1.5%</td>
<td>1.7%</td>
<td>2.1%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.5%</td>
<td>0.3%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>1.9%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>2.0%</td>
<td>1.3%</td>
<td>1.8%</td>
</tr>
</tbody>
</table>
U.S. Consumer Sentiment Remained Depressed 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 30, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930c.jpg" width="353">
The University of Michigan indicated that its final reading of consumer sentiment during September was unchanged from the preliminary indication of a 13.7% m/m decline to 76.9, the lowest level in over ten years. The September decline followed a 7.7% drop in August and Consensus expectations had been for improvement to 78.0 in August.
During the last ten years there has been a 78% correlation between the level of consumer sentiment and the y/y change in real consumer spending.
Consumer expectations were depressed 17.7% as the index of expected business conditions during the next 12 months cratered 39.2% (-46.6% y/y). Unemployment was expected to rise but interest rates were expected to decline.
The mean expected inflation rate for the next twelve months rose to 5.5% from 3.7% in August and that helped erode expectations for real income by 1.3% (-7.3% y/y).
The current conditions index fell 9.3% m/m, roughly double the decline in August. Sentiment regarding personal finances tumbled 12.0% m/m and was at its worst level in over two years.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Sept (Final)</th>
<th scope="col">Sept (Prelim.)</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>76.9</td>
<td>76.9</td>
<td>89.1</td>
<td>-18.4%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>98.1</td>
<td>97.7</td>
<td>108.2</td>
<td>-5.4%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>63.3</td>
<td>63.6</td>
<td>76.9</td>
<td>-28.1%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
Chicago Purchasing Agents' Index Improved Unexpectedly 
by <a href="/comment/Moeller.html">Tom Moeller</a> September 30, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930d.jpg" width="353">
The Chicago Purchasing Managers Business Barometer improved unexpectedly in September to 60.5, recovering most of the 14.3 point decline in August. Consensus expectations had been for a slight increase to 52.
During the last ten years there has been a 65% correlation between the level of Chicago PMI and the three month change in factory sector industrial production.
The new orders index rose 16.9 points after a 23.1 point drop in August but the production index gained back less than half of the 14.3 point August shortfall. Employment fell for the fifth month in the last six. During the last ten years there has been a 75% correlation between the level of the employment index and the three month change in factory sector employment.
The index of prices surged 13.4 points to the highest level since Januarys. During the last ten years there has been an 86% correlation between the Chicago price index and the three month change in the &quot;core&quot; intermediate goods PPI.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF05/@EF05.HTM">Chicago Purchasing Managers Index, SA</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">&nbsp;Sept &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Business Barometer</td>
<td>60.5</td>
<td>49.2</td>
<td>64.3</td>
<td>62.9</td>
<td>54.6</td>
<td>52.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>63.4</td>
<td>46.5</td>
<td>71.8</td>
<td>67.0</td>
<td>58.0</td>
<td>56.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid</td>
<td>76.3</td>
<td>62.9</td>
<td>86.9</td>
<td>80.1</td>
<td>55.8</td>
<td>56.9</td>
</tr>
</tbody>
</table>
French Unemployment Little Changed in Short-Run, but Young Workers Suffer Significant Joblessness 
by <a href="/comment/Stone.html">Carol Stone</a> September 30, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930e.jpg" width="353">
As we have noted recently, European economic performance has been basically flat. Today, another piece of evidence in this direction comes from France, which reported its August unemployment rate steady at July&#39;s 9.9%. This does continue the reversal of a modest uptick in the rate to 10.2% in March, April and May. So conditions are not worsening, as it might have appeared during the spring. But the foundation appears fairly tenuous ahead of a winter when heating and other energy costs are likely to be burdensome for even the strongest economies.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050930f.jpg" width="353">
These data, reported by age group, highlight another feature of the French labor market: the extraordinarily high unemployment rate among younger workers. The overall rate has risen a moderate 1.3 percentage points from a low of 8.6% in the spring of 2001. But that for workers under age 25, now at 23.1%, is up 5.5 percentage points over the same period. Similarly, the total number of unemployed is now 2.712 million, up 17.7% from 2.304 in March 2001, while those under 25 have increased to 625,000 from 452,000, a substantial 38.3% advance. Among the other age groups featured in the French data, for &quot;middle-aged&quot; workers, ages 25-49, unemployment has risen only modestly, with their rate at 9.0%, up from 8.0% at its mid-2001 low and the number unemployed up only about 8% during that period. Older workers have seen a larger percentage increase in their idle numbers, nearly 32%, but their rate is up just 0.9 percentage point from 6.2% to 7.1%. Perhaps more notably, since mid-2003 the rate for this last group is actually down a bit and the mid-range group has seen its rate flat.
Over a longer period, the picture for the youngest group gives greater concern; they have seen their number unemployed ratchet downward from about 1.0 million in 1985 to the 625,000 mentioned earlier, but their unemployment rate is virtually the same at 23%-plus. Thus, by implication, job opportunities for young would-be French workers have diminished markedly. 

<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/FRANCE/FRANCE.HTM">France</a>&nbsp; Unemployment Rates Seasonally Adjusted</th>
<th scope="col">Aug 2005</th>
<th scope="col">July 2005</th>
<th scope="col">June 2005</th>
<th scope="col">Aug 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>9.9</td>
<td>9.9</td>
<td>10.1</td>
<td>10.0</td>
<td>10.0</td>
<td>9.8</td>
<td>9.1</td>
</tr>
<tr>
<td class="firstcol">Age under 25</td>
<td>23.1</td>
<td>23.0</td>
<td>23.3</td>
<td>22.6</td>
<td>22.4</td>
<td>20.7</td>
<td>19.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Age 25 - 49</td>
<td>9.0</td>
<td>9.0</td>
<td>9.1</td>
<td>9.1</td>
<td>9.1</td>
<td>8.9</td>
<td>8.3</td>
</tr>
<tr>
<td class="firstcol">Age 50-plus</td>
<td>7.1</td>
<td>7.1</td>
<td>7.1</td>
<td>7.3</td>
<td>7.3</td>
<td>7.5</td>
<td>6.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Sandy Batten

251223v2.jpg

251223w2.jpg

New orders for durable goods fell a more-than-expected 2.2% (+4.8% y/y) in October following an upwardly revised 0.7% m/m rise in September (previously +0.5% m/m) and a 3.0% monthly jump in August. The Action Economics Forecast Survey expected a 1.5% m/m decline. A 23.7% m/m drop in aircraft orders more than accounted for the overall decline. Orders excluding aircraft increased 0.2% m/m (4.0% y/y) in October on top of a 0.5% monthly increase in September.

More generally, transportation orders fell 6.5% m/m (+7.3% y/y) in October following a 0.6% m/m increase in September and an 8.0% monthly jump in August. In addition to the drop in aircraft orders, orders for motor vehicles and parts edged up 0.1% m/m in October, their sixth consecutive monthly increase. Across other sectors, orders for primary metals fell 0.7% m/m, their first monthly decline in ten months. Orders for electrical equipment and appliances slumped 1.5% m/m, their first monthly decline in seven months. In contrast, orders for fabricated metal products rose 0.5% m/m, their fourth consecutive monthly gain. Machinery orders increased 0.8% m/m, their eighth consecutive monthly rise. Orders for computers and electronic products increased a solid 1.0% m/m on top of a 1.2% monthly increase in September.

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 rose 0.7% m/m in October following an upwardly revised 1.2% monthly gain in September (previously +0.9%). The was the second consecutive monthly increase and the fifth in the past six months. The strong end to Q3 and the continued rise in the first month of Q4 provides a solid starting point for all of Q4. The October shipments figure was 5.9% at an annual rate above the Q3 average. Core capital goods orders rose 0.5% m/m in October on top of an upwardly revised 1.1% m/m increase in September (previously +0.9%). This was the fourth consecutive monthly rise.

Total manufacturing shipments edged up 0.1% m/m (+2.8% y/y) in October after having been essentially unchanged in September. Shipments of durable goods increased 0.6% m/m (5.9% y/y), led by 1.4% monthly jump in transportation shipments. However, apart from a 0.1% m/m decline in shipments of other durable goods, all of the other major sectors posted monthly gains in October. In contrast, shipments of nondurable goods fell 0.4% m/m (-0.3% y/y) in October for their third consecutive monthly decline. The monthly decline was led by a 2.4% m/m fall in shipments of petroleum and coal products although it was relatively widely spread across major sectors. The one exception was a 2.1% m/m increase in leather product shipments, but this came after four consecutive sizeable monthly declines.

Unfilled durable goods orders increased 0.2% m/m (7.9% y/y) in October for their third consecutive monthly gain following a 0.8% m/m rise in September and a 0.7% m/m increase in August. Total factory inventories were unchanged in October (+1.4% y/y) following 0.1% monthly declines in both August and September. Durable goods inventories edged up 0.1% m/m in October while inventories of nondurable goods fell 0.2% m/m, the third consecutive monthly decline.

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



251223x2.jpg

251223y2.jpg

- New orders for durable goods slumped 2.2% m/m in October following increases in both August and September
- A 24% monthly drop in aircraft orders drove the overall decline
- Orders excluding aircraft rose 0.2% m/m in October
- Core capital goods shipments and orders continued to rise in October with small upward revisions to September


Weak Aircraft Orders Pushed Down U.S. Durable Goods Orders in October

251222f8.jpg

251222g8.jpg

The Chicago Fed National Activity Index (CFNAI) increased to -0.21 during September from a four-month low of -0.31 in August. It remained below a high of 0.42 during February. 

The employment, unemployment & hours measure led the improvement and rose to 0.01 during September from -0.11 in August. The employment readings had been negative in each month since February. The weakest occurred in July which equaled August. The production & income reading edged up to -0.10 in September from -0.13 in August. It remained below February’s high of 0.36. 

Moving lower, the personal consumption & housing measure fell to -0.06 in September from -0.03 in August. It was the weakest reading in four months. The sales, orders & inventories reading declined to -0.07 during September from -0.05 in August. It was the lowest figure since April, and down from a 0.16 high during March.  

The index's three-month moving average, which smooths out the m/m volatility in the index, fell to -0.21 in September after increasing to -0.18 in August. It was the fifth consecutive negative reading, but above its -0.24 June low. It remained below its recent high of 0.11 in February.

The CFNAI Diffusion Index, which measures the breadth of change in the component series and is also a three-month moving average, fell to -0.32 in September from -0.20 in both July and August. It was the weakest reading in three months. Negative for seven straight months, it was below the February high of 0.10. A reading of zero indicates that all of the indicators are growing at their long-term average. 

The CFNAI is a weighted average of 85 indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

These figures are available in Haver's **SURVEYS** database.


- The CFNAI is negative for sixth straight month.
- Three of four index components remain negative
- Improvement in labor market reading leads m/m gain.

The Federal Reserve Bank of Chicago indicated that the December 22, 2025, release of the CFNAI was originally scheduled to cover data through November 2025. However, because of the delay in data releases from government statistical agencies due to the federal government shutdown, this CFNAI release will instead only cover data through September 2025.

Chicago Fed National Activity Index Improves Slightly in September

251218L5.jpg

251218M5.jpg

The Consumer Price Index increased 2.7% y/y during November, down from 2.8% in October. The 0.2% m/m increase fell short of the 0.3% gain expected in the Action Economics Forecast Survey. The y/y gain in the headline CPI was the weakest since April. It was down from September’s high of 3.0% and compared to 2.9% during 2024. The CPI excluding food & energy increased 0.1% (2.6% y/y) in November. Its y/y rise compared to 2.8% y/y in October and was the weakest rise since March 2021.	

Energy prices rose 1.6% (4.1% y/y in November. Gasoline prices strengthened 3.0% (0.9% y/y). Fuel oil prices increased 3.1% (11.3% y/y). Natural gas prices fell 2.1% (+9.1% y/y), and electricity prices strengthened 1.1% (6.9% y/y). 
Food prices rose 0.1% (2.6% y/y) during November. Egg prices declined 6.4% (-13.2% y/y). Meat, poultry & fish prices strengthened 0.8% (6.8% y/y), while dairy product prices fell 0.9% (-1.6% y/y). Cereal & bakery product costs held steady (+1.9% y/y). Fruit & vegetable prices fell 0.4% and were little changed y/y. Nonalcoholic beverage prices increased 0.9% and 4.3% y/y in November.

Goods prices less food and energy rose 0.2% and rose a steady 1.4% y/y during November. Prices of used cars and trucks increased 0.3% (3.6% y/y), and new vehicle costs rose 0.2% (0.6% y/y). Appliance prices fell 0.6% (+0.5% y/y) while home furnishings prices rose 0.4% (2.6% y/y). Recreation product costs fell 0.3% but increased 0.7% y/y in November. Apparel prices increased 0.6% (0.1% y/y) in November. Education & communication product costs declined 0.3% (-3.1% y/y). Medical care goods prices rose 0.1% (1.1% y/y) in November. 

Services prices less energy edged 0.1% higher but increased 3.0% y/y in November, down from 7.0% y/y in 2022. Shelter prices (35.5% of the CPI) rose 0.1% (3.0% y/y), as owners’ equivalent rent of primary residences also rose 0.1% (3.4% y/y). Transportation service prices fell 0.3% (1.7% y/y). The cost of medical services edged 0.1% and rose 3.3% y/y, and the cost of recreation services fell 0.3% (+2.4% y/y). Education & communication services prices increased 0.4% m/m and 2.2% y/y.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

For the release of CPI on December 18, 2025, the BLS was able to retroactively acquire most nonsurvey data for October and will publish October 2025 values where possible. However, the majority of the CPI series rely on survey data which was not collected for October 2025 due to the government shutdown. Accordingly, the BLS will not publish October values for those series. Haver Analytics has created a second set of CPI indexes and relative importance series in **USECON**. These series will contain any published BLS values for October and interpolated values for unpublished detailed indexes. We will then calculate higher aggregate series such as the All Items index and All Items less food and energy using any published indexes along with our interpolated indexes and relative importance. 


251218N5.jpg

251218O5.jpg

- Year-to-year comparison is slowest in four months.
- Core price gain exhibits weakest y/y increase since 2021. 
- Services price inflation tumbles y/y; core goods price gain is stable.


U.S. Consumer Price Inflation Moderates in November

251219j5.jpg

251219k5.jpg

Existing home sales rose 0.5% m/m (-1.0% y/y) in November to 4.13 million homes (SAAR) following a 1.5% monthly gain in October and a 1.3% monthly rise in September, according to the National Association of Realtors (NAR). It was the highest level of sales since February and matched expectations in the Action Economics Forecast Survey. The average effective 30-year mortgage interest rate was unchanged at 6.54% last month, but this is down markedly from 7.10% in May and accounts for some of the revival in home sales over the past several months. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales rose 0.8% m/m (-0.8% y/y) in November to 3.75 million units after a 1.1% m/m rise in October and a 1.4% monthly gain in September. Sales of condos and co-ops slumped 2.6% m/m (-2.6% y/y) to 380,000 in November following a 5.4% monthly jump in October.

Compared to a month ago, sales rose 4.1% m/m in the Northeast, increased 1.1% m/m in the South, were unchanged in the West and fell 2.0% m/m in the Midwest. Compared to a year ago, sales were unchanged in both the Northeast and the South, fell 3.0% y/y in the Midwest and declined 1.3% y/y in the West.

The median price of all existing homes (NSA) declined 1.4% m/m (+1.2% y/y) to $409,200 in November. The median price of an existing single-family home fell 1.4% m/m (+1.2% y/y) to $414,300 in November. Prices of single-family homes in the Northeast edged up 0.9% from a year ago. Prices in the Midwest jumped 5.8% y/y; prices in the South rose 1.0% y/y. In contrast, prices in the West declined 0.8% from a year ago.

Inventories of homes for sale continued to weaken in November. The number of existing homes for sale (NSA) slumped 5.9% m/m (+7.5% y/y) to 1.43 million units in November. The supply of homes on the market at the current selling rate (NSA) slid to 4.2 months, its lowest reading since March.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.


251219l5.jpg

251219M5.jpg

- Existing home sales increased 0.5% m/m in November, the third consecutive monthly gain.
- Month-over-month sales increased in the Northeast and South, were unchanged in the West, and fell in the Midwest.
- Year-over-year sales were unchanged in the Northeast and South and decreased in the Midwest and West.


U.S. Existing Home Sales Edged Up in November

Robert Brusca

251219E.jpg

The new UK Confederation of British Industry (CBI) survey on the distributive trades sector shows a sharp weakening of an already weak survey for December and for the outlook into January of 2026. 

The month-to-month deterioration from November was widespread across metrics for retailing as well as for wholesaling for the current month as well as for the outlook. The monthly degradation is without exception across the board - omitting the inventory metric which is a different animal in any event since inventory building is sometimes involuntary. 

**The Retail survey**
Current conditions: In December, the retail survey for sales compared to a year ago, orders compared to year ago, and sales for the time of year (a seasonal adjustment metric), all worsened month-to-month. The November readings were weak and in December sales compared to a year-ago worsened by 12 points, Orders compared to a year ago worsened by 17 points month-to-month and sales for the time of year worsened by 11 points. These metrics for December are below their respective 12-month average by 6 to 13 points, as well for these categories. The rankings tell a stark story, year-on-year sales have been lower only 5.3% of the time, Year-on-year orders have been weaker only 5.6% of the time, while time of the year sales have been lower only 13% of the time. These are all extremely low-ranking metrics.

Expected Conditions: In January expected conditions have weakened month-to-month by amounts ranging from 33 points to 16 points depending on the metric. And sales and orders compared to a year ago as well as sales for the time of year each are weaker than their respective 12-month average readings by amounts ranging from 4 points to 23 points. The rankings on expectations are even worse than for the current metrics. Expected sales compared to a year ago rank lower less than 1% of the time, the same is true of orders. While sales for the time of year have been weaker 7.7 percent of the time. 
 
**Wholesale survey** 
The rankings for wholesaling are even lower than for retailing across the current and expected metrics. The month-to-month degradation for the current readings ranges from 7 points to 17 points weaker while the reading degradation monthly ranges from 5 points to 16 points. Wholesale sales and orders compared to a year ago and sales for the time of year each rank below the 5% mark. The expectations for January shows expectations for the three categories each are at a 2.5 percentile standing or lower. 

**Summing up**
The distributive trades survey has all but crashed and burned in December. Over the last 26 years the average of the three current metrics’ rankings has been lower only 18 times. The average outlook ranking for the month ahead has been weaker only 5 times in the last 26 years (over 313 months). On a relative basis the expected sales/orders performance is more depressed than the Current results for January. The pooled rankings show current ranking over the past 26-years weaker only 5.8 percent of the time with expectations lower only 1.6 percent of the time. These are very weak metrics. It is surprising that the BOE is walking on eggshells to cut rates with mixed support for rate cuts amid such weakness. There is already a GDP decline in the monthly data for October. UK and inflation is still too high, but it is breaking lower at a relatively fast pace. Will the UK be the first economy down after Covid? 




Economy in Brief: 2005

Jump to:

U.S. Construction Spending Up

ISM Index Lifted by Hurricane Rebuilding & Inventory Restocking

ISM Index Lifted by Hurricane Rebuilding & Inventory Restocking

French Unemployment Little Changed in Short-Run, but Young Workers Suffer Significant Joblessness

Chicago Purchasing Agents' Index Improved Unexpectedly

U.S. Consumer Sentiment Remained Depressed

U.S. Personal Income Fell

U.S. Personal Income Fell