Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081028c.jpg" width="353">
Consumer spending continued to weaken this month, according to the International Council of Shopping Centers-Goldman Sachs Index, chain store sales recovered just a piece of the prior week&#39;s decline. The 0.5% increase came after a 1.6% drop keeping October sales 1.1% below the September average. Chain store sales fell 1.9% during August.
The level of sales during the latest week remained near the lowest since December of last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081028d.jpg" width="353">
During the last ten years there has been a 59% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Portending further weakness in consumer spending was a 1.3% drop in the leading indicator of chain store sales from ICSC-Goldman Sachs. It fell 1.3% (-5.8% y/y) during the latest week to the lowest level since 1996.
The chain store sales figures are available in Haver&#39;s SURVEYW database.

<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/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">10/25/08</th>
<th scope="col">10/18/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>479.3</td>
<td>477.0</td>
<td>1.3%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


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Consumer spending continued to weaken this month, according to the International Council of Shopping Centers-Goldman Sachs Index, chain store sales recovered just a piece of the prior week's decline. The 0.5% increase came after a [...]

U.S. Chain Store Sales Further Confirm Weak Retail Spending

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081028a.jpg" width="353">
The retail price for a gallon of regular gasoline fell by twenty five cents last week. At $2.66 per gallon, according to the U.S. Department of Energy survey, the price was the lowest since March of 2007. Prices have now fallen roughly $1.50 per gallon, or by one-third, since their peak early this past July. The latest decline was accompanied by a drop in the average price for all grades of gasoline to $2.72 per gallon.
Yesterday, the spot market price for a gallon of regular gasoline fell further to $1.60, down twenty cents from last week&#39;s average. In futures trading the November contract closed down further at $1.48 per gallon.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081028b.jpg" width="353">
Weekly gasoline prices can be found in Haver&#39;s WEEKLY database. Daily prices are in the DAILY database.
In reaction to the general slowing of U.S. economic growth and relatively high prices, the demand for gasoline is down. The 4.2% y/y decline, according to the U.S. Department of Energy, was the largest y/y drop since late 1995 (the latest four weeks versus the same four weeks last year).
These DOE figures are available in Haver&#39;s OILWKLY database.
The price for a barrel of West Texas Intermediate crude oil fell sharply last week to an average $68.16 per barrel, down by more than one half from the high in July of $145.66. In futures trading, the two-month price for crude oil was down further yesterday at $63.71 per barrel.
Last week prices for natural gas were near their lowest level since August of last year. At an average $6.73 per mmbtu, prices ticked up slightly from the prior week but the average price this month was nearly one-half below the high for natural gas prices in early-July of $13.19/mmbtu.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">10/27/08</th>
<th scope="col">10/20/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per Gallon)</td>
<td>2.66</td>
<td>2.91</td>
<td>-7.5%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>68.18</td>
<td>75.21</td>
<td>-23.9%</td>
<td>72.25</td>
<td>66.12</td>
<td>56.60</td>
</tr>
</tbody>
</table>
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The retail price for a gallon of regular gasoline fell by twenty five cents last week. At $2.66 per gallon, according to the U.S. Department of Energy survey, the price was the lowest since March of 2007. Prices have now fallen [...]

U.S. Gasoline Prices Lowest Since March '07 As Demand Falls

Reflecting turbulence in the financial markets, the Conference Board reported that its October index of consumer confidence collapsed by more than one-third m/m to a record low level. The latest index level of 38.0, off by two-thirds [...]

Consumer Confidence Collapses To Record Low

Robert Brusca

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027e.jpg" width="353">
Europe&#146;s money supply growth and credit growth do not show signs of further slowing in September. Growth is slower that it has been over the past 12months but 3-month growth rates are about the same or a bit higher than 6-month rates of growth. In the US and the UK rates of growth in three months have picked up beyond those for their respective 12-month paces. In Japan money growth rates are very low and continue to ease. The grow rates for real money balances actually look a bit stronger all around except in Japan. 
As the financial problems have gotten worse one thing we have seen is that money supply numbers have bulged. Money demand has three components: precautionary, speculative and transactions demand. We tend to look at increases in money supply as being for transactions demand but in times such as these the precautionary element could be spiking as investors ditch riskier investments and flock to bank deposits. I would not look at the pick up in money growth or in the growth in real money balances as something that is inflationary for that reason. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr><th colspan="8" scope="col">Look at Global and Euro Liquidity Trends </th>

</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar-all</td>
<td colspan="3">Euro Measures (E13): Money &amp; Credit</td>
<td colspan="3">G-10 Major Markets: Money</td>
<td>Memo</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&#128;&#128;-Supply M2</td>
<td>Credit:Resid</td>
<td>Loans</td>
<td>$US M2</td>
<td>&pound;&pound;UK M4</td>
<td>&yen;&yen;Jpn M2+Cds</td>
<td>OIL:WTI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>10.1%</td>
<td>8.5%</td>
<td>7.2%</td>
<td>7.0%</td>
<td>16.3%</td>
<td>1.2%</td>
<td>-63.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td>9.2%</td>
<td>8.1%</td>
<td>7.0%</td>
<td>4.0%</td>
<td>14.3%</td>
<td>1.8%</td>
<td>-3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>10.1%</td>
<td>10.5%</td>
<td>8.7%</td>
<td>6.2%</td>
<td>11.8%</td>
<td>2.2%</td>
<td>30.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>10.2%</td>
<td>10.8%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>12.3%</td>
<td>2.0%</td>
<td>27.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>9.6%</td>
<td>11.2%</td>
<td>10.2%</td>
<td>5.7%</td>
<td>13.0%</td>
<td>1.5%</td>
<td>16.4%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Real Balances: deflated by Own CPI. Oil deflated by US CPI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>9.2%</td>
<td>7.5%</td>
<td>6.3%</td>
<td>4.3%</td>
<td>9.7%</td>
<td>0.0%</td>
<td>-64.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td>6.6%</td>
<td>5.5%</td>
<td>4.4%</td>
<td>-1.2%</td>
<td>7.2%</td>
<td>-0.7%</td>
<td>-8.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>6.2%</td>
<td>6.6%</td>
<td>4.9%</td>
<td>1.2%</td>
<td>6.3%</td>
<td>0.0%</td>
<td>24.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>7.1%</td>
<td>7.7%</td>
<td>6.6%</td>
<td>2.3%</td>
<td>8.6%</td>
<td>1.0%</td>
<td>22.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>6.9%</td>
<td>8.5%</td>
<td>7.5%</td>
<td>2.4%</td>
<td>9.6%</td>
<td>0.6%</td>
<td>12.7%</td>
</tr>
</tbody>
</table>
</body>
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Europes money supply growth and credit growth do not show signs of further slowing in September. Growth is slower that it has been over the past 12months but 3-month growth rates are about the same or a bit higher than 6-month rates [...]

Money Supply Growth Stabilizes

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027d.jpg" align="left" border="0" height="265" width="353">
It is no surprise, given the world economic turmoil that
German firms have become increasingly pessimistic regarding their
economic outlook. The IFO Business climate indicator fell 2.9% to 90.2
(2000=100) in October from 92.9 in September. The indicator is now
approaching the lows last reached in 2001 and 2002.The Business Climate
Indicator is based on the responses of some 7000 firms in the
manufacturing, construction, wholesale and retail trade industries to
questions regarding current conditions and expected conditions over the
next six months. In the current survey, the index for current
conditions increased minimally by 0.1%,while the index for expectations
declined 5.9%. The indexes for the business climate, current conditions
and expectations for the next six months are shown in the first chart.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027c.jpg" align="right" border="0" height="265" width="353">
In addition to the indexes, the data are also shown as
percentage balances of good versus poor for current conditions and more
favorable versus less favorable for expectations. The percentage
balances for the business climate in the manufacturing, construction,
wholesale and retail trade industries are shown in the second chart.
All the indicators have been declining since the sub prime problem
arose in the United States in the Fall of 2007, but the declines in
manufacturing and retail trade appear to have accelerated in the past
few months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">GERMANY
IFO BUSINESS CLIMATE&nbsp;</th>
<th scope="col">Oct 08</th>
<th scope="col">Sep 08&nbsp;</th>
<th scope="col">Oct&nbsp; 07&nbsp;</th>
<th scope="col">M/M %chg&nbsp;</th>
<th scope="col">Y/Y&nbsp; chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">INDEXES&nbsp;
(2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Climate</td>
<td>90.2</td>
<td>92.9</td>
<td>104.1</td>
<td>-2.91</td>
<td>-13.35</td>
<td>106.2</td>
<td>105.4</td>
<td>95.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current
Conditions</td>
<td>99.9</td>
<td>99.8</td>
<td>109.7</td>
<td>0.10</td>
<td>-8.93</td>
<td>111.2</td>
<td>108.4</td>
<td>94.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Expectations for Next Six Months</td>
<td>81.4</td>
<td>86.5</td>
<td>98.8</td>
<td>-5.90</td>
<td>-17.61</td>
<td>101.4</td>
<td>102.7</td>
<td>96.3</td>
</tr>
<tr class="odd">
<td class="firstcol">PERCENT BALANCES (%)</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;Pt chg</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Industry</td>
<td>-20.2</td>
<td>-14.9</td>
<td>7.5</td>
<td>-5.3</td>
<td>-27.7</td>
<td>11.6</td>
<td>10.2</td>
<td>-9.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>-18.9</td>
<td>-11.9</td>
<td>18.4</td>
<td>-7.2</td>
<td>-37.3</td>
<td>22.4</td>
<td>19.8</td>
<td>1.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Construction&nbsp;</td>
<td>-27.6</td>
<td>-25.2</td>
<td>-20.3</td>
<td>-2.4</td>
<td>-7.3</td>
<td>-16.1</td>
<td>-15.8</td>
<td>-37.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale
Trade</td>
<td>-15.1</td>
<td>-10.3</td>
<td>2.6</td>
<td>-4.8</td>
<td>-17.7</td>
<td>11.1</td>
<td>11.7</td>
<td>-9.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail
Trade</td>
<td>-25.0</td>
<td>-24.1</td>
<td>-6.4</td>
<td>-0.9</td>
<td>-18.6</td>
<td>-6.5</td>
<td>-6.0</td>
<td>-28.0</td>
</tr>
</tbody>
</table>
</body></html>

It is no surprise, given the world economic turmoil that German firms have become increasingly pessimistic regarding their economic outlook. The IFO Business climate indicator fell 2.9% to 90.2 (2000=100) in October from 92.9 in [...]

No Surprise: German Ifo's Business Climate Indicator Continues To Decline

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027a.jpg" width="353">
The U.S. Census Department reported that September sales of new single-family homes ticked up 2.7% m/m to 464,000. The rise followed a 12.6% m/m decline during August that was little revised. The level of sales in September was down 66.6% from the July 2005 peak but it was slightly better than Consensus expectations for 450,000 sales.
By region sales in the West accounted for most of last month&#39;s increase in the total with a 22.7% gain. However, the rise did not wholly make up a 30.2% slide during August. In the South sales ticked up 0.7% but that hardly dented a 5.7% August drop. Reflecting the weakness in the auto industry, new home sales in the Midwest sales reversed all of their August rise with a 5.6% slide. Suffering greatly from weakness in the financial industry, new home sales in the Northeast dropped 21.4% m/m after an August slide of 34.9%. September sales in the Northeast were roughly 80% below the peaks in 2004-05.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027b.jpg" width="353">
The median price for a new single-family home declined a slight 0.9% to $218,400. However, that slip followed a sharp 7.1% m/m drop in August and prices were off 9.1% y/y. New home prices in September were back to where they were late in 2004. The decline in home prices roughly matched the drop reported last week by the Office of Federal Housing Enterprise Oversight (FHFA). The FHFA figures, (formerly the Office of Federal Housing Enterprise Oversight (OFHEO), as well as the Census Dept. figures, are available in Haver&#39;s USECON database. 
The number of new homes for purchase again fell sharply, by 7.3% (-25.4% y/y). That reduced the inventory of unsold homes to the lowest level since late-2004. In each of the country&#39;s regions the inventory is down roughly one-quarter during the last year.
The month&#39;s supply of new homes for sale ticked lower m/m to 10.4, not far from the peak of 11.4 months during August.
Foreclosure prevention efforts and market stability is last week&#39;s Senate testimony given by Fed Governor Elizabeth A. Duke and it can be found <a href="http://www.federalreserve.gov/newsevents/testimony/duke20081023a.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">US New Homes</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y (%)</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales (SAAR, 000s)</td>
<td>464</td>
<td>452</td>
<td>-33.1</td>
<td>768</td>
<td>1,049</td>
<td>1,279</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>22</td>
<td>28</td>
<td>&nbsp;-65.1</td>
<td>64</td>
<td>64</td>
<td>81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>65</td>
<td>69</td>
<td>-37.5</td>
<td>118</td>
<td>161</td>
<td>203</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>269</td>
<td>267</td>
<td>-23.8</td>
<td>408</td>
<td>559</td>
<td>638</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>108</td>
<td>88</td>
<td>-37.9</td>
<td>178</td>
<td>266</td>
<td>356</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA, $)</td>
<td>218,400</td>
<td>220,400</td>
<td>-9.1</td>
<td>243,742</td>
<td>243,067</td>
<td>234,208</td>
</tr>
</tbody>
</table>
</body>
</html>

The U.S. Census Department reported that September sales of new single-family homes ticked up 2.7% m/m to 464,000. The rise followed a 12.6% m/m decline during August that was little revised. The level of sales in September was down [...]

September U.S. New-Home Sales Ticked Up but Still Near the Cycle's Low

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027a.jpg" width="353">
The U.S. Census Department reported that September sales of new single-family homes ticked up 2.7% m/m to 464,000. The rise followed a 12.6% m/m decline during August that was little revised. The level of sales in September was down 66.6% from the July 2005 peak but it was slightly better than Consensus expectations for 450,000 sales.
By region sales in the West accounted for most of last month&#39;s increase in the total with a 22.7% gain. However, the rise did not wholly make up a 30.2% slide during August. In the South sales ticked up 0.7% but that hardly dented a 5.7% August drop. Reflecting the weakness in the auto industry, new home sales in the Midwest sales reversed all of their August rise with a 5.6% slide. Suffering greatly from weakness in the financial industry, new home sales in the Northeast dropped 21.4% m/m after an August slide of 34.9%. September sales in the Northeast were roughly 80% below the peaks in 2004-05.
The median price for a new single-family home declined a slight 0.9% to $218,400. However, that slip followed a sharp 7.1% m/m drop in August and prices were off 9.1% y/y. New home prices in September were back to where they were late in 2004. The decline in home prices roughly matched the drop reported last week by the Office of Federal Housing Enterprise Oversight (FHFA). The FHFA figures, (formerly the Office of Federal Housing Enterprise Oversight (OFHEO), as well as the Census Dept. figures, are available in Haver&#39;s USECON database. 
The number of new homes for purchase again fell sharply, by 7.3% (-25.4% y/y). That reduced the inventory of unsold homes to the lowest level since late-2004. In each of the country&#39;s regions the inventory is down roughly one-quarter during the last year.
The month&#39;s supply of new homes for sale ticked lower m/m to 10.4, not far from the peak of 11.4 months during August.
Foreclosure prevention efforts and market stability is last week&#39;s Senate testimony given by Fed Governor Elizabeth A. Duke and it can be found <a href="http://www.federalreserve.gov/newsevents/testimony/duke20081023a.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">US New Homes</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y (%)</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales (SAAR, 000s)</td>
<td>464</td>
<td>452</td>
<td>-33.1</td>
<td>768</td>
<td>1,049</td>
<td>1,279</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>22</td>
<td>28</td>
<td>&nbsp;-65.1</td>
<td>64</td>
<td>64</td>
<td>81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>65</td>
<td>69</td>
<td>-37.5</td>
<td>118</td>
<td>161</td>
<td>203</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>269</td>
<td>267</td>
<td>-23.8</td>
<td>408</td>
<td>559</td>
<td>638</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>108</td>
<td>88</td>
<td>-37.9</td>
<td>178</td>
<td>266</td>
<td>356</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA, $)</td>
<td>218,400</td>
<td>220,400</td>
<td>-9.1</td>
<td>243,742</td>
<td>243,067</td>
<td>234,208</td>
</tr>
</tbody>
</table>
Money Supply Growth Stabilizes 
by <a href="/comment/Brusca.html">Robert Brusca</a> October 27, 2008


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027e.jpg" width="353">
Europe&#146;s money supply growth and credit growth do not show signs of further slowing in September. Growth is slower that it has been over the past 12months but 3-month growth rates are about the same or a bit higher than 6-month rates of growth. In the US and the UK rates of growth in three months have picked up beyond those for their respective 12-month paces. In Japan money growth rates are very low and continue to ease. The grow rates for real money balances actually look a bit stronger all around except in Japan. 
As the financial problems have gotten worse one thing we have seen is that money supply numbers have bulged. Money demand has three components: precautionary, speculative and transactions demand. We tend to look at increases in money supply as being for transactions demand but in times such as these the precautionary element could be spiking as investors ditch riskier investments and flock to bank deposits. I would not look at the pick up in money growth or in the growth in real money balances as something that is inflationary for that reason. 


<colgroup></colgroup>


<tr><th colspan="8" scope="col">Look at Global and Euro Liquidity Trends </th>
</tr>

<tbody>
<tr class="even">
<td class="firstcol">Saar-all</td>
<td colspan="3">Euro Measures (E13): Money &amp; Credit</td>
<td colspan="3">G-10 Major Markets: Money</td>
<td>Memo</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&#128;&#128;-Supply M2</td>
<td>Credit:Resid</td>
<td>Loans</td>
<td>$US M2</td>
<td>&pound;&pound;UK M4</td>
<td>&yen;&yen;Jpn M2+Cds</td>
<td>OIL:WTI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>10.1%</td>
<td>8.5%</td>
<td>7.2%</td>
<td>7.0%</td>
<td>16.3%</td>
<td>1.2%</td>
<td>-63.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td>9.2%</td>
<td>8.1%</td>
<td>7.0%</td>
<td>4.0%</td>
<td>14.3%</td>
<td>1.8%</td>
<td>-3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>10.1%</td>
<td>10.5%</td>
<td>8.7%</td>
<td>6.2%</td>
<td>11.8%</td>
<td>2.2%</td>
<td>30.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>10.2%</td>
<td>10.8%</td>
<td>9.7%</td>
<td>6.2%</td>
<td>12.3%</td>
<td>2.0%</td>
<td>27.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>9.6%</td>
<td>11.2%</td>
<td>10.2%</td>
<td>5.7%</td>
<td>13.0%</td>
<td>1.5%</td>
<td>16.4%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Real Balances: deflated by Own CPI. Oil deflated by US CPI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>9.2%</td>
<td>7.5%</td>
<td>6.3%</td>
<td>4.3%</td>
<td>9.7%</td>
<td>0.0%</td>
<td>-64.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td>6.6%</td>
<td>5.5%</td>
<td>4.4%</td>
<td>-1.2%</td>
<td>7.2%</td>
<td>-0.7%</td>
<td>-8.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>6.2%</td>
<td>6.6%</td>
<td>4.9%</td>
<td>1.2%</td>
<td>6.3%</td>
<td>0.0%</td>
<td>24.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>7.1%</td>
<td>7.7%</td>
<td>6.6%</td>
<td>2.3%</td>
<td>8.6%</td>
<td>1.0%</td>
<td>22.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>6.9%</td>
<td>8.5%</td>
<td>7.5%</td>
<td>2.4%</td>
<td>9.6%</td>
<td>0.6%</td>
<td>12.7%</td>
</tr>
</tbody>

No Surprise: German Ifo's Business
Climate Indicator
Continues To Decline
 
by <a href="/comment/Curley.html">Louise
Curley</a> October 27, 2008



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027d.jpg" width="353">
It is no surprise, given the world economic turmoil that German firms have become increasingly pessimistic regarding their economic outlook. The IFO Business climate indicator fell 2.9% to 90.2 (2000=100) in October from 92.9 in September. The indicator is now approaching the lows last reached in 2001 and 2002.The Business Climate Indicator is based on the responses of some 7000 firms in the manufacturing, construction, wholesale and retail trade industries to questions regarding current conditions and expected conditions over the next six months. In the current survey, the index for current conditions increased minimally by 0.1%,while the index for expectations declined 5.9%. The indexes for the business climate, current conditions and expectations for the next six months are shown in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081027c.jpg" width="353">
In addition to the indexes, the data are also shown as percentage balances of good versus poor for current conditions and more favorable versus less favorable for expectations. The percentage balances for the business climate in the manufacturing, construction, wholesale and retail trade industries are shown in the second chart. All the indicators have been declining since the sub prime problem arose in the United States in the Fall of 2007, but the declines in manufacturing and retail trade appear to have accelerated in the past few months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">GERMANY IFO BUSINESS CLIMATE&nbsp;</th>
<th scope="col">Oct 08</th>
<th scope="col">Sep 08&nbsp;</th>
<th scope="col">Oct&nbsp; 07&nbsp;</th>
<th scope="col">M/M %chg&nbsp;</th>
<th scope="col">Y/Y&nbsp; chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">INDEXES&nbsp; (2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Climate</td>
<td>90.2</td>
<td>92.9</td>
<td>104.1</td>
<td>-2.91</td>
<td>-13.35</td>
<td>106.2</td>
<td>105.4</td>
<td>95.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>99.9</td>
<td>99.8</td>
<td>109.7</td>
<td>0.10</td>
<td>-8.93</td>
<td>111.2</td>
<td>108.4</td>
<td>94.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Expectations for Next Six Months</td>
<td>81.4</td>
<td>86.5</td>
<td>98.8</td>
<td>-5.90</td>
<td>-17.61</td>
<td>101.4</td>
<td>102.7</td>
<td>96.3</td>
</tr>
<tr class="odd">
<td class="firstcol">PERCENT BALANCES (%)</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;Pt chg</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Industry</td>
<td>-20.2</td>
<td>-14.9</td>
<td>7.5</td>
<td>-5.3</td>
<td>-27.7</td>
<td>11.6</td>
<td>10.2</td>
<td>-9.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-18.9</td>
<td>-11.9</td>
<td>18.4</td>
<td>-7.2</td>
<td>-37.3</td>
<td>22.4</td>
<td>19.8</td>
<td>1.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction&nbsp;</td>
<td>-27.6</td>
<td>-25.2</td>
<td>-20.3</td>
<td>-2.4</td>
<td>-7.3</td>
<td>-16.1</td>
<td>-15.8</td>
<td>-37.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale Trade</td>
<td>-15.1</td>
<td>-10.3</td>
<td>2.6</td>
<td>-4.8</td>
<td>-17.7</td>
<td>11.1</td>
<td>11.7</td>
<td>-9.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail Trade</td>
<td>-25.0</td>
<td>-24.1</td>
<td>-6.4</td>
<td>-0.9</td>
<td>-18.6</td>
<td>-6.5</td>
<td>-6.0</td>
<td>-28.0</td>
</tr>
</tbody>
</table>


</html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
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background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
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.grey1{
background-color:#f0f0f0;
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</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081024c.jpg" align="left" border="0" height="265" width="353">
Europe&#8217;s PMIs are now weak. They are at or near the lows we
have seen since the services PMI was issued in July of 1998. Both
service sand MFG PMIs are below their respective neutral readings of 50
and are thus indicating CONTRACTION.

The MFG PMI is even at its lowest level since June of 1997
when its survey began. 
 

The month to month drop in the MFG index is the largest over
this period while the services drop ranks as about the 18th smallest
&#8216;gain&#8217; in its history of the 63 drops in the 123 observation of the
series. This months&#8217; drop also ranks 45 in size among all drops or as
the eighteenth largest drop when ranked among drops (or the bottom 28
percentile). In relative magnitude this month&#8217;s service sector drop is
a bottom third affair. The MFG sector is taking the relatively larger
hit for this month. It is taking its largest drop on record and falling
to its lowest position in its history.

Europe has been a late comer to weakness but is catching up
with the US. In September the US MFG PMI stood at a level 43.5, below
where Europe was then but above where Europe is now. The US ISM may yet
fall to a lower level in October and be weaker than Europe. But the two
indices are clearly now sharing the same dimension of weakness
regardless of which is the weaker. Last month the US non-MFG PMI stood
at a level of 50 above the service sector reading for EMU. EMU&#8217;s drop
to 46.91 seems clearly a weaker reading than what we get out of the US
Non-MFG PMI (where 44.6 is the weakest reading ever) since sharp
declines have not marked its recent trend. But things are changing fast
and maybe the US non-MFG sector will weaken beyond Europe&#8217;s reading. We
do not yet know how rapidly the economy descended in October. But this
is not a time that has rewarded optimistic projecting. Maybe the
message from Europe is that we should brace ourselves for even worse
news from the US.

One message from Europe is nonetheless clear. Both MFG and
Services indices are quite weak and the MFG sector is falling very hard
right now. Expect the more conventional readings for Europe to start to
look a lot weaker. Since this report is topical and up-to-date as of
October it is a month or two ahead of the release of more conventional
economic reports form Europe. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col"> FLASH
Readings</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="3" class="firstcol">Market PMIs for the
E-Zone-13</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Oct-08</td>
<td>41.33</td>
<td>46.91</td>
</tr>
<tr>
<td class="firstcol">Sep-08</td>
<td>44.97</td>
<td>48.44</td>
</tr>
<tr>
<td class="firstcol">Aug-08</td>
<td>47.55</td>
<td>48.46</td>
</tr>
<tr>
<td class="firstcol">Jul-08</td>
<td>47.38</td>
<td>48.32</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>46.63</td>
<td>47.76</td>
</tr>
<tr>
<td class="firstcol">6-Mo</td>
<td>48.40</td>
<td>48.60</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>50.37</td>
<td>50.52</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">33-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>57.61</td>
<td>60.65</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>41.33</td>
<td>46.68</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>0.0%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
</body></html>

Europe’s PMIs are now weak. They are at or near the lows we have seen since the services PMI was issued in July of 1998. Both service sand MFG PMIs are below their respective neutral readings of 50 and are thus indicating CONTRACTION. [...]

Europe's PMIs Are Weak- Showing Contraction!

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

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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250430N1.jpg

250430O1.jpg

Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

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Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

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High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

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- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

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The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

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The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

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- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 62,000 (1.4% y/y) during April after increasing 147,000 (1.4% y/y) during March, revised from 155,000. A 124,000 April rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.5% y/y during April, from 4.6% y/y in March and from 4.7% y/y in the prior two months. Manufacturing sector pay grew 4.6% y/y during April, down from 4.8% y/y in March. Construction sector pay was unchanged at 4.7% y/y. Natural resource & mining sector pay grew 4.4% y/y. Financial sector pay rose 5.1% y/y, while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.3% y/y as did trade, transportation & utilities pay. Information pay rose 4.1% y/y. Median annual pay for “job changers” rose 6.9% y/y after 6.7% y/y in March.

Small business hiring (less than 50 employees) rose 11,000 (0.6% y/y) after rising 18,000 (0.6% y/y) in March, revised down from 52,000. Employment at medium-sized firms (50-499,000 employees) rose 40,000 (1.1% y/y) after rising 43,000 (1.1% y/y). Large business hiring (500+ employees) rose 12,000 (3.4% y/y) in April, after rising 61,000 (3.6% y/y) in March, revised from 59,000.

Goods-producing employment rose 26,000 (1.3% y/y) in April, after rising 16,000 (1.3% y/y) during March, revised from 24,000. Manufacturing jobs rose 4,000 (-0.2% y/y) after rising 17,000 (-0.3% y/y) in March. The number of construction sector jobs rose 16,000 (3.4% y/y) in April, following a 2,000 (3.6% y/y) March increase, revised from 6,000. Natural resources & mining jobs rose 6,000 (2.8% y/y) in April after falling 3,000 (+1.9% y/y) in March.

The number of service-producing jobs rose 34,000 (1.4% y/y) during April, following a rise of 131,000 (1.4% y/y) in March. Professional & business services employment fell 2,000 (0.6% y/y) after rising 46,000 (0.7% y/y) in the prior month, revised from 57,000. Employment in the financial industry rose 20,000 (2.1% y/y) in April, after rising 38,000 (2.0% y/y) in March. Leisure and hospitality employment increased 27,000 (3.0% y/y), following a 23,000 (2.9% y/y) March increase, revised from 17,000. The number of education & health care jobs fell 23,000 (1.6% y/y) in April, following a 15,000 (1.8% y/y) rise in March, revised from 12,000. Information sector employment fell 8,000 (-0.1% y/y) after a rise of 3,000 (0.2% y/y) in March. The number of jobs in trade, transportation & utilities rose 21,000 (0.4% y/y) in April, after falling 4,000 (+0.4% y/y) in March, revised from a 6,000 fall. Employment in “other” services rose fell 1,000 (+3.2% y/y) following a 10,000 (3.4% y/y) rise in March, revised from 11,000.

By region, employment in the Northeast increased 10,000 (1.9% y/y) in April, following an increase of 95,000 (2.0% y/y) in March, revised from 89,000. Employment in the Midwest rose 42,000 (1.5% y/y) after a gain of 84,000 (1.4% y/y) in March, revised from 81,000. In the South, employment rose 3,000 (1.3% y/y) during April, after rising 10,000 (1.4% y/y) in March, revised from 27,000. In the West, employment rose 9,000 (0.6% y/y) after declining 43,000 (+0.6% y/y), revised from a 41,000 decline in March.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Employment increase is modest in both services & factory sectors.
- Wage growth for “job stayers” moderates.
- Small and medium-sized business employment slows.

Economy in Brief: October 2008

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U.S. Chain Store Sales Further Confirm Weak Retail Spending

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